and there would be a human cry, why didn't we fix this, we thought we fixed it. >> next question. madam? >> i'm mittsy wortheim with the post graduate school. seems like one of the problems we have is nobody understands how this system works and where do we find a collection like you that can sort of draw it out? what's the process? who are the players in a way that the general public can understand how screwed up the system is. maybe there's nobody that understands it well enough that can explain it to us voters who are also the victims of this process. >> good question, who would like to take it. >> yes, the answer. >> no more. >> shameless plug. >> i'll really interested in this stuff at a sixth grade level. looking at the american voter,

it has to be at that level. >> the public and so-called experts has never been wider. it certainly isn't sexually wider than the sector we've been talking about for most of this morning, which is the financial sector. can anyone explain to the public? it's a reasonable question. who would like to take it? >> i would simply recommend to make as part of your daily reading three journalists, one who is also got another job. paul quigman, "new york times," martin wolfe, "financial times," and david of the "wall street journal." you read all three and you will get a nice flavoring in easy terms of what's going on in our economy. and they're not all cut from the same political cloth. >> okay. >> i like the second answer

better. >> paul amberdean. as i listen to the panel -- >> speak up a little bit. >> i said, as i listen to the panel there was no mention of the world oil if you go back to what happened in 2008, they increase the population of oil undoubtedly, had a role in the melt down that we had. and now the price of oil could impact the recovery. i think we should -- good question. clearly already saying some impact on the economic confidence with gas prices. how big is threat is this? how big a threat is that? >> that's the issue when you're trying to do an economic forecast. the number one risk was europe. the number two risk was around fiscal policy, you know, and sustainability of the u.s. economic recovery. oil wasn't actually on the list of what the top three, top three to five risks were.

but all of a sudden because of increased tensions in the middle east, oil is now on the plate as a major risk to the economic forecast. and what we saw last year is when gasoline prices got over $4 a gallon, we could see i'm perically the i'm fact that had on retail spending. when it got through the $4 market, really started to tamper economic growth. so oil prices acts as drag on the economy. at this point if oil prices stay about where they are it only knocks down growth by about a tenth of a point, you know, relative to last year. so as a result, you know, the real risk is what happens in politics which you cannot guarantee with any degree of certainty. although that doesn't stop financial markets from betting. i think right now the financial markets are betting a 38% chance of a strike by israel against iran. but it's made up numbers.

pure betting for financial market speculation basis. if we did actually see a disrups in oil we would go up to $180 a barrel if you had a major problem in the straits of hormuz and it would be a major risk to the global economic recovery. that's probably not the most likely scenario. >> sorry, madam. i ignored you. you've been there from the beginning. please. >> i'm marianne stein with the fund for global human rights. i am curious rat least one of you mentioned that the sustainable recovery isn't a big enough goal and that, in fact, we should be aiming for shared prosperity, which is -- >> fair commercial. >> which i happen to like. and i'm just curious whether any of you would address what you think some of the steps would be that would be different in terms of going toward shared

prosperity. >> thomas? >> wow. did someone pull out that question there? thank you. look. i'd like to -- how i characterize the policy configuration, i call it a neo liberal box. we put workers inside the box and fenced them in and pounded them with a particular form of globalization, labor market agenda, abandoned full employment at the ped and made inflation our goal and pushed a small government agenda, night watchmen state agenda. we have to repack that box. we take workers out we put financial markets in and we put rules around them so they actually work for the social purpose for which they're legislated. remember, these are creatures of legislation and law. we need federal reserve to take full employment really seriously. when times are good.

what happens went the tough questions are to be made. we need to have a managed globalization. we need what i call a soliduristic agenda that ties wages back to productivity growth and we need a social democratic agenda. that sorvels the problem. >> i'm going to have to finish it now. we have run over. really good job from all of you. thank you so much. [ applause ] >> ladies and gentlemen, we're going to move immediately to the next session. just bear with us just a couple of minutes. >> thank you very much. as you can see, we have a lot of content. we're trying to squeeze as much

into the day as we can. we only get one break. they will be relatively brief. that break will happen about 12:45 and lunch will be delivered. in between now and then silverware will be arriving to your places. just bear with us on that. we will try to make that not too much of a distraction. let me remind you again to go be back between any of your comments. if i could get your attention please just for a moment.

may i get your attention please for a moment, thank you. thank you. we will move into the next introduction and next panel discussion. it's my great pleasure to introduce cindy fernelli, executive director for senate audit quality. part of somethings the centers dreker cindy served as executive director at the u.s. securities and exchange commission commission and then as the regulatory conflicts management executive at bank of america. in her current role cindy was the force behind launching the center for quality and served as organizing board for the public quality auditing firms and cpas and independent public members as well. cindy has twice been honored by directorship magazine as one of the 100 most influential people on corporate governance and in the boardroom and in 2010

accounting today named her one of the most influential people in accounting for the fourth consecutive year. cindy's a frequent guest speaker and panelistic business community events and has been interviewed or quoted by media outlets including fox business channel, "usa today," "washington post," "wall street journal," "financial times," reuters, dow jones, "bloomberg news" and others. cindy served on the national association of corporate directors, 2010 blue ribbon condition on the audit committee, and the nacd 2009 blue ribbon commission on risk 2k3w06 governance. if i could get your attention, please, i would like to turn the mike over to cindy fernelli. thank you. [ applause ] >> good morning. i think it's still morning, yes.

thank you, elizabeth for that great introduction. i think she told you everything about me except maybe my shoe size. we'll leave that to be a secret until a little later. at huge me sure to be with you this morning. obviously this could not come at a more exciting time and a more timely topics that we have to discuss today. so the caq is very proud to be an underwriter of the atlantic's economy summit. the caq just brief briefly is a public policy organization based here in d.c. and our mission is to focus on enhancing competence and public trust in our capital markets through public company auditing. so i, of course, am very interested to hear not only what our last panel had to say, even though it was a bit pessimistic, but also what our next panel will say. hopefully they'll have some ideas that will give us some optimism. one of the things that we do at the caq is an annual survey of investors. and these are main street, man on the street, woman on the

street, investors. and we just issued a few months ago our fifth annual survey and i was very pleased to be able to present those findings working with the atlantic on their investor confidence forum here in washington, d.c. one of the things that we found is despite the bad economy, man on the street, the thousand investors that we interviewed or surv surveyed, there was still a remarkable amount of confidence in the system. 7-10, 70% indicated they had confidence in u.s. publicly traded companies. that was down 5% from the year before. but still remarkable given the economic times that we were in. they also had 61% of them had confidence in our u.s. capital markets. the percentages were not so high with respect to european companies and european market, however. we also asked the investors what

kept them up at night, was the question that we asked them. and not surprising, i suppose, 59%, the question got -- or the answer that got the most responses at 59% was not having enough money for retirement. and then coming in second at 54% was not having enough money if they were to be injured or suffer a serious illness. so our findings have special relevance for our next panel. one like that panel i am not a medicare or social security expert, but like many of you here in the audience, i am a baby boomer. and i can't help but wonder what is on the horizon for us, especially as we heard peter note on the last panel of the ratio of retirees to active workers as those figures are going to balloon in the coming years. it's been estimated that ten

years ago there were approximately ten new members in the labor force for every retiree. in another ten years their predictions are that there will be ten new senior citizens for every new worker. that's been a flip of that ratio in a 20-year span, which i find that quite alarling myself. as tom noted in our last panel, we need to pull for shared prosperity if, indeed, ten of us are going to rely on each new worker. so i'm hoping that by the time the caq does our next main street investor survey this coming here that the numbers will be better and that there will be more optimism in the system. so i am very much looking forward to our next panel. if our first panel was the panel of doctors diagnosing the problem, i'm hope that this coming panel will the doctors that prescribe ways to jump-start the economy. we are in good hands with derrick thompson who is going to

moderate that panel. derek is a senior editor at "the atlantic" where he oversees business coverage for the website and he is also a visiting research fellow at the committee for a responsible federal budget at the new american foundation. so we're in very good hands with derek and our panel of experts. thank you. [ applause ]

>> i'm going to be the ringleader of this. guinness world record for largest panel hosted in washington. we have with us doug, president of the america -- american action forum. kevin keller, certified financial planner. also annette nazareth, partner, llp, governor ed rendell, peter shift, chief executive officer at euro pacific capital, and finally sheryl, director of economic growth at the new america foundation. the name of this panel is the no nonsense prescriptions for jump-starting real economic growth panel. this does not suggest the panels before and after us are nonsense panels. merely that we hold ourselves to a higher standard of no nonensness. doug, i'm going to start with you. on the subject of nonsense, washington and tax policy. >> yes. >> both sides seem to agree that we need tax reform. number one. at the same time, number two,

nobody seems to understand how to get to tax reform. when you get democrats and republicans sitting in the same room at the same time given a deadline they come up with a plan that always seems to have three variables. one is lower rates. two is reduced tax expenditures, tax spending, deductions. and three seems to be raise revenues slightly. at the same time, barack obama released a tax plan, it does not lower rates. mitt romney released a tax plan, it does not raise revenue. who is right? obama, romney, or democrats sitting in the room? >> this is washington, so i'm right. i think you have to recognize a couple of realities. number one, we've had an income tax for almost 100 years and you can count the number of serious reforms on less than one hand. tax reform is hard and you shouldn't expect it to be something that happens easily. number two, mr. romney and president obama are run for

office. you should not listen to them. number three, it is true that tax reform is defined to be raising the revenue more efficiently, typically with lower rates, allowing time to thus grow more quickly and right now i think the simpson commission, the ones that came out that way with lower rates, broader bases, and more revenue, reflect three things. we need to grow and we have to have a ruthless, a ruthless attention to it growing more rapidly, it's our top priority right now. and the oecd, no one's idea of a radical right wing organization identified the corporate income tax is -- you've got to do that. number two, we worry a lot about workerses in u.s. economy. increasingly income taxes are paid by workers in the form of less wages, poor benefits and jobs just not being there. number three, we have a big debt problem so you're going to have to raise the revenue.

i think you look at boles simpson and the people in the room, ignore the candidates and pray that history doesn't get in the way when we get this done. >> right. so taxes are arithmetic but another arithmetic that matters is demographic. we're going to jump a little bit from issue to issue but there is a line that connects through it. annette, 80 million people. the boomer generation is going to turn 65. this is going to put new strains and it comes at time when people have lost their savings, that they were depending on retiring in the next decade. we're living in a time of potential losterity, lost personal income. what sort of ideas should americans have for investing responsibly to create a secure retirement and how can government help them? >> well, i do think that retirement is really a social imperative, that -- and it's got to get, i think, and have a lot more focus, nationally, because this is going to be one of our

great challenges. apparently the earlier panel spoke about this, cindy fornelli mentioned the 80 million baby boomers starting to turn 65 that actually comes to something like, you know, 10,000 people a day are turning 65. we now find that said, with an economy that has done poorly, people were basically borrowing against their 401(k)s. the safety net that we were used to having years ago, the pension plans that people relied upon have sort of gone the way of the jacket, they don't seem to exist anymore. social security is something that we have less confidence in than we did before. and so the -- you know, the private pension plans and the 401(k)s are really what we're going to be relying upon. this was not intended to be front and center our retirement plans. these were supposed to be

supplemental plans. what the imperative is now is that the responsibility for retirement savings there is so little nst. . >> kevin, your company released a stud dwla asked people about

attitudes towards personal investing. people seemed to say two things that are contradictory. on the one hand, government, help me. on the other hand, hands off my money. take your filthy hands off my safety net s this cognitive or sensitive for people to have a sense of i want the promised government made for me to be there whether i retire but i also want a space where i can make my own personal decisions without proper support from the government? >> i'm not so sure that the results are as ominous or conflicting as you might think. we did release a study this morning. there are copies -- the really curious thing was maybe encouraging in contrast in that to your bleak, somewhat bleak prescription for the future n that study was cross section of all americans. and 67% said that they feel like they have sole responsibility for their financial security.

now in contrast and also acknowledging what you said, clearly, there's a feeling that the government needs to provide that social safety net. and so, you know, at the same time that they recognize the importance of providing for their financial security, they also want social security, medicare and again to your point, protection for financial investors. i'm not so sure it's that conflicting. i think it's encouraging that two-thirds clearly want to -- you know, they feel like they need to. i think part of that and as a part of that, they're feeling like they're making their plans with medicare as a part of it. >> governor, i want to talk with another generation. i want to talk about young people and education and what we can do to make education work

better. for the people that are basically going to have to be paying with their tax dollars a lot of the income and medical security that this whole generation is going to need. at the state and local level, what are some of the -- what are the major problems in paying for and creating quality education? and what are the best ways to address these problems? again, at the local level? >> well, let me begin. i just want to follow up on what he said. it is a quandary. first of all, i can't really listen to polls because polls ask a question but they often, most often, don't ask the follow up question. do people believe they have sole responsibility for their financial future? yes. but the same people believe that medicare and social security should be there. 70% of the tea party does not want the government to change medicare. 70% of the tea party, folks. so understand it's like that lady who held up the sign keep

the government's hands off of my medicare. you know? i mean you have to understand, you got to ask six or seven questions to get at the truth. so do we need -- we need medicare to be sound. we need social security to be sound. so message to my democrats, we have to change entitlements. we have to reform the system. we have to make common sense changes to take into account we're living longer, all sorts of things. and democrats react reflectively and say we can't change anything. that's wrong. president obama in the health care bill took half a trillion dollars over ten years out of the bill by changing medicare, in this case he changed it in relationship to pharmaceutical companies. we've got to do a whole lot of that stuff. we have to do a whole lot of that stuff and be reasonable. we have to understand and we've got, i believe, a five-month

window from after the november election until the middle of march if we don't get things done for the country, that means tax reform, that means raising revenue, it means cutting entitlements, it means an investment strategy. if we don't do that in those five months, we are cooked. we are cooked as a country. now to go back to your question. education is partst inve of the investment strategy. there are four crucial thing swrez to invest in. one is infrastructure and hopeful will he we get back to saying moodies spent a dollar on infrastructure. infrastructure is crucial. it's our fastest way to juice the economy with well paying jobs that impact construction

and impact manufacturing. second, we have to continue to invest in research and development. research and development is what we paid this company the leader of the world economically. we can't roll it back. we can't stop. thirdly, we have to invest in an alternative american energy strategy. and as the president's fond of saying but not doing, everything has to be in the plan. everything. everything. but fourth, we have to invest in education. because in the human capital that decides which countries are the most viable economically. and we're not going to have that human cadisconnect. we still produce out of our universities the smartest phds and mbas and you name it in the world, in the world. and good lord, congress, let's keep the foreign students who come here and get phds and mbas want to start businesses. let them become citizens. i don't care how you do it.

if they want to stay here, let them stay here. let them open their businesses here. that disconnect between the greatest postsecondary education and the world and what we do in k through 12. it's stunning. we have to invest, number one, start as early as we can. and federal investment has to be there as incentive for state and local investment. we have to start certainly prek and certainly start with our 3-year-olds, make sure that our 3-year-olds by the time they hit kindergarten have great skills, have the basics of reading, have the basics of socialization. let's roll. we have to start early with that. then we've got to make sure that our teachers are trained and our teachers are paid a decent salary. so our best scientists, some of them going to teaching science as opposed to the private sector. we got to find a way to incentivize the scientists to stay in the classroom. and then we've got to make use of technology. one of the best things we did in

pennsylvania, we invested $220 million to put a lab top in every one of the four curriculum -- four basic curriculum courses in 9 through 12. we got the teachers smart boards, we trained them on how to do it. because our kids have to be technologically ready. and then lastly, in addition to college, we have to make sure our technical schools and community colleges are the best they can be. and we have to spend money. you spend money to make money. every business understand that's. if we stop investing in ourselves, we're truly cooked. >> thank you, governor. peter, i know you have a very different take on the economy from the rest of this panel. i want to broach the subject by first making a plug for my organization. this is the cover of the new atlantic. it says the hero. and the hero on the cover is ben bernanke. peter, in the greenroom, just outside there, you told me -- and i believe this was on the

record -- it is now. get ready. >> it's always on the record. >> if it was my contract ual obligation to do everything possible to wreck this economy, what i would do is go back and follow every single thing that ben bernanke, the hero, did in the last three years. explain that. >> sure. you know, first of all you mentioned you think the government needs to protect investors. investors need protection from government. they need protection from people like ben bernanke. i mean he is the greatest threat to american investors. he's got interest rates artificially low, he is destroying the value of our currency, the dollar, and the government -- [ applause ] and the government is forcing americans to participate in the world's biggest ponzy scheme. we need to be protected from government, not the other way around. the reason i'm