story. as i realized that it was a pure market, a mercantilist model, i started looking at what the peg meant. peg is a great pr word. it sounds like you struck a nail on a board and went away forever. right? here is what the peg is. constant intervention, messing with a not free market to make sure your side wins. on a dailily basis. that's what a peg is. if i'm any country and decide there are two i was for ways fo to get rich at home. we can work really hard and invent more or i got another idea, i'll do what china did or japan did or south korea did, i'll just mess with the currency market. that's easy. doesn't take much money. i can get a 20% lift in brazil's case. they're lucky enough to be

experiencing with china what we experienced earlier, it is fascinating to watch. australia too. every time there is a partnership dance with china, watch the unfortunate dance partner. the first sign is the currency gets slammed. their currency went up 34% in one year. ouch. that makes things expensive at home. so now we have a situation which is really out of control because every president, every prime minister knows this and since it is clear that china is not going to be playing, barely, how do you play? japan is not -- ask japan if they're going to stop intervening in the markets. they'll laugh at you. it is just part of their model. that's what they're going to do. they want to favor export companies and they're going to do it. where are you from? you're from peru. are you going to do it? you better. if you're not, you're an idiot. everyone in the room is playing the game except you. you're going to hurt your people. so we're in a situation today where we have taken the wrong path for the wrong reasons to

get ahead on nation versus nation competition. and the result is a completely out of whack currency system worldwide. and all i can think of is the conversation where people take the pledge and say, no, not japan, i'm sorry, you got to stop. no, not south korea. everybody stop. we'll find a new basket, we'll see what the basket is, we'll let it float but no more interventi intervention. we find your intervening in the markets, we'll all gang up on you at once and you're not going to enjoy that project at all. so i think we need that kind of situation. like the united nations of money. we don't have that right now. it is out of control. >> kathy, then scott. >> i would like you to address what i think is the greatest asset that we have right now, and for the future of the united states, which is creativity. >> okay. >> in general. i mean, how much of a commodity do you think it is and what can we do to leverage it?

>> great question. hard question. by the way there is a book i haven't read yet, which i think is very good, it has been on the huftings this week called imagine. it is about creativity and i've seen this guy and heard this guy. normally i heard people, they don't know what they're talking about. i think this guy does. i haven't read the book yet. i think he's on to a deep understanding of creativity. i just mentioned that. i'm a science guy. and so you may -- we're all taught the scientific method it is very simple. i'll explain it to you now. you have an idea. you test it. and then you take the results, and you compare it to what you thought and then you go again. wow. how simple could it be? and we teach this to our kids in science. this is like the answer to what we're supposed to do. they forget one thing. where did the bloody idea come from? it is the most important part, you know?

and you -- no one teaches where did the idea come from. i've never been to a class of any kind that teaches that. so it is like, oh, einstein, where did the idea -- when he was 16, he asked himself a piece of light is running along at the speed of light and if i were running along next to it and i look left, what would i see? he was 16, right? where did he get that question? what is it that makes a kid who is 16 who has got a crazy background ask a question like that? that's what you're asking me. so i think we need to focus on -- there are some answers in that book. there are things we can do that lead to more creativity. the one thing we know, and, again, this book touches on that, the only thing we know is if you sit and stare at the problem at your desk and have more and more coffee that will not do it. and if you do it for ten hours or 20 hours, doesn't matter. it just gets worse. and the time when you have these a-ha moments, you step aside, go for a walk there are lots of

famous stories about people who had a-ha moments, get off the bus and the idea in your mind. people have these ideas off line. we have to include the idea of going off line in your thinking as part of the creativity process. if we learn to teach that, it will be a teachable thing, a teachable moment. yes. >> you talked about the united states trading with countries that protect ip. how much, i guess two-part question, one, do you risk trading with countries and not to another value of gen next. do you risk not spreading democracy to places like eastern europe, russia, china, other places where we want to spread our ideals and values by shutting down that trade with countries that don't protect ip like we do. >> okay, so first.

i didn't mean to imply shutting down. >> okay. >> what i've been saying to people is preferential. i assume there won't be a shutdown, but i would like the idea that there is a preference. i think it is going to take that to get china to pay attention. i think it is the only thing that will get china to pay attention. but there is a mean -- a myth and i'll just say this clearly, people have been laboring under a bunch of means about china. i'm talking about china for a minute, not about eastern europe. and they're all wrong. i don't know whether they have been plated intentionally by china or someone who is trying to help china or some pr agency or what. but these are literally the opposite of what is happening. so i'll give you a couple of examples. human rights are getting better because we're trading with china. no. human rights are much worse today than they were ten years ago. that's interesting. okay. how about there are more private companies now because i've been trading with china than there

were before when the economy began? sorry, actually about two years ago, the soe thing reversed and there are more state enterprises today as a fraction of a total than there were before. how about another one? let's say china tells us they're turning away from exports to domestic consumption, we can stop worrying about this stuff. but check the numbers, it turns out the percentage of gdp is actually declining. there is less consumption as a fraction of gdp in china today than last year. okay. get my point? these guys aren't about to give out the wand. whatever you think you're achieving, you aren't. and that's a myth. it is a mean. it is a wish. we wish that it were true. it isn't true. so if it is not true, what do you do? do you keep doing it? as einstein would say, the definition of insanity. you don't do that. you do something different. >> i had a question but i want to ask you a question about what you just said.

you said that you're not saying to stop trading with these countries. you want to give them preferential treatment. how do you define that? >> i haven't. >> okay. all right. >> you can help me do it. >> all right. so that's how you get in the trade war thing, right, if you start putting tariffs and we know that doesn't work. >> well, what you don't realize is you're in one. and you don't know it. >> no, i -- >> let me put it really clearly. america has been bled to death in a trade war that we don't recognize and we're not allowed to talk about it. and the -- all the tools i am describing are unfair, unbalanced, not fair trade rules that they're playing by. >> i agree with you, but no solution. >> the effect of that has been to almost destroy our economy. so we're in -- you know what is funny. the military guys do their job. they're worrying about a cyberattack that would bring down the grid. a cyberattack that would halt

the fleet in its tracks, which could be done. they have a lot to worry about. all this stuff, where their job, until now, until now, has been protect the nation through the military wit, military techniques. you know how they say don't fight the next war like the last war? that's what wear doing. the chinese don't want to have a military fight with us. they have no interest in that at all. my favorite metaphor, not a pretty one, is there is a patient on a table, a line on that patient's vein and the blood is going out as fast as possible and the last thing the vampire wants to do is upset that patient. they don't. they're making too much money. why not just wait until we have so little left, we can barely get it back off the table and afford one more -- we're going to be done. unless we get the first part fixed, not the military part, nothing to do with the military at all. if we don't get the economic stuff working and there are a lot of smart guys in the pentagon who get this.

there are more guys in the dod who understand what i'm saying than in the commercial world. they now consider the economy to be the number one security issue. there is a statement made last week by the head of the -- saying this is our number one concern. they elevated it to number one. so they get it. but a lot of people don't get it and we are in a trade war. don't be afraid to say it. say it. then say how do we get out of it? we don't like trade wars. what can we do to make things normal again? and that would be great if we could do that. >> okay so the question i was going to ask, sorry if you'll let me do that, is my issue is improving education. i think that's how you get entrepreneurialship, creativity and invention and i think we're failing in this country in our, i would say all of our education system, but particularly our k-12. so how do you -- what is your take on that and how do you

improve that for the future? >> i can solve that problem in four minutes. i have the advantage that i spent about six years with a thing called project ink well where we took all the big vendors and looked at the problem you're asking from a technical perspective. we worked with kids, superintendents, it is not a flip answer. but i know what the answer is. ignore everybody and what they say to you and just do the following two or three things. number one, provide broadband in every school. number two, provide some kind of appropriate device to every student that can link up to the internet. number three, provide access for those students at home no matter what their parents make in terms of money. do a means test so every kid can do his or her homework. number four, provide professional development for the teachers ahead of time before you do this so that for the three months before it, they have their own laptop, whatever

it is, and they're properly trained. and by the way, there are no exceptions. nobody gets out of this. if you're going to be a teacher in this new school, you have to take the professional development. and then number five or six, whatever it is, provide support at the school so that when the teachers need curriculum advice, need to know how to get going on this stuff, they have someone to turn to when the batteries get old or something, they have someone to turn to. i'm done. that's all there is to it. i'll suggest that that isn't even very expensive, which is the usual objection. when we started this, people objected to the whole idea of technology. now it is like we know it is the future, but it is very expensive. no, it's not. today you can get a really good laptop for 250 bucks and big numbers. today you get broadband for not very much money and in fact intel looked at this from a business model perspective and i think, i was saying this to jay insly, hopefully your future governor, that -- who is a tech

guy, i think that what is going to happen is there is a business model where the school becomes the broadband distributors, an isp, and makes some money doing that, and ensures that the kids in that school district are provided. and it can be a private/public partnership which i've seen work well with comcast for instance in san diego. instead of 19 levels of administrative costs, you have the sturdent and the teacher connected to the world of knowledge directly and that's the revolution in k-12 you have to have. there is no way around it. it is going to be the future. if you wait 30 years it will be 30 years of misery. it is the only way out. >> did you have a question? and then brian. quicker questions and quicker answers so we can get a few more -- >> along the lines of creativity and developing talent, i think one of our strengths as a country is we're an immigrant nation. we have talent that comes from other places in the world.

and as the world kind of evolves and liberalizes, and economies become stronger and other regions, do you anticipate that having any effect in terms of us being able to attract creative talent to the country? >> you bet. happens now. you know how many students come to the united states for university here from all these countries we're talking about? in australia, i was just in australia working on some things and there are a number two or three revenue line is students from australia coming to university. some 140,000. huge numbers. so, yes, i do. i think if we just get -- put your head down and do the job, do the work, you know, be creative, create high margin things, people come to us from all over the world to learn how to do that. you bet. >> so jay insly had the misfortune of sitting next to me on a five-hour flight, he melted

under the pressure, you have the cameras on, the headlights, you can't melt here, respond to the observation that walmart is the greatest anti-poverty program in the world and attributing factor of that is the peg of the rimby that we have low cost of goods, we're able to serve all kinds of people with grocery and food stuff and consumer goods. >> i disagree with everything you said. let me try to -- let me try to say it in a way which is reasonable. i used to think the same thing. i used to think walmart is great for poor people. then i saw what walmart did to american businesses. so, you know here is the story. you take -- you make a sleeping bag, you go to walmart, they say -- it is being made in north carolina. they say, well, i would like to sell that, it is very good, but sears used to do this too, by the way, but, you know, you're charging us $19.95. it has to be $9.95. i can't do that. these people have to pay their families have got to eat. i don't care about that. right.

now i'm on a plane to china. they're happy to do that for 19 reasons. depends on the business. tvs are different from sleeping bags. so all this stuff, walmart becomes an agent of the pla almost. walmart becomes an agent of the chinese government economically in the sense that walk down the aisle and check how many things are made in china in walmart. >> 75%. >> so while that's happening, the people who would have made those things had real jobs in the middle class here are on the street. >> are they on the street or are they actually biotechnology now? >> no, they're not in -- the guys who used to make furniture in north carolina are on the street. they're not selling chairs through walmart. so there are people who have been retrained, but not enough of them. and i don't know what the numbers are, but let's guess maybe 30% get retrained into good jobs. the rest are getting mcjobs. they're getting jobs for 7 walk bucks an hour and used to get 20 bucks an hour.

now, i'm not against competition. here is an interesting problem. you look at the question of free trade. forget everything i said so far, just free trade. and you know that there are people who would kill to get a dollar a day, right? god bless them. i hope they get it. but you're the president of this country, and you say to yourself, politically i'm inspired to believe in free trade. all the guys tell me i should. and we had this -- we had both parties. we had bush sr. and bush, clinton, i think they didn't think it through. that was the -- ross perot was right. that was the destruction of middle class. and so if you're willing to say no tariffs, no questions no boundaries, no borders, guess what is going to happen? your average wage is going to drop from whatever it is today to 50 cents an hour. are you ready? i'm not. so if you don't want that to happen, you have to start talking about words you don't like to use. trade policy, industrial policy,

you want to save steel? okay. steel is pretty important. all right. can't go to war without steel. we'll save steel, right? well, that's not necessarily free trade. so we're in a situation where we need to be honest with ourselves internally and then decide what is important. and if having a middle class is important, we can do that. but we didn't have that conversation. we just did the free trade thing and now they're gone. >> last two questions until i close it out. sam. >> you said something in the second question that was brought my question up, which was you said we're in a trade war, we have to recognize that, and but if we make the changes it is time to get back to when it was normal again. when do you think it was normal prior? >> that's a good -- that's a very good question. i have no idea. but i guess normal is like saying some leakage is okay. i think that it is -- always

been wars, a lot of wars are caused by trade problems or by burgeoning populations or lack of resources. what is normal? it is pretty ugly. but if you are in the mind that you would like to have a somewhat sustainable project, te got to plan for it. it's not going to happen. someone will come and eat your breakfast. >> so it stops the bleeding. >> exactly right. i'm not saying there won't be more theft or you won't win or lose half the time. you will. that's what i call normal. if you lose every time, that's not so good. >> okay. >> so you're describing a situation where there is this once you finally realize you're about to die, you're pretty much dead. what do you expect -- what is

your predictions going to be the c catastrophic moment where something has to happen and that's going to make a giant shift in policy. >> you know, let me put this in an interesting way. i have spent a lot of time on boats. and in other dangerous situations. and i learned something about life-threatening crises. what i learned is the earlier you recognize your end one, the more likely you are to get out alive. people for whatever reason don't want to talk about it or don't want to recognize that the boat has a hole in the bottom of it. the boat is going to sink while they are on it. so i'm going to suggest to you we're in that moment right now. we are experiencing -- if you

look at the economic carnage right now in the countries that i'm naming with the exception of australia because of their mining, it's breathtaking. we are in the middle of that cusp of that curve and we're experiencing it and living it and half the people you know are going through bad times because of this. and you ask when is it going to happen? it's happening right now. the question is how do we focus ourselves when you're in the middle of a charter. it's like you're too close to see it. you think it's just a matter of a few minutes and it will go back to normal. no. the boat has a hole in it. it's not going to go back to normal. i was on it when it hit that famous rock and almost sunk. there are 500 people on that th boat and they were thrown off their chair and the captain says get back on your seats, everything is fine. no problem. and i'm thinking, jeez, at that speed, we probably ripped a

15-foot hole in that boat, which we did. we were sinking. and the captain is like don't worry about anything. if you need to know where life jackets are, we'll tell you. i'm running around yelling for life jackets and the crew was shushing people. so we need to ask where the life jackets are now rather than later. >> last question. peter teal, he wrote a piece in national review called "the end of the future." one of the arguments in the piece is that there's a major difference between change and progress. and we tend to look at technology as this panacea. it's going to solve all our problems. but that means we're just too focused on technological change, but we're not seeing new inventions. do you think he's right? is there an end of the future? is technology not the big solution here? even your education answer was

essentially just technology. that's the solution. >> when i said we were an inventing nation, i'm talking about what we call technology. it's also pure science. so doing pure science and making the money. i don't believe that's over. i think we're doing a good job at that now. you can look almost anywhere and it's exciting. you can see which ones are going to grow. they are everywhere. so we don't have a -- even in this economic climate, we have a lot of people starting new companies. it's exciting. it's really exciting. here's a problem that i never thought we'd have. >> when i was a kid and shooting for the moon, the last thing -- i thought i was going to go to the moon. i was prepared to be an astronaut. i was ready to go. if you had said to me then, half of your country is going to start thinking the dinosaurs walked with men and they are

going to ignore science entirely, and also the other half won't be able to talk to each other anymore and all decision make is going to come to a halt because they can't be civil, i would have said you're nuts. but that's my description of tonight. so the part that -- i'm not worried about can we invent. i'm not worried, is the technology useful. i'm worried do we have a maturity as a people to protect ourselves and to do the right thing and to make decisions together. and i don't see that we do. so i'm very worried about that. >> thank you so much. we have a genx bottle of wine. and the romance label says "sophisticated, dynamic, and bold with firm structure and multiple layers, resulting in a commanding but excessable offering. this wine may be gen-xed, and

you too. let's give him a round of applause. [ applause ] >> y'all can get up and get a drink. he might give you some. coming up tonight, a debate between the candidates running in wisconsin's recall election. republican scott walker is being challenged by milwaukee's mayor tom barit. watch this live tonight on c-span. tomorrow on washington journal, our guests include daniel mekstroth from the

manufacturer's alliance, david kramer, and mona charen. life is incredibly precious and it passes by far too quickly. so during your time here, use all of your unique god-given talents to serve one another as that will be the true measure by which your life will be judged. follow the golden rule. >> memorial day weekend, watch commencement speeches on c-span, politicia politicians, white house officials, and business officials share their thoughts with the graduating class. saturday through tuesday. the public policy center held a discussion on fact checking and the 2012 presidential election at the national press club in

washington, d.c. journalists and political checkers examined claims made by and about former governor mitt romney and president bashar al assad barack obama. this portion of the event runs an hour. >> thank you, kathleen. thanks to all of you for sticking around for the final panel today. these are the guys who on the news side take these commercials and truth test them. and i think that's an important part of the process so that's what we're going to get into for the next hour. we were talking in the last panel about how the money is flowing this year and you may or may not know that across the

country, it's now estimated that close to $10 billion will be spent in this political season both by the candidates themselves and by the super pacs. and you know, as was mentioned, a lot of that is going to go to key battleground states. there was an article in the "usa today" a couple of weeks ago that quoted a general manager of a station in columbus, ohio, a good media market in a very important battleground state. and he said, you know what? we're running around with a bushel basket just trying to catch all the money that's falling out of the sky. and that's got to be an interesting and for his owners i'm sure, a good position to be in. but that's the kind of thing that we're looking at this year. and these gentlemen are among those who on the news side take these ads and put them to the test.

so let me introduce the panel and what we'll do is each one of these folks brought examples of their work. you'll see those. they'll talk about them a little bit and then we'll have time for -- i have some general questions and i hope you do, too. so let's get started. greg fox right here. to my immediate left has been covering politics for wash-tv in orlando. that's the hearst owned station, 25 years? >> this month. >> okay. he's younger than i am. he's a two-time winner of the walter cronkite award of excellence in journalism from the annenberg school of communication. he's especially recognized for his series of truth tests, some of which you'll see today, that cover inaccuracies and distortions in political campaigns. next to greg, pat kess a