shutdown. but we need to come back to my department and its mission and i can't pay for last summer's surge of resources to deal with the spike in migration in south texas last summer. and we asked for a supplemental, we haven't received support from congress and that bill needs to be paid and we need to pay more and we open this week and we can't pay for new investments and border security technology and we have another of other individuals on cause in terms of

some of our very important homeland security initiatives until we have an appropriations bill. it's key that we get one. on the good news front the year ago there were a number of vacancies in the senior-level positions and we now have including myself over the last 12 months is to the hard work because 13 confirmed presidential appointments. ..

we also have confirmed president presidential points and is the assistant secretary for legislative affairs in the new assistant secretary for public affairs. we have one nomination think an undersecretary for management to actually happens to be a former client of mine. the retired vice president bird of johnson & johnson russ dio who has impressed virtually every senator he has met. he will be a great addition to our team but i'm hoping he will be confirmed early in the new year. it's no accident that i selected

somebody who was the vice president for administration of johnson & johnson which is a large decentralized health care company with operating components. in terms of congressional oversight it is still the case that we have something like over 108 committees and subcommittees in congress that report to exert oversight by my department. we have however improved and we have received a lot of compliments from members of congress on both sides of the aisle and improve their response time to congressional inquiries. we have developed good bipartisan relationships on the hill in my judgment. though i testify now in 12 months i have testified 12 times before congress which keeps me busy but i believe we have improved our relations and their relationships with congress and the leaders on the hill. in conclusion i would like to say that in my judgment the role

of my department and the role of the secretary of homeland security is to strike the right balance between homeland security and the preservation of our values and our freedoms and our liberties. the first instinct very often that the security expert is to rush to the harshest form of security. for example there is some sort of risk to aviation security the first instinct may be to require no carry-on luggage, no food, no utensils, note jackets, nobody gets up to go to the men's room and you can create a risky -- risk-free commercial flight but it would probably be an unnecessary burden on the traveling public so i like to tell people i can erect more walls, more screening devices and build higher walls wider fences interrogate more people in the name of homeland security

but you would live in a prison. so in this country we put a premium on freedom of movement, freedom of association. we cherish diversity. we cherish our freedoms. we cherish our privacy so homeland security means striking a balance which is what we seek to do every day on your behalf. i tell my workforce that there is no more important mission than the safety of the american people and the security of the homeland. i'm pleased to have the opportunity to talk to this group because i know there are many in this room who help support our mission and we look forward to working with you. i'm glad to have the opportunity to be here so you can see me in the flesh and i can meet you and i look forward to a productive working relationship in the future and i want to say thank you and happy holidays to everybody here. thanks a lot.

[applause] >> i will look for questions from member companies. >> thank you for taking the time to join us today and happy holidays mr. secretary. you have outlined an impressive track record of the 22 agencies within the department but many would say there is still room for improvement in terms of integration of those. >> i would be the first to agree. >> when you issued a directive for one dhs initiatives could you take a little time to speak to what progress you have seen in terms of that integration and

what things you still would like to see to create a more corporate entity? >> we created a decision-making process within the department which is typically chaired by the deputy deputy secretary to bring forward various different decisions that are made with the input of all the components sitting around the table and that concerns her budget process and a host of other issues. that process is already in pla place. less formally we have routine discussions not just normal staff meetings but routine discussions around the table and department headquarters where we gather component leadership to talk about a variety of issues as recently as yesterday. we are in the development phase of our southern border campaign strategy which involves a

discussion of coast guard leadership, the leadership of i.c.e. the leadership of cbp and the leadership of the cia has. they are in my office frequently in the development of our executive action, that involves a discussion that went on for eight months with my component leadership. that was not something that we developed simply by me and my immediate staff at dh as headquarters. there is a collaborative inclusive discussion that involved the leadership of the components last summer when they were dealing with the surge in texas. that routinely involved a coordinated effort and a task force led by a border patrol, the number two person in border patrol in coordination with the cia has, coast guard and fema. and so each time i met with the

leadership charged with responsibility for dealing with border security involved leaders of those components. there is still in my judgment a lot of work to do. the department is 11 years old. think about where the department of defense was in 1958 in 1959. the department is 11 years old but we did a very large corporate merger in 2002. a lot of the components of our government i believe is a good thing. think about world these different components were scattered across the federal government before. but we need to do more to eliminate the stovepipes. remembering how much we function and think in terms of stovepipes and i think we can do a better job without sacrificing the uniqueness and the culture of each of the components.

>> i am with the law firm mckenna long and aldridge in washington. i have two quick questions. speaking of orders to what degree does the homeland security department coordinate their efforts with canada because as you know terrorists in 9/11 came through canada and my second question is drones can do all kinds of things nowadays and i think they play into homeland security. >> on drones i can give you might dhs and termite dod answer. [laughter] i will give you might dhs answer. i will start with your second question first. i think we are moving generally to a risk-based strategy for homeland security.

a risk-based come a risk-based strategy with the hallmark of aviation security led by tsa for the last couple of years but as we get better at technology surveillance we can move to a risk-based strategy for border security as well. we don't have literally border patrol agents and walls across every inch of the southwest border. that's not feasible and is usually expensive and the taxpayers don't want to pay for that. our intelligence capability and our technology which includes aerial surveillance, we can and we should move to a more effective and efficient way to patrol border security. so balanced with appropriate protections for privacy and civil liberties they think aerial surveillance is a good thing. that's number two.

number one we are in constant partnership with my canadian counterparts about our shared order interests. could we do a little better? yes, and so mr. blaney and i my canadian counterpart have committed to working together on sharing information about individuals of suspicion and creating more of a partnership environment. i think that's good now but i would like to see it get better. for the sake of our shared border interest but we are in close corporation there. i have to very very important international relationships. canada and mexico. i spent a lot of time with my canadian counterpart and my mexican counterpart. i spent time with my mexican counterpart two days ago in mexico city.

>> mr. secretary let me ask you about the sony case and the hacking. the specifics. from your perspective as the department has looked at what is the significance and implication of what happened in the sunny situation? >> it's a very serious attack. we know that the company itself was affected. we know that employees of the company were affected. we know that information, movies that the company was not ready to make public were made public so it's a very serious attack and we have got to consider a range of serious options which we are doing right now in the u.s. government about how to respond to it.

i would not want this type of attack to be a wave of the future and so we were considering a range of options about how to respond. in addition there is also -- this is also something that should heighten awareness of our private sector partners. go to dhs.gov right now on there is information about how to increase the term i have learned in the last year cyber hygiene but there is a role to play for less sophisticated companies in cybersecurity. the big firms particularly in the financial services sector know and understand cybersecurity and the thing that they benefit from this information-sharing with the u.s. government. there are a lot of companies out there that are not as

sophisticated they need to be an and dhs is in a position to help them with cyber hygiene and we continually offer information to the public and it's up to people in corporate america to take advantage of it. we are willing to partner with a lot of companies to do that. that plus i'm very pleased with the cybersecurity legislation that just passed congress which i hope -- i think will help strengthen our department and puts us in a good place but there is a role for private companies when an episode like this comes to public light. thank you. [applause]

the u.s. special envoy for sudan and south sudan and israeli-palestinian negotiations among others. the u.s. institute of peace is hosting a discussion tomorrow on if using special envoy's works in addressing international conflicts and what should be done to both through the effectiveness of these envoys. that's live at 9:30 a.m. eastern on c-span3.

next discussion on u.s.-china relations including former u.s. ambassador to china and former 2012 presidential candidate jon huntsman. hosted by the center for strategic and international

studies and the tcu school of communications, this is an hour. [applause] >> thank you all very much for coming. this is going to be a good one tonight. we have a great panel here. chris johnson down here most of you know i think senior adviser in china studied at thesis. he's an asian affairs specialist. he spent more than two decades in the u.s. government intelligence and foreign affairs community. he is the senior china analyst or was that the cia, played a key role in supporting the 1996 taiwan strait crisis, the 1999 accidental bombing of the chinese embassy in belgrade, the downing of a u.s. aircraft on hainan on the island in 2001 and

in 2001 he was awarded the u.s. department of state superior honor board for outstanding support especially for aiding the office when chinese leadership changed hands in 2012. to my right here is someone who has become very well-known and recognized for his knowledge of china. evan osnos is a writer for "the new yorker." he covers politics and foreign affairs and is the author of a recent book about china the age of ambition chasing fortune through fame and new china. it's based on his experience of living in china for eight years. he was also before he joined "the new yorker" was a member of the "chicago tribune" team that won a pulitzer for investigative reporting in into my left ear to former ambassador jon huntsman. he of course was ambassador to

china from 2001 and of course before that he was governor of utah for two terms. he began his career in public service as a staff assistant to ronald reagan, served each of the poor president since then. roles include ambassador to singapore, deputy assistant secretary of commerce for asia, u.s. trade ambassador and most recently of course as ambassador to china. as governor of utah he focused on strong economic reform and brought unemployment to historic lows. about this time four years ago governor you are very busy getting ready to run for president. >> we don't need to talk about that. [laughter] >> i thought we would start off, are you going to run again? [laughter] i i'd like to ask the obvious questions.

>> no pressure. >> there was an editorial this morning called the ostentatious moderate and my response is better that than a piezo landall is pander because there is no room for ostentatious moderates. you kind of look for solutions as a way to get to the finish line and it becomes more complicated in the early primary. >> but my daughters who are on your program would love to be here any time. >> we have i think the overriding issue for policymakers over the next decade managing china relations. when i was getting ready trying

to learn something about everything before the last presidential debate i went and talked to the grand allison at harvard and he pointed out to me in the long history of the world this goes back to sparta and athens. there have been 15 times when a rising power rose up to challenge whoever happened to be the lone superpower at the time. in 11 of those 15 cases the result was war. so the big question with china and the united states is can the policymakers on both sides find a way to defy the odds? i am going to just start with the three of you. chris why don't we just start there. i want to ask the three of you how would you define relations between the united states and china right now and what do you see as the main challenge?

>> thank you bob for being with us tonight and everyone for coming out. i would characterize their relationship is definitely on an upward trend following the summit meeting between president xi jinping and obama. we had a bumpy first half of 2014 and my assessment and i think both sides recognize that and wanted to use the opportunity to get things back on the rails. i think we have seen significant agreement that came out of the summit, climate change agreement and a very real world of economic interaction between the two sides something as simple as the visa extension for chinese business people coming to the united states does make a big difference. i think the challenges the very notion described in how to escape the dash trap and the chinese have come up with a new style of day officially translated as major country

relations. so far neither side has figured out how to find that. then u.s. has been reluctant to embrace it and the challenge i think in the nearest term is generally speaking there is an assessment in beijing and what do they do with him for his remaining term? how they interact quit my sense is there are two schools of thought about how to do that and this is i think a high-level debate. one side would argue that 2016 is a very uncertain territory but there is a general inkling that whatever comes out is likely to have a harder policy toward china so perhaps we

should invest in president obama and try to do as much as we can with him to have a smoother handover to whoever comes next whether it's a republican or democratic administration. the other school tends to argue because he is weak and he is therefore inconsistent which tends to unearth the chinese the most so therefore they should keep the relationship stable and turn their attention more toward the region. we saw this coming out of president xi jinping's major policy address foreign affairs were conference they had a couple of weeks ago. it was a very striking speech where the message was very much we are here, get used to it. that was the message coming out of that speech. i think that is the chief driver that is going to complicate our relationship going forward. how do we adjust to that reali reality? >> evan. >> first of all thank you for having me here today and thanks everybody for coming.

if i can give a plug to chris who said the central foreign affairs were conference is not the most elegant phrase but he has written some of the most eloquent stuff on the subject so i encourage you to read it. it's not easy to make that sank and he has managed to make it fascinating. a look at what could have come out of this recent meeting with xi jinping and barack obama. it's easy to forget that. you go back five years to the moment when the president made his first trip to china they're reporting that came out of it was not good. this was a president who had gone in and this was the perception at the time, had been in a sense shown his way around. he hadn't really been able to shape the contours of the visit. they didn't come out of it with a sense that he was in control. you look at this time in the story was very different. they came out of it with a climate change agreement that was a surprise to many of us who watch the relationship closely and they came out also with something that didn't receive as

much attention which were a couple of deals about building confidence between the two militaries the chinese and the americans. these were designed to help get rid of some of the uncertainty about what happens when you have these two big countries that are now playing in the same neighborhood on the chinese coast. how are they going to talk to each other? what are the rules of the road and this was the beginning of the more candid conversation about how do you avoid that very clear pattern of history? one thing that is worth mentioning is that pattern of 11 out of 15 times when a rising power has challenge an incumbent power what strikes me is that you see that written about in the chinese analysis and the chinese press. the fact that they are talking about the usage of these trap. the fact that they are talking about it. it sounds much nicer in chinese but the fact that they are talking about that is a good

sign. it means we are at least establishing some the same fundamental understandings of the risks that we are encountering in way we to do to avoid those risks. >> let me say what an honor just to be with you and to thank everybody here and to pay tribute to so many in this room who i i have glanced at well-being i have clients that while being up here who i have known over many years and worked with in different professional capacities. it's just a honor to be with many of you once again. i know how hard you have worked in promoting the u.s. china relationship and making it what it is today. i would say the u.s. china relationship is based on one fuel type in one fuel type only and that is trust. sometimes the trust is depleted from the gas tank at which point you to point you have to fill it back up and we are at a point where we need to. ..

that was another thing that kept us at the negotiating negotiating table, both sides wanted the outcome that was aspirational and does honest.

we did not fall victim to the headlines which can be a destructive thing. i would say we are doing okay today, managing the downside risk which is no easy feat, but we are missing the upside potential, which is vast. that is the only thing i would say. we are missing the economic peace. nothing came out of the last round of discussions which is the glue that holds us together, particularly through the times that are difficult, the choppy waters which we inevitably have and there's a lot more we could be doing, whether it is the integration. i don't think anyone has had a make sense of that, but it could be turned into a huge opportunity as far as i'm concerned, bilateral investment treaty which could be a pathway. so i would just say we are

doing fine for protecting the downside which is an important thing to do but we are neglecting the upside. >> this may have nothing to do with us china relations with the reason i ask questions because i don't have the answer. what will what will china take away from the president's announcement yesterday that we are going to establish relations with cuba? because they are argument at the white house was that our relationship with china and vietnam informed of the decision to do this and they pointed out why it was a good thing. >> how will that be interpreted, do you think? >> to be honest i think they we will have views but won't dwell on it. they will look at it mainly

the degree of the difficulty in the factory had the russian bombers showing up for caribbean again. they will look at it largely. largely. they will think about how it redefines latin american diplomacy. they do they do have investments all up and down. i think they we will think about it in that regard, but i don't think that it will give them much pause. >> we will they like it, not like it? >> it will probably change the economics of the cigar market. >> i would say that they would hope to see us a little off balance. the one issue that has kept us a little off balance the mac cube and immigration. and so this is what it takes, is somewhat. i think china would see that they would rather see the water shopping. maximizing the relationships around them,, strong

diplomatic relationships throughout the asia-pacific region and on there periphery. it will be the same thing in our neighborhood. >> i think they may also see that the president may have more gas mistakenly thought. the unpredictability of of it will probably come as a surprise. this guy may not be on his heels quite as much as we thought was pleasant to how they approach and. you do see chinese presence visibly in places in the caribbean and the idea that the united states will be staking out a new position is probably not entirely welcome development. >> what struck me about it, this secret, this town does not keep secrets for a well. but everyone i talk to, they

did not like it as well. what that means, but it was -- that was my take away from it. do the chinese see this as an effort to contain china? a lot of business in that part of the world, and we should be involved. what i've always wondered about is whether it was a good idea to announce. >> as to whether or not it was a good idea, yes, it was reassuring. the challenge was the rebalance, pivot, whatever you want to call it, the rhetoric is been different than the follow-through. we have stations and marines in darwin, moved to the split with the navy.

those numbers aren't going to change significantly. in the complete absence of any kind of economic piece, which is critical frankly to the rebalance being successful. economics is security. they tend to look at it that way. if for only pursuing the security side it makes it easy for the chinese to say we are about trade and growth. these guys are about creating difficulty. the rebalance or the challenge. when the president first came into office there was some dialogue among him as rises and so on as to whether or not this would change what they call their so-called strategic opportunity, they have a benign external security environment. there was some posturing as to how it might change but having had a

couple of years to observe how the rebalance been rolled out they have called down quite a bit place out of the react? the way they see things. >> i suspect it is seen as an extension of fairly aggressive us policies. on plus three, plus six. the agreement is based on lower standards. trying to do things in our neighborhood without including us to why don't we work collaboratively figuring out what the transition vehicle is going

to look like to integrate these two agreements and ultimately will have to be done. the asia-pacific region has benefited from tranquility and call that has largely existed in the postwar. now they are looking, more problematic. alliances in the region. they would like to have there own spear of influence project power it is inevitable. a little late but inevitable because we we will follow trade flows and the flow of people. at some.we we will have to

deal again with reconciling some of our differences in the region. over islands, geopolitical issues. >> i think the key underlying issues that a lot of us think about. some of the pieces on the board at the moment: the board itself is the fact that we don't yet have an understanding, mutual understanding about how the united states and china are going to orient toward each other when it comes to the pacific in asia. the president has said that the united states is a specific nation and will be through the end of the century. it's teaching thing fundamentally believes that china will inevitably return to a position of dominance in east asia. it is a historical a historical fact, and the question is when and how. we are really having an overt conversation about that. we talk about the smaller details, but i think that part remains really unsettled. for me at least that is the one that is the greatest source of concern.

>> i i don't think we do necessarily. the key.is this notion,, to be able to operate with impunity, the so-called second island chain, guam, chain, guam, that is the plan and they want the rest of us to accept it. we see them through their actions preparing the ground. as we have all been saying, saying, what has been accomplished, they bump up against each other. what is interesting about the rhetoric that is, is this notion of greater activity. for many years chinese foreign policy was guided by the dictum that we keep a low profile, don't stick your head up.

very clearly announced that that is over and that they are moving to something different which is important especially in this town for us not to take the term activism and immediately say -- i try to think about it in a volume filter, but it we will be more active and we have to figure out how to respond and have a a debate about how people respond which is not happening now. >> japan is perhaps our strongest ally, i would say, certainly in that part of the world. there are obviously problems between japan and china relating to these. how does the united states navigate its way on that problem between japan and china? >> well, you have some complexity. you complexity. you have some complexity of the starting with china and japan that goes quite deep based on history, geography, politics, based on worldviews. you have in one capitol a deputy prime minister under mao, and on the other end in

tokyo you have shins a lobby, the grandson of noble shoe was a wartime minister and help to administer japan occupied men's jewelry. already there is tension without even talking about anything else. else. layer over that the geographic sovereignty disputes and the history which, of course, we we will be celebrating and celebrating and celebrating and celebrating and remembering and remembering and remembering. managing that relationship, and i thought the ice cold handshake we saw in the media recently was a major positive step. whoever would have thought that that kind of handshake, an advanced person and the white house and never had a picture like that you would be fired. but it was a major breakthrough because you no what it means in each, standing together and

shaking hands._we no their will be a delegation going over meeting with the lower level functionary and moving up. and things were normalized. we go through through these distinct cycles between japan and china exacerbated by transition politics. he had his transition politics. the same thing. a lot of what we have experienced, the united states must be loyal to its allies. we have certain commitments that we just must respect and live up to. sometimes we don't do a good job, the days better than anybody. we have got to get back to that. that will create fiction from time to

time, but that should be the centerpiece of our relationship for building trust and confidence. >> that. >> that is an interesting.and makes me wonder, do you all think that japan and china and the policymakers have a good understanding of our relationship with both of those countries? did the japanese, are they confident right now that we are there ally and that that tree, that we will honor that tree if it should come to a showdown with china? did the chinese understand that? and i guess the other question i would ask is what we? >> i would argue that both sides have had some doubts. they combed out over time especially with the president's visit in april where he made for the first time by a us president the to declaration regard article five applying to the area.

and so my sense is the japanese are always concerned about the nature of our relationship with china, what is happening. how you address that from the us policy side as studies you make sure that you pretty brief and post- brief every time with regard to interactions. these sort of things. and likewise with with the chinese it is helpful to explain. there may their may have been some doubts especially after the syria issue. this is been talked about a lot. lot. i think the president clarified that very much. that message got through and it did modulate chinese behavior which is important. >> we talked about the photograph before. if you look at it from the west, why do you even have this picture? i think it points to the underlying domestic politics

which we will be a reality that we should be prepared for. you are going to see, and we should be prepared. you will see demonstrations against japan was some element of demonstration against the united states. people are not going to be as easily mobilized around economic growth and will mobilize around more essential fundamental issues one of those we will be history and its relationship with japan, but i think it it is sometimes worth us remembering because we can see these street demonstrations and immediately assume that there is this reservoir of energy ready. i think their are a lot of opportunistic protesters. if that is the issue they we will go for that reason. >> speaking of demonstrations you recently wrote about the demonstrations and what they meant. in 97 when the british handover hong kong talked

about one country into systems. is that still the prevailing view? hammered out between the early 80s. we are now living with that. the white paper came out when we were living in asia this last summer in june, and that created, of course, the response in hong kong in terms of the ways in which the chief executive candidates for chief executive would be nominated or qualified, and i think it was terribly problematic in terms of how it rolled out and interpreted in the changes that were made. it took the trust that has been built up for a number of

years and the expectations on the part of this. and it diminished that sense of trust. so you have politics and good economics in hong kong, people have jobs, go to work, there is stability in the streets. because streets. because of that my sense was the demonstrations will only go so far because you have people will actually have day jobs on michael we saw in the middle east with the arab spring where for you have bad politics and bad economics and can turn the market quickly in terms of the reformers. all the demonstrators be back at it and i can inevitably there will. the hong kong people are quite different than those you find in other parts of china. they have been raised and educated under the traditions of the uk, but i think the bigger issue really is taiwan. and all you have to do is look at the elections that were held just a couple of weeks ago, the democratic

progressive party cleaned house with many of the major municipalities including. i i was just having 25 i was pretty stunned by that. the marketplace change with respect to the reaction of the people in taiwan to the way that hong kong is handled as if to say if this is a model they think will work for us they have another thing coming. now we have the rise, kind of a firebrand follow commands we have presidential elections not far on the horizon. i suspect that this issue we will loom large and be transformative in terms of the politics which brings me to conclude without that maybe things have stabilized and across grade relationship with the good

work of my angel and certainly the foreign minister and china who of course ran the taiwan office. there and just made a well chronicled trip. and i think we are going to be yet another problematic. with respect to the relationship. i'm not sure a lot of people anticipated over thinking clearly about it right now. >> i would agree with that. i want to add to that by noting that that is the piece of china's approach to the hong kong illustration that i do find counterintuitive. the fact that they don't seem terribly concerned makes me wonder about their thinking. but i think the other piece of it is that this is sort of part and

parcel with the message that we have seen of the presidency with regard to sovereignty issues. what he is communicating through the responses this is our territory and has been. we will run it and administer it the way we want. the white paper and other comments that have been made about the applicability of the joint agreement that was signed with the british originally. it is not just disappointment. they feel the social contract has been betrayed and i think that is a big problem. demonstrations will demonstrations will come back because the underlying issues have not been addressed. eventually they would. >> i think there's a lot of ways to explain how the hong kong demonstrations happened. the happened. the immediate precipitating cause, this declaration from beijing. the underlying issues are economic.

young people go to school and the sleeping on the appearance counts because they can't buy into the real estate economy and feel that is because the local developers are in cahoots. that's the question of how will china broadly defined fundamentally oriented so for the rest of the world. what they are finding is in this time china is defining itself specifically as chinese. the not sure what they think about that.

>> the pictures of north korea. concerned about technology transfer, intellectual property rights the greatest danger for us china relations. is it that we might accidentally stumble in the war, or is it about? works well, we have not had a digital pearl harbor. we still have the destruction of silicon for the most part, ones and zeros and lots of them. that will change ultimately as cyber becomes a different playing field for battlefield i should say. it it needs to be seen as such.

i'm not sure we are their yet because we are looking at the internet, the most complex tool ever created in the history of humankind. on the sure if folks know what to do about it. it was developed based on trust, the collaborative spirit where you did not worry about defenses. now we have to worry about it. offense has the distinct advantage, and we are seeing that play out. a distinct advantage, and no one knows what to do. do. there are no real answers. the real damages on less the cyber attacks we have seen because again we have not had a digital pearl harbor so to speak but we certainly have seen a lot of intellectual property ripped

off. to my mind that depletes the whole notion of a that creative entrepreneurial society. why develop something and expend resources. if your best idea we will be hacked and stolen. there is no punishment for doing so. in the defense authorization act for 2015 is a knew box created for responses to cyber theft which would empower congress to be able to deny the evildoers access to our financial markets which is a start. you have to make it hurt. the theft the theft of intellectual property, jobs, gdp. that is the heart and soul.

>> in terms of addressing the problem. going the opposite poles. everything they're doing, every day what's going on. it's messy. very uncoordinated. the reality is they do have a one-party state one-party system and certainly to the degree one might make a case that they were not aware of this problem, we made them aware several times. and so in that type of the system if he wanted to stop he could. it has not happened.

that is significant. the broader issue, a couple points, this notion of the response in the us business community, especially silicon valley oriented companies, we we will just keep out innovating them and it we will be okay. interesting work is been done about history where you hit a on innovation before there's another breakthrough innovation, and many arguing we are at that.now. it becomes all the more pernicious. the other piece on the military side, what i think we all ought to worry about, talking about how good these confidence building measures are. particularly dangerous because the pace of escalation is so quick. the the unknowns about the other side's intentions are very, very fraught. two ships come together and they can see each other and have some sense of what is happening. cyber suddenly a portion of

the power grid goes down and the desire to then respond asymmetrically is very high. >> i get the sense the cyber is particularly prone to the problem unintended consequences. look at the last 48 hours for demonstration. who. who would have thought that a body, the about north korea would have led to this candid conversation about exactly what it is american studios are doing, how they are responding to these kinds of threats, not so much cyber but our relationship with how we portray other countries which is a conversation worth having because in china hollywood had to deal with the question of how much we cut our movies if we want to show them in china. what i mean is that, you know, in its own way cyber can produce all kinds of confrontations that we have less experience handling. one last piece of that as you look at the way the american business community has gone from being tolerant

a few years ago saying we we will just keep her mouth shut and see what happens to being quite vocal and in the way i think the unintended consequence for. now that is no longer the case. there is a lot of re-examination going on. >> you all are well informed. does this appear to you to be the work of north korea? >> well. [laughter] i am not that well informed. >> the story is all over ory is all over town that it is, but the white house won't say that it is, but they say everything but. >> a pretty good likelihood. some subcontracting out. >> it sure seems that way. >> if the north koreans are this good than the chinese,

i would guess, are better. >> well, one of the interesting things about shiny cyber behavior is how obvious it is and how clumsy it looks. leaving big muddy footprints. and so i think that is something of a surprise to a lot of people they do have some capability. you devote resources in a singular manner it tends to produce results. >> does it bother you that the studio is canceled? is almost like we lost the cyber battle. what would what would be the impact of the reaction in this country? >> cuba and north korea.

>> i'm with you. >> let the studios make movies. the north koreans are good at threats, very explicit in terms of how they articulate the threat. they they take them seriously. you always have to take these things seriously. there's a pattern to the pronouncements and carrying on and showing the movie and doing what we as americans do typically would have been the right thing to do. >> you can't blame the theaters for making a business decision. it does also sparked a debate about first amendment and how we will defend it.

>> there should have been some response. >> i think so. >> if you were a policy maker what would be the options that president obama would have? >> to encourage and say these are our values and we are going to go ahead with the bully pulpit type statement. >> lets go to the audience. there audience. there are a lot of people. >> first end up right there. >> the market value is skyrocketing. >> the executive intelligence review. one of the things on the top agenda is this idea of the knew silk road where they are building an infrastructure driven policy which should benefit all their neighbors. kazakhstan, kyrgyzstan, they have actually done something with it.

this has been seen with some skepticism in the us viewing and more as a chinese geopolitical ploy than anything else, but the chinese have been opened that this program is open for everybody's involvement, and when pres. shooting thing had his press conference with pres. president obama invited the united states to take part in this program. how that would work is difficult to say, but it seems to me that if you're going to talk about a major country relationship the idea of using infrastructure to develop the rest of the world with a two major economic powers china and the united states together would be a good model for moving forward with regard to china. i was wondering if you could comment on the proposal. >> so there are a couple of different proposals around the infrastructure investment.

i thought our response was incorrect. we should we should have engaged and helps to shape the rules of the institution as opposed to spending time picking off south korea, japan, and australia. we could have been a lot more constructive in helping to shape the outcome which is to say that when it comes to central asia the collaborative efforts of the united states and china will be very important. i say that because as chris rightly pointed out china desires of the minor external environment. you look west and see nothing but trouble. you need to do something in terms of building capacity and creating greater economic opportunity. then you look at afghanistan

and see the advances of the taliban, pakistan, india, nato troops out 2013, who is left with the security of afghanistan for the most part? china will have to step up and play a renewable. ultimately the longer term fix is not more and more troops. doing just that within the more immediate region. he could have a country by kazakhstan which we will emerge in the region as a a balancer of sorts who could help in defining such a strategy. i think i think it is kind of the new frontier if you we will. the united the united states need to step up and participate fully. we need to decide what our strategies can be.

>> congratulations. you are killing them on sunday. one of the recent battlefield contests between the prc and china connect the energy deal and specifically to you, preview of coming attractions. >> political and in the match no space on russia and china energy. i think it is gone has gone well beyond what anybody would have forecast a couple of years ago in terms of the sweeping nature of the dragnets. the economic model is out of

gas. it have to ship from the investment export model the consumption. consumption. the rules of the road sort of the way in which business is governed and adjudicated is now outdated. in order to get to the next level of growth things have to happen. who will govern that? well, well, the party is experiencing difficult times because there is a trust between the people in the party because the lack of transparency, little responsiveness and the core of corruption, and i think shooting pain has that up and said there is only one course of action i can pursue, to fundamentally fix and rehabilitate the party because if that isn't on the party collapses based upon the internal and there is no alternative governing system in which case you have a calamity and all of the station. east asia. my sense is he is going

after this methodically. taking on the tigers. >> and when you round out what shocked everybody and you find that their will be a public trial, when was the last time there was a public trial for a member a member of the standing committee of the politburo in china? one of the foremost experts. the last time we saw a member of the standing committee goes back to the gang of four. we have seen members of the politburo, but we have not seen a member of the standing committee since 1979 to 1980. this is fairly unprecedented. there is a method to the madness, and that is you have to have high profile displays in

terms of what you're trying to get done for the world to see, for the people of to see, for the people of the country to see, and ultimately you have to clear certain elements of the party out to get to the reform agenda or it won't happen. happen. so there we will be the personnel aspect, military included. security aspect and the political aspect as well, and there we will be big names involved, and i suspect for the time we get to the 19 party congress in 2017 it we will be pretty much through the anticorruption cycle and we will see how they are in terms of the overall strength. the foundation will be strong, maybe unprecedented since the days of deng xiaoping, and my guess is it we will take from 2017 to 2022 and 22 and really focus on the reforms that were first floated. they died for the most part.

>> the questions from some of the women today. >> on from afghanistan in bc in washington dc. i dc. i want to thank these two gentlemen for their services they have provided and on there behalf for all men and women in uniform that they served in afghanistan. my my question is as we talk about a lot of complexity between the us and china in the pacific, i'm glad that ambassador also mentioned that their are a lot of potential between us and china. particularly about afghanistan during the cold war us and china were allied against the threat that came

us and china national interest. don't you think afghanistan to become a model of cooperation between us and china once again? >> i would love to here the views, but i think your onto something important. china has played mostly an internal game with respect to its resources and its clout. and now being on the world stage they we will have to engage more and more there is no more immediate issue than south asia and specifically afghanistan now that all sure afghani has taken over, and he has to look at the picture and say what do i do in terms of my negotiations? what do i do about economic prospects? china will want to play a role.

what do i do with respect to my ongoing relationship with pakistan which we will be key to any outcome with the taliban and india will have to factor in. you look at the players, you look at the traditional prospects for trouble in that region of the world over hundreds and hundreds of years, and there is huge opening for the united states and china to work collaboratively on issues of stability and economic prosperity and security, and i'm glad you pointed out because i think when people say well, what can the united states and china do, it's a perfect example. the world will be better off because of it. >> do you think there's anybody right now thinking about that? >> yep. i mean, we have had more and more dialogue with the chinese about afghanistan. the administration is done a good job on that. and our guests.out there is

a real opportunity. one thing that has been interesting is how the forces of shape china's previous behavior. for example, they have largely focused on commercial interest in afghanistan for lack of a better term free writing off nato security. after the change. and so one thing that's interesting is china has more un peacekeepers than any other country. they're starting to shift their minds set on that. likewise, there was a time when the chinese sort of sublet their approach to pakistan to the us because we were so involved. that is also changing. the pressures have interests in these places. it's fundamentally different because they have huge interest in the oil sector which is a big problem. i do think there is the potential. >> if you look at the comment that double baccarat by dotty made, the leader of isis, he identified china is

one of the countries that is a target of his concern. but we have not yet seen is how that we will translate into a chinese participation. i think their are a lot of people without minimizing the significant possibility for cooperation, there's a moment where they are saying or waiting for china to fulfill that role. if you're going to be the kind of power that they imagine china to be that means taking on some of the costs that come with the shared global risks. he saw china taking on a global but counterterrorism will be part of that double waiting to see what shape that we will take. >> next question. yes, ma'am?

professor of media studies. we talked about the climate today but am not really talked about the impact of environmental issues like air quality and food safety on internal stability. stability. i was wondering if you might want to elaborate further on what impact you think it'll have. >> i guess i can say after eight years in beijing about these issues home with me. >> the most interesting change that happened is that issues that are previously been of interest to foreigners like the quality of the air in beijing for the quality of the food became a primary interest in chinese, and they were the ones talking about it. in fact this sort of became a status symbol to know about the equality and to care enough about your health that you were checking checking yourself to five smartphone every hour. this has become a very pleasant political issue for the. i think because it's not simply about air quality and it really is about the bargain, bargain, the

underlying bargain whether the government's filling its obligations to people. you talk to people who have no interest in being overtly political because being political and china is dangerous and costly, but they don't see it as a political gesture. if you get you get interested in air pollution at a health issue. so i think you saw there is a reason why the premier declared a war on air pollution because this is not that they woke up and decided that it is an inherent good but they realize is a fundamental political imperative that they have to be. >> let me just -- we are getting close to the end, but i just want to close with this thought. i would like to here from each of you, what would you like this audience to take away from this discussion today to? what are the things that we need to be thinking about in regard to china and the relationship, its

relationship with the united states? >> well, fundamentally it is to recognize that the landscape is changing and that the relationship therefore is going to have to change. the whole cadence of the way the relationship is conducted as us to change. china has made clear that that is how they view. we will have to accept these changes which does not mean we get out of the way. we we have to technology shift. one thing that's interesting, we all travel. these geopolitical tectonic plates shifting is very vivid to you, you, technicolor. sometimes you're in washington it looks black and white. i think i think this notion that understanding that this is a different character, was powerful chinese lawyer in two decades, he has very sort of unique views on a lot of this we have to figure out how would argue with that.

>> am struck by the fact that the very moment were talking about the tensions in the relationship in our going to manage the sense of two great powers edging closer and do some kind of confrontation, the experience of what it feels like to be chinese and american has never been more similar. that is a remarkable fact and specific to our history of dealing with other great powers. being in the soviet union was a different experience, but if your a young chinese person the day your in many cases watching western television shows, the websites, you are not believing necessarily the same things that americans do. we can stipulate the obvious. china has its own values and its own set of priorities pollution not overlook the fact that even as we are going to inevitably over the course of the next few years find ourselves in moreover confrontation we should remember that their are people on the ground who have never been more

familiar to us. >> i will let you. >> i would say with no royalties coming my way my advice would be to read evan's book. i have two of them on my desk at home, one for each eye. i eye. i have enjoyed enormously. so i watched my daughter grace from china page 15 on skype talking to friends in china, english, mandarin, movies, books, boyfriends. movies, books, boyfriends. it's incredible how the generations sort of melt without even trying. from my generation top, from parents generation impossible. so my generation has inherited all this incredible work of those who built the us china relationship, and it's not so old, just over 40 years old and with the task ahead will be do we reflect on our common sense of humanity which we share it with this great commonality between us and we focus on the vision and let the tools modern

technology drive us apart which can happen quickly and easily? and then you get right down to the fact that it is up to the people the people thing. we can either stare at each other with a sense of trust and honesty and talk about our issues are not. if we can do just the fundamentals, the 21st century century we will get back to the whole city track , and that could be the story of the 21st century if we don't handle it right. >> on behalf of tcu and csi s, thank you for coming. [applauding] [inaudible conversations] [inaudible conversations] >> coming up, look ahead at the next congress and what lawmakers can do to improve the economy. energy secretary on energy policy.

homeland security sec. jay johnson gives an update on how the department is important to the presidents immigration executive order and later a discussion on us china relations. >> this week on q&a author and townhall.com editor katie pavlik to him what she perceives as the apocrypha liberals on the war on women rhetoric. >> what is your problem? >> well, it goes back to the idea for this book, the 2012 dnc convention when they were showing distribute video and portraying him as a woman's rights champion when he left a young woman to drown in his car. if he did not gone back for nine hours and try to save his own bond she would probably survived.

you can do an entire video at a convention climbing to the preaching and fighting about the war on women and glorify someone like that while not including that part of his life in a video about women's rights records. >> sunday night at 8:00 o'clock eastern and pacific. airing one program from each year starting december 22 at 7:00 p.m. eastern. >> president obama holds an end of the year process. combating the islamic state, a, a bowler, and the presidents immigration executive order. live live coverage at 1:30 p.m. eastern. >> the heritage foundation hosted a discussion today about what the next congress could do to improve the economy. radio show host and cnbc contributor larry kudlow moderates the discussion which includes american

conservative union foundation chair and former hewlett-packard ceo carly. and former reagan former reagan economic advisor arthur laffer. this is an hour and a half. >> good morning. welcome to the heritage foundation. we appreciate those joining us on our website as well as c-span during his presentation. i would ask everyone here and now

secured be so if you would be so client to thought so kind to check the cell phones. our internet internet viewers are always welcome to send questions or comments at any time simply e-mailing the speaker. we will have a question and answers and ask that you wait for the microphone for the convenience of record. opening our program this morning and making a special welcome to our guests is the current president of the heritage foundation former senator jim dement. >> thank you. merry christmas, everyone. merry christmas to all who are tuning into the heritage network or through c-span. this is a. this is a great day to come together and talk about the power of ideas. we have a super panel here today, and it is our job to help to shape the debate, build consensus around ideas that we will make life better for people all across america. part of part of that process is bringing in people from all walks of life, business,

the think tank world and to actually that different ideas and to set priorities as an organization and as a conservative movement. that is a big part of what we are doing. doing. i appreciate steve leading this and ensure larry will completely introduce our panelists. thank you. i cannot think of a better panel. the ideas to do this and to have other guests and all around the country to bring america in and help america see those ideas that really will build a better life. what we want to deliver is a conservative policy reform agenda that really focuses on opportunity for all and favoritism for none. that is where where the dividing

line is in politics, the politics of division on the left, breaking people into groups, playing one group against another, trying to get special carveouts whether it's corny capitalism are was a mother types versus the idea that we are all americans. we all want to build a a better country. that is an inspiring message there are some, but most americans don't want to be part of a minority. they want to have the same opportunity and they don't like a government that is picking favorites, winners and losers and taking taxpayer money and throwing

it one way or another. it is not fair or equitable. but you will here today is lot of good economic messages for energy, tax code and i can't think of a better group to talk about that and really dig down into the issues. larry is going to facilitate this one of the brightest economic minds in the world, and of told him several times about being on his saturday radio show where we can sit back and dig in. thank you for being here and leading this. i hope that i can do my next meeting quickly. welcome to heritage. >> thanks. [applauding] >> thanks to sen. jim senator jim goodman, truly a great american, blessed to have him. cnbc. we have a distinguished panel.

essentially were going to try to talk about ideas to promote economic growth, the application of free-market principles. a lot of angles, of angles, subheadings. i would just say from my own standpoint domestically the greatest challenge to america in the next decade is to restore economic growth in the least that a minimal get us back to the post-world war ii tram line which is about three and half percent per year. as much as $4 trillion behind that. we create jobs. taxes, energy, taxes, energy, all deregulation including obama care. monitor policy by notice

sen. elizabeth. one of the cochairman of the sandinista wing of the democratic party has come out today in the newspapers against the trade promotion bills, but the european bill and the pacific bill which is perfect example of congress sending the wrong message and failing to understand what causes growth and what continues growth. so that is essentially what we are we're trying to do. now, to my left immediately is this carly farina, an old friend. by way of introduction before we came up and i agree i think the greatest part is she started as a secretary. ..

>> >> and finally here at

heritage also a dear friend of mine i will not say most notably by importing the from the "wall street journal" pumping about exactly the kind of stuff stuff, the benefits of free market economics and i can only assume a large percentage of congress has note reading skills because of the bad education background. and their failure to read "the wall street journal" editorials that steve more rotisserie would all be better if they had.

it will let each panel speaker five minutes then we will go back and forth. even where we disagree. on the matter of promoting economic growth, what would you say are the three most important ideas in your mind? to run the country? >> it is a pleasure to be with everyone here at heritage in my distinguished analyst. but we have to start with a recognition of the most important resources that we have. the only limit this resource

that we have is human potential. in this country became the greatest economy because we created the economic system that unblocks human potential. i started off as the secretary and one of the most important things that happened in my young life is when two men said we thank you have the of potential to do what we do. somebody took a chance on me. in interest every brigades someone to take that chance. we lifted people mostly women out of poverty and destitute circumstances with the starter loan of $150. we have lent $6 billion that

way and that demonstrates everyone has potential regardless of circumstances to live a life of dignity and purpose in meeting regards this because our founders knew that. it when they say "life, liberty, and the pursuit of happiness" they mean everyone to have the opportunity to use their god-given gifts to fulfill their potential every create a system were more things are possible for more people. we did that in large measure because small businesses thrived into entrepreneurship was valued. i started a nine person company. small-business not big business give two-thirds of americans there first job in an employee half the people and in opaque as seven times the rate of big business for

if we want to grow our economy we have to focus on the most important resource that we have. to recognize for the first time in u.s. history we are destroying more businesses than we are creating. big businesses doing great the stock market is doing great but small businesses are struggling they cannot handle the crushing load to what the government puts on it 40 years. but today we are wasting potential that burden rests most heavily on women and children with income inequality at the highest level for policies have been

in place 30 years. so i think to focus on economic growth and to have a chance not independence and entitlement.

>> >> what you see is americans think they don't have limitless possibilities anymore. they're children don't. we used to be a nation of

people thought i can do what i want. but we are losing at and it is tragic with economic consequences of people's lives and we're missing leadership that recognizes everyone does have potential or deserve a chance and we save lives with trading. we can solve every problem that we have to recognize the most important resource we have it is human potential. it is limitless. thank you so much. [applause] >> i am going to go out of order for one second. you have written a lot of good stuff on the decline of the americas start a parade

that quantitatively which is the most important form of job creation of start-ups what is going on? >> thanks to the heritage addition i appreciated. i think when high-school students 100 years from now garner about economics there will hear about john maynard keynes and art laugher absent a. and then to go into permanent decline. i read a lot about what is going on.

i use google and facebook did we're doing great. with web applications. looking at the numbers of a steady erosion of the startup the past 30 years. with big box retailing stores that is not so good for mom-and-pop but it is for consumers. they get paid higher wages in than people get less expensive goods. that could explain part of it. to see a decline not only of start-ups with the high-tech start-ups overall which was the fastest growing business consultants call a fast growing firm. that is worrisome because

not only do they create a lot of jobs but innovation whole over the past 20 years the start-ups have the important function with big companies. you can do two things you can try to innovate or weighty there is the third thing you can try to get a tax break or a regulation to get the advantage. but that decline is

extraordinarily important. we don't become like scandinavia but we are a social democracy with the huge wealth first-aid. >> welfare state. and our only edge is an entrepreneurial sector. if not for our innovations looking at the dynamism i hope that the congress looks at all policies. >> is there a single overriding wet blanket to prevent the start up? >> there is a lot of research.

for the older countries to be less to economic -- dynamic. as the heritage fund asian regional lot of work on taxes but we also have to remember a regulation. at this point to kill dynamism that anytime congress passes regulation the lens is does it make it harder to grow that business or give the edge to the incumbent? >> 70% of small-business owners described the federal

government as hot style to them. is there one single regulation? not that i am aware of so add that up as a heavy burden. >> i don't see a lot of specifics that the growth of the '80s and '90s with broadbased tax reform what are you thinking? which direction should we be going? >> the other 30 percent are selling to the federal government. [laughter]

but we have experience with the enormous reservoir data. over the last 75 years we have a huge base to look as success and failure but to have success you need a 5.program. o o rate broad based query replace all existing taxes to put them into the aisle will come back to that. spending restraint as milton friedman taught us government spending is taxation and the tooth fairy and a longer works at the treasury every dollar they spent the take from someone

else. , the flat tax and spending restraint nothing can bring in the economy to its knees than the unsound monetary system. when we came into office 1981 and the private interest-rate was 21.5% with double digit -- double digit inflation. there are some things we do better them foreigners some things they do better than us but they would be foolish it is called the gains from trade and i don't care what you call it but free trade is essential to economic growth. we all know we need

regulations but to create a system of regulation. the one should suggest she should wake up to decide which said the road you will drive on today. about if i can with that of a flat tax to mix a little politics and then a government should get the hell out of the way to let the private sector solve the problem. you should not pick winners or losers that is up the government's role. looking at the low rate broadbased flat tax. and he replaced all federal taxes.

with two flat rate taxes on personal and adjusted gross income and 12.8 percent flat tax on business net sales. but the flat rate tax across the board to you would match all revenue. with no laugher curve of fulham point mitt could you imagine what would happen if that is what we had? with a low rate broadbased flat tax? you would not have to pay taxes get rid of the irs. if you go your neighbor's lawn for $10 yes have to send it into 0.8% of that but just with the politics of it the closest we came i told you about jerry brown

he came in second and i will tell you we would have taken clinton out in the democratic primary. hakes said three weeks before the new york primary jerry brown announced he would have jesse jackson as a running mate and then it evaporated moments thereafter but jesse though he had the second most number of delegates in 1982 on the flat tax. the democrats. let me tell you with the '86 tax act. with marginal rates is that a big enough cut? just in case we mistake couple people we cut the corporate rate 46 percent down at 34%. do you follow me? we got rid of lot of

deductions and exclusions so it was revenue neutral we lower the highest corporate rate it replaced 14 tax brackets 15% and 20%. that's it. the bill passed. can you imagine that today? it was 97 / three. three democrats voted and then just leave me give right now. kennedy and bradley and dr. dr. ben and why did they vote? because they know it is right. if you read their press releases it is the

pro-growth agenda. it can be done and my motto is don't just stand there. un do something. get rid of the damaged. [laughter] and that should be the private agenda to run do stuff to let this wonderful country solve its own problems. >> why can't we get there now? >> we can. we will. we just won the elections and eject jimmy carter to get ronald reagan myth and you cannot imagine is that great president who will follow barack obama. [laughter] >> steve let's pick it up with tax reform. there are other issues.

it looks to me judging from the white house that president obama will come out against against the keystone xl pipeline in now to hear governor cuomo is against fracking on new york state with the recommendation of kennedy, jr. is said yoko ono has been his energy advisors. [laughter] people with long held experience in the energy field. so what will happen when obama finds the way? and what should republicans do about it? >> is the biggest dory but i just want to back up to get to your point of about 4% growth. how to make a bad, that

pass? we had that dropped the 80s and 90s and i would say that one of the contributions is that he is set up this interesting experiment about the two competing models we have been talking about the keynesian model of government spending and the reagan model to a lease the supply-side unisys the important point we have to hammer home it will never be learned by economics that the people are starting to understand. reagan came in with incredible crisis. but obamacare and entering great economic crisis no question. and as you know, they use diametrically opposite

approaches he deregulated the economy and those private businesses with the stimulus plan with the multiplier effect. he has thrown the keynesian playbook at it. but look at the records and this is what drives people on the left crazy. that in the five and a half years of the start of the reagan recovery u.s. economy grew at 4.1% and at exactly

2% under obama. that may not seem like a big difference but it is enormous because of the compound in fact,. so with that growth deficit is a huge mantra of pro-growth republicans to face the economic growth deficit and that is $2 trillion out. and with the first five and a half years under ronald reagan we had to a trillion dollars more gdp imagine how better of the american people would be. if you took that amount to a program to every family that is $15,000 more. and this came through loud and clear with the midterm elections. the american people are

angry and filled with anxiety with the middle-class increases so here is one other statistic. the average family in america the average middle-class family since the recovery began not the recession but the recovery has lost $1,600 in income. that is devastating. that is why americans don't believe the president when he says how great things are. but if we were sitting here seven years ago he and i told to america will go to the biggest economic boom and by the end of the decade the energy independent to see oil prices down at $52 a very with a guy was crazy

but just as recently as a few years ago to say america is running at of oil and gas. but the growth dividend is so enormous that they peddled the story is craziness. it comes hundreds of billions of stimulus into the economy when energy is cheaper. >> wait. i argue this i am told by the best portfolio managers and hedge fund managers who missed the five-year stock market rally they had a lot

of schwartzman they were covered yesterday as the dow went up 300 points but they tell me but it is bad because first of all, you can make any money. they can make any money. there over the average. the banks made leveraged loans to this is 20081 guy a accused me of not understanding that. to have a systematic baking / energy / junk-bond global default.

>> the good news we will be on tv a lot more. [laughter] >> i asked them if they drive cars do you see a lot of motorists weeping at the gas prices? [laughter] so i just want to ask that the hedge fund guys are not right? >> that is because it hurts the hedge fund like crazy life expectancy because it hurts the people at the role homes. teefor teefor

.. .. by the way they did it in texas. >> just to finish the point very quickly so