possible. no one, i think, rationally says it will be eliminated. i think in this environment, we are dealing with threat mitigation. we are going to mitigate that threat. we are also dealing with vulnerabilities. vulnerability mitigation. we are not going to eliminate vulnerabilities, unfortunately. the one thought i have on that, in other areas, we agreed you don't drive cars when they rear end they explode, that is unacceptable. having planes that tumble from the sky is likewise unacceptable. having computer hardware that is immediately subject to or vulnerable to intrusion is unacceptable. actually, it's not. we actually have accepted that as a model. we accept that there are updates that are provided to our computers because they, in fact, are perhaps inherently subject to vulnerabilities.

i only make that point to say we live in an environment where we are mitigating all these problems. as much as i would love to live in a world where we could simply eliminate them or get to a place where we eliminate them, realistically we are going to be dealing with strategies to mitigate these problems. >> i want to, before we open it up to questions, get a little more specific on what the private sector should be able to do, and maybe steve you or anyone else jump in on this. there's been a lot of discussion of active defense, of actions that the private sector could do in its own infrastructure, honey pots, et cetera or moving outside of its infrastructure to try to get back its data. is this part of what you're talking about as greater private sector role in deterrence, and i guess from others, are there

reactions to that specifically? >> first i would like to say there is the playbook for cyber events. some of these issues are discussed there and in a way that is very even-handed to address the issues. >> steve saved us by holding it up. >> i have no financial interest in this. i actually can say that. a very good compendium. i would rather start on the highest end of that question where the private sector should be and touch on the comments i made earlier, which again would require a sort of paradigm shift. a paradigm shift in which we try to realize that the internet and technologies from a security perspective have differential that it's not the case the top secret computer i used to use for the government should be the very same computer with the very same protocols that i could buy in any electronics store.

that makes no sense, right? it has obvious consequences in terms of moving data between top secret and secret and unclassified networks. we heard a couple of years ago how the consequence on one occasion led to the cyber net, i don't know if riddled is the right work but affected with malware. if a worm could destroy our information base. the first thing is to try to figure out what the technological solutions are. that's going to be a private sector challenge. it might be funded by the government, but by and large there is an r&d opportunity to come up with hardware, software and protocols that differentiate between security and privacy models.

i think that there might be a happy coincidence here in which some of the areas we need the greatest security happen to be the same areas that require the least amount of privacy, which is interesting if you think. certainly an opportunity for where we should start. when you think about the electric power grid, a high security environment, a very low or should i say nonexistent requirement for anonymity. if you're operating on the electric power grid you should be known down to the biometric level of who you are, right? what we see though is that the technologies that have been developed for interoperability really have focused after that. the internet, the first consideration for the internet was interoperability. after that became the reality. focus was on bandwidth. after that focus was on speed. after that focus of the engineering community was on privacy.

we really haven't turned the best minds of the world to a focus on detection and attribution for threat deterrence. i think that's the first level. where can we have better systems that are interoperable, internationally that promote environments for detection and attribution with our civil liberties and privacy requirements. second would be trying to figure out what those communities of interest are internationally. one could think all the problems we have coming up with international agreement between governments, starting with the cyber crime convention, counsel of europe which can't agree on search and seizure principles between allied countries for law enforcement purposes. that doesn't include major players in this space. could be much more easily resolved in a privateer sector that would say if you want to operate in this platform, this hardware, these protocols internationally, the governance model has private sector certs

that can do transport search and seizure, locate data, lock down data, stabilize the situation in a way that then can be used for some penalty on whomever the adversary is that did that. it might be shutting, locking some people out of a system. it might be turning it over to the government. it may be civil lawsuits. it might be engaging in name and shame campaigns. whatever the issue is. this notion that the model that we are looking towards might not be in agreement between governments fundamentally, but international agreement between similar communities of interest in the private sector. i was often reminded in the government and now certainly it bears out that i'm in the private sector, when i'm speaking with a company, they are likely in place, in excess

of 150 countries. if i could bring ten trans national corporations together, i have a really good international strategy. so that's the second thing. the third is to think through then what the government's models are. right now we are looking at nongovernmental organizations that are handling domain issues. we are looking at internet protocol and how that is managed. you don't have a similar nongovernmental organization formed and federated for the purposes of security. that's a model that we could consider. where does that leave us without the larger strategic vision? what you're seeing now is that the private sector, similar to governments are operating differently depending where they are. we saw an internet security company abroad that actually broke into a pla, china pla infrastructure in hong kong by breaking down the passwords, getting in and looking through the infrastructure and publishing that for the security of the community saying here is where all the bad guy

infrastructure stealing all your data. to look at that from the perspective of the united states, looking from that vision, the point is you broke into that computer system. you didn't destroy it, you didn't damage it, but that's an unauthorized access. you may have by going through that system and publishing it, committed all sorts of other harms, including violating surveillance law and entrapment statutes. depending on your world view whether that is the case now or not, the real dialogue has to be whether or not that should be the case and how those types of activities, if they lead to the positive good goals we want, how you do that in coordination, cooperation or under the guidance of nation states and lawful systems, and what comes of those. there is a debate on the active defense side. certainly i've never been in

favor and strongly oppose anything that looks like vigilanteism, going out and getting a pound of flesh for a pound of harm as pure matter of revenge, but i think that there's a lot that does president fall into that category. when people speak about active defense, there is some group that immediately drives towards escalatory models. i don't know if they think that's what's going to happen or throwing that into the mix to disturb the rest of the conversation in a disingenuous ways. a lot of bad guys are operating on networks that have no protection of passwords, where they are pulling information back. they are keeping it there until they then go back and obtain it for further use. i never heard anyone say if there is an open access point that has your information on it you can't go and get it back or

delete it. that's different than saying you're going to bring down the infrastructure. the area i think is most right for consideration by a group of lawyers such as this and from that policy perspective is where does the real world views of self-defense, defense of property, defense of life have its cyber analog? we haven't in the past seen that areas where something would be traditionally or technically unlawful, when it's done in a necessary and proportionate way is justified under law. that would be true of someone who steals someone's property running down the street. if someone were to say are you able to tackle somebody, hold them down on the street for a period of 15 minutes you would rightfully get the law school answer, no. that would be assault, brought and kidnapping. if i put it into context and

said they were making off with someone's property that there was no law enforcement present and that the purpose was simply to get them in place, not to harm them and to hold them until law enforcement arrives. you would say that could be done and that would be justified a lot of the areas the private sector is considering is what is that ability to stabilize situations, to restrain certain evidence in place with restraint in order to then reengage the government. only as necessary and proportionate to harms that unless the private sector acted would be met with irreparable harm. >> okay. thank you. steve, i want to get to the audience. we've got a couple of people want to briefly jump in on this. maybe laura and jim. >> i take the point there are differing levels of privacy protection. to say you have no privacy interest in the electricity you use, there is a case on point with kilo thermal imaging.

you cannot collect information from a home that indicates high use ever in this case grow lights for marijuana plants, because that is a search under the fourth amendment. similarly, if you're not at home and your electricity use would indicate, the idea you can figure this out from all of that information, i think would be open to challenge. the fourth amendment protects person's effects and houses papers and that information against searches, you have to have probable cause and information particularly describing -- >> could i respond to that because it's directly addressed to me. i never suggested that when it reaches your door step there wasn't a privacy consideration. i was talking about the electric power generating grid itself as having high security, and no need for anonymity, i'm talking about the actual grid. i'm not talking about smart grid coming to the home. i don't challenge that in any way. >> i'm going to talk really, really fast -- no, i'm not going to talk fast.

i have a different experience from most people in the united states, which is for the last four years i've been conducting with the permission of the government regular talks with the chinese ministry of state security and people's liberation army about cybersecurity. the participants include u.s. government officials. one of the reasons we worry about escalation and misinterpretation, companies are acting at your behest. of course they say that, that's how it works in china. if we show up and ask for fbi cooperation, will you cooperate? if you find someone doing something, an american company and bring a case to the fbi, will you cooperate? the fbi representatives in the room said, yes, we would community in investigating and perhaps prosecuting that american company. something too bear in mind. the legal framework is changing. the group of government experts

in the u.n. put out a report endorsed by the secretary general and general assembly that said international law applies to cyber space, national sovereignty applies to cyber space, and the u.n. charter applies to cyber space. there are borders in cyber space, get rid of that dotcom stuff and states are responsible for those resident in their territory. this is the new international standard. think about how the world will change in the next three years as people move down this path of moving cyber space from this dotcom vision to another extension of the national framework for international relations and national security that we have now. >> all right. why don't we see if we have any questions. anybody? okay. back there and then harvey.

>> hi, nicholas, north carolina school of law. china combined some of the points made around the presidential directive. the points are sort of the band aid being insufficient and how we need to deter would have been addressed in large part by the president's actions, top secret but available on the guardian website as revealed back in july, that authorize offensive and defensive, even defensive seem sort of in a mode of deterrence, and headlines all ran with there being a target list associated with this revelation that the president authorized. i don't know if there's any kind of constitutional or congressional issues that it was just by the president alone, but

regardless, that would seem to be exactly to the point of there being a failure of deterrence by the government. if it's not, is that because -- maybe this gets into the meta issues of i don't understand what's happening in my computer because the terms are abstract. it sounds like cyber effects operations and target lists isn't that the government doing something to directly deter, and if it's not, why not? is there something about the mechanics that don't equate to actual deterrence. thank you. >> can i try that one, first? >> the debate in the u.s. hasn't caught up to the larger international debate. >> i think it is. >> i'm sorry, igor, i take it all back. discussion in the u.s. hasn't caught up to where the international discussion is. in part because it's normal diplomatic stuff and classified. they would be useful if the

state department were a little more transparent. i think they are trying. but the issues you raised deal directly to how people are beginning to interpret the laws of our own conflict as they apply to cyber space. and the first is can we define what an actual attack is? yes, we can and it's consistent with the definitions we have and this grows out of the estonian experience and others, there has to be damage or casualties or death. there are areas of ambiguity, but this is an attack that would justify a military response. there's a desire to see this carried out and the provisions of the u.n. charter and the things applying to self-defense. most of what we see in cyber space does not qualify as an attack. we call it an attack in the press but from the perspective of the international community it's not an attack. therefore, a military response is not justified. we have tremendous military capabilities but they are not

going to deter crime espionage. and they didn't deter it in the cold war. why are we surprised now? >> the question on cyber offensive capabilities is the nation states ability regardless of what the incoming threat is. this is our ability to use cyber offensive effects. it could be against a bombing. it's not necessarily symmetric to a cyber threat. so when i talk about threat deterrence, although that could be one piece, and with limited potential, limited set of circumstances as part of a greater mix of military power we might have, i try to put that into the wider context of all of the league elements much national power. you still have diplomatic informational law enforcement and private sector capabilities that combined really should have

a deter ent effect. it's one small aspect to answer your question and one that is limited in its availability as our use. >> you might want to look not only at the u.n. group of government experts reports but the work i think will be public out of the organization for security cooperation in europe, both have tackled this issue. >> harvey? >> hi, thank you for a wonderful panel. jim, as you know, groundhog day, bill murray does become a better person and gets the girl. there is a good ending. last night it's too bad there weren't more people, but melissa hathaway gave a presentation of where we are in cyber. she worked for both the bush

administration and obama administration. one of the co-authors of the cyber security initiative which many are familiar with. her sort of plea, one of the things she talked about, she's been at this since 2008 like many of us and kind of taken aback by the lack of an international strategy that the united states seems to be pursuing. i think it's intriguing to hear what you have to say, what you think as a group because you raised the itu issue and the quiet negotiations that jim has been involved with. but what do you as a group see what the best model will be for international set of standards or norms at conventions that we are should be heading towards because if you're a fortune 25, you're acting all over the world and enter a whole range of information sharing. not just the united states. i would curious to hear what the

brain power thinks. i do hope you'll look at the cyber playbook many issues you raise here are sort of discussed in that for the community. thanks. >> i'm ultimately very positive about this. remember that keith alexander is an army general. every morning he wakes up he recites the army creed. the key line is i will never accept defeat. i will never quit. he says it's true tooth paste dribbles on his chin because he brushes his teeth while he is saying it. if there's a place we're making progress, it would be on the diplomatic side. the terrain is changing for a couple of reasons, both, legal, the agreements, and political. the u.s. has experienced a range of setbacks, our influence is diminished. we have a diplomatic strategy, it's not necessarily entirely public but is available at the white house website. what's happening and steve touched on this -- i've been trying to remember why we did this.

i worked on these issues in the clinton white house. we split them. we had a security public networks working group and e commerce working group. i was one of the two crossover people. why did we split them? who knows. but they've come back together. so you now see issues of cyber security and internet governance. the itu overlapping considerably. and as part of that, you have the control over content issues and you have the issue of transborder data flows, not helped by the snowden revelations, right? every country has the same reaction. we did too. you're going to store my data in some other country, no way, it's got to be here. most countries actually that's their opening position. that's kinds of the debate we're

having now. how do you manage -- we're in a period of transition, we're moving to a world where cyber space will be treated like every other space, like the physical land. and how you manage that transition so that we don't lose the key values and yet we can have a more stable and secure environment will be very difficult. i do think we have a strategy. you could say perhaps it's not public enough, but there's these larger political influences buffeting and make it more difficult to achieve. >> in light of the recent revelations, the standard setting and high level of cynicism overseas, it's not just the brazilian visit canceled. there's serious opposition to what the united states did overseas. it was remarkable the extent to which and anger towards the united states. we can often forget that when here here domestically. but these revelations have been a significant setback to diplomatic efforts abroad. it's too early to see how it

will pan out. if it's going to pan out the united states will lead from behind or regain a leadership position, we're going to see significant fallout for some time to come. >> brief point. i think like jim on this issue, i'm an optimist. time is on our side here. i think the development of international norms will follow from just the proliferation of the technology. in 1996 when they start to negotiate, it was some countries that had a certain amount of tech no logical gain already. i think what we're seeing with proliferation everywhere, some of the norms have driven the other doctrinal advancements will become more possible. people -- i wince when someone brings up letters of mark in this context. but there are certain types of international attitudes towards hacking and the -- and the offensive of intruding upon networks that likely will gain

purchase and will make it easier to perhaps create international doctrine. >> okay, any other questions? over here? great. my name is anna soleil, from the office of general counsel. listening to what steven is saying and i agree with you about how it probably no longer suffices for government to just exlicate stale practices and constantly changing threat environment. but laura made an excellent point about the cyber distrust between industry and between government. i would add a third corner to

that, the masses and the popular pushback against sispa and sopa show there's a trend for cyber distrust. even before we get our international cyber grand strategy in line as melissa was talking about. do you have ideas going forward how to get these disparitely positioned stake holders on the same page? that seems critical before we can get everything else going. >> i was hoping those guys would jump in. they are not the same. their privacy community tried to cont flate them. i talked to one republican fla. i talked to one republican chairman in the house who had gotten for letters on sopa than any other issue -- >> can you say what that is? >> what does it stand for? >> stop online piracy act, i was about to make a bad joke.

i won't. it was an act that would have diverted people who were typing in, give me a free version of mickey mouse, it would have diverted them to some website that said stop, you are violating federal law. it messed with -- messed is a technical term, with dns. a bad idea. sispa is different. conflating them -- this is sort of how things work on democracy and because we are in a politically difficult situation, maybe it's moving more slowly. i do think we're going to be able to bring people around. when you talk on the hill, five years ago we probably all of this experience. five years ago they would say get out of my way, kid, why are you bothering me with the cyber stuff? now they get it. we are on a path to fix these things.

you will have significant objections though and one of the things we're not dealing with -- when i put on my think tank hat, what i say, snowden, episode, it's not accidental. it's planned and nonstate actor engaging in information against the u.s. we have a new kind of opponent, new kind of conflict. we're not doing so well in dealing with it right now. these are things we're going to have to overcome. i'm positive we can overcome them. >> dan? >> i'll just pick up the part of your question related to developing levels of trust and credibility between all of the players in terms of privacy protections, there is -- there are models to proceed here and i have a personal -- unique perspective on this. i was appointed by the president in april of 2003 to be the first officer for civil rights and civil liberties at the department of homeland security. it was a first. this had never happened in government position -- never existed in any government agency

before. on the same day, the secretary pointed the chief privacy officer. we headed out together in this uncharted world trying to figure out what to make of it and how to develop traction between and shared offices and try to figure out how to get through the policy world and make and develop some traction. i have left the department of homeland security four years ago and come back in the last few months. i've been really struck by the structure of privacy that has been built in. i walk past a cubicle three times a day and it's -- so and so, privacy officer. the privacy impact assessment, the idea of having a privacy impact, to discuss the privacy impacts of your program was foreign to us in april of 2003, foreign.

i remember my colleague kelly introducing this idea for the first time. if you look at our website now, we have probably a dozen privacy impact assessments on cyber related programs. we have five on the einstein program. they do cyber specific training and outreach and advisory counsels. i think there are -- my point is, i'm optimistic there are models that we can build upon in the privacy and civil liberties arena that could establish levels of confidence. now, we need to adopt those all across government and in a lot of private entities as well to have the embedded appreciation for these issues, but there are ways to proceed there. >> we have, i think everybody on the panel -- leonard, steve and laura have something to contribute. >> very brief on that question. for me it comes back a get to the point i made about information and people understanding technology. i would like to -- as much as i

can. i do believe that the private sector is not going to get out in front of the public on this. they have business concerns that will drive them back from being at the bleeding edge of doing certain things. one of the frustrations we faced -- i mean working closely with colleagues at dhs, for example, several years ago, when people were very, very concerned that there would be systems that would be filtering their e-mails, trying to find malicious code, we spend time asking, do you have an e-mail account? do you know spam is not getting to you? how do you think it's not getting to you. there was a lack of appreciation that the very technologies we're talking about were things that were broadly implemented in the private sector and used as just baseline common sense security measures. but there's a lack of appreciation for that. so i do think that part of it is trying to develop a more tech

savvy world where people the way it is normally protected. and an appreciation for why it is different parts of this whole enterprise are implementing those, including government. >> all right, steve? >> this gives me an opportunity to end on a happy note. despite certain pit falls you'll see here and there over time, the government and private sector are actually working remarkably well together every day. even some of the players you mentioned daily are working with law enforcement, with the government. those might not make the headlines but they are happening all the time. the fbi's program started in 1996 has 55,000 people in it today, meaning throughout the country every day building up

the type of trust. that's historic. that doesn't change based on an event here or there. the secret service with electronic funds task force, dhs working with the defense industrial base together with nsa insurance director of the csp program that dhs has, it goes on and on. my main point is that private sector and government are working really well together. you have to align for the right goals but i don't see a problem in that regard. >> laura? >> i want to respond particularly to dan's points and part of jim's points. there's a real danger here that we think by checking the box we've addressed the underlying concern and i'm speaking about privacy. we have a privacy and civil liberties oversight board with no money and no teeth. the idea we have one, great, but what can it do? >> we have systems of records notices but exceptions for national security that routinely used by dhs and others. with regard to the biometric programs, we have a privacy act almost 40 years old and no

longer does what it set out to do. we have a foya with exceptions for national security that are routinely used to deny request for legal reasoning as to why somebody engaged in certain activity. we've seen with judge reggie walton's release that actually you can release legal reasoning without providing too much information about the underlying issues. and what we found out is that a secret court has secretly carved out an exception to the fourth amendment that the supreme court itself never recognized. so when you say we're doing a lot on privacy, it's a little bit hard not to be too cynical about that when you see there's an underlying deficit and this comes back to the point and your question, which is, there is a problem when you have a population, if you're trying to get by and from them. there's a certain amount of cynicism and concern about the level to which democratic governance can continue if you don't know what is happening in your name and what you're elected representatives are doing.

>> okay, well, we have two minutes left, if somebody has an easy question. >> the questions are always easy, the answers are -- >> hi, i hope it's an easy question. it's actually two, one may not be an answer to yet. that is, how the liability issue that was mentioned with regard to the new framework may play out. and i wanted to ask also about the broad community of hackers who many of whom see themselves as security researchers who report zero days when they find vulnerabilities. i would like to know what the panel thinks of that community. is there a place sort of a crowd sourcing vulnerabilities? what do you think? >> who wants to jump in on that? >> there are -- take the financial sector as an example. there are about 20 different laws that relate to customer's privacy information.

in terms of liability, they are the most obvious, you have the act of 1999 and the fair credit reporting act, you've got the electronic fund transfer act, the right to financial privacy act which is protects information against government access. you have telephone consumer protection act. there's all sorts of ways in which liability is incurred under the current statutory regime that would have to be addressed in some sort of a long-term comprehensive cyber security package. >> on the second portion i'll give you both a descriptive and normative answer. those people are breaking the law, they are -- the fraud and abuse act does not have a provision for either self-help or for i'm doing it really just to help everyone else. there is not anything recognized under law currently that would assist those people in behaving or having their acts rendered lawful.

normatively, i personally think there are concerns about opening up the landscape to say different parties can determine themselves what moves they can take, what the data they can achieve, what cost they can actually impose on others when information is taken from their networks. and in part, because i -- there's great variation in this but anyone who suggests to you that conducting an intrusion and perhaps either retrieving or deleting information on a network that you're unfamiliar with is simple and without risk is probably selling you something. there are great risks of doing that. the question is if we build that into the law, are we actually creating a more or less resilient and secure cyber space. many of us feel it's an open door to a less secure and stable environment. >> jim says he has a -- >> a tiny one.

one thing to track is the cost of buying these sorts of vulnerabilities. the price has gone up. used to be 50 k for a new one, now it's 100 k. the people who complain the most are the researchers in china because the mps or mms comes to them and says you owe it to the state to give it to us for free or discount. all of the chinese guys are trying to move to singapore. interesting market here, not that visible to you. on liability, that's -- i think it's going to become easier. we're collecting more data. think where we were -- everyone on the panel knows this. we know so much more than five years ago. you're going to be able to see to a company with a significant problem, here are things you could have done to reduce risk, why weren't you doing them? when that happens, you'll start to see legal action. >> i hope everybody will join me in thanking this terrific panel. [ applause ]

>> thank you, administrative announcement, if you would clear the room as you did yesterday, you could leave your personal belongings on your seat and we will be back together at 45 minutes at 1:00.

"ms." magazine founder gloryia steinem is one of 16 people president obama honored with the presidential medal of freedom. you can watch her remarks live at 1:00 eastern here on cspan3. mrs. johnson as first lady loved to show off the texas hill country and home. the guests would gather here in the den. various heads of state came to visit. we have a few things to speak to her connection to the room here. one of the things she wanted to highlight was the native american heritage here in the hill country, and we do have a small collection of arrowheads over there. she had an eye for copper and collected various items through the years and had gifts from various friends. mrs. johnson gave a tour of the house in 1968 that was filmed where she featured the china purchased in mexico, very

colorful. first lady mrs. johnson spent a lot of time here at the ranch. it was important because it provided such a respite from all the turmoil of washington, particularly later in the presidency when the johnsons could come home, recharge their batteries and make that connection back to the land and this place they valued so much. >> first lady lady bird johnson, tonight live at 9:00 eastern on c-span and cspan3. there are some serious scholars in women's studies. most departments include their fair sheer of nonideolgical academics of women in literature. ideologically fervent women set the tone. if there is a department that defies this ser type, let me

know. i love to visit them. conservative women, moderate women, libertarian, traditionally religious women left out. >> feminism in american culture labeled her anti-feminism. looking ahead to the new year on "in depth" join mark levin january 5th, the first sunday of every month on cspan. to a white house summit on business investment. panelists talked about ways the u.s. can attract foreign investment with the ceos of walmart and black rock as well as national economic council director gene sperling. this is about an hour and 15 minutes.

good morning, everyone. secretary lew, thank you so much for your very excellent remarks. i want to thank both for their leadership. they have been outstanding for the subject matter we have before us these next two days. i know their insights, particularly as it applies to the business community, are very valuable to all of us that are joining us today. we are off to a great start that promises to be a great conference with a packed agenda. thanks to all of you who have come great distances to be with us today. i am very pleased to announce our first panel, which is entitled "why select the usa, perspectives on investing and operating in the united states." this is going to be a very

informative and valuable discussion. it is also my pleasure to introduce the moderator of this panel, an important member of president obama's white house team, valerie jarrett is a senior advisor to the president and a long-time confidante of the president. she oversees the office of public engagement, intergovernmental affairs. prior to joining the obama administration she was chief executive officer of the habitat company. valerie held positions in the public and private sectors and hails from chicago before coming to washington, d.c. ladies and gentlemen, please give a warm welcome to valerie jarrett.

well, good morning, everybody. you look fantastic out there. we are also delighted to be here. i like to begin by congratulating secretary pritsger who hit the ground and running. she gave a party and everyone showed up. not only did you show up, we were oversubscribed. i want to give credit to former secretary, now ambassador gary loch who was the brain child behind select usa two years ago. xis he' his excellency is in the audien audience. gary, please stand up so we can welcome you. you'll be hearing from president obama later today. let me say a few words about why this sum mid and select usa are so important. for the president, encouraging

investment in the united states is a core part of his strategy to build and grow our economy. the u.s. does remain the largest economy in the world and is the largest recipient of direct/forei direct/foreign. the united states simply can no longer rely on being the biggest economy or the obvious choice. we have to work every day to do our very best. select usa is the result of the president's broad commitment to making it easier to do business in the united states. we are centralizing resources as the secretary mentioned to give you the information and the assistance that you need to navigate the u.s. marketplaces. that's why it's so important that we are also joined by representatives of state and local government because they are our partners in this effort. you should leave here today with the resources and relationships that you need to make select usa

work for you and for your businesses. put simply, we want your partnership and we are going to work hard to earn your trust and your confidence so that you do select usa. i'm thrilled to be joined on the stage this morning by a great panel of business leaders who can offer their perspective on why the united states is such a dynamic destination for your capital. so first let me introduce larry fink, chairman and ceo of black rock. larry has been a great partner to the administration. we have benefited greatly from his global advice about the economy. he obviously is the largest asset manager in the world and his council and advice have been important over the last five years to the president and his economic team. in fact, larry convened a group of very large global investors several months ago and that was the fruits in the beginning of our decisions to have this large

conference today. so larry, thank you for your leadership and for being here. please join me in welcoming larry. next, i would like to introduce andrew livers chair and ceo of dow chemical. he spends a lot of time in washington. he is running a fabulous company, but we see him almost every week. he is the kind of ceo who rolls up his sleeves and is not shy giving advice. he was recently appointed co-chair of the president's advance manufacturing partnership. a very, very important player and someone whose advice and council we appreciate. join me welcoming andrew. we are also joined by bill simon, president and ceo of walmart usa. we work closely with bill and walmart on a range of issues that are important to the president and our economy. in fact, just this summer, bill

invited secretary pritsger to florida where he had suppliers, encouraging them to invest in the united states. he has been a partner with the administration on a range of issues including the first lady's "let's move" initiative and more recently taking a bold and important position to encourage veterans to look to walmart as an opportunity for a job after they leave the military and really set a standard that's very hard and high for everybody to match around the country because after serving our country, the least we owe our veterans is a job when they return home. please welcome bill with us, as well. last, i would like to introduce my buddy gene sperling. secretary gave him the credit he deserves and helping to pull together this important forum. i have to say he is the longest-serving director of

national economic council in our nation's history, having served under two of the last four presidents. he is the brains behind all of the president's major economic initiatives that he put he's pu since the president took office five years ago and he is a force to be reckoned with within the white house. known for coming in early and staying late and burning midnight oil and has given his heart and soul to our country over many, many years. please join me in welcoming gene. now let's kick things off. i would like to ask each of our panelists an opening question why businessers or investorsbul united states. can you give your sense for prospects for the u.s. economy and why the united states is a good place for investment given the global opportunities?

>> thank you. it's an honor to be here. i can answer in two parts, one as an investor who helps companies come to market in the equity markets and one as an investor in companies worldwide. first and foremost, we have the most resilient capital markets in the world. we actually have the safest capital markets in the world. just ten years ago a lot of people were pessimistic, but ten years later we've witnessed more ipos than ever before. we're seeing young companies coming here. but not just domestic companies, more and more international companies seeking to come here. the primary reason as an investor, we have much more confidence in the financial statements of these companies especially young companies that we don't have a long history of understanding and don't have a long history of having strong

and robust financial statements, but you feel much more confident that a regulatory process, which sometimes is so maligned in this country and absolutely wrong. companies are now seeking to come to the united states to find sources of capital, because the investors worldwide are willing to invest in the u.s. markets much more than other exchanges worldwide. that's the first in a real unspoken issue related to the united states today. even today we have a couple of very large companies that are talking to the new york stock exchange for a listing that would be a real statement about the difficulties of investing overseas versus bringing companies here and listing here in the united states. let me also now turn to as an investor in these companies, most of you out there. we are the largest owner of equities worldwide as any

company. let me talk about the united states specifically which makes us so constructive on the country today. first and foremost, we are the quickest too resolve our banking crisis. europe is going through the third round of stressing their banks. we did that four years ago. and so as a result of that, our banking system is as strong as ever. in fact, the weakness of our banking system, there's not enough demand for loans and that is one big change that you can't say that in europe or other parts of the country. also, linking that with a banking system in our capital markets, we have the most robust banking and loan market too. second is the drag on our economy from housing, despite there's still great pains in the united states related to housing. we went from housing market that had over 5 million excess homes to an economy now where we're going to be building 700,

800,000 homes today. that's going to be adding jobs and opportunity and going to be a source of commerce for all of the companies that are trying to sell components to housing. let me also add one other major component. as housing and construction builds, small business builds because a major component of small business is in the form of construction. the third biggest reason is our energy sector. it was surprising to me only a few years ago people didn't realize the change of technology and what that has done in terms of extraction of carbon and the refining of carbon. and i'm sure andrew will be talking about this in a minute. but we have gone from a nation that was very dependent on importation of carbons to a nation that we will ultimately become an exporter of carbons in the future. so this is going to be a major change. as we see mexico changing and liberalizing their energy law,

it only will empower texas and other components of this country and i do believe having a stronger mexico only makes the united states even stronger. i think will become another major component. let me also talk about a few things that people just don't talk about enough. our energy cost. at black rock, we have two major data centers, one in washington, on the columbia river and one that we're building right now in buffalo, new york. we're paying approximately 3.5 cents per kill watt. if i will had to do data centers in europe, i would be paying 18 cents and other parts of europe over 80 cents per kilowatt. we have cheaper energy. we have cheaper cost of energy for manufacturing and then the

last thing why very constructive of the united states and where we spend a great deal of time, our educational system, which unfortunately a lot of people malign that today. we have more -- and i know this will be discussed later on. but we actually have more students overseas than any other country in our educational system. why do they come here? not just the quality of education but the type of education. i think some of the disadvantages of education globally, so many people are taught facts. this may work very well for testing scores and i'm not trying to diminish that at all, but i do believe advantage of the american style of learning which should give more credit is the ability to be thoughtful and critical thinking. but as an employer this year we hired 1100 employees and year

before hired 1100 employees and year before 1100, over 80% come from u.s. the bulk of our employees come from the united states universities and what we're looking for, people who know how to think and think creatively. >> thank you, larry. >> let's shift to bill for a minute. as our nation's largest retailer you source all over the word but made a decision to try to increase sourcing you're doing here in the united states. could you give us prospective on how and why that decision was made? >> thank you, valerie. let me thank you and the secretary and president for their interest and energy in this initiative. it really truly is an incredible time in the history of the country and in this particular

area. it's a math equation and the math equation is never in a generation or maybe longer been more favorable for investment in the u.s. we just heard about energy costs. that's one component. and the labor and transportation components that earlier in earlier decades led to migration of manufacturing outside the u.s. are all in our favor. if you think about it, the math equation favors expansion manufacturing in the u.s. and earlier this year, we made an announcement we were going to increase our u.s. purchases by $50 billion in ten years. that's $50 billion in ten years isn't 5 billion a year, actually going to project to be $250 billion in additional spending over the next ten years. it's a major commitment and done because of the math and the economics for us. as you mentioned, we hosted a bit of a summit similar to this of all of the suppliers that we

deal with and the state and local governments we deal with, we brought everybody together in orlando and kicked this off. we had 1500 people in 34 states and 8 governors joined us. the real exciting part is we had an outcome that launched hundreds of projects. since that time this summer, we've been able to announce initiatives that will add about 1600 jobs just to get -- just to get this ball rolling. after the event today, we're going to make an announcement with three more great companies investing in u.s. manufacturing today. hopefully you'll keep an eye out for that. it's an exciting time and the opportunity is there for us. one of the points i want to make and everybody should take note, there is a significant and distinct first mover advantage. if you're a state or local development officer, there's a distinct first mover advantage. as you begin to build capability and get investment in a particular area, you'll get the component parts from it.

we see manufacturing and investment grow that way. so be first. if you're an investor looking for an opportunity to invest money, there is a distinct first mover advantage in markets as we go forward. for our part as the largest retailer in the world and in the u.s., we believe and see the interconnectivity of global economies and healthy and vibrant u.s. economy is very important to the global economy. so investment in building of the -- rebuilding the american middle class and manufacturing sector will make us a more robust economy so we can trade better with partners around the world. finally, just laws of efficiency would suggest with transportation costs increasing, the aavailable of inexpensive fuel and energy in the u.s., capital markets, free stable and

the lowest interest rates that anyone can remember would suggest the time is now. and it is immediate. and so as we think about where we're going and how we're going, we are very pleased to participate from walmart's part, certainty is a very important -- it's important in how we deal with each other. it's important in how we deal with business. what we can provide is the certainty of a purchase order or contract so as companies look to establish and build manufacturing bases in the u.s., we are changing our policies and making more longer term commitments so they can have a certainty to invest capital here. if we can help with any of the decisions, we have a team we put in place and they are ready to serve and ready to do business. so we appreciate being here and look forward to the rest of the panel. thank you. >> thank you, bill. >> andrew, speaking of manufacturing, something you know a fair amount about. you worked very close with the administration over the last five years as i said in your

introduction, advised us on a range of issues that would make the united states more conducive to investment in manufacturing, one example being corporate tax reform as we broaden the base and reduce the rate, reducing it even further from manufacturing and how that helps spur additional investment. give us a sense as to again being a global player, coming from australia, give us a sense of what you think is so special about the united states. >> thank you and congratulations on making the decision to be part of team usa in the conversation we're having here. one thing valerie didn't mention is as an australia global citizen been with dow chemical 37 years, 32 of which i spend in asia. when i came back to the united states over a decade ago, i was struck at the conversation going

on in america that did not include manufacturing. and that how brand manufacturing in america in psychology of our consumers and media and everywhere was assembly line, smokestack and yesterday'si manufacturing. really we done it to ourself. the notion that labor cost would drive the manufacturing sector, had come what everybody believed. you didn't mention this, but i wrote a book called "make it am america" in my spare time looking at what other nation states do. and what they do is they recognize important parts of the manufacturing value chain that the administration has embraced fully in which i applaud in the advancement of partnership that i'm sure gene will touch on, really gets at. which is mostly where production goes innovation follows. so the eco system that we celebrate in this great country around universities and

institutions and the famous bell labs and labs that proceeded them and still there today, 77% of nongovernment r and d spent in the manufacturing sector for a reason. you prototype off the industrial floor. learn the mistakes and understand them and attach research to it and therefore the next generation part occurs from that and that eco system was not in the national conversation until the last several years. and by putting an end to the national conversation, firstly we can reverse the trend that we can keep innovation here. from a china perspective, when i go around the world, in 1990, china had for foreign owned r and d centers. so they've gotten it and not just chinas, it's germanys and singapore and thailands. they compete as companies these countries. for the united states to get this notion that it should be

competing for business like a company was not about big government or small government. it's about interaction between government and private sector to set the rules of the road so you can, if you want an analogy, a gold medal olympian athlete. what does team usa look like? it needs the blood flow and liquidity and financial system to be the very best and i believe larry embraced that. it needs the nervous system in the brain to be the very best. and i think big and others touched all of that as well. when we get rrn o talking about that, build innovation clusters, eco systems right across the country and directing money between the public and private sector in a smart way. what's the braun? what's the muscle? well, natural resources. this no found energy advantage and building it to good use to

allow united states to become an export machine to really take not just liquids but solids and em bed the brains, athletic brains of the braun, brain and liquidity, team usa is there. as far as i'm concerned as i travel around the world and come back to the u.s., i get asked, where's the bright spot. it's here. it's for ours to squander. we can definitely get it wrong. therefore we've got to get all of us collectively to work together and get it right. long story short, i do think advanced manufacturing of the nano teches and sustainable supply chains and advance manufacturing the sense ors and robotics and biokind, that's all occurring at the intersections of markets and sciences and the united states because of its

entrepreneurial system, and way it teaches at schools and the way the kids grow up in the system, to look at opportunity, not a problem, to go at the answer, to work out how to make planet all green. to work out how to actually reduce human footprint on the planet. these are the things that make the united states the attractive part of the world to invest in. you can do it here, 77% of all dow r and d is done in the united states. 70%. not to say -- but right now the united states is unbeatable for that. second, the resources putting its money where its mouth is. value adding, we're putting thousands of jobs at work by the way, in whole industry is putting $100 billion in place in the united states that will create somewhere between 2 and 3 million jobs.

a lot of that will be exporting brains and a little bit of braun. >> thank you, andrew. [ applause ] >> so, having heard from these three global business leaders, i know that one of your many strengths is appreciating the long term sustainable health and growth of the country rests with private sector. help the audience understand how in creating policies you think about the comments you've heard this morning and what you've heard over the course of your tenure and how you make decisions accordingly. >> i think ever since president obama was first running for president, he very much had a focus on what you have to do to lay the foundation for the private sector to make the united states a magnet for job creation. i do think in 2011 there was a bit of a seed change, you did start to see major business

consultants, boston, mcken zi and others coming out with a message which was quite a change to their clients. it was, your analysis on cost that has led us in the past to recommend you considering locations other place, those cost calculations have changed. one that when you look in the future over the next ten years, which is what you should be looking for for location decision, the wage productivity factor now has turned around and will favor the united states number one. two, as andrew has stressed, the realization of the natural gas cost advantage, that 50 to 70% lower cost. and third in 2011, i think there's also a greater realization that there perhaps were more hidden or uncertain costs with that being an overly diffuse and remote supply chain. perhaps that was spurred by the

natural disaster in japan. all of these led to more of a reconsideration, which of what people were advising our own companies. this was also going along trying to make a focus that we should be looking at manufacturing location like we look at r and d. it's not an industrial policy. it's an innovation strategy. and that location matters and has significant spillover impacts. so i think we felt that this was a policy that i've seen the president support it but now there was more wind at our back. the president would be at his jobs council where people would be disagreeing and you would hear from both labor and major ceos as bill was seeing, where they would say, this -- the u.s. may be the most competitive location of jobs as it's been in 2 to 3 decades. for the president policiwise,

you look and realize this is a moment of opportunity. if you have a positive trend and want to put more wind at its back. so on the manufacturing, advantage e advanced manufacturing front, we've started and will soon announce the second third and fourth of our network of manufacturing innovation hubs. we've had the focus on higher education, all of the things that are important to stability, attractiveness of jobs. we were successful as you saw yesterday in having a dramatic fall in the deficit. the path is more stable than it was. but we do think that more needs to be done. i'll put it in two categories, one or more additional policies that we need cooperation from our congress to implement to help make us more competitive and more attractive to you. and second, is how we organize ourselves and the messages we

send, which we have a little more control over. on the policies, some of the things the president is pushing right now, which do for all of our divisions have more bipartisan support than you would think, presencive immigration reform. which would increase the need for skilled labor that many people say is critical to their location decisions. so this is a very, very top priority of the president as is making sure our training programs are more demand, working with you and community colleges, if you want to locate here, there's someone who says, if you're a little unsure whether there's a particular skill, need may not be met in a location, that we will work with you to make sure there is a training program, a partnership that works for you. that's one area. the second area which the president put out, a grand bargain on jobs, you would lower the corporate tax rate, have a

lower corporate tax rate and at the same time, use some of the one time funds to strengthen our infrastructure so that your supply chains can move more quickly. these are important components we have to do and the third one is that we have to give and fight very hard in this, greater sense of stability. i guess you could say we want more manufacturing and less manufactured crisis. and we haven't been at our best the last month but it looks brighter in painting a picture of stability. now, the thing that is under our control, the signals we send and how we organize ourselves. to be honest, we have to recognize there are places where the signal that the president wanted to send was not coming through. one or two high profile cases might be sending the signal that we were not open for business. we want to make clear. if you want to come here and make your fortune playing by the

rules investing in the united states, creating jobs, we don't just tolerate, we welcome you with open arms. a lot of the motivation for this select usa conference was to in a very bold way make that abundantly clear. how do we organize ourselves? >> generally organized itself in our embassies, et cetera, in ways that focus on commercial advocacy and expert promotion. our efforts at recruiting in the united states, this goes back administration after administration has been moreh d more ad hoc. it's not good for those who want to do it either because it can seem ad hoc. not clear who's going to be there and who's going to help. when the president comes today, what he's going to talk about and what we're putting out is a

major reform effort to for the first time ever have the united states make a core economic priority. the encouragement foreign investment in the united states. this is not just an empty phrase, we are engaged in a serious effort of having unprecedented coordination between congress department led by prits ger. state department with john kerry, working with valerie and myself and others in the white house economic team. this means in the 32 to start, the 32 nations that make up over 90%, for the first time ever, there will be an organized team led by ambassadors who will work together with one team in their state department and commerce department officials and they will have as one of their core missions now for the first time

encouraging and facilitating foreign direct investment in the u.s. then they will have one channel they will go to to that kind of headquarters of select usa, so when you are making a decision, you'll have one stop shopping. you'll have one place you can go to to look at visa issues and state and local and federal issues. when it's helpful, to talk to someone in the white house, or valerie jarrett or even perhaps the president or vice president themselves will have a process for doing that. that is the major policy announcement that we're announcing today. i think 20, 30 years from now, you'll still see this organization in place and people will wonder why the united states had not started earlier making a core part of its international and domestic organization this type of broader select usa reform. >> thank you, gene. particularly for making that announcement. i think historically, most of our investment here in the united states has come from

europe. today we have people from aftr a africa, south america and saz i can't, asia, if you can respond and let us now if there's more we should be doing and do we need to change our strategy given there is this opportunity for more expansive global investment shown by the interest demonstrated today than has historically been the case. larry, let's start with you. >> i have the advantage of talking to ceos worldwide. and in every conversation i have, valerie, they are asking how can they find more opportunities in the united states. so many manufacturers are trying to actually replicate with andrew and dow chemical are doing. they are witnessing the cost of energy being dramatically cheaper, as much as 75% cheaper here than in other places of the

world. as a result they are looking to move more manufacturing here. because our educational system here, more and more technology companies from korea and japan and parts of europe, and even from china today are looking to have footprints -- foot hold in the united states today. we're not an accident as a country. i mean, i think we as a country always when we have a problem, we expel the problem. and we always undersell ourself as a nation. but the opportunities today because of natural gas, because of the oil production here, because of our educational system and mostly, also because of our capital markets, more and more companies worldwide are looking to add facilities here. our research center here, and i do believe we're going to continue to see this being driven. and this is not just going to be

by coastal phenomena but a phenomenon in the heartland and in texas where we have cheap energy. i was in india and one of the largest manufacturers in india is building a plant up in idaho right now because of the cheap natural gas and oil from the balkan. i visited one of the largest egyptian companies recently and they are building another plant here in the united states because of this. i actually believe we are underestimating the power that we have as a country and every time i travel overseas, i'm asked continually, why aren't you more bullish yourself and why is your country acting like you have a problem. from our perspective, this is the biggest opportunity we see in the world. i think andrew said that. >> i would add that we're in 160 countries around the world and

get to travel like larry and others and i recognize what i'm doing, ceo of a global company, so if i go to another country, wouldn't they ask me to do the same? so at the end of the day, advantages is themselves. i think what gene is referring to, i have never seen the partnership between u.s. embassies and multinational businesses as good as it is now. that's after decades of doing business. i would tell you and ambassador right there, when i go see him all of the ambassadors we have there's a whole new mindset not just for american companies going to the countries but other way around. the ability to get the advantages that we've been talking about, innovation, the new found energy advantages and government systems and transparency of those and the

fact that the rules are the rules are the rules. there may be dysfunctional in this town we have to overcome. this is definitely why we get cynical views. you can't manage yourselves? in all honesty, that's something we have to overcome. the national advantages with an energy advantage, with an innovation advantage, they sell themselves. what do you do to be team usa and help this? i think this notion is that nation states complete like companies and make our incentives clearer. you mentioned manufacturing taxes and proposal but that is incentive and a subsidy. we're going to remove the notion all about subsidies, everyone thinks it's a level playing field. it is not. and establishing the principles of free and fair markets, that's an american ideal that we should

push as hard as we can to set standard on trade and just a reminder, 16% of the global gdp is manufacturing but 70% of the world trade. so we have to do it in businesses like mine and that encourages us to go to places where we'll be treated fairly, to the new markets and other way around. >> larry? >> i want to add one thing. i did it i was in south america, europe and asia in the last six weeks, a lot of travel. and met governmental officials in every country and every governmental official is asking how can we create jobs. the one thing that is very clear when you look at the trend in the united states, as we all know, the manufacturing process has been so refined that the human element of manufacturing

has been reduced dramatically. obviously this presents social issues worldwide and these issues that every country is facing right now. but the point is, because a rule of law andrew just discussed, because of our advantages in cost of energy and also if you look at our workforce and if you look at wages worldwide there's been a expression of wages worldwide, where ten years ago everyone spoke about other places in the world where it was much cheaper to manufacturer. if you add transportation costs if you add rule of law in this country, the cost of energy, this is why more and more countries are trying to come here. this is why i'm asked in every country today, how can we create jobs and they are actually feeling insecure about the

opportunities here. >> interesting. >> bill? >> we buy and sell products all around the world. we're as competitive as anybody in the u.s. but this isn't about us or somebody else. in a global interconnected world, efficiency would suggest that production occur closest to the point of consumption. and as we sort of talk about this, the emergence of demand in middle class all across the world is going to absorb the consumption capacity that exists today and i think what we're looking at is a fantastic opportunity and we're very, very excited about it. because i think this panel is a great example. we have an administration that is making effective moves to support policy decisions that will encourage it. we have somebody from capital markets saying that the capital markets are ripe for it. we have a manufacturing, one of the world's greatest manufacturing say the manufacturing and innovation base that exists today, favors

expansion of the u.s. and we have somebody from the consumer markets, you havewide and willing able bodied consumers. i don't know what more you can ask for. i'm excited to be here. >> gene mentioned immigration reform. and it's interesting because we've seen just over the course of the last five years an evolution in terms of the enthusiasm coming from the business community, not just for high skilled em grags, but commencive immigration reform. can you talk about how that factors into our global competitiveness and impact it would have on our economy? >> i would just say i was with the one of the more important leaders of europe this past summer. and the leader said to me, if the united states passes an immigration law, shame on the rest of the world was we're

going to be envious of the united states. that's part one. and shame on us if we haven't passed that immigration law right now. second of all, i do believe it would be -- it would be dramatic in the future growth rates of the united states. first and foremost, we have 12 million people who are living in fear. if they had a path towards immigration, towards citizenship, think about the new houses that will be purchased and look at the construction related to that. one of the difficulties we have and i'm sure everybody has difficulties on in trying to get visas for some of the really smart foreigners who are graduating or graduate schools and even under graduate schools having a very difficult time to be permanent resident, maybe even become a citizen here. just that path of process is going to make it much more advantageous to us. it's not just a technology

problem, but a problem for many other countries to have more and more workers and these are going to be productive workers that will stimulating the economy and buying houses and adding more and more to many other people's livelihood. and third, the immigration bill is going to be the standard that will set us apart as a nation and through that standard and my opinion it's going to drive more and more commerce coming in here. >> there's no question that the accelerators to this great position we find ourselves in as a country, there's no more important than immigration and the business community understands that because it sees gaps in the workforce that we're all filling in some way. it's not perfect. and it's very, very difficult. the 600,000 stem jobs opened in the country right now but we can't get enough qualified candidates for.

what we do is we do everything we need to do to get retraining and reskilling. dow put a $250 million direct grant to ten universities in this country to rebuild chemical industries and chemistry departments and get people retrained in the business and many of these countries in the panel, doing everything they can and not just the ph.d. the masters level, community colleges, returning vets, many of us have krik lar development and community colleges to get the modern factory worker trained and the person skilled who can work with robotics, nano technology and things i said earlier, we're doing it ourselves. but what we're finding is our kids just aren't as ee namerred with it so this is part of what a and p and others and myself are going to be working on, rebranding this notion that stem is something our own workforce

should be excited about. and you're right, everywhere i go, the issue before the world is we are not creating enough jobs. youth unemployment is a chronic issue in most countries. the jobs of tomorrow in case of the united states economy of today, our education system needs to catch up. our immigration system needs to catch up. we can be the standard -- we can be if we pass immigration reform and really get the flow off human talent to this country and wherever they may come from, even australia. if we can get -- if we can get them in and really be part of this system, what bill said earlier all of the advantages are here. i can think of no more pressing issue for team usa than immigration reform. >> thank you. bill? >> i would agree. if you think back in our history, every major growth period we've had in our country's history has been preceded by or led by

immigrants. we're a nation of immigrants. if you believe in free enterprise, you have to believe to immigration and the talent and capability and shoppers and consumers that immigration would bring would help fuel and drive that next level of growth. and i think as we evaluate how we go forward, moving forward without addressing that issue i think would leave a problem that's been in existence in the country for quite a long time. unaddressed and could actually slow and dampen the opportunities that exist. i'm very pleased that's one of the topics that's going to be addressed hopefully in the next few months. >> absolutely a top priority of the president. larry and andrew, several of you have mentioned skills. and this is something that gene sperling has been working on for a long time. i would like gene to share a little bit in terms of

everything we have been doing to improve skills. just last friday, president obama was in new york and went to a school that is created in partnership between the city of new york and ibm. and the goal is to get young people excited and enthusiastic and passionate about math and science and technology and engineering and computer science, stem, as we call it. and one of my hats is particularly to figure outweighs of getting young girls interested. if we can capture them when they are young and keep the passion going, they'll pursue fields in stem. but gene, share a little bit because i know you spent time thinking about skills. >> the immigration discussion is a perfect lead-in to this because the attitude that some people might have had in the past as to why we should have or why some people would resist

immigration or high skilled immigrants coming here is some notion that there's like -- it's a zero sum game. there's a set pot of jobs and high school immigrant comes in, that means somebody in the united states is going to do worse. but this whole conference we're having, about the fact that it's not the way the world works. there's a global competition for location. the message the president has had very much on immigration is that if the three people here can hire -- and yourselves can hire the people that you need to fill the jobs you need, that you are more likely to locate them here. and that will be a plus for job growth, not a negative to our people. so again, in the sense of us as an open arms country, the support right now that immigration reform has very much goes to the support for foreign and direct investment here as well. people want to see the bottom

line, what's the impact for job creation? obviously we don't want to fill the skill gap simply through high school immigrants but building our own pool. we've tried to take a multifacetted approach. one of the things that valerie has mentioned is we as a country do not do as well as getsing all of our populations interested in the science, technology and engineering math professions they want. you have to hit that at every approach. one is starting early, getting rid of the kind of strange social pressure that seems to make girls superstars until they are about in their adollessing years then lose interest. encouraging more people from minority to choose stem skills and professions and also, one of the things we've partnered well with this, we find there's a

certain number of our young people who the idea of just academic study doesn't grab them as much. when they can go to an alternative high school connected to a company that they will finish and have a degree and be first in line for a particular job, it excites a certain number of young people and helps fill that pool. one of the things we're trying to do is build a pool of people who are actually getting skills needed to fill the jobs that you want to be filled. the second thing is, our new secretary of labor has a great expression. he goes around and says we can't have a training policy anymore which is on the theme train and pray. the training has to start with understanding what are the needs -- what is being demanded from the private sector. i think if there's one thing the president will want to focus on, and have the whole administration focus on, make

sure all of the training programs start with are they demand driven. are we talking to particular companies and understanding what the needs are in a particular region? one of the companies obviously seaman's has been one of our partners in working with community colleges. this has the geographic, if you're in an area where you want to come but you want to make sure that there's enough of the skill needs there, the idea that you can partner with the united states that we will work with the community college and on the curriculum in the skill base you need, for you that helps you fill a job. for us, that means that we're actually increasing skill base of the country and that will benefit you and also benefit them in their next jobs as well. >> that is where we could use the partnership and this kind of

demand driven training that can be tailored to the particular needs of a region. i think i will tell you, there's nothing the president would like more than for somebody to say, i will come locate here if you will help me ensure i have 300 more of a particular skilled workers here. great, we'll take on that assignment and work with you. that will define our vision of demand driven training over the next -- over the rest of this second term. >> thanks, gene. it's a good segue talking about the local level to we're so fortunate to have so many from state and local government here. bill you mentioned the conferences in florida. we had a number of governors present. i would like you to share with us your thoughts about the importance of state and local government and bill, you obviously have retail stores all over the country and making decisions every day where to put the stores based on demand. but i'm sure also the

welcomeness of the state and local government has an impact as well. any stories for us? >> no, thank you. the decisions i think that can be made at the federal level are more policy and environmental climate decisions. the state and local decisions are really brass tax detailed driven rub et meets the road kind of offers. what's been fascinating to see and watch, the engagement from the states and governors and city economic development leaders, they are competitive and aggressive and advocates for their own ge geographies and it interesting to watch as we've had discussions with manufacturers and introduced them to the states with the resources that they are looking for to watch the dynamic between many of the governors. they are very, very competitive folks. so seeing that is encouraging

because as gene said, they'll do what they need to do to take care of the requirements that you might have for workforce capability or natural resource capability. and we see that a lot and see some governors very, very personally investing their team and making decisions about that and if anybody has any questions about who those are and where those are, please feel free to give us a call. we would be happy to introduce you to anybody who has those resources you're looking for. >> thank you, andrew, you too comb the country looking for places to invest. how important is state and local government to you? >> it's critical. i mean, the way i think about our company, like so many great american global companies, we're a community company first and foremost. we're still in the place where our founder founded us, 117

years ago, a little town in the midwest, below michigan. we've taken the value system of a community into other parts of the country and exporting the values of one place to another is only as good as the partnership one creates at the very local level. local government, community, community advisory panels that we've had for decades really, people in our vicinity who can come in and look at all of the facilities and actually openly tell us how to improve. and it wasn't all that long ago where we were smoke stack industries and how to become sustainable manufacturers of the era, you have to be in touch with your local communities. then of course, at the state level, there's some states in the country who are very pro business and understand that they are in the business of attracting business. in the business of providing jobs for their communities. and as was said earlier, the pace of business, they also adjusted. part of the problem and bill was

alluding to it, i want to touch on, geography is long gone apart from natural resources as the topic due jour. a state boundary or country boundary, in this world of fast decisions and incredible dynamic change, financial markets, energy markets, you name the market, consumer markets, how do you actually get everyone involved in the decision-making process at the pace of business to use a term, which i actually love? i do think elected officials and making sure they are partners and i'm not talking about which side of the aisle here. i'm saying locally, state, understanding that this is the job creation world and it's not yesterday's jobs, that we have to work with the union movements and all of the local jurisdictions. we have to work with all of the regulators but do it in a way that creates the next wave of

opportunities for that community. and i would say to you that that is not perfect across the country. some states do it better than others. we're in 40 states so we should note, not all equally. one of the things we do is make sure that our partnership at the local level is not just one of advocacy because we create jobs but one of critique for self-improvement. >> excellent. >> larry, state and local. >> we have a different perspective because we are the financ financeer of most state and local governments so our job is making sure each state and local community is competitive as possible so they have the highest revenue space. we are advising quite a few municipalities in related to how can they be a better place for employment. it is quite different than the other -- analysts. but i can say from a firsthand

experience, when we decided we needed another data center, it really was designed for two things, one our citizens wanted to have another data center that was more green. so we had to look for areas in the country that more reliant on energy through hydro. our first big data center was there. before that we had 20 different data centers. and the reason why we selected buffalo obviously working with the state government related to that in the city, but also because of the expansion of hydroelectricity from that area. as i said earlier, this is a big opportunity for us by having this center we're saving $3 million a year. and the fact we're moving from data centers that were principleably generated through carbon, having it at a renewable

center was a big advantage and something our employees wanted. >> if i can add, there's best practices of state and local governments and we see the most successful opportunities for when the state or the government or local government entity will appoint a project opportunity to sort of shepherd personal cell phone and give you the detail 24 hours a day, call us and if you have a obstacle and we'll solve the obstacle. less are the more standard, here's our package kind of thing. there are best practices that the development officers should be sharing across the board. we see that the success for those who are the most energetic and move at the space of business. >> thinking about state and local government, the other area that comes to mind is infrastructure. i know i've spoken about the importance but maybe you can share a little bit from your

various vantage points about the importance of that and what more we can do to make sure that we are investing in infrastructure. >> so this is something near and dear to me. as i said when i travel around the world, every leader of every country, every economic in every country, looking for ways to find jobs and they have a lack of capital for infrastructure. crea create more jobs, if you look at the countries that have great infrastructure, they generally have a good infrastructure because there's a partnership between public and the private. comparative for us if we want to bring down our unemployment rate. we have a national policy for our building and we do believe there's billions of dollars of private capital and would like to be investing in this. one of the great problems we have as an investor is we cannot

find enough good high quality investments that are long term in nature because most of our retirement money is 20, 30, 40 years out. it is very hard to find that long-term high quality investment, one of the things i'm been spending time here in washington, trying to make sure that we have a policy to build some type of policy in which there's public and private partnership in doing this. we can do that going forward. i believe there would be billions of dollars of capital going into the investment of this side by side with the state and local government or even federal government, for instance in ports and airports and in our grid. i can go on and on and on. if we have that, the money is there from the private sector. and it is imperative for us in terms of creating jobs in high quality jobs that we make this

an emphasis in the future. >> andrew? >> i'll take a plus/minus on this one. i think we've talked a lot about the u.s. economy from the context of businesses like dow and walmart, others like us. i think now supply chains, we have over 75,000 suppliers, you can imagine -- not as big as walmart but big number. when you think of the eco system, most of us are at version 6.0. the u.s. economy, 100 years of growth. really spurts of growth and sometimes backwards but mostly forward, our infrastructure is 3.0. and we've got to do something about that. other economies like you said, larry, are putting in version 6.0 infrastructure but they haven't quite got the private sector division 6.0 yet. they'll enter but won't enter

where we enter, obviously far advanced because they've licensed in technology and learned from mistakes we've made and build eco systems like nation states competing, so they get -- other countries are going to catch up on the private sector side of it, especially if the infrastructure is advantaged. we've got to practice infrastructure. there's many of us involved in ideas here and larry just mentioned one. this capital point he makes and he's obviously understanding that and having this long term return and how we can model and maybe i can go to an example of how we've done it well for another reason. it works and works really well. it's a profit maker and it's actually, it's a government -- it's a phenomenal example of how all things in government aren't bad. so we really need to figure out how to do that for

infrastructu infrastructure. we ought to have a summit to that topic alone. i do think ports and rail and obviously airports and all of that, this is becoming our bubble. the positive side is the reason our energy market has become what it's become, is because we have infrastructure. this country's pipeline and storage networks and energy, which is why it's so important we have to make sure we don't disable that, that is why we have a domestic energy sector that is so competitive to make the point. there's a proof positive to why your question is something we've got to tackle. >> thank you. >> well, we move products all around the world and our supply chain is just, you know, world class. it rides on infrastructure and we see infrastructure all across the world. while the opportunities to improve is among the best in the world, andrew's point is a good one. other markets are generations skipping in. the term infrastructure con

injures up images of old, stojy, long, but it is innovative, what was 100-year life cycle is becoming a 7 or 8-year life cycle. it isn't an initiative. it shouldn't be an initiative. it should be a permanent mixture because the frequency of innovation and technology and infrastructure adaptation is going to continue at light speed as we advance over the next 10 or 15 years. it needs to be a base of what we do from a policy perspective. and larry's dead on. there's a lot of private capital dollars ready to invest in that once we sort of figure out that the policy side. >> gene, reaction to what you've heard? >> no, obviously we've heard this a lot and larry obviously organized a discussion for us

that we had at the white house with investors around the world. we have responded in making sure that our tax laws incur -- we have by proposing ensuring that our that our tax law is generous to a foreign pension as it would be to a domestic pension so that is one important area. some of it is all of us working together because it's not just the supply of capital, it's making sure at the state and local government level they can expect a steady revenue stream that is what these potential foreign investors and others would be interested in. then again, too, i think as bill was saying, not limiting ourselves just to a narrow view of infrastructure. just to give you a small example of something that would expect lots of different countries, the

president has an initiative that will happen because it's regulatory through the fcc to ensure that every school in our country has enough high-speed broadband that every child could sit at their desk with an individualized learning device. well, that is an infrastructure that if you put that in place, you know, bill was just saying what's the new exciting thing out there? if that's in place, the new exciting thing may be an entire industry of lower cost, educational devices that every student has. if every student has that, then now suddenly you have content not through textbooks, et cetera. we are very focused for infrastructure reasons in improving airports, roads, bridges. we need all that. and that's partly an issue of fiscal strategy and partly our tax laws. we're working on that. wee keep our eye on the

infrastructure of the 21st century because one of the first moves or jumps the united states got in the end of the '90s was small businesses and entrepreneurs were using the internet first and foremost that generated a lot of inventory improvement and a lot of growth and productivity spurt we had and we'll make sure we're staying at that now and one thing i want to say, we're doing select usa but i want to be clear. we learn from other countries. we look at what south korea is doing on universal broadband for schools. we listen. when the president did his insources forum, he listened to companies say why they chose another country on things that we could have done better and it's affected what we put in this new reform. as we're here, we are trying to improve but we are listening and learning and if we don't mention something here and there's something you think makes a difference in your investment decision, please bother us. be a nag. >> we welcome that.

i'm beginning to get the high sign that our panel is coming to a close. before we end, i want to ask larry -- larry and i got together and had dinner in the midst of the government shutdown with looming potential calamity if we didn't raise our debt ceiling and you were frank about your perspective and andrew you have been outspoken. i had an opportunity to speak to your folks at walmart during this period as well. maybe if you could share your perspective on what that does to the united states in terms of our reputation and potential for investment around the world and your perspective going forward. >> well, thank you, valerie. let me start off and say i'm very bullish on america but washington is making it more difficult for me to remain bullish. we are the standard bearer of

principles. democracy in america is a standard. countries worldwide are looking to the united states as a bearer of standards. we are the principle nation in the world and by these hundreds of years of principles, we have had the luxury of being the currency that is in trade worldwide. we're the reserve currency of the world. as a result of it, we have a luxury that we could borrow trillions -- billions of dollars of money, trillions of dollars of money overseas. the debt of the u.s. treasury, not the debt owned by the federal reserve at the moment but the debt owned by the federal government issued by the treasury is held by foreigners and when you have a narrative that's talking about default, a

narrative of threat. it goes against all of the principles. i would challenge anyone in the room, can you go to your bank and say i'm not going to pay my loan. what type of behavior the bank is going to give back to you. we should expect that type of behavior if we continue to act in this petulant way where we think we can walk away from peninsula principles. i was the source of many angry phone calls from foreign investors in u.s. debt. i do believe i've calmed everybody down. we're in the midst of another negotiation as we speak. we have a process in which we're going to learn in january where we are again. this process has to be much

smoother. it is important that we drop the conversation about default. and i talked about foreigner need but i can tell you ceos in the united states i spoke to, that doesn't matter what industry, they are pausing on hiring and they are putting a pause on investing until they understand. i have to remind you the average ceo in the united states is five years. to build something that andrew is building is an eight or ten-year project to complete so you need to have a lot of confidence that you're building out these factories for hundreds of thousands of jobs. and this narrative in washington right now is forcing everyone to put a pause button on. i was talking to bill earlier.

i'm sure consumers in this country are putting the pause button on a very important time when we have christmas sales coming up so i'm alarmed. i remain to be alarmed. and the one last thing i would say if washington understood how many tens of millions of dollars, hundreds of millions of dollars were wasted with every company setting up contingency plans if there was a default, i had work streams working all weekend long of people working toward the what if scenarios and what do we tell our clients. if there's a default on u.s. treasuries. according to bankruptcy rules if one of the u.s. treasury does not meet its coupon payment, that's a watershed effect for all treasuries. you have all of these issues and it created a lot of excess noise and it creates uncertainty on how do we navigate. i'm very bullish on america. i think we have more opportunity

in the next five years than we've had in the last ten. we need the narrative to be much more pro-opportunity and less narrative about talking about things about walking away from standards and principles. >> thank you, larry. as you know, president obama -- [ applause ] thank you, larry, for changing that perspective from the private sector. president obama is absolutely committed to making sure that our full faith and credit is always protected and we pay our bills and pay them on time and do everything possible to avoid any future such crisis because we would much rather those of you who were doing contingency planning were instead figuring out how to invest in america and that's what select usa is all about. i want to thank each of the panelist, larry, andrew, bill,

gene for taking time to be with us this morning. our panel is now finished. thank you. [ applause ] >> this is c-span3 with politics and public affairs programmi im throughout the week and every weekend 48 hours of american history tv. get our schedules and see past programs on our websites and you can join in the conversation on social media sites. >> at 3:00 p.m. eastern time here on c-span3, we'll have live coverage of the senate homeland security committee's look at the

impact of digital currencies that allow people to exchange goods and services without using any real money. we'll hear from the general council of the b.i.t. coin foundation at 3:00 p.m. eastern here on c-span3. live now to the national press club in downtown washington, d.c. where feminist and founder of "ms." magazine gloria steinem will be speaking and she'll talk about what is still to come for women and the big issues that remain on the front of women's equality. >> the 106th president of the national press club. we are the world's leading -- [ applause ] >> thank you. we are the world's leading professional organization for journalist committed to our profession's future through programming with events like this while fostering a free press worldwide. for more information about the national press club, visit our website