>> i'd like your thoughts on a broad capital ownership as a way to distribute new wealth in capital assets to promote real economic growth. not just in creasing wages as a way to create demand for purchasing goods and services. >> do you understand what he's saying? >> i think that's an important issue. not so much on the growth part but, you know, we have seen across the globe these trends in both in commonwealth equality over the last couple decades. it's real clear what's going on with the entry of trading system, the return to those skilled labor has gone down, the return to financial capital has gone up. and in the u.s., the reflex has been to try to fix this with after the fact policies are higher and tax rates and things that just will never work.

they're swimming against the tide of force that's are just too strong. the answer is to give people skills, that's the education agenda and to have financial capital by having them, for example, save for their retirements more successfully and thus reap those benefits. that's the only way we're going to ever stop this awful, you know, land war in asia approach to get the income distribution right and get ahead of the curve. >> it isn't about creating demand. you mentioned that earlier. demand is faculty input. what we need is supply. if we have supply and we have legitimate demand, there is something to buy. but until we produce something, it doesn't matter what you want, it's not going to be available to you. and the reason we have a shortage of supply is because we don't have enough production. it's all the things the government does to interfere with capitalism which would produce more products and create that demand. >> go ahead. >> yeah, at the new america

foundation we looked at this issue for more than ten years. and generally came to the conclusion that it has to be part of the toolbox of addressing maintaining a quality of life and standard of living particularly in light of the trends of rapid productivity growth and manufacturing which shifts workers into long services, many of which for a variety of reasons don't db will be relatively low productivity and won't pay relatively good wages. the question has always been how you structure a much broader array of capital ownership that just doesn't mean people to save for retirement. we don't have to have a serious conversation. we had the flirtation of the ownership society in the '90s

and it all got in the early george bush years. but it all got caught up with financial services liberalization. i think we have to go to the drawing board and have more serious ideas put on the table. thank you. >> i'm from research pays. i think you're doing a great job, by the way as a moderator. >> thank you. >> my question, i want to bring in a live wire here which is the teachers union. it hasn't really been touched. i think manufacture us know that the pension, the cost of the pension is for the teachers is higher than what's being spent on education. so obviously there's a disconnect there. the question i have is if we're not looking at that or should we welcome at that. if you were given the opportunity to redesign how education would be done in this

country, what would it look like? i've heard so far first get rid of liberal arts. that's quite extreme. and then i heard, you know, go become a u.p.s. driver. and i don't -- i don't really get a comfortable feeling with that solution. so i -- >> most of them have liberal arts degrees anyway. >> i'm just saying, we have smart people in this room. what would you do? how would you redesign our educational system? and i just threw in that variable of the teacher's union if you choose to touch that. >> thank you. that's a big apple. >> first of all, i don't think people that work for government should be allowed to unionize. they want to work for the government, the whole thing is corrupt from the beginning. it's like a terrorist organization. you know, so we -- and the biggest losers, of course, the children who get a lousy education and their parents who often get stuck with the bill. but some of the best things we can do, if we just got rid of government subsidized student

loans or any government direct loans for higher education, university was have no choice but to slash the tuition. and college would be affordable again. but the people who did go will get a decent education and it wouldn't cost them that much. they wouldn't graduate with a mortgage but no house. and, you know, if we had more competition in k-12 and had vouchers and we had some way so that there was some competition with these government created monopolies, whenever you have a government monopoly, it's not efficient. it's not going to deliver good product. i mean everything that we get from the free market, you know, such as cell phones or computers or televisions, the quality keeps going up. and the price keeps going down. everything that government gets involved in, the quality goes down and the price goes up. >> understanding that education is important if not crucial to getting ahead in a globalized economy, are there good ideas, good realistic ideas for

bringing down the cost of higher education? >> i was going to say it's a mistake at the -- i think you have to separate some degree as annette suggested k-12 from the college community college, college and graduate school. and there's two separate problems. with the k-12, i don't think it makes sense to talk about it as a purely education issue. james trout did a very important piece for a "new york times" mag zun a number of years ago that says it's a neighborhood and local economy problem. and so until you're able to be able to create workable schools that come out of healthy communities and neighborhoods that you're not chasing housing values to get your kids into a better neighborhood, i think you have to think of the k-12 as a

larger economic development issue and improving education. in the case of the higher education, i think obama has sent a -- started an agenda that is very important in that is that our colleges and universities are horribly inefficient. they have tuition escalation that goes far beyond the value that they're providing schools. and we relied on the fact that they're going to be flexible enough to support our workforce. least flexible institutions i've ever worked in, much less flexible than government. governor rendell did an admirable job of trying to put private sector people on the

advisory. but we have a major -- there's two major sectors of our economy that have to undergo major restructuring and productivity gains. one is health care sector. the other is the higher education sector over the next 10 to 15 years. and i think we need to begin to move some to more vigorous experiments of what restructu restructuring of the experiences will be required and also begin to offer also back to some functional equivalent of on the job training because companies trend their own employees maybe than the community college model which was used to try to s subsidize community colleges. that may not be a successful model.

>> don't demean u.p.s. driver jobs. there ray lot of americans that would love to have a job like that with a company like that and there are a lot of americans that are not going to be computer technology or science teachers or economists. right. that's number one. number two, can college dozen better? of course they can. when i became governor, the first year the university system of education system called a state system of higher education, 14 colleges came to me and said we want my permission to raise tuition 11%. inflation was 2.5% that year. i said are you kidding? why? they said we can't afford it. what colleges have done for too long is when they have a fbl probl financial problem, they raise

tuition. i made them go back and i made them do escrow. they save millions of dollars on their energy costs. i made them source their purchasing all 14. we saved millions of dollars system wide. we wound up that year with 3.1% tuition increase. for eight years pennsylvanians tuition increases were lower than inflation cumulatively. the educational product continued to remain high. we have a good system. it didn't affect it at all. you have to force people to do the hard work in cutting costs. and most of the universities don't do that. they don't do that at all. last thing just very quickly. k-12 can't tell you how important it is to start young. start young. start before kindergarten. when we get into kindergarten and first grade, have small class sizes. do things where the kids can get excited aboutnce program that

actually came out of something the bare aspirin sponsored. we had kids as thirdridents in classroom, little experiments to learn how rain happens, you know, by heating up water and in a lig plastic cup. they never forget that stuff. they love science. we have a lot of kids hings we do. it's just a question of having the ingenuity to do it and having the will to do it and having the willingness to do difficult things. if we're going to succe to go bk to what jfk said. we do these things not because they're easy, but because they're hard. >> i just want to make this observation. when you think about these issues -- hold on. there are two unproductive back waters in the u.s. economy, one is health care the other is education and both are service operations where you're paid for doing stuff. open ended government subsidies.

and both need to see a future that has real budgets, payment on the basis of outcomes with accountability and providing people with more choice in competition. that will solve both problems. >> great counter. >> we have time for one more question. >> how important is low cost energy in jump-starting the economy? is the administration doing enough to promote low cost energy or are they moving in the opposite direction? >> quickly, the biggest problem with the cost of energy right now is not our energy policy which i don't like. it's our fiscal and monetary policy. the reason

expense sieve because we're printing all this money. a lot of people don't realize this but gasoline production in america is the highest since 1993. demand for gasoline is the lowest it's been since 1997. the reason that gas is so expensive is because we're printing so much money. and if we keep destroying the value of our money, then the price of gas is going to go up. but if you take a look at the price of gas in terms of real money in the 1950s you could buy a gallon of gasoline for 25 cents. can you still buy full service for 25 cents and get change. the thing is you need the same quarter. it's made of silver. so when you have real money, price goes down. when you have funny money, when you have fiat money, prices go up. that's going to go a lot higher and that is going to further undermine our economy. >> real quickly. >> as i made the point in the introduction, low cost energy is a big boom towards -- towards

the revisitalization of our parts of our manufacturing sector. that is happening. it's happening even absent a coherent federal policy. the advantage of low cost energy doesn't necessarily apply with we're able to produce more of our own energy because more of the income and multiplier effects stays in the economy. so our necessarily more, i think the goal would be sort of more of a open timmal energy policy that allow us to provide the opt mall price of energy and revitalization of manufacturing if we're able to be able to produce more of it in the united states to improve our income and wealth posture. >> i'm afraid that's all we have time for. i want to thank our great and high energy panel. thank you. [ applause ] >> thank you very much. quick instructions for you

allment we ask everyone to move out into the hallway. we're going to go to lunch. if you have things on your places, put them on your chairs. we'll have former fed chairman speak over lunch. we're expecting more people to join us. please come back to your same chairs. and 10-minute break. just until we set the lunch. thank you again to our underwriters, governors and the foundation, td bank, the center for quality and the financial planning board. thank you very much.

>> i know a lot of people are socializing. i need everyone out of the room because that way people can bring food in. there are several other doors open here. so take your conversation partner out of the room and we will be assembled in ten minutes. >> the atlantic is hosting the annual economic summit here in washington. looking at the economic recovery here in the u.s. and globally. a short break now for participants as they prepare for lunch. the luncheon speaker will be former fed chair paul voelker. we'll hear from him in ten minutes. we'll hear remarks from former treasury secretary robert rubin and former fdic chair sheila

bare. while lunch is being prepared, we'll go back to earlier today to get opening remarks during this event. >> thank you very much. on behalf of steve clemens and the atlantic, i want to thank all of you for your participation in this extraordinary conference. it's frankly a privilege to be here. in this conference, we have very specifically tried to include voices from across the spectrum. in some respects you might say that is the purpose of this conference. and we have asked then the very straight forward question, what should we do now? through the day we're hoping to

hear different ideas and hopefully some provocative proposals. for my part, i would ask a few questions to keep in mind. has the u.s. private sector already started to reliever, taking impetus away from the need for more stimulus? shouldn't we be making more differentiation anyway between fiscal stimulus that is productive and that which is unproductive? have we properly framed the population question? the most important phenomenon of the last couple of centuries has been the unprecedented population growth. in the many respects the world is build an expectation of high population growth, our defined benefits programs, our social security programs and the like. yet, population is decelerating, making market changes in thousands of things.

lastly, in any discussion of job creation, shouldn't we be focusing more on innovation than monetary fiscal and trade policy? won't nano technology, genetics, robotics, and the cures for major diseases have far more to do with job creation in the future than these types of policies? in any event, here's hoping for a great exchange of ideas. and now it is my disstint privilege to introduce james bennett. since 2006 james, who is a graduate of yale, has been editor in chief of the atlantic. prior to that he was the jerusalem bureau chief for "the new york times" where his coverage was widely acclaimed for its balance and sensitivity. before jerusalem he was the times white house correspondent and he was preparing to go to the beijing bureau when he was

snatched away by "the atlantic" to be its editor. please join me in welcoming to the podium, a tree leader and visionary, james bennett. [ applause ] thank you very much, richard. i'd like to tell you all a quick story about "the atlantic" to explain why the conversation we're going to all have together today means so much to us. "the atlantic," as you may know, was founded in the 1850s to advance big ideas in the culture and the society, and particularly to try to promote the abolition of slavery. but when the magazine actually launched in november of 1857, the country was very preoccupied with a different issue, which was the economic crash of that year. and so the big public policy offering in the first issue of "the atlantic" that november was not about slavery, it was about the state of the economy.

and our writer surveyed the landscape and he identified four different diagnoses of what had gone wrong. if you'll bear with me, the prose is very much of that era but the critique itself, i think, will sound somewhat familiar. he identified four different viewpoints and perfect son any fied them. one, he said one critic cries that we americans are an unconscionably greedy people, never satisfied with our gains and in the frantic eagerness of accumulation, disregarding a like justice, truth, probe at this, and moderation. the second qualifies this view and shouts that our vice is not so much the greed which is the vice as the miezer as extraf va against which is the vice of the spendthrift and as soon as we get one dollar we run in debt for ten. we must have fine houses, and

our dwellings must be more royally arrayed than the dwellings of the might iest monarchs. when the time comes, as come it will for paying for all this glorious frip ri, we collapse, we wither, we fleet, we sink into the sand. a third voice, he says, complains that the problem is actually the absence of a protectionist tre's high tarif. and a fourth says that the problem is the very existence of a credit system which is by inf. the writer went on to say that all of these views have some merit, but that the real problem was the ease with which our currency was inflated then by the american banking system which he said varies from state to state and which, outside of new england and new york, where it is by no means perfect, is as bunkling a contrivance as was everen flikted on the patience of man kind.

it would actually be another 50 years, more than 50 years, i think 1913 before the federal reserve was created to deal with at least some of the problems that he identified in that first story, which actually brings us to the issue of the -- the new issue of "the atlantic" which appears today. our cover piece is on ben bernanke's efforts to use the federal reserve to address the economic crisis we find ourselves in. it is a wonderful piece by roger loenstein. on the cover he's the hero, inside he's the villain. as he's explained, he has managed to enrage the right and the left. it's a daring and fairly effective effort to get things moving again. i'm hoping that there will be some disagreement as well as some agreement with our conclusions over the course of today. this issue is out today. there's some other wonderful stuff in it, if i may say,

including a nice piece on how our spending habits have changed over the last few years. a terrific piece by the political philosopher, michael sandel, about how market has seeped into our connionness. there's a terrific profile by mark boudin of a man who broke atlantic city. he took three different casinos for $15 million and how he did it. our special money report also on our website goes live later this afternoon. now falls to me to bring steve clemons up here. i generally feel silly introducing steve clemons because it always turns out that everybody already knows him. steve is -- if you do know him, is a man who believed deeply in surfacing the next provocative idea hearing from as many different points of view as possible, which is what makes him a perfect fit for "the atlantic." he is the editor in chief and

the guy who brought us altogether today. steve. >> thank you, james. thank you, james. thanks for all of our underwriters. we are being covered today by cnbc by bloomberg. we're live all day on cspan. we have many blogs streaming this live. we have a big community outside of this room. so those of you, if you like something, you can tweet it. if you hate something, you can tweet it. i think the notion -- we had a dinner last night preceding this, and one of my friends who was there, david korn, msnbc commentator and kind of a good left progressive radical writer, i'm not sure david would like that depiction, texted me after he left the dinner. he said, steve, fantastic cerebral intellectual discussion. really varied, but boy does that differ from the politics out on

the street. and i said, that's exactly what we want to try and achieve today. we want to demonstrate that you can not only bring together people who have very different views on what's wrong with the economy and what their prescription is to fix it, but that we can do so in a way that raises and uplifts the discussion and doesn't tear it down. so the notion of being both provocative yet constructive i think is important today. >> earlier remarks from the atlantic's all day summit here in washington looking at the economic recovery here in the u.s. and globally. attendees are taking a short break right now for lunch. the luncheon speaker will be former fed chair paul volcker and we will have his comments live. right now comments from the first panel on how to fix the u.s. economy.

thank you very much. on behalf of steve clemons and "the atlantic" i want to thank all of you for your participation in this extraordinary conference. it's, frankly, a privilege to be here. in this conference we have very specifically tried to include voices from across the spectrum. in some respects you might say that is the purpose of this conference, and we have asked them the very straightforward question, what should we do now? through the day we're hoping to hear different ideas and hopefully some provocative proposals. for my part, i would ask a few questions to keep in mind. has the u.s. private sector already started to re-lever taking impetus away from the need for more stimulus? shouldn't we be making more

differentiation anyway between fiscal still mu lus that is productive and that which is unproductive? have we properly framed the population question? the most important phenomenon of the last couple of centuries has been the unprecedented population growth and in many respects the world is billed in expectation of high population growth. our defined benefits programs, our social security programs and the like, yet population is decelerating making marked changes in thousands of things. lastly, in any discussion of job creation, shouldn't we be focusing more on innovation than monetary, fiscal, and trade policy? won't nano technology, genetics, robot particulars, and the cures for major diseases have far more to do with job creation in the future than these types