we're running a bit behind and i know you've got a schedule to keep. so, maybe i'll ask one question, just to start off, and then we'll turn to the audience. we had, as you heard some discussions about the international services agreement, and a discussion about mfn versus non-mfn. i know that the u.s. and the european union right now maybe have a slightly different view of how to proceed on that. so i wanted to give you the opportunity to tell us a little bit more about how those discussions are going and kind of what your view is on in terms of whether mfn or non-mfn is the best way to accomplish what we're trying to accomplish. >> well, it's an important issue. but before i get to that specific issue i think it's really important to emphasize something that some of the other speakers today have picked up on. and that's that we should not overlook the significance of the excitement in geneva right now

about having this discussion about a possible services agreement. i've been in geneva for coming up on probably two years and this is the first time since i've been there that i've really felt that genuine sense that we have the potential to do something really significant. and i think that intangible quality is something that we should take advantage of and really seek to build on. and so, the u.s., along with the eu, and the other participants in this discussion, i think, are all working together in a very constructive way right now to figure out how we resolve the various kind of sub pieces of this puzzle. but just to give, offer our view on the issue of mfn versus non-mfn, i think it's our view that we wish that the broadest participation possible can be achieved in this discussion. the unfortunate reality that we

have seen played out over the course of the last two years, is that there are certain players, significantly among them the emerging economies, that don't want to negotiate in this area right now. and so the very practical question that we face is do we do nothing, or do we do something that is less than all of us would like. and our perspective clearly is that we should do the best we can with those who are willing to engage. now one aspect of that is how broadly we share the benefits of a potential agreement. and when it comes to major services players and major services traders, we, the united states have a real problem with negotiating a deal that then gets extended to others on a free riding basis. that's when it comes to major players. one of the things that we have been looking at in this discussion, that's separate from that discussion is whether there

are ways of involving ldc's example, perhaps on a nonreciprocal basis. so i think we have to have this discussion in a very open way, that makes the types of distinctions between different developing countries that i discussed earlier today. >> excellent. all right, let me open it up now. i have to give it to bob, coalition services industries. >> thanks a lot. >> thanks very much. in discussing the isa with colleagues in europe and europeans here and others, we commonly have a response that why do we wish to antagonize or offend the biggest emerging

markets that are growing so fast that are indeed our future, in a sense, it's where the growth is happening, what is it -- and i would like to know, i guess how you respond to that. because surely you must have encountered that argument in the councils of the wto. and secondly, we hear that there's no additionalty, that failing to engage in emerging markets, the bigs, and simply engaging the countries that are basically open, basically engaged in global trade, those who can and will, isn't really getting us anywhere. so i think those are the two most heard objections, maybe on the european side and elsewhere. could you respond? >> well, let me pick up on the

issue of our attitude toward the emerging economies first. one of the realities of negotiations in geneva is that every actor is their own sovereign. and every actor decides whether or not they wish to engage or not engage. and i'm fully respectful of that and if the emerging economies have made the determination right now that negotiating on services is not something they want to do, then we have to be respectful of that. but what that should not mean is that because they don't want to negotiate it right now, nobody else can negotiate either. and what's clear from the discussion we're having is that there's already a significant critical mass of countries that want to go further in liberalizing trade and services. and i think that those countries including the u.s. and the eu, should be able to have that conversation. i'm very optimistic about the

ability of the global trading system to walk and chew gum at the same time. over the decades, we've seen the ability of discussions to take place in multiple fora that complement each other. when i first started working in washington 20 years ago, i can remember the panic in some of the academic world that nafta would be the death knell of the multilateral trading system. and of course what happened a year after we concluded the nafta is that we concluded the long-stalled uruguay round. and so i think there is a lot of capacity for agreements to have a positive synergy between each other. one of the other things we've frequently seen is using these bilateral and plural lateral discussions as a laboratory for expanding good ideas and later on finding ways and

multilateralizing those ideas. that's very much the model we would like to see with the services discussion is that we use that plural lateral combination, first of all, to bring together a lot of work that has been done bilaterally. but then use that as a steppingstone to multilateral participation. >> dr. quick? >> thank you, ambassador. i think you have given me now very nice suggestion to make -- to be made that let's negotiate an eu/u.s. trade agreement so that we can finish the dda. and i would be the first to subscribe to that. but i think i would like to -- to ask you a question on plural

laterals within outside. because i think if you look at the mfn issue from within and you don't want free riders, because you could say we have a critical mass and i don't care about the rest, then you can have a fleur lateral and you apply the same principles to everybody. that's a plural laterals which have been done in the past. you can also go outside, because wto provides for exceptions for free trade agreements in both goods and services. and that's all defined. but i see quite a danger to use the wto from within to have a conditional mfn on a plural lateral to ask for the wto for a waiver. because then you can do it. that could, as far as i'm

concerned, make the whole wto implode from within because then you will see plural laterals with requests for waivers on issues which we certainly won't like. >> you and i have had a lot of interesting conversations about different trade issues over the course of the last two years. this is one where i don't agree with you. i'm not too worried about implosion. and i'll tell you an anecdote to tell you why. we had at mc-8, this ministerial meeting last december, on the first day the first thing we did at mc-8, there was this huge celebration to -- to acknowledge and recognize the fact that we had just concluded a non-mfn plurilateral agreement called the gpa agreement. about 48 hours later at the press conference concluding the ministerial meeting, there was all of this hemming and hawing about how there might be a new

mfn plurilateral agreement that would somehow destroy the multilateral system. they've never been quite able to square those two thoughts. look, going back to what i said earlier, i think that the system has an awful lot of resilience and ability to sort this stuff out. and i should say, as a starting point, that in the -- in the group of countries, this friend. and i should say, as a starting point, that in the -- in the group of countries, this friends group that is currently looking at services, there's no decision yet on exactly what form an agreement will take. and -- and the decision that ultimately is made will be a product of consensus inside of that group. but i do think there is infinite capability of the participants to carry on this one discussion and -- and have that be a complement to the multilateral trading system. having the discussion in geneva i think is actually -- whether it's technically part of the wto

or not part of the wto i think is a very useful way of providing transparency to wto members who aren't participating directly in the talks. it's a way of facilitating negotiation among members by taking advantage of their experts who are resident in geneva. and so i think from a practical standpoint, it makes a lot of sense and some of the more technical legal things are issues that we'll work out as we -- as the discussion moves forward. >> and we have time for one more question. but it has to be on trade facilitation. can you do that? >> sort of about that. a question of timing, really. we're in a campaign year. this process going forward that you've described, ambassador, is sort of -- sort of it strikes me

as a bit ad hoc. what are your thoughts about whether anything will actually happen on this plurilateral approach this year versus should we in the business community be thinking about building up for post-presidential election year activity? >> well, i think that -- i think as i mentioned before, i think there's a lot of energy, and we want to tap into that as much as we can. that said, i think -- i want to -- i would rather underpromise and overdeliver than overpromise and underdeliver since you've had a lot of that over the years in the wto context in particular. i think we should tap into the energy that i see in geneva today. i've been very gratified on this issue by the broad bipartisan support that has been expressed in washington. i've seen no distinctions

whatsoever between republicans and democrats in terms of what they think about the -- the concept of promoting services liberalization. so -- so i think we should get to work, continue the work that's going on. there's a meeting this week, the next round of discussions among the experts that are involved in this services discussion. i should mention one very positive sign. we will be joined in the friends group this week by two new additional members. costa rica and peru, two developing countries, approached the group about participating. we're very happy to welcome them into the discussion. we view them very much as being like-minded in terms of countries that have a demonstrated interest in services liberalization. so we're seeing a very positive dynamic here, and let's build on that as much as we can.

>> all right. with that, ambassador punke, i want to thank you on behalf of the chamber for all the work that you're doing, for coming here to be with us today. i want to thank business europe for helping to organize and sponsor this conference. of course, the chamber for hosting us. and finally, last but not least, of course, all of you for participating. and thank you again. and good luck. voters going to the polls today with primaries in wisconsin, maryland, and the district of columbia. mitt romney was in wisconsin today, hosting a lunch.

rick santorum is back in his home state of pennsylvania, where he'll watch the election results tonight. newt gingrich was in maryland yesterday, but doesn't have any public events today. and ron paul is in california this evening. he's hosting a town hall meeting in chico. california's primary is june 5th. 95 delegates at stake today, with wisconsin with the most at 42. and maryland with 37. you can see live coverage of the primary results and candidate reaction speeches tonight starting at 7:00 eastern on c-span. this week on c-span3 we're featuring hearings on president obama's 2013 budget request. this afternoon at 6:30 eastern, energy secretary steven chu. he testified before a house appropriations subcommittee and was criticized by a corporation's chairman harold rogers. here's a look. >> -- budget proposal, and the recent denial of the keystone xl

pipeline seem to insinuate that this administration is not serious of that responsibility, and responsibly diversifying our energy portfolio. instead, this budget request for doe, coupled with the budgets of interior and the epa seem merely a continuance of this administration's political posturing. and diversion of scarce federal dollars to favored sectors at the expense of the others. in particular, coal, so important to my region of southern and eastern kentucky. and our country's most abundant energy resource, has remained squarely in the administration's crosshairs for extinction. >> you can see this full hearing this afternoon on c-span3. and then later this week, more hearings on president obama's 2013 budget request.

tomorrow, secretary the veterans affairs budget, and thursday, defense secretary leon panetta, and general martin dempsey on the defense budget. >> this is c-span3. with politics and public affairs programming throughout the week. and every weekend, 48 hours of people and events telling the american story, on american history tv. get our schedules, and see past programs at our websites. and you can join in the conversation on social media sites. former federal reserve chairman paul volcker says a tsunami hit the u.s. financial system in 2008. speaking at an economic forum hosted by "the atlantic" magazine, he emphasized the need for reforms. mr. volcker said he believes lawmakers should be more ambitious and go beyond the simpson bowles economic plan. this is just over an hour.

>> good afternoon. my assignment, my privilege is to introduce paul volcker. but i can hear you calling out to me, don'tish in such a rush david, slow down, tell us about yourself, how are you doing? well, you're good to ask. thank you very much. i'm fine. i have the oddest thing i want to tell you about. i want to tell you about the occasion when i -- my wife and i moved from my bachelor's apartment to our starter home. it's 1986, and we went to the closing of the selling of my apartment, and i was introduced to the real estate agent for the buyer of the apartment and was told that her name was jean dixon. so in a break i turned to my real estate agent and said is there any chance this is the jean dixon, the astrologer, the futurist? and she said, yes, she is. so who knew that jean dixon was a capitol hill real estate agent. so we did the transaction, and there was nothing interesting about it, but when we finished

we were saying good-bye to miss dixon, and she took my 22-year-old wife's hand, kathleen's hand, and put it in hers and she turned her palm upwards and she looked at it and she collapsed it back in both her hands and said, my darling girl, you are going to have the longest and loveliest life full of friendship and full of prosperity. and then she shook hands with me and she turned my palm face up and then she turned back to just shaking hands and she said, i do so hope you enjoy your new house. so the connection between paul volcker and my starter house in the '80s, directionally i don't know that i would have been buying a house in the 1980s. i don't know if many of us would be buying a house in the '80s. i don't know how much of a housing market there would have been in the 1980s without paul volcker. 1979, summer of 1979 jimmy carter appoints him chairman of the fed.

what i'd like to do is read to you a bloomberg profile of that moment. so in october 1979, two months after his appointment was confirmed by the senate, volcker convened a secret saturday meeting of fed governors. some told their offices they were going fishing for the weekend. where he convinced them to switch the agency's focus to tighten the money supply instead of setting short-term rates. when the fed restricted the money available to banks, interest rates surged throwing the economy into a recession. volcker knew the medicine had to be painful to work. there were demonstrations every day in front of the fed building in washington by groups ranging from home builders to car dealers. volcker received car keys in the mail symbolizing vehicles not sold as the company sputtered -- country sputtered. gross domestic product fell almost 8% in one quarter yet the remedy worked. by 1986 inflation fell to the lowest level in two decades. so in october of 1979 the citing of this story, inflation was 12.1%.

when i was married in september of 1986 it was 1.5%. as a canadian theologian who thinks of the finest character quality as being what he calls a long devotion in one direction, so we're in our sixth decade of paul's teaching and public service. remember 1962? some of you remember 1962. gary powers is released by the soviet union. johnny carson takes over "the tonight show." the pope ex-communicates fidel castro. that's 1962. he paul volcker starts his national service at the treasury department. in '63, deputy undersecretary of treasury in the nixon administration. she's undersecretary of international -- treasury for international monetary affairs. 1975 the president of the new york -- the chair of the new york fed in 1979. chairman of the u.s. fed until 1987.

five presidents in a row, reagan, kennedy, l.b.j., nixon, carter, reagan. a 20-year hiatus of largely some teaching and finance work and then the return to the national spotlight in 2008 with his endorsement of barack obama and subsequently his role in the economic recovery across the last four years. there's a volcker rule but there's also for this moment in time a bradley rule, which is it is always a really good thing when you get to introduce paul volcker at a podium. here's paul volcker and steve clemons who is my colleague at atlantic media. >> thank you, david. ladies and gentlemen, that was a rather fulsome introduction. there were parts of the introduction that made it quite evident that i'm not the youngest guy around.

i'll say one thing about the introduction, david, i've heard a lot of fond and extended introductions over those long years, and that introduction stands out as the most recent. we have quite a challenge here today. i have, you all have. by my account when i looked on my calendar and looked at the program, there are 20 strong-minded economists on the program. they come from across the international spectrum. they come from a range of occupations and that, of course, is only a sampling of all the professional talent that is in this room right now. we have collective many, many years of academic learning and practical experience to draw

upon. and you would think that ought to count for something. it keeps coming to my mind with all this collection of wisdom available, i have to ask, how did we ever get into this economic mess? what is even more in doubt is how we get out of it. maybe i'm wrong because i'm told that at the end of this program larry summers will be here. and he has the responsibility to clarify all the analysis and all the priorities, what we should do and what we should not do and then go out and do it. my assignment is a little different. i'm here to be a little provocative, and i do want to emphasize a longer term perspective. and i do have some idea about

how we should approach that longer term perspective. what we all know is that the world of political economists has lost a sense of self-confidence that it once had. i entered the united states treasury in the early '60s in the midst of the triumph of canadian thinking. the consensus then was, and i can give you quotes from some of the leaders then, we had conquered the business cycle. instead, of course, we ended up with a log period of stagflation. we had to invent a new word to suit the unhappy circumstances. then more recently in the 1990s we had those benign years of the washington consensus, of rational expectations, of market

efficiency. we even for a year or two managed to balance the budget. and then without much anticipation it all went bad. the big lesson is that in an inherently uncertain world we should be wary of any seemingly simple and all-embracing approaches toward economic policy. a period of success seems to perversely breed overconfidence and excesses. and those excesses produced the next crisis. it was howard manske, little known then, not so well known now, who rationalized that observation of repetitive cycles into a theory of the seemingly inevitably repetitive financial crises of the 1980s that nobody was listening.

the economy has perked up in the last few months, but in my mind we're still far from a satisfactory level of activity. my impression is there's still a long slog ahead of us before we can claim anything like success. rising consumption, partly based on lower savings, and a pick up in inventories do not a strong and lasting recovery make. housing and commercial construction look like remaining flat for at least a year or so ahead. business investment has come up from a low level, but it's still lagging well under previous peaks. export markets are slowing. there's heavy weather in europe in particular. i don't have any silver bullets

for a vigorous, short-term growth pattern. i do know that for the immediate future we do have to do what we can to sustain the recovery. that inevitably means maintaining for a while fiscal and monetary stimulus, but that's not a recipe for sustaining a healthy economy over time. indeed, we should know that pressing stimulus too long will be counterproductive. i suspect it's hard for any of you to really quarrel with those generalities, but what's still harder is to make the more basic and necessary reforms that will sustain growth in the economy. we are in an environment of well-financed resistance to change and a deep rooted political polarization.

now in that respect i could speak at length about needed reform in the financial system. i've had a lot of opportunity to do that recently, so let me simply say that financial reform is a work half done. some important areas haven't really been touched. the mortgage market is one. what about accounting and auditing practices? what about credit rating agencies and money market funds to mention some important areas that so far have received very little attention. even in those areas where an international consensus seems to exist, it is difficult to actually implement new capital and liquidity standards. important parts of the dodd-frank legislation need to be nailed down. the important parts dealing with derivatives, even more important parts dealing with too big to