funding and other, you know, sources of capital raising. you know, there are critics of it that say it would create penny stocks again and boiler room operations and hoodwink small investors into buying into crummy companies. i think that's probably not all that true. i think at the, you know, margin, it's a helpful thing. we should be encouraging small businesses to raise capital in whatever ways they possibly can. i don't know. it's another one of these things where it's not a big factor, i don't think, in boosting the economy. i don't think it's going to play a large role in job creation. i think it's probably helpful at the margins, but i don't think it's a big factor. >> i remember writing a supportive editorial for the jobs act and several days after it, groupon had that problem. then facebook had all their problems. i'm having a little bit of buyer's remorse here. all that said though, i think unbalance is still a good thing. i think without, you know, the best of intentions in this country, we've made it far too

difficult for small companies to raise capital and to access the public markets. i think politically, actually, it was a significant act in the sense that one of the reasons obama got behind it so enthusiastically was that whatever misgivings he may have had, it was a fairly low-cost way of demonstrating he's, in fact, pro-business when everybody, you know, paints him as anti-business. it's a major issue for him to overcome to t overcome. i think obama and romney both have to battle against their opponents' efforts to paint them as more extreme in one direction or the other than they really are. obama has a terrible ability to connect with business. i mean, he's the teleprompter. he's not the back slapping guy business folks can relate to. i think that translates to him not being sympathetic or understanding how a private

sector economy works. the gaffe he had last week certainly didn't do anything with that impression. i think he actually has sought to find directions forward on policies that are as unintrusive towards business as possible and still true to his liberal agenda. i think the affordable care act is one of them, and the jobs act is one of them. one of the ironies of the keystone pipeline issue is that if he did not have to worry about how approval of that pipeline would disenchant his liberal base, he would have approved it ages ago. i'm fairly confident that within days, if not minutes of him being sworn into his second term, he will approve that. >> he just couldn't take the headline risk with the environmental groups saying i'm going to green light this thing. they're very concerned. i think deep down, greg is absolutely right. the president would just let that thing go and create the jobs that could be created through it. you know, it obviously was a big political risk to do that. there was a lot of opposition

lined up among the big green groups. the anti-business argument gets thrown around a lot. i don't think he's anti-business. he doesn't have the mind set of a, you know, private sector business creator man. he does not have that ease that bill clinton did with the private sector, with wall street, with the business community. so they have the sense that, you know, he's very much against them and is going to do anything he can to put in these new regulations that are going to block him from creating jobs. that doesn't make any political sense. obviously, he's going to try to do certain things to increase that. but that idea that he is hostile to corporate america and hostile to business is absolutely set in stone and is not, you know, going to change between now and

november. so he's going to just have to overcome that if he's going to win again. you see it. i see it on wall street every day. people who used to, you know, be fans of his, who raised money for him, just really viscerally can't stand him. >> how did facebook become fleecebook? well, it became fleecebook because you got to love the people on wall street. they're so inkorage bli bad. >> read this book before you boy an ipo. >> the machines are picking your pocket. they're fleecing us retail lambs. what happened is -- and this was pro prove den shl. the machine malfunctioned and bit the traders. it's similar toematic of a structural problem in the

marketplace, which has frightened the retail investor out of the stock market. in terms of the jobs act, you know, we talk about widows and orphans being taken advantage of in the stock market. if you look at the -- like, the commodities, future trading commission, if you look at their cases they bring against scamsters, it's rich people that get ripped off more often than widows and orphans. they're people that should know better. but we have a false sense of security because of our regulators. you know, we just project more power and wisdom on to the regulators than they really have. i use the analogy, if you go to a fast food restaurant in a really gamey neighborhood, they generally have a rent-a-cop with no gun to try to convince you it's safe to eat a hamburger here, you're not going to be robbed. that's the same with wall street. you get the false impression because of the securities and exchange commission that people

are watching out for you. you don't do your homework, and you're just walking in like a sucker into the den of sharpies. you know, this is a case of where the job act, the crowd funding, go for it but keep your eyes wide open. >> we have a question in the back of the room. >> hi. maryland with npr. my question is for jim. you took some hard shots today with the fed. seriously, i want to think through, what were the alternative scenarios? let's go back to 2008 and the crisis that we're facing. what should the fed have done? what would have been a better set of policies, and where would that have brought us to today? >> the feds should not have robbed the savers.

the feds should give savers a decent return on their deposits, because though deposits are used by the banks to make loans. what the fed was doing at our expense was giving the bankers a huge spread between their deposit costs and their loan costs. so in addition to the bailout of wall street, our savings are being used to subsidize the banks and wall street. they should have given us our money in savings, number one. we would have gone out and used that to stimulate the economy with purchases. that's my biggest gripe. the other thing is when they debase the currency. you know, in order to improve our exports, say, and make us more competitive. they're reducing our purchasing power. that also hurts the economy. so i think -- i mean, we did have a credit crisis.

we had to unfreeze the credit cycle, but at some point, you have to ask the individual saver to stop paying for this and, you know, give them what they're due. >> can i just respond to this quickly? i hear this a lot. you have to think of the interest rate as being like the price of saving, right? essentially it's the price that gets the supply of savings equal to the people who need the demand for savings, the people who want to invest it. it's a harsh fact of life right now. there's lots and lots of people who want to save and supply their savings and not a lot of people who want to borrow it because the borrows have been crushed. every country in the world is trying to export its way out of trouble. the world is a wash on savings. it's not great time to be a saver because you're competing with so many other savers who are trying to get a good return on their money. that's just the way it is. it's the opposite when savings are scarce. when the fed has high interest rates, people do not turn this morality argument against them

and tell them they're subsidi subsidizing borrowers at expense of debtors. the job is to keep inflation low for everybody. you could run 8% interest rates that would tank the economy, and everybody would be earning high returns because their wages and savings would have been wiped out by the ensuing depression. the job of the fed, again, is trying to maximize the size of the pot. maybe we'll learn in time that there are other policies they could have pursued that would have worked better. with respect to banks, the big thing banks complain about right now is the fed's policy by pushing down long-term interest rates while they're forced to still pay some positive number to their depositors. it's one of the reasons bank docks are so weak right now. it's a direct transfer to the customers of banks because it's flowing through in terms of money the depositors are getting

and the borrowers from banks are getting. >> one more question in the back of room, then a question in the front. >> hi, there. thank you. i'm with the voice of america tv service. i'm a general assignment reporter, so bear with me if the question is a little too broad. if i were a member of the middle class or someone in the working poor, what, over the next six months, election aside, would i have to be worried about the most? what one or two sort of critical pessimistic forecast do you see for someone like that? if two years ago it was my home is losing most of its value. if last year was realizing that my unemployment is going into month 12, month 14. is there a way for people like you to know or see over the next six months what will be the next one or two crisis moments for that category of person, working poor, middle class, your average american. >> i think one of them is student loan interest rates.

it's the one sort of real big open question. can congress figure out a way to not have the interest rate on government subsidized student loans double, which it would, i think, the end of this month or next, if there's not another piece of legislation passed that would put that off. i mean, a lot of people, you know, in the middle class struggle with a lot of student loan debt. you know, our own president just paid his off a couple years ago. he's been around for a while. so i think -- and there's close to $1 trillion in outstanding student loan debt. you know, that also crowds out other economic activity based on people with limited disposable income having to use a lot of it to pay down student loans. so i think one key thing to watch is does that get fixed? do we not see the interest rates go up on student loans, which would take what little

discretionary spend iing famili are spending with and see a little piece of their monthly budget go to increased interest costs. there's not a lot of talk on the campaign trail. there is in washington and congress a bit, but not so much among the candidates. this one particular of the interest rates, but the student loan crisis in general and what's to be done about it and how do we address it and not have it turn into, you know, another piece of the debt crisis. that, then, opens up the whole question of education, education reform, how to we prepare people for the kinds of jobs jim was talking about earlier in technology that are going to drive incomes and growth going forward. we don't have a lot of talk in the presidential campaign about how to address the skills gap that we have, the job openings that can't be filled because the work force doesn't have the skills to fill them. the immediate near-term thing is the student loan interest rates, longer term, the entire size of the student loan debt people are

facing, and then beyond that, how do we get the skills to the people who could use them to get good jobs that put people in the middle class. >> i would just say the biggest thing to worry about is europe. >> there's that too. >> if you're in that economic position, i've spent most of my life in that economic group, you know, and you live from paycheck to paycheck. you don't really concern yourself with what may lay ahead. you have to live a very spartan existence. when he a mild winter and fuel prices are down. if we have a cold winter coupled with higher fuel prices, that's going to be a tremendous burden for the lower and middle classes. food prices are going up. you go to the supermarket, and you notice that you're paying a lot more for a lot less. that's a big concern.

so the other concern is we're not seeing wage growth in the country. and so if you're expecting a raise from your boss, forget about it. as i said, there's more of a wage deflation going through the economy. that makes life a lot harder to live. >> and up front. last question. >> ann white, unaffiliated. i wonder if you all would talk a little bit more about europe. ben mentioned -- listed the bilbig things that have to happen to stabilize the crisis. i wonder if you would talk about them a little more, like the deposit insurance, how hard they are to do and get done. >> i should also disclose that ann white is my mother.

maybe it's a good place to end. >> you should have asked a harder question. >> putting me on the spot here. i mean, those are things that people a lot smarter than me have mentioned as potential steps that could be taken to mitigate the crisis. i mean, one thing that the federal government did in our crisis in 2008, 2009, was more than double the fdic insurance on deposits, guarantee all, you know, money market funds. to, at that point, make sure there were not runs on banks. we were at a point in late 2008, early 2009 where there was real concern that we were going to have massive bank failures and there's the famous hank pahlsson moment where he's talking to his wife on the phone saying i'm worried people are not going to be able to buy food and we're going to have a real disaster on our hands. the banks are going to fail. so one thing they could do, but they don't have the mechanism to do it now.

they would need some greater, you know, political union and banking authority, regulatory union to put in place, cross continental increased deposit insurance so you don't have the situation in which somebody takes their money out of a spanish bank to put it in a german bank. you need to have everybody assured their deposits are not going to disappear. then you need -- you have all these, you know, different levels of sovereign indebtedness and places like spain going above 6% on the fear that even though they don't have much of a debt crisis as greece, that eventually they will be unable to meet the burden of their existing debt. if you have an agreement across europe to put all of that sovereign debt into one pool in which, you know, germany, stronger countries are assuming some of the risk for it. it's presumably interest rates go down and the crisis is reduced. a lot of this takes a lot of difficult, complicates

agreements on each of the 17 members of the you're reurozone. you need to move toward it and these are the set of policies we're going to take eventually. presumably, you get the market taking its foot off the neck of some of these countries. >> i think what europe needs is the equivalent of a u.s. treasury bond. essentially, i mean, one of the reasons the united states can run the enormous deficit it's running now and bail out its banks is because no one questions the treasurer to repay the bonds or the ability to stand behind its banks to whatever extent possible. that's something spain and italy and greece cannot do because of the framework they've adopted. something they're trying to lurch toward is something like a treasury bond for all of europe so spain can borrow at the same rate as germany. but the catch is this requires enormous political compromises. it essentially means the

creditor countries like germany have to be willing to stand behind the borrowing countries like spain and greece. i have some sympathy for the german position, which boils down to, why do you think they'll be more careful with our money than they were with their own? the germans are very sincere is saying more europe, not less. we believe in the european project. they are not convinced they have gotten the buy-in yet from the other countries that keep wanting to use the german credit card to get themselves out of their problems. so for europe to solve their problems will require movement on both sides. it will require the germans to become more comfortable with the idea that their credit card will have to play a more important role in keeping europe together, and the other countries to realize that that credit card will require them to make certain concessions of their own that they have thus far not prepared to make.

>> i don't think europe will solve its problems, unfortunately. i think that's one reason you see the royal stock market here. if europe's banks collapse, we don't know what the effect will be on our banks here. that's sort of a secret i have been unable to unearth. you know, i just don't see the euro standing up into the future. >> and with that, i think we'll conclude. >> on that note. >> we're still not crying. we haven't done our job yet. >> ben, greg, jim, thank you very much for this lively conversation. and thanks, everybody, for joining us this morning. again, please watch press.org for more panels like this on the presidential election. [ applause ]

tomorrow here on c-span 3, live coverage from capitol hill of a hearing looking into the defense department's 2013 budget request to congress. defense secretary leon panetta and joint chiefs of staff testify before a senate appropriations subcommittee. live coverage begins at 10:30 a.m. eastern. also tomorrow, jp morgan ceo jamie dimon is testifying. live coverage over on c-span at 10 a.m. eastern. and a note that jamie dimon will be on capitol hill next tuesday and c-span 3 plans live coverage at 10 a.m. of that house financial services committee

hearing. the economy will continue growing at a moderate pace, according to an assessment by the american bankers association. but the group says a lock of agreement on the deficit by congress creates a lot of uncertainty. the chairman of the aba economic advisory committee also discussed unemployment, lending, and the housing market. this is about 20 minutes. >> good morning, everyone. the committee's forecasting continued moderate economic growth of 2.2% in 2012 followed by relatively modest, moderate economic growth in 2013. 2013 will likely be weighed down by fiscal uncertainties, and that, as a result, our forecast

is probably a little more modest maybe than some. certainly if we were not encountering this fiscal cliff in 2013. then maybe the forecast would be considerably higher. but in general, moderate economic growth is the forecast. personal consumption started out the year approaching at 3% annualized growth rate. consumers went out and made a large consumer durable purchases, specially automobiles. and this trend is probably going to continue throughout 2012. you can see the forecast shows a pick up in consumer spending. at least a moderate pick up in the second half of the year. the low interest rates have helped consumers to improve their balance sheets. certainly employment growth has been quite good.

it's been 2% annualized growth. in the household survey, 1.5% according to the payroll survey through the first quarter on an annual basis. there have been some significant improvements in labor markets in the last year. however, having said that, there are still some concerns among committee members that real disposable personal income growth has been quite modest during this particular economic recovery. and that could become an issue if there are some other shocks to the economy, for example. we do see there are some significant risks, primarily from the eurozone sovereign debt crises, but also from the u.s. fiscal situation. and those, in essence -- both of those are moderating our views

on many of the economic growth areas, including business equipment, investment, inventories, and exports which showed a drop here this morning in april according to the most recent data releases. overall, the going into next year, with the fiscals uncertainties playing, we have personal consumption dropping off in the first half of the year before gaining traction later on. inflation forecast is for moderate inflation, around 2% annualized rate. not a deflation their situation, but not a high inflation situation either. relatively modest inflation. from the perspective of the banking industry, our forecast for lending is actually quite

robust. cni lending is forecasted to grow at double-digit rates, over 11% in 2012. easing up in growth rates a little bit next year but still remaining relatively strong. also consumer lending is algs expected to remain quite solid, clearly supportive of overall recovery of the consumer and the economy. the large consensus, the wide majority of members in our committee think that both credit vailability and credit quality are going to improve in the next six months. so again, that is also supportive, again, of our forecast for at least a solid second half of 2012. overall, the labor markets have become a bigger area of focus. there are some differing views on that. some think that the weather was

an unusual factor that tended to move employment around from month to month. again, the forecast calls for relatively firm employment growth. it actually comes out to about a $2 million per year. that's not bad. that's what we've seen. it's even a little better than what we've seen in some of the earlier years of the recovery. the unemployment rate could start to be slower in coming down, however, because the participation rate could rise. more people could be encouraged to come back into the work force. although, that is, again, an area where there are various and diverging opinions on the committee. with that, i'll open it up for questions. yes, sir? >> kent hoover with american city business journalists. as far as the u.s. fiscal situation, i guess it kind of depends on what they do and

when, right? and how much different si their yoes impact on economic growth. say they don't do anything after the election but do a short-term extension of the tax cuts and maybe somehow avoid the sequester but don't really solve the whole thing and kick it into the next year versus, like, doing a full boor deal after the election versus doing nothing at all and a sequester happens. how much do those three scenario, what's the difference in the economic growth projection? >> this is a very challenging environment to forecast, given that there's a great deal of uncertainty on the fiscal side in general. it's not only the forecasters that are having problems. i think many planners in the economy as well. there's tremendous uncertainty

in terms of tax policy, for example. just as one example, the so-called bonus depreciation on capital equipment, that's been coming down. we've seen slowdown in capital spending. that's an example of how fiscal uncertainty can impact real economic decisions. in general, the weather, another area would be the for example capital gains tax cuts. how is that going to affect financial markets this year? that could create some uncertainty and prevent business planners and forecasters to be

able to see and have more accurate forecasts. so in general, the it's a lot of forecast risk. from our perspective, we're concerned about the certainty to the economy and the consent that a consensus can be somehow built in washington with regards to the budget to perhaps a come pro miez, but at least a consensus. that would be the best for the economic forecast. yes? >> pedro from reuters. so, a couple of questions in one. you see the probability of departure, is it potentially at 55%. could you shed a little light on what the committee's thinking was on that? which countries are at risk and what the probabilities are to the individuals countries? and do you see any scenario in which a greek exit