employ employed. it was a number made up probably by the president but certainly politicians to make them look good. the economy is not good. the economy is bad. we are sitting on a bubble. the banks have money. they gave it to you for nothing if you are rich. if you are not rich, which is when you need the money, they don't loan it to you. probably here you have great companies with good smaller companies and you cannot get the banks to give you money. the banks are controlled by the regulators. the system that this country is run under is out of control. and we are going to change it. we are going to bring back the jobs. we will bring back our companies. and you know i have had such a response and the reason i had the response is because of that and then i look at the ads today and i am in my hotel looking at the ads and cruz makes this up saying we will bring back jobs. he is using my same language.

here is the problem; they don't know where to begin. if they did lying ted. lying ted. liar. he comes up -- did you ever see a guy like this? ben carson, who endorsed me is a great guy, and lying head, he said ben has left the race. this was on election day. it is not like two days before or after. it is during the election he left the race. people believed him. and thousands of votes were cast not for ben but for ted cruz. it is pure deception and it is lying. there are many other things. during the debates, marco rubio looked over and said you are a liar and i said i never heard an another politician call him a liar so we call him ly'n ted.

i have met a lot of tough people but never anybody who lies as much as him. i have the tremendous evangelical support and such incredible support. he thought he was going to get the evangelicals but they don't like liars. he walks up and walks in with the bible held high. held high and then he starts to lie. he is bad. so anyway, i don't think that you are going to fall for that. i really don't think anybody can fall. heap he doesn't talk. i said ted, take it easy, just talk. we are doing really well. the whole thing is working out. i loved being here. i have been here for a long time

time. thank you. we are staying and i think we will do fox and friends tomorrow and some other shows. we want to bring this hope. we have a movement going on, folks. it is a movement of intelligence and common sense. we will not let carrier make air conditions, fire all of its people, and make air conditioners and come in and take the money out of the country. remember jeb bush he is not a conservative they would say. i am a conservative. but you know what? i believe in free trade. but when you have free trade you need smart people running your side of the free trade. if you don't have smart people, or if you have people like ted cruz that are totally controlled by the people that give him the money and controlled by the establishment.

look at the establishment. this guy didn't know what the word establishment but now they say trump is terrible he doesn't want my money. i have a friend who came into my office and wanted to give me millions and i said i don't want your money, i am self-funding. he wanted to support me. i said i don't want it. he was finally convinced he didn't want his money. and i said what are you going to do with the money and he said i am going to give it it another candidate. and i said why? he is like a gambler. he wants to give me probably close to $10 million. i would have had the greatest super pac in history if i had taken the money. my whole life, i said this before, my whole life as a business person is this. it is okay. there is nothing wrong where it. i keep taking. i take and take. but now i am going to take for

the united states and we will not be the stupid people anymore. we will not be the stupid people anymore. we cannot be. we can't be. with nato, when they don't pay, i said i was asked a question by wolf blitzer a fair question nato. i have been a world class business man. built a great company. i tell you that because that is the thinking we need in washington. we need sp of that thinking. wolf blitzer asked me let me ask you about nato. i haven't been asked about nato but i understand nato and understand common sense and i am a smart person like many of the people in this room, hopefully all of the people, but he asked me about nato and i said it is obsolete. guys that study nato, and good people, but they study nato and

said i don't believe it. they study it because they are so into it. it was really put there -- you had the soviet union and now you have russia which is different but russia is powerful so we can sort of say it is a balance but it doesn't really cover terrorism. many of the countries in there are not countries you associate with terrorism. so i said, number two, to the best of my knowledge the united states pays far too much. why are we always paying the bills to protect other people? the press the next day says trump doesn't want nato. i said we have to pay our bills and if they cannot pay the bills they have to go.

this isn't 68 years ago. this isn't when it was originally formed like many years ago. many decaddecades ago. it is interesting, some of the smartest people have said trump is genius. it is obsolete and that is true. we cannot give the free rides away anymore, folks. we need somebody with background. it is america first. north carolina is a problem. a problem can be solved by china easy but they don't want to solve it. they want to tweak it. they are building a massive military fort and they should not be doing that and taking on money and you talk about the imbalance of trade and the kind of money. how about this? we owe china $1.7 trillion.

they take our money, our jobs, and i love them. i am not angry at china. i am angry at our leaders for letting it happen. they take our jobs and take our money. they take everything. we owe them $1.7 trillion. that is a magic act. japan, they send cars by the millions coming off the boats. los angeles, i was there at the docks and look at the biggest ships you have seen. the cars are pouring off the ships. we owe them $1.5 trillion. it is like how does this happen? here is the story. we are going it change our thinking and be the smart people. we are going to be so smart and so sharp. [applause] >> so a lot of people don't know we protect japan. does anybody know? you might know this. we protect japan, germany and

south korea. when you want a television you get it from south korea. and big ships. these are monster economies and we protect them. they don't pay what they should be paying for not having to have this massive military apparatus that we supply. you know what? we get that because we have people that don't know what they are doing in washington for many years. i am not blaming. obama is the worst. the worst. i mean he just realized the iran deal is a bad deal. i said why didn't you listen to me two years ago? just two years ago. can you imagine? did you ever see a deal take so long? usually it is bad automatically when it takes that long. we protect japan. it comes out and they say what do you think of japan and i said i would have to tell japan and i

am talking about other nations because i have great friends from japan and south korea. we have to go talk to it. we love protecting you. we don't want them to arm necessarily but at some point how long are we going to do this? we have to say you have to help us out. we have this massive amount of money we have to get rid of because we are sitting on one of the worst bubbles you will see. we have to straighten it out. we are taking care of all of these countries. we go to japan and i am telling the people and they said that sounds good. you have to take care of us. they will probably say initially no. and then they leave and we will say yes. but if they don't you always have to be prepared. you cannot say the problem with the iran deal is secretary kerry was like an amateur. they call him amateur night. he refused to walk. they were laughing at him in the

streets of iran and claiming it was the best deal before it was made. they were saying this deal is unbelievable. they were laughing at the secretary of state of this country. they were laughing at the united states saying this deal is so great. and they are dancing. remember burning the flag and dancing? when they start dancing about a deal i am making and burning the american flag i'm out of there. he just kept going back. and i kept waiting. i wanted to call him. i wanted to call him. i wanted to say walk. every single think he would say we would like to get this. no. oh, okay. you got it. the persians are unbelievable negotiator. just yesterday president obama brought up he is unhappy. think of it. a $150 billion. it is the worst deal. we should have had the prisoners

back before we started negotiating, increase the sanctions. say you give your prisoners back or we are not starting. you leave and what happens? you double up the sanctions and within 24 hours they call you and say you have your prisoners. that could have been years ago. we have people that don't know what they are doing. here is the story. you need trump. you do. you need trump. we have to have trump. we do. i mean you have to have trump. it is sort of interesting because i see when i turn on the television. i see ads like crooked people. i see the ads and they are mostly right. some are right but they are negative. i am watching ad after ad in florida and they spent $38 million on negative ads and i won in a landslide. it is not much for the advertising community when thank

you they spent $38 million, a record number. in florida they spent thousands and thousands on nationwide ads. 55,000 negative ads made on me. most of it was made up. we have the club for growth. these are among the dumbest people you will meet. they come to my office and want me to give them a million. i said who are they? the club for growth whatever that means. they come and ask me for a million. i said no, thank you. that is it. they leave and then write me a later which i posted asking me for a million. i said nicely, i am not a bad person, no thank you. you know, you can be rich but you don't have to be stupid. why give them a million? what happens is all of a sudden they see their name all over the place and they talk about ridiculous things. it is the worst. one is a fraud lnt add because

it says if cruz and kasich got together and you add up their delegates and they show the graph going much higher than mine and it is much lower than mine. they are a fraud. what we did is tell them to stop that ad. that was a week ago. we pleaded about it. everybody is talking about it. where see it last night again. they are crooked. it is like a form of extortion. they come to your office, ask for a million, you don't get it and they go out and do negative ads. if these people are call it no trump. they call it never trump. oh, you need trump so badly, though. i was saying if they would have worked so hard and diligently against president obama they would have beaten him.

they would have had everything they wanted. i always say obama is the worst negotiator i have ever seen except with the republicans. he gets everything he wants. you look at the ominous budget and he got everything he wanted. fund obamacare, bring people in the country that should not be here. he is the worst negotiator worldwide. we have sergeant bergdahl. we get bergdahl -- a trader. and they get five of their most coveted killers that have been in jail for eight years at guantanamo bay -- which we are not closing down -- we get bergdahl, a trader who five or six people were killed going out

to try to get him back, he left. he is a trader. we get bergdahl and that is what we get. and they get five people that are right now back on the battlefield or soon to be back on the battlefield trying to kill everybody in sight including us. we have to stop it. so with japan, i said maybe we have to walk. had next day the headlines trump doesn't want to defend japan. trump wants japan to get their nukes. you have japan and they are very concerned with north korea. i like the way it is now but i want them to pay more money and they probably will but if they don't it is not so bad if they are at heads. maybe we are not supposed to get into that fight. that is a bad fight. maybe we are not supposed to, okay? same thing with south korea. every time he raises his head and starts talking.

every single time he raises his heads our ships start floating over and planes going over and we do exercises. what do we get out of n this? we have 28,000 soldiers on the line. i am talking as a person financially and militarily. we don't have a country that can do this anymore. saudi arabia, until the oil went down and they are still making a fortune, but saudi arabia was making a billion a day. if we were not there saudi arabia wouldn't be there. if they didn't have us protecting them for years they would have been long ago. somebody else would have it. maybe iraq. by the way, i was against going into iraq from the very beginning. from the very beginning. and i am going to build our military bigger and stronger

than ever before. hopefully we never have to use it. nobody is going to tell us what to do. our military is depleted. but if our politicians would have gone to the beach for the last number of years we would be much stronger in a sense because the middle east as a -- is a disaster. he was person of the year. i was supposed to be person of the year in "time" magazine. she beat me out and destroyed germany. that is not good. i wonder if "time" magazine had that one to do over what they would say. they have treated me nice. i have been on the cover a lot and the reason we are on the cover a lot is because we have a movement the likes of which people have never seen. here is the story. here is the story. you know, one of the great writers called me up and he said

what you have done is incredible and i said i have win. he said it makes no difference if you win or lose. it doesn't matter. what you did was down in the history books and you will be covered for all time. i said no, sir, i have to win because i will consider a tremendous waste of time and money. but a tremendous waste of time. here is the story. we will take care of your second amendment. it is being chipped and chipped and chipped. we will get rid of common core. we will bring education back locally. we will repeal and replace obamacare which is a total catastophe. we will save your medicare because we will make our country rich again, we will bring back our jobs and not let our jobs go, we will be able to afford it.

you have been paying into it for a long time and a lot of these guys want it knocked to hell. it is not going to happen. we will start winning again. we don't win anymore. we don't win with our military. we cannot beat isis. we will win. we will knock the hell out of isis. our vets are being treated worse than illegal immigrants. they are being treated so unfairly. they are great people. the vets have endorsed me unanimously. a lot of vets come up to me and say mr. trump, you have the only person that ever mentions the vets. hillary clinton recently said about the vets that they are being taken care of just fine.

i know the vets. nobody has spent more time with the vets that is running. i know the vets and we will take care of our vets. we are going to tear up and make great and lucrative christmas parade deals. we use political hacks who don't know what they are doing. they are dealing with the smartest people in china, japan and all over the world and our now negotiators are political hacks and we are not using them anymore. we are using the greatest business people in the country. they are endorsing me and i know the best ones from the not so great ones. we will have great trade deals. we will have a strong border. we will have a real border. we will have a wall, mexico is paying for it. we will have a wall.

and we will stop bad, bad things from happening in this country because if you look at what is going on and the tremendous crime and drugs pouring across the border. the drugs are pouring like water. new hampshire is a special place to me. they were the first i won. i won in a landslide and wasn't expected to learn it. they tell me mr. trump our biggest problem is heroin. and i say heroin? it doesn't make sense. it doesn't work. it is not working. but it was heroin. i said if i get in we will stop that problem. i said where does it come from and he said the southern border. they come right in. new hampshire rated it their number one problem. and many other communities, including you, have this

problem. we will stop it cold. we will stop it coldism -- cold. the bottom line is this. we have a big day. this is one of -- i love the people. they say donald trump can do almost anything. in fact, one person today said anything. they interviewed a woman sitting in a hotel room, not the most beautiful room i have been in, but it was clean. they were sitting there and said to a wonderful woman, probably 55 years old and her friends were there, and they said what would it take to get you to vote for somebody other than donald trump. she said don't play that game.

there is nothing he can do that would get me to vote against him. i wish i could find out who she is. but we have so many people like that. we are all like that. a big chunk of the country is like that. we are tired of seeing what is happening to our great country. you will go home and remember this. you will be so proud of your president. but forget that. you will be so proud of this country again. and you will remember the evening because we will start winning again. we will win on trade. we will win with our military and knock out isis. we will win. we are going to win with the milita military. we will win for our vets because our vets have been treated too

badly. we will win at the border. we will win with education. we will win at every singleal element of what we are doing. and everything single thing we will win, win, win. and you will say that was the single greatest vote that i have ever cast. you will look back and you will be proud of yourself and you will be proud of your country again. so thank you very much, everybody. this is a great, great honor. thank you. get out and vote. i love you all. thank you. thank you very much.

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>> what do you do for a living? >> what is your company? we changed our name and a few years ago. >> how long did you did in the business? >> my a father and mother started in an the hometown we just celebrated our 50th anniversary.

>> company customers? >> 47,000 commercial and residential customers in the two county area. in ohio. >> host: how has summoned the issues that you deal with change over the last 20 years? >> guest: oh my gosh. it is hard to know where to start the biggest change in the last 20 years is the addition of fraud and. still looking at a broad band company rather than and tv but most of the industry with member companies more broadband they and tv customers. >> host: with that said deal have cable-tv options? >> yes. full function internet tv felled home security.

we have a very fiber rich design. reoffered dedicated cyberservice to larger commercial customers full service on television with a home gateway with video-on-demand. local advertising. we do everything though large companies do but better. [laughter] >> host: deface the same regulatory issues as comcast >> yes technically. there are some exceptions that were created over time i would like to think we don't face the same scrutiny because we bind our peace and cues and take care of our customer. >> is a profitable?

>> absolutely. is cable-tv? >> i don't know the television element standing on his old is highly profitable but that content class is incredibly high for example, basic cable-tv service cost $85 that is before the set top box but our cost is more than $50. that is a pretty small portion that has to pay for electricity or trucks benefits or wages so far was tried to operate 45,000 cable tv systems it would be

hard to do with just cable television service. >> host: you were quoted did a article saying television presenter is the internet is the future. >> absolutely. we're making plans now to build up the overlay over the entire system. but that is really where the future lies of the television ecosystem that seems so badly broken in a distorted it is of the auto pilot course tb of affordable by the consumers. what does that mean? the crisis of affordability

has to be nationwide. because it is a little more expensive to provide the service if you prove yourself to dallas it could be 45,000 compared to 55,000 it is more difficult in smaller communities to afford cable television. we have to solve it consumers will do it themselves. they will stop subscribing to the expensive satellite delivered programs to rely on a combination and a bundle and what the water from the internet. >> host: talk about your cost. what makes up that cost?

and it is of mixed. is $65 per month that is the competition -- a combination as well as satellite networks. the broadcast television is a smaller dollar amount growing the fastest because they started at the lowest on a parabolic curve going upward. >> the toughest element you deal with is sports with the three regional sports networks and in short order they will be $10 per customer per month. that is the largest cost. >> host: what is that to the ohio state proximity? >> i guess with the rates

probably 35 percent but the indians have the channel, the cavaliers, . >> they're all owed by fox are the most problematic their expensive but come together as one company. >> your also with us preference see that aca. the american cable association. what did you just hear it in the conversation? >> it is a typical story 800 members serving seven and a half million customers with the 800 billion companies to have 1,000 customers or fewer. they have 5,000 or fewer animated at the traditional cable operators with

kissable providers those originally telephone company providers so to provided various communication in smaller markets all across the country why we come to washington to tell our story and why we have to do we get 23 years. >> day you face the same issues with the american cable association? >> we do. >> do you agree on the same issues? to read there is redo work closely and his family has been involved for many years. we added companies that founded cairo -- -- out of the necessity in we are very invested in the cable industry. what we have learned is that washington operates on the one-size-fits-all basis.

but in our smaller markets there is a difference because it involves communities and others to get 20 homes per mile. not customers then you could be down a 15th or 12th or tenth where it cost the state ought to provide this service so very much smaller area with a logger rate of return. we believe regulation provide disproportionately to our members in what is at stake is the broad base and future what we hear a summit 23 to tell that story. >> one of the issues discussed this giddy bundle all cart -- a la cart. >> are you in favor?

>> absolutely. but my belief is those content companies that have eight different channels space evident difficult time to break up their own bundle. and elsie why we cannot have a process if the consumer wants one or more of the turner channels they have to buy all of them. the same with viacom and disney. >> host: if they did not want sports channels? with that go down? >> it is very complicated most think i have 80 channels the cost $80 and must me $1 channel obviously

that will not work but what complicates it is the requirements established by the programming networks that don't allow less that with all of their networks to be most of the most widely distributed level of service. so what we end up with is the bundle that everybody has to take and as an operator our blood to aggregate that to sell that to people as they wish. of course, most consumers don't recognize if that happens it will skyrocket because those companies have to meet their targets for revenue where they can pay for the content. everybody uses espn as an

example is a fixed dollar per month customer if it was available a la cart and half the people took it would be $12 a month, one quarter of the people would be $24 a month that is the way it would work then you throw in the problem of advertising revenue fewer potential eyeballs means higher rates and more expensive. >> host: what is the position on bundling? >> choice is important consumers want choice we see that today there using their eye frozen their cell phones and the tablets in laptops they are enjoying choice and say can you give us more on cable television? the desire of consumers will move towards greater choice maybe even in a la cart because consumers will demand it.

so they will make us think what the sec has noticed with programming issues it is vitally important to us because the sec is asking questions how are they bundled? how can independent programmers have more of an impact despite the big bundles? >> should have said this up front with consumer choice and the request to purchase what you want and pay for what you have is of number one consumer content or question. then i cannot afford to pay this much i don't watch most

of these channels why can't i buy what i want to pay for what i want to take the rest away from me? and those who are concerned we would be fine to deliver that. but we cannot do that because of the our restrictive contracts required by the content provider. >> if they said no to that espn then some of the big guys can so i will say goodbye to those 40,000 customers and not worry. >> there are cases already over the past couple of years numbers have dropped popular bundles of programming. they have done well they didn't have the subscriber lost you would think because consumers get it. that right now because of

these restrictions they have to buy a big bundle of programming at an increasing rate. to a smaller bundles with smaller flexibility that is why they tried to launch skiddy bundles but at the same time it is the largest content programming companies that are fighting that opportunity that the members are trying to give consumers. but it comes back of what we're trying to do to give customers what they want. they have enjoyed the bundle and many are part of the large conglomerates we have always wanted to give customers what they want. to bid for too expensive and we want choice.

>> host: we talked about a set top box is a couple months ago on this program and he said his members would love to get rid of their set top box. it is the big frustration do you agree with that? >> yes. there is a great deal of discussion recently because of the fcc proceeding. ad is starts with the basic misunderstanding what is included it is unjust to hundred $50 minicomputer but there is a data costs and a user interface and then comes the service element. a call center to explain how to use your remote control. to plug it into the wall or

putting in batteries that had set so fast. after five or six years you will replace the box. that set top box charges now cover the cost of the box but it isn't highly profitable parts of the business it is very complex. consumers still want to learn how to use the equipment so they call us we have a constant turn of the calls to support that. there is easy consumer interface through tablets or computer that they like and enjoy coming great. we don't need to keep making the millions of dollars of capital investment of equipment every year. >> host: with their recent vote the fcc said it is to increase competition. >> we are in complete

agreement of the set top manufacturer saying it is up problem in search of a solution. [laughter] i'd been a solution in search of a problem. to the chairman has talked about this rule to a mock the box but is our view to open the pandora's box because it is so vague to create a standard that is yet to be determined about what gateway device what do types of technological mandates are imposed? that we have no weighty and the capital cost that will take away by the end investment that that sec erotically said it is one of the most important things they want them to do. we don't believe it is sensible rule making and

frankly looking at the impact once again to have that disproportionate impact and said this is not a good idea at. >> host: why can somebody have that the app? >> door around the corner here they have a nice exhibit of four or five different commercially available set top box that run app apple tv, game consoles, a smart tv, comcast all of those represent a new way of watching television on and connected devices. but there isn't a government mandated standard of which to do that. but there was a that and

tall last year rencontre said do away with that it isn't working. but to be a continuation of an effort to of the technology platform. >> rather they and unlocking the box we agreed that consumers say they don't even want a box. they are providing choice through the competitive set top boxes are your choices about which to purchase and then coming back to the customer with that relationship and how can we provide that? if this rulemaking does go forward we will spend years years, hundreds of millions of dollars m budget cable invest with the old regime where congress two years ago

said get rid of it? because it has not created a competitive market. we would be where we were a couple of years ago. congress said get rid of it. if you want to do a study going forward is fine but it did not say to start new rulemaking. even so we have come to the commission to have said we have other proposals we would like you to consider in addition but that is not part of the rulemaking but the one in the standards to improve hundreds of millions of dollars and three think it is time for chairman wheeler to raise those issues that we have brought together where he said i hope i can have the industry

collaboration. we are here to collaborate. >> host: hoosier competition and? >> today in the television market is directv, additional work, a little bit of time order. as well as at&t it a fairly large portion. we have a century linking and frontier as internet and phone competitors. we have some those to pipe bin as well. >> what about netflix? is that considered competition? >> no. complementary. i am a broad band company. i want to make a great product that consumers know they can acquire burger tried to make a careful

distinction between television and video a linear television network that they have not traditionally but then there is video a more robust than dynamic concept. i want consumers to know that my broad band is the best network on which they can but if i hear a live broadcast tv then more power to her. we would love to work with or to other consumer advice and so we can attract their attention. >> for all of those companies regulated the same fashion? >> talking about video or broadband the sec open in

the internet order on member companies those who have their own desire we are connected to provide broad been paid to do it again it is like a utility. talk about those that are across the country today watching service not because they were told to but they appointed to. so yes talking about broad patent and fighting for the future. >> those companies. which like crumb cast your netflix our infrastructure

competitors are competitors. if i have a grave concern about the internet that the network mutually and does not address the entire network but many consumers have been fooled into thinking that network neutrality applies to the old network and it does not. think about the internet there are two gates. i am one of them as the isp. people come to me to reach the internet at the other end is another gate that lets content onto the internet that gateway is control the virtuous providers didn't people like netflix and viacom and cbs, google and so forth.

my gait is regulated by network neutrality it is totally unregulated their streak to block or throttle for paid prior to a position. it is a tilted playing field so they will start to have cable is asian and the internet by "the new york times" reporter when they come to the highest peak to demand payment otherwise content is unavailable. >> host: that has already happened? >> in exchange for cash and as leverage in negotiations and i am just afraid when a big provider gets a hold of that content like facebook they can add dollars of cost

to every single internet subscriber that they have no control and that means they have no interest. >> host: we have talked about the issues you face with the sec in washington but what about the state of ohio? >> we have to a dozen local franchises. no problem real local 165 local employees my family has been involved when hundred -- 75 years we don't have any issues really. in the state of ohio it is only a handful but the state of ohio is ever franchising authority, because of abundance of competition

with the dishes and at&t covering the whole state day assume that competition will dictate the winners a and losers so they'll feel the need to be intimately involved on day-to-day basis but the selection of the programming services. >> what is another issue? >> free transmission consent. we have talked about this many times and in return for allowing us as cable operators to carry the broadcast signal. it has been around since 1982 increasingly hard consumers.

with broadcasters blacked out the signal because they cannot reach an agreement with a historic amount of blackouts. of the sec to its credit has undertaken greater balance so that consumers are not harmed by reach transmission consent to blackouts. we expect to see on line blocking as a result in could naipaul a signal before the marquee event like the super bowl or march badness. and to get consumers out of the middle of the negotiation. that is a big one we have talked about when they get the problem fix.

>> we have absolutely no leverage when it comes to broadcast television network a good friend of mine says he pretended to negotiate. but essentially they say take-it-or-leave-it. >> not because of a cost for negotiation and to wake up budget refers to and then to negotiate with another station those created by the broadcast. >> dc a day when it is simply the i sp? >> our third generation of leadership is installed now

my daughter joined as a couple years ago. that is a problem she will have to deal with but not in my tenure or my lifetime. >> host: from cable communications president and from the american cable association. this is "the communicators".

[inaudible conversations] good afternoon. and the vice president for defense and foreign policy studies here at the cato institute. a special shot up to the conference department for

their hard work to make our even such a great success. since 2001 and the united states has restructured more than two counterterrorism organizations with the application it has made tried to commit terrorism within the country. central to this enterprise are the efforts of police and intelligence agencies to follow-up on 10 million tips that lead nowhere. to answer a few simple and asked questions is it worth the effort with the danger that terrorism presents?

because we have it for sale it is priced to sell here at the cato institute $18 and i am quite certain on top of that the authors have assured we they will sign up for you. if you are watching on line at home you'll wish you were here but the rest assured you can find the book and other fine retail establishments on light. we have a senior research scientist and also my senior fellow here. i will mention only a few.

with more and ideas with public opinion the remnants of four and terror in security and monday a member of the academy of arts and sciences and as a professor of civil engineering and also a fellow and has also written more than 300 technical papers and reports of his career the current work focuses on the risk of aviation security of five universities in austria for a the commonwealth with the

fund a project and climate adaptation injured during. with that eyeleted over to my colleague. >> it isn't totally uncommon to co-author with engineers. to be overblown managed to get on the john stewart show and they're actually visiting ohio state at that time to say i with levitt -- i am looking along that line and. as we start talking about a the break even analysis.

dealing with terrorism is so simply to say the probability of a terrorist attack but how many would a security measure half to justify the expense? that is the cost benefit analysis. so then we embarked on a career and dozens of all beds. -- opinion editorials and it has been a very productive education. we published our first book together mostly the

protection end of the infrastructure to protect office buildings and a terrorist attack does not make sense unless it is a thousand times higher the current book for terrorism between in the two to take a 80 year descent of expenditures with domestic, is security. i will talk about that to put it into context says chris pointed out there has been a prodigious increase of policing since mid 11. the fbi counterterrorism budget went from 1 billion

and 3 billion and is continuing there was the effort overall to fight terrorist after 9/11 the thought is you must be everywhere in be sophisticated so the intelligence people were telling reporters between two and 5,000 al qaeda operatives and then to look back at that the total number was closer to three or seven also very impressive under the direction under the director of the fbi at that time the order without to follow every lead that came in.

but our calculations are the fbi has followed up over 10 billion leads since 9/11 in 1,000 have been productive. but it is pretty trivial. just recently they said they're not taken:dash chasing 5,000 threats but 10,000 threats a day. so there chasing down 20 million leads so it is a prodigious amount of effort and the question is, is it worth it? the idea of going after every tip and be very effective? what we try to do is assess

how bad the terrorism threat is. what is the likelihood they could create? the breakeven analysis suggest to be justified to deter one quite large attacks like boston marathon every two months. and then to do in a number of attacks. and then to go through what terrorism has been in the united states.

with that what is taking place since then 113 people per year. to be hit by lightning is like 10 times higher. but the attack would have happened so to see this at various levels and to be caught in various plots over the period. well into a hundred pages with the case study of honor students in each of these cases of 60 or 70 and to

perpetrate them. and to be fairly an impressive. and what is put into a forest and then to be disrupted by a inserting an informant in to the plot itself and not just looking but pretends to be a fellow terrorists. but in baltimore a few years ago to say to be a jihadist. it isn't at all unusual and

got three responses. first told him to stuff it and then to argue out and said i need some help and i need some help setting it off. in that is very typical not so much they are working on innocents but those who are predisposed to do something. but they seem to be amazingly incompetent and consequently the idea they could get together is questionable. saw another one wedding get around to doing much of anything.

so if you look at these cases there are some better pretty scary but it is questionable. in you would have one every two months. we can say about all the plots we have disrupted there are a bunch. but we disrupted in a different way that we cannot talk about. i have two quotations. one is from marco is dead in the middle of this for many years writing books and said as a member of the intelligence community who was kept abreast of all plots in the united states i

a bus to any significant lots that had been distracted and not disclosed on the contrary the government is out of its way to take credit for the non plot such as a state operations. else the checked with the deputy national intelligence officer at the cia. and i asked about the report said were undisclosed i am on c-span but his response was three words, six words to words repeated three times. it started with s and end with s. [laughter] and so in other words, there are people who would talk the talk but but pataki

is kind of danger is sounding. but you cannot get them ended bb cases they were disrupted and that was at a performance last night the phrase about thought crimes. about possibly committing a crime. oh and then they are prosecuted if eight can be put in jail for.

bid is almost impossible without lying. if you are an american citizen to be legitimately in jail to run drugs in the past. of bunch of these plots but they're more embryonic. if they were less they would have been tried directly but they have not been. of those policing agencies have gone full bore. the next case is about deterring attacks with the security apparatus it has

deterred them from attacking because it seems to be very difficult. as that is here much the case there are certain targets for example, tried to hijack an airliner is incredibly difficult. the chance to be successful under 1%. and those that is probably off-limits and many want to attack the military bases and will these were the chief thing that causes them to radicalize but that's fat

-- caliphate to do sharia law. you may remember the boston marathon bomber who hid in the boat to rating and a manifesto. it is typical with this kind of verbiage coming from a would-be terrorist. the u.s. government is killing our innocent civilians as a muslim i cannot stand to seek such evil go unpunished. you hurt one of us you hurt us all. we are beginning to rise up. basically in the middle east. so they tend to focus with

those recruiting stations. if to ba dedicated jihadist. i cannot take down the airliner. it is hard to see why. if they don't get their gold standard but they should keep doing this is questionable. that deterrence is effective. finally there is the notion we have only cop the stupid terrorist and the smart ones are still out there then why

don't they do something? the law under the weight so the idea only the smart ones are out there suggested they were smart to reduce something but they haven't. so that overall the fact is the amount of threat disclosed and undisclosed is limited. end to come back to this later to look at those trends they are just about all flat do you feel there have been other terrorist attacks you feel more or less safe?

they bounce around but are flat to all the way through because you think there would be some erosion over this period of time. and this is before her isis. osama bin london has been captured but the conclusion is serious but the final one he said chile is one of the problems this kind of terrorism that there is no center to it. some fears about the domestic communist even

though very little happened to be concerned about them and the other comparison is the witch hunts in europe and at what it will dash at one time that they were among us so tens of thousands of witches were executed in europe. but it took to madrid years of that is a gloomy conclusion. thanks for your attention. [applause]

>> thanks for inviting us here today. as mentioned diamond in junior i am very comfortable in to me to talk about risk that we quantify the risk and that is a more rational basis for decision making. so we have this compromise. [laughter] . .

low because the threat is quite low. that is true as well. and then you can look at this data in more detail. but they start to give you insights. it no one seems to want to know. it's acceptable. driving is how a lot more dangerous. a bit more risk. trying to say, ten times a risk. so as a threat to human life terrorism at its current levels in the west is an acceptable level. something that we can tolerate.

does it have the same social and economic impact is one gets from terrorism. it is how to compare. so this is where the cost benefit analysis really comes in, the next up. so i 1st bit of analysis, the cost against the benefit. live saver damage is averted. and this is where we come. so the benefit is the probability that attack would be successful that is existing risk. how many deaths to expect per year on dollars in damages we could expect per

year. if you have to spend some money you would expect it. 1 percent, 5 percent. and some compare one against the other. this equation can be expanded in much more detail. these are the three main parameters you need to be asking yourself. so let's look. we will run through a fairly simple example. this can be very revealing. the fbi and counterterrorism, the highest priority. the budgets of gone up. andand this is just the budget devoted to domestic counterterrorism. it has gone up by a factor of five. so is nothing magic.

so risk reduction. effective. responsible for most plus being foiled. a very effective organization. very professional, well organized organization. there has been a lot of tipoff from the public as well. so let's assume nine out of ten plots have been deterred comeau foiled comeau disrupted by the fbi. 90 percent while bit high, below. now, there are some benefits other than just stopping the attack. identification, like with the boston marathon bombings

, 445 days risk-averse behavior. shut down. washington at the time, people who were afraid. careful where they went. and so that's a very strong cold benefit. that really minimizes command in the process they might find other types of crimes. so that helps. man opportunity costs. the fbi had the surge capacity in terms of counterterrorism. maybe they are not providing the same amount of resources that they used to provide an organized crime.

that could be an opportunity cost. other criminal activities. just making us whether can be co- benefits and opportunity costs. so we do breakeven. how high does the probability have to be? so we have our equations before. the losses could be between hundred and $500. risk reduction is 90 percent how high does that have to be? it is a fairlya fairly simple equation. and that gives us a table of breakeven probabilities. then the left-hand side we see different risk reductions. so the boston bombing, the

losses sustained were about 500 million. 200 million. you start to get into trillions of dollars. so this is a table comeau what you think the most likely type of attack would be. so we think a typical threat be something like the boston bombing. as he said, the breakeven analysis, 6.5 or 6.7 every year. that is not one every two months. that is a pretty high attack frequency. more concerned about the london bombing, two of these type of attacks every three years. we would suspect we don't think the threat probability

is that high. most in the us and australia , very little loss of life in damages. so we could argue then it might not be cost-effective. that doesn't mean you should spend nothing. just at that level might not be the most optimal. so they are likely to be worthwhile. so what we also says the detailed cost-benefit analysis, double expenses, that is probably about the level that is about right. it is the return. the total expenditure is

115 billion per year. that is just domestic counterterrorism. fbi takes up about 3 percent. probably the most effective they are going to get. something a lot more to be concerned about. to give you a nice example, full body scanners at airports in the federal air marshal airports because more than $2 billion per year. the risk reduction is one to 2 percent. very specific threat. so the fbi is clearly preferable. now, weand a lot of work on aviation security, and if we are looking at the threat of hijacking or ied, then all

the existing layers of security reduce the risk by 99.5 percent. the question becomes how close to want to get and how much are we willing to pay for it? so we have a table here. but the federal air marshals service, to the 4,000 and marshals. in the us they fly on the more than 5 percent of flights. they'rethey are not going to hope against an improvised explosive device. the risk reduction is 1 percent, probably less. every dollar the government spends there getting $0.10 investment which is a very poor return. compare those to the other security measures on the flight deck offer every

dollar you spend the attendant benefit. so the benefit to cost ratio is ten. the air marshal service is just not cost-effective. the lowest risk reduction at the highest cost. it doesn't seem to pay for itself. something that we are looking at at the moment where there is screening for passengers were seen as low risk so that people can travel through the screening checkpoint much quicker. saves at least a hundred million per year. the risk reduction, very small change in risk plus passengers are much more happier. and so that is something you

can lower cost. finally, what happens in the us and australia is much different. a couple of teenagers wanted to find a kangaroo or capture kangaroo comput an explosive in his pouch compact the kangaroo black and then let it loose amongst the public. the us is not alone. thank you very much. [applause] >> yes, it is a good thing we don't have kangaroos. thank you.you. it is my pleasure to introduced are distinct commentator today.

professor at the georgetown university law center where she teaches courses on international law and also writes a weekly column and serves as a senior fellow at the new america foundation. return to georgetown in july 2,011 after leave of absence during her time she founded the office will law and let a majora major overhaul of dod strategic communication and information communication efforts. just a few things, faculty director of the human rights institute, special counsel of the president and associate professor of the university of virginia school of law where she taught human rights law

constitutional law and criminal justice. >> thanks. and it is great to be here. this is a fantastic book. it is about that i know i have been wanting for some time because these are little cost-benefit calculations i have tried to make myself and i'm not particularly good with numbers. i always fear i am making some embarrassing mathematical mistakes. i recommend this book, full of useful detail in numbers and i know i will be referring to many times in the future. you know, the whole thing reminds me of the old joke, there are many variants my guys walking down the street in new york city and has a stick and is banging it

rhythmically. finally another guy comes up and says were you doing in the gases can i do this to deploy the tigers. the gases, there are no tigers in new york city twice the guy says, see, it works. it is obviously very apropos this massive counterterrorism apparatus in which the answer about the vast amounts of money getting sucked in, you raise the question and say, is this worth it? the answer is, well,is, well, you know, we are preventing all these terrorist attacks. but i haven't been in a. and it is very hard to challenge that.

because that assertion is usually couple with regrettably i can't share the evidence with you because it is classified. you're just going to have to trust me that the collective several million people who are living by being part of this machine, you have to trust that if we weren't here there would be an attack more or less every day. and it is amazing. i'm going to come back to a couple of minutes. the book itself, you have gotten a flavor for the kinds of things discussed. one of the things that mark and john have done, preparing this to the wedge scare in europe is really in some ways giving us a good analogy for thinking about what this really is.

they painstakingly go through their own cost-benefit analysis include that we are spending a vast amount of money with very little to show for it, and this is money that has opportunity cost. they don't even really going to the question of the ways in which some activities may be increasing very threats that we think we're trying to respond to comeau whole other can of warrants. at a minimum it is impossible to read this book and mcavoy thinking, this is crazy. we are doing all these irrational things, not unlike the europeans in the 17th century who were thoroughly convinced. the smoke out the real witches were having orgies with the devil and turning people in the cats dogs and making the crossrail.

burning these people at the stake was not going to accomplish anything. but us posts september 11 counterterrorism strategy, in many ways has absolutely nothing to do with what we want to call reality and much more to do with ritual thinking. there are all kinds of things that we cannot control. we get scared about the economy,other kids will do well in school, better health and just as seeking out and destroying which is becomes a way to take all these anxieties and put them

on something for terrorism for modern america has become very similar. there's almost no relation to the stated end and becomes a substitute for doing anything particularly useful for having to think about the harder more frightening issue that we might be able to do something about if we put our mind to. i think the biggest challenge, and my suggestion that this is better viewed through an anthropological frame perhaps leads to this question. when i say this is better viewed anthropologically, i

don't know if this is the wrong approach. if we wish to sustain belief as a political community that doesn't just favor magical thinking so we have to engage in this kind of analysis and do it courageously. we still live in a culture in which if you write a book like this you expose yourself to people saying, you don't care. youyou evil person. how will you feel when your family is killed. and you know you will get that. that is wildly unfair just

as it would for someone to say, it's good that the number of people killed in car crashes is gone down. there is a limit to how much money i can spend on making cars safer. we always making hard choices and want to be the kind of society and our government to be the kind of government, individuals can be risk-averse. we want the government to make sensible decisions and not panic but we are not rational by and large most of us. we are just not. this is in some ways, an anthropological case study in how hundreds of thousands of very intelligent people, millions of extremely

intelligent, thoughtful people have managed to convince themselves that it makes sense to dedicate their working lives to an enterprise that is fundamentally flawed, absolute waste of money because we are not in fact rational people. so this is the challenge, i think. you wonder what the purpose of these federal agencies are. you can say, the purpose is protecting both themselves and the american public from the devastating threat of information that might actually change our minds are policies. send them off at all cost and live in a society that we know is like that. humans in general are horrible and risk analysis to start with. we panic about peanut allergy. the panic about threat of child abduction, overreact, say no peanuts at any

school. we keep our children home, don't let them go to the park despite the fact that that exposes them to other risk. you know, there are all kinds of things that we think about the don't bear any particular relationship to the actual risks out there, foregone benefit only choose to adopt posture of extreme risk-averse and live in a world in which america has become more politically fragmented into smaller and smaller sub audiences each with their own favorite radio show in tv news source and internet source was permits us to screen out conflicting information that does not happen to conform with our preferred way of thinking about the world. it has gotten tougher and tougher to find ways to speak to americans generally , it's less to find

ways to get them to listen seriously to things that might change their mind about deeply held belief systems that have the status of belief system, religious belief systems much more than they have a status of beliefs that have been developed through some empirical assessment of the world around us. so my fear looking at this fantastic book is that i am going to read it, i hope some of you will come and say, yes, this is right, completely persuasive. we are wasting several trillion dollars. there are sensible things that we can do to reasonably reduce the risk of terrorism , but we have gone overboard by a factor of a couple thousand. and despite the fact that we are going to come to the conclusion, most people won't and that if we walk around saying to friends and family and cousins and aunts

and uncles and your congressman that they will go back to where i started. yes, but you have no idea how much worse things might be because of all of this. it is true there are no tigers. it is because it is working. not only that, you are obviously a terrible person. in putting your head out of the sand and are coward. natalie breakthrough that? that is the biggest challenge of all. the book does not really focus on that. i think that the broader challenge is this is not dissimilar to let's say we discovered that a commonly taken vitamin supplement is in fact terribly dangerous but it isis beloved in

common. how do you convince people not to do it? you know, the only thing that gives me some hope obviously is that political moods do change over time. they seem to get worse and then better. when i think back to europe in the late 1970s and early '80s a this comes through little bit, that was the period in which the annual death from terrorism in western europe were three or four times higher than now and it wasn't because of islamic extremist terror groups that the ira, massive separatists, antifascist terror groups, you name it. they collectively managed to doing enormous amount of damage and yet europe did not fall apart, did not come apart at the seams. my sense was the degree of public panic was much lower than it is now. that suggests it is not

impossible take it much more in stride. we all have to let it turns inside out. i think the challenge is how we breakthrough our collective resistance to taking on new information that will challenge the belief system that really has turned in to a full-fledged bubblelike belief system command how do we take new information and get through the bubble in a way that will lead to political change i'm going to end with the question. again, it is a terrific book and an honor and privilege to be here to talk about it.

>> thank you. i'm going to briefly exercise my prerogative. in terms of how you respond to the stars that you don't care what i like is that individuals can be risk-averse. they can choose not to undertake certain risky behaviors, but governments should be risk neutral. and this is so important because when the government is seen to be dedicating resources that are vastly out of proportion to the dangers that they are fixing , then caring about one thing implies not caring about other things that are more likely to result in premature deaths. to me this book does address that you don't care in that

way. >> maybe we should say don't you see that if only we take more money we could put it on new addressing peanut allergies. >> okay. please wait for microphone. especially out of courtesy to the speakers appear on the stage by your fellow attendees, limit yourself to an actual question. the speeches. right there in the back. >> hello. olivier you lewis and i am visiting researcher at

georgetown. i have a question about talking about money for these issues. how much can we link effectiveness of the budget because i think that is what is being insinuated here. going to the reform of homeland security or the intelligence community that was related to the budget but more organizational issues. if terrorism or to increase or include gun violence or your argument be we should increase the budget? and more fundamentally how easy is it to quantify some of the things you're talking about on the cost and the benefit and on the other side in terms of waiting. >> okay. thank you.

>> the issue is a very good one. what do other countries do? the uk is a higher threat, they spend about per capita or gdp basis and get they seem to be just as effective. australia and canada probably spend about a quarter of the portion of gdp per capita. it seems to do a fairly fine job as well. so part of it is the united states seems to be fairly certain. in terms of how we quantify the cost benefits that's going to be a challenge.

you need 20 phd topics to solve this. he can do a fairly straightforward type of estimation. within ten a 20 percent. we need to spend a lot more resources. we do include the value of life. and that number varies a lot we use 7.5 million based on the dhs report. the most of the losses from terrorism is obviously extremely tragic. in terms of cost benefit analysis most is the indirect loss.

decide not to travel. that affects the terrorism industry, loss of business. and there's a lot of affects on that. it is probably the indirect loss dominating. so the number of casualties is not that important. it is important. people decide not to travel will lose confidence in the stock market and so on.

>> three kinds of costs to a terrorist attack. what is the direct cost. another's property damage. so those of the direct costs and then there is indirect cost. just mentioned the collapse of the stock market are not traveling. but it tends to vary a lot. although much of studies. and they come out with maybe a hundred billion to $200 billion and in this case the indirect cost for the secondary cost, economic cost is higher in that case in the direct cost. there are other terrorism events, the fort hood shootings, basically really not much in the way of indirect cost. but there weren't people avoiding going to fort hood or taxes.

the indirect costs are quite limited. there is a 3rd kind of cost, the direct and indirect cost. third cost might be called reaction cost. we don't deal with those, but they can sometimes be astronomical. multitrillion dollar set of wars in the middle east. but in any kind of analysis you have to do it. life is not infinitely valuable. a finite amount of funds. if you think life is infinitely valuable you will be very much in favor of the following provision for changing the law. that modest proposal would say something like 30,000 lives every year.

if you don't think it's a good idea it means you're willing to spend -- have 30,000 americans die every year from this particular hazard. he simply can't avoid the problem. >> right there. >> a question about what recently happened in france in brussels. both governments we found out i spending a lot less gdp and security, are they making a mistake, reacting to these events and secondly , the us is the house on the block that has the big dog in the windows and therefore they are going to places that are easier to access such as france in brussels? >> am not sure. but one of the problems has been like a please

coordination. that may cost more money. so i don't know what the numbers are going to be. as terrible as they work. clearly the reports coming out of brussels, they did a rather poor job. >> right there. >> just myself. spent my career insecurity and counterintelligence. hermione of the battles we had during the '90s. risk avoidance san

bernardino, acceptable to the american politicians and public. >> the answer is none. >> they overreact. it's not clear that a lot of heads would roll. one thing politicians should be saying is bad things happen. and if we keep them well enough we are in pretty good shape. they should also be saying things like your chance of being killed is one in a million per year. >> trying to manage expectations. the police department does not say. we expect that they can

happen. the public seems to accept that that is a fact of life. >> okay. >> my question is whether it is more who attack terrorists, nowadays we have so much high-tech, i wonder if life can be designed to stop hijacking computerized.

>> well, anything like that should be subject to the same sort of cost-benefit analysis. the risk is already extremely low. whether you want to spend money making it lower is something you want to consider. clearly risk reduction measures are basically desirable. but the whole idea of acceptable risk is simply not there. i would ask several people in the aviation industry and aviation security administration, how much risk is acceptable? if your chance of getting on an airplane, being killed by terrorists is one of the million, is that acceptable enough? .5 million, 110 million, 190 million? and they basically have not

really considered that. the key issue is not are we safer but how safe are we. that issue scarcely ever comes up. maybe you don't think one and 90 million is safe enough. that should be front and center. even committee politician our son that? rosa brooks has. >> i would love to see the two of you do a similar effort to evaluate us targeted killings. the claim that is made leaving aside whatever legal and ethical issues there might be, the claimant is

made about efficacy that has to do with the variant, go after they can further their plots enough to pose a serious threat to the united states or its allies and interests. clearly there is a theory that the us government is working on. i think we have very little ability at the moment to evaluate that claim. and it is right for that kind of analysis although becomes even more difficult than the realm of classified information. just climbed back to the issue of indirect cost, part of what is so challenging is that it gets into -- it is a vicious circle. the indirect costs are unlike costs property in human life which are quantifiable.

whether people diane property is damaged is not depend on how we feel about the attack. on the other hand, those indirect costs, people not traveling more to the stock market collapsing are entirely within our control. the more we believe more does create costs, the more it creates those costs within our control the easier it gets for those who support the kind of enormous budgets and agency proliferation we have seen to say, but look, this is not the same as a death from a highway accident. right there. >> kendell and.

-- can dylan do you think there have been any instances of successful terrorist attacks that under this government officials managed to cover up? >> not that i know of. >> if so the coverups have been very effective. >> right there. then back in the back. >> there is a saying attributed, terrorism is the war of the poor. wars the terrorism of the rich. what is your different -- definition of terrorism? >> thank you. >> we effectively use the standard definition which is politically motivated act of violence.

that is the whole thing. without specifying targets or anything. using violence to express yourself, if it becomes very common, in other words routine what we tend to do is switch the word and don't call it terrorism anymore. we call it war or insurgency. isi s is being seen as a terrorist group, considered a combatant, and insurgency. and one of the problems is sometimes civil wars have a lot of insurgents in the or considered insurgents. but essentially if terrorism becomes frequented often deadly enough we start calling it terrorism.

initially it was fairly small. within. within a couple years the military was calling it insurgency. >> wait for the microphone. >> a definition proposed by un high-level panel. has never been accepted. under that definition things that we do would also be terrorism. >> ii should've acted that it has to be done by a nonstate actor. it is done by the state we don't call it terrorism. that was never to influence opinion politically. it is usually not considered terrorism. >> back they're. >> been friedman. i want to ask a question which i think i raised and we did the event for terror

security and money. i guess the question is, who really believes the government should be risk neutral? i don't think that is actually true. the corners of the office of management and budget, aren't our disagreements about political parties and ideologies really disagreements about what risk to confront with the government socially and what risk to leave to people and markets to deal with point can you speak to the utilitarian premises that are underlined the analysis here? >> i accept the politicians are not going to be risk neutral. the agencies should being -- should be doing risk neutral analysis.

it's unclear evidence of what the trade-off will be. prepared to spend a lot more money on counterterrorism and not so much protecting people from tornadoes. >> it is not just the politicians side. politicians make it part of their platform. the policy proposals reflect the fact that they are not risk neutral. they are making a choice to elevate one type of risk over another. that is a political platform. >> it doesn't necessarily mean they have to spend a lot of money. john howard and tony blair were all seen as very tough on terrorism and security,

but the spending did not match the rhetoric. so they still get a lot of political advantage. >> one note on that. essentially governments are mainly form for public safety. preserve domestic tranquility. so consequently people in charge of public safety have a limited budget and should use it in the most productive and scientific and careful, systematic manner to maximize the number of lives saved. spending a billion dollars to save a life with one device but another device that only costs hundred thousand dollars can save a life and they are ignoring it. that is extremely irresponsible. they often say they have to do that because otherwise they lose their jobs. in my position that is if you take a job in which making career threatening decisions may come up, you

should make those career threatening decisions. if you don't like making career threatening decisions don't take a job. there are a lot of save jobs like plumbers, college professors and so forth, but it is basically a fundamentally irresponsible dereliction of duty to miss penn public funds in a manner that does not maximize public safety. the numbers are not always precise but there should be a systematic effort and for the most part when you come to terrorism it has not been done though it has in other areas which is nuclear radiation and nuclear reactors and things like that. >> right there and then in front. >> i notice the pre- check program is pretty good treatment in your

assessment. people pay a little money and then don't have to go through the strip search machines are advanced imaging technology. is that because background checks provide cost-effective security avoiding a lot of the cost. >> i mean, we are working on doing risk assessment. we are not fully converting metrics. we seem to like it because it treats people as low risk and therefore they should be treated accordingly. so this is a really good example of tsa using risk-based approaches

command we think this is a pretty good step. >> right here. >> identify any top corporations receiving money? a lot of that my go to employees. >> other companies that we identified that are benefiting disproportionately? >> a lot of them. i don't blame the companies. if you find out they want to buy a zillion at your machines your likely to be in washington in a flash. and when you get there you are not likely to say you don't really need these

x-ray machines, we have some nice ones. so it is up to the public safety people who should be spending money in an appropriate manner. they certainly must expect that people have think -- have things to sell and will try to sell them. there are carnivals basically of people trying to sell their wares. some of them are very good probably. increased security and reduce cost which is important. something that should be considered. business people i've been a product is probably a natural force. >> here in the front. >> good afternoon. proud citizen of the district of columbia. i question is prefaced by complement for all the speakers because i think it's very interesting. it is ongoing. thank you for that. specifically i would like to say i appreciate the

titillating analogy are metaphor about the tigers. i certainly thought of, jobs. >> have you been in the company of someone of the caliber of j johnson of homeland security you may have a response to what is actually going on behind the scenes that he could not reveal in retort to your assumptions? >> we have tried various times to get through, but it does not seem to be working very well. you know, there is not a lot of receptivity. let me give you an extreme example. a total no-brainer, federal air marshals. we looked at a 748 ways and others have. basically it is an incredible waste of money.

does not improve risk reduction much at all if at all and costs an incredible amount of money. you keep some marshall's, shift things around and you would say both the airlines and the taxpayers several hundred million every single year. the approach this in various places. one member of congress has come out and said we ought to get rid of the air marshals. flabbergasted. someone is actually saying it. we visited the office of duncan and they said duncan could not get anyone else to sign as bill to get rid of the air marshals. they are starting with something which is bone crunching the obvious. it is not subtle. on the face of it and you analyze it.

appears to be exactly right and nothing was happening. >> you know, i don't want to put words into his mouth. the only thing i will say is that in my own time a government i certainly did not come across anything that made me doubt the basic premise of the book where the cast out on the basic premise of the book. two other things, one problem with bureaucracies is so fusion of responsibility. you have lots and lots of people, the mystery of all the smart people doing something completely irrational, but they each have a tiny little part of the enterprise and don't actually have the book. they are not looking at it that way. my job is to be the person who helps recruit federal air marshals were to be the person who books their flight. i am not responsible for figuring out whether this

enterprise makes sense. .. >> >> there are lots of people who are broadly speaking aware of this but did not have the authority for

authority to say so or it isn't the right moment or to testify before congress to say yes mr. chairman everything we do my agency is pointless. [laughter] so there are lots of reasons this system stays in place despite the increasing body of evidence. >> in the apparatus involves hundreds of different agencies handed it is a separate agency end instead of saying cut down the numbers ended on austria and

we have of a couple of agencies and that is it. and to employ those resources internally. it is part and has better zero police officers on vacation to do this. they can lower them or do whatever they want. >> please join us to thank the panel today.

>> end if we haven't the already done so please buy a copy of tousing ghost. thanks for coming tonight. [applause] [inaudible conversations]

stood 66x

>> [inaudible conversations] and good afternoon. welcome to the american enterprise institute. lyon pleased to welcome you to this discussion entitled a labor market for the digital age. every are especially honored to welcome governor daniels

governor hickel cooper and walter isaacson from the aspen institute. we have a tremendous conversation on one of the great issues we're wrestling with. i will start by a giving a few remarks on this subject finding new solutions to unemployment getting people ready for the skills they need it is so important here at ati. we are a think tank dedicated to think he did dignity and human potential to believe our commitment to truth requires to function well and a free society it requires an opportunity society as well as those allot that americans disagree on that what brings us together is the moral consensus up to push opportunities to people at the periphery of society so

watery missing that makes it so hard? it's just a question of government money we could have solved it but the panel talk about what we need we thought about this said great deal and there are some philosophical points making in passing relatively recently five years ago i was listening to a speech by a catholic cardinal named francis george of chicago. and he was known as a prodigious fund-raiser for end was talking to the donors of his poverty programs giving lavishly and

made the following statement. pour need you to pull the ball and you need the port to keep you out of hell. [laughter] i thought i will not use that to fund-raiser for ati but it did raise an interesting issue. [laughter] and then to be marginalized in your society. and to tolerate people that our different indices he to say to help those people but to what extent do we need them? and why we need people more. to make the necessary.

it to stop treating people as a liability to manage and more as those with the lives of other people that is our goal today that is wonderful. before it turned over i want to welcome my a friend. [applause] >> i am very honored to be here. as part of this even today. in that i particularly appreciates his focus on human dignity and opportunity to address poverty.

we don't always agree on solutions but there's so much shouting we appreciate the idea is of no whole host of issues. and with the work they have dead and to address the challenges there is no putting aside the fact that they are struggling with important issues of paula to insure that prosperity is there for everybody for the margins and of little. and that is politics on all sides of the debate.

could to bring together a bipartisan group of leaders in this arena to prove even in the election-year to focus on these challenges. but globalization and technology with the challenges we are facing that the job ended in the united states is growing but the wages and the middle-class life affects many people. in these challenges offer an opportunity to address these challenges. is to be at the forefront to think through these challenges.

that is why would they will use technology to solve these challenges is so critical. we're working on issues like apprenticeships and issues around that they are providing an honor to be part of the debate and discussion that focus is on how we use new innovations with technology to insure we your matching jobs for everyone. it is an important debate so i am honored to be a part of this and i am excited for this panel and to start walter on this important discussion.

[applause] >> to people food of help to elevate the dialogue not just with your views and ideas with innovative solutions as well. it is great to be working with a eln the marco foundation and of our to panelist in this year that is filled with bullet -- bitterness for shouting in that place soon partisanship they represent decent politics in what they are supposed to be all about. also leave the network america as the of commerce

department digital committee. but also help to build skills in the work force with the market base platform. from perdue university one of the world's great leaders and is recognized by "fortune" magazine as governor of indiana. also taking produce a new direction. and with the great challenges that they face. and governor hickenlooper is really one that has become governor since samuel adams and has become governor. [laughter] and not to procure and small businessman.

and an old friend and governor of the state of colorado. as we slowly come out of the session and for those that need to hire an what indiana has been doing. >> let me frame the issue this way. list of the people in in this room have them part of encouraging people to get a college degree for decades about 70% have not but they have great skills and the of this match that walter talks

about as we increasingly require of a diploma and experience onto a job description as jobs have devolved with information and technology and health care that are transformed by a technology competing in a global environment. so we have said we can capitalize on the talents of americans much more effectively to use the of power of technology to break down and understand the skills that are needed to help people get rapid trading whether on the job for educational institutions. this is the to the exclusion of getting a college diploma

my bet is more will have a diploma over the course of a lifetime. and that is the big part of the challenge to help every american see themself in the new economy and we're trying to start out something called skillful although it is oriented toward those geographies a and we are creating a scale based label market and he has recruited employers that have participated to look at their jobs and then new way with workforce centers and folks on the ground in

training people in the middle but they're working with us now in how to post a job description when you are now posting i have an mba or cpa but how do you define your skills? and they connect that with employers. and to connect the workers and the skills. >> the result whole togo's a set -- society left behind.

with all of these prodigious innovations we have done a pretty poor job to get close to what they had before struggling to look at the achievement gap in the communities like colorado it to say one way is to use technology in a fresh way. your education doesn't prepare you it is a life and a career but too much is on a career but that is more about skill. and of how they get paid. n/a italy beaten dollars now or but they work three days in today's they go to a community college or private

enterprisee're not talking pipefitters but banking industry with the advance manufacturing trade with a curriculum hired you know what trends affect the of business? with some of those basic skills but if you tie that that they were already giving to employees how to do inventory or customer service so to look at the skills you acquire with different courses to admit that skillful platform is to

get to the point where each community college class but what skills you will get to go to a place where it shows those types of jobs it will show you what other skills you need to acquire in realtime allow kids to have a much more direct and authentic relationship to their career and they're choice. is intruding into individuals' privacy. it is about which degree it is each badge and certificate with the next level of education.

it is easy to see and for those that have been marginalized. what we have seen in the presidential primary season that is part of the deep-seated frustration because we haven't done a good enough job to be trained for the jobs. with of those jobs waiting to be filled you don't need a for your education. they can be trained in one year to get jobs under $70,000 that thurgood compensation.

>> how were you doing that with perdue? >> it might be nice for the economy that we're talking about. one out of 10 colleges first got the cert anywhere and progress set your own rate. and the institute and i don't much worry about our graduates and they get hired in they do very well i think

we have to be appreciative if there are jobs away team in there is the mismatch. with the middle-class society a sense of constant optimism but those democratic institutions and so to me, but clearly years of stagnant slow-growth could not but produce a situation we will not have the america we go staggering along from a very deep recession.

even factoring in to that we're still worried about these problems. what i am trying to understand better is what else we have to worry about. clearly the erosion of social capital if people are addled by drugs with no sense of motivation in their life with the connectedness to have economic leave productive people. i guess i have always been a techno optimist but somebody calculated the three

categories in the anemic recovery were retail and food service and call centers so lightly quiescence structural issues. their self-imposed by the choices we have made to limit growth even on top of that problem there are things we have not seen before. >> can you give us some examples? >> high taxes and don't pay anybody more than 30 hours or don't have more than 50 employees or with paid sick

leave to treat contractors as employees you making it more and more and more expensive bed onerous and difficult i dunno why you are surprised and fewer people are hired to. >> and in some places a low unemployment rate in some places not. what didn't work and why? >> what did twerp was the sufficient upscaling improvement a lot of changes were made arrows pointed to the right direction but that is the biggest problem is the human capital issue.

aid manufacturing jobs have come back banks in some part and for the most productive variable in terms of politics at least though one that we all looked at but that is the one to watching and it is 10%. >> so i will take that what do you do about this hollowing of the middle-class?

to be under employed or are mismatched. >> to do some polling we wanted to understand and some of the most powerful focus groups for those of their forties and fifties who all had jobs. when you ask them to go on the internet to look for a job they raise their handy as. -- yes, how often? almost everybody said every day. they were clearly hungry for something more.

we could only imagine the answers. but a significant part is that it is for young people to find a career path. but it is also for people in their 40's and 50's they are hourly workers even if big companies. they cannot tell you they're evil income. that was a very surprising moment. so what is the range? people don't know the our the blue dash yearly in, because they are paid hourly adults think that way. for and in addition to what

i have talked about it is important to have many more good jobs. it to have a collective effort we wrote to a book it is around here somewhere. >> it is right to buy your foot. [laughter] >> or how to create more jobs. or how we create more jobs in adweek concluded and we concluded that does provide

an opportunity to create many more good jobs. so one of the things we need to do to have flat forms to make it easier small-business this particular which is where most are employed to make it easy for people to sell into those markets because who is buying from you on the internet. in that is said area of tremendous potential. or increasingly services in

their companies are growing faster that is one area. and other to create more good jobs is to enable small and medium-sized businesses to use digital knowledge to the data analytics to understand the product or a customized product but anyone should be able to have access on that granular knowledge so one of the things that we are working on is for platforms to develop to help people

accumulate but if they are part of the system where that is available to get information from a small business in colorado and still figure out. there are other policies in the directions that could help to get capital to use this kind of information in. but the bottom line is we're in a totally new age. in with the industrial age to the digital age there was a study done of the of presidential debates there wasn't a single time the

word internet was used with the economy or jobs. we have to have been a national conversation and how to prepare. >> so we said technology and trade can create jobs rather than destroy them but the acre people believe the middle-class jobs are destroyed but it undermined by trade. where do you stand? you have always been the small businessman. >>. >> when he talks about the social issues facing it is something we all recognize.

because using recreational marijuana. to see a less drug dealers out there. >> but it is a whole universe. it is red tape to create a bureaucracy of people starting businesses. and he is the best she to rocker there is a lot of red tape and bureaucracy annual the more incentive and those are the job creators.

and those that are not the right shape go into the juice bin if they're properly round their packaged for consumers. each one was tutored $40,000. i almost couldn't sleep it wasn't just the technology now that i have a title the right now we have a bottleneck in almost every industry when you don't have the necessary labor or

capital and that growth helps to create the middle-class that creates more growth. ended realtime that they can grow at the rate that they should to the catalytic. and that will allow them to get that right where it needs to be. in the years and a lot of work but genuine increase is the productivity all over the world. >> she said the transformation going from industrial is comparable for bigger cultural to industrial one thing we did back then is to be radically changed education in the united states to say high

school should be free in universal. what should accompany this transition? >> you have to start at the bottom. i am losing track of decades. is now three in a decades-old aid to say you made nearly sufficient progress. immelt one change evade at indiana. did it turns out they are not ready for college you should take their greedy shang cost for something

we're not very good at. with a solution that finally deals with the difficult -- difficulties of cater 12. bayou answered your previous question that one thing that we did not make enough headway with my time in public service, but that huge astonish leave big the number of americans that they ever finished. there is some great stuff going on in the on-line world a with today's 18 through 22 year olds.

and then to make it with a two-year community or the trade school. it just as i school was made 100 years ago does that make sense? >> it would if not $19 trillion in debt. >> so to socialize i am not saying all ideas but purdue university we're in a four year tuition freeze i think of my classmates the cohorts and one that cost less because the room and board and books are cheaper. there is a lot the people in the system can do that is

well established that floods in the marketplace. with subsidy dollars the system pocketed much of the many -- money to the intended beneficiaries i don't think that is fruitful >> you are that cochair that zoey has helped to support with the senator mark warner with what ties into what we have just been discussing with economy and the social contract that is the 1099

economy that are retiring at 60. conner stand up. to have acicular way to frame the question? >> [inaudible] >> en all those sunday employer based economy. >> senator warner that i kept trying to leave a i could not do it which was i will sign up as an exercise

of continuing education. is a fascinating phenomenon i have a better reading into that a lot that by one measure with a fairly recent study long -- fits into this category it runs the whole spectrum from outsourced janitor all the way down to uber. do we like this or not? i read sometimes a conflicting cents there is a lot to be said the flexibility, and it independence the dignity of

choosing your homework and all the downsides that conner is asking about the they don't have health or sushi with full-time work. reintroduce added to the system. if we don't think this is a positive trend it to push things in that direction with the independent workers because of the things we put in place for traditional employment. >> what do you feel about this new phenomenon even if we don't like that?

>> we touched on it a little bit of mostly raised questions that is a very fundamental values question in vir driven by policies that were enacted in a prior time that i just the nuclear not having the of policy as a public and political debate to write the frame work increase we haven't had a political environment where that can happen. but the challenge isn't in my judgment to figure out well lot to change the water the values that create:of

america? when you talk about social safety net and economic security we haven't begun to have that conversation but arthur alluded to that for which i am very grateful for ati to collaborate but we can debate government does it goodwill working with us that is a what i would go to good will for. people don't realize how much those social institutions on the ground are changing because of the tremendous need in cities and states but we need to figure out what we're going after the and address of

policies that make sense. but then going to the rise of the west and then happening with the silicon valley. if it did your state whether boulder or denver or south bend there is a new creative economy coming back to start new jobs to be innovators and entrepreneurs what can we do to encourage that? it is that a real phenomenon? certainly if think it is real but the notion as the

young graduates come out of school they will live where they want to live rather than starting a company with their career to focus on modifying taxes and interesting to say is superfluous but we're one of the top destinations for millenials looking for a place to relocate. 1,000 miles of bike path it is a superfluous quality of life but sell many of those who write code for the internet they didn't hang out with the football players in daylight to be in

a place for everyone is accepted in really are succeeding and qc of block all over the country with a sense of monumental live. >> i also read the great cover in the atlantic which talks about even in small town you are seeing a revival. >> first of all, of our predecessors renata's farsighted and it makes it easy. one of the great strengths of the federal system with said genuine competition and

then they say that isn't working try something different. for jobs and investment and that is all we were, and and i hope we made some headway. so far the romantic notion writing a book that it is absolutely true. see that hundreds of times individual enterprises, from an unlikely place. but there were zero parts

are still depopulating. because frankly they do everything they can but california acts like a do you a favor if you come to indiana on the east coast state immediately colorado is pretty hospitable. you can do those things but rehab the challenge with regard to the smaller communities of the metro areas with this significant university presidents we're taking something of a calculated gamble.

we live in a nice town but it doesn't have all the features so we do a 50/50 deal with our town and transform the whole stretch. it is either a big -- a big step forward that the governor sees coming to denver or they will say what it yet? >> daniel patrick moynihan said if you want to build a great city build a great university and wait 100 years. [laughter] >> i with the progressive policy institute you

required -- a job for those who don't have the degree but the skills that our relevant can the panel talk about that information failure others include those who never get the resonate seen or serve their time as felons. >> that is part of what we are trying to take on and to do some good work on some of these issues where the information comes from. but it is possible to take that biotech job which has done some interesting work

that requires a college diploma based on what people are doing and what they say they need to know. they found most of those little skill jobs that lead to a great career path could be done by somebody with an associate's degree into biology courses. there are others of jobs like the executive assistant job where 20 percent have a college diploma of that 60 percent of the postings require a college diploma. it is hard to believe it has changed that message -- that much but with that new spreadsheets you can reveal

that on a profile to demonstrate you have all the skills needed during the audience manufacturing job. so that is what we're doing is training people where employers can look-ins' the the skills and different levels and apply that to their own job postings and trying to break through the we have a lot to learn but that is what we're trying to go after. >> introduced herself. hi paula. i did not recognize you.

>> they key for the rich conversation one way you can do something about that problem is don't look for gender but we're doing a study with the mayor of new orleans to see f. we confined to the biases that is eligible. >> we have 150 different documents and apply to your own culture of your setting academia included. the question goes to the president and the federal government's role who has an

unseeded this computer science which is a dramatic program dealing with the fact the states in the local level have not put that into the curriculum. and how we get this at the state level. in we should be hesitant about investing in the workforce or the infrastructure. >> i thought that was about the federal government. [laughter] >> you can run for national office if you want.

[laughter] . .

the process needs to be incentivizing us. >> the 1st computer science department in the world.