but it is not necessary to go to college to have a productive life. and the more we have this idea that you are a failure unless you have gone to college, we are going to water down the academic standards of college so much, as is already going on, that it's virtually meaningless. so i think that we have to get our message straight here and not cave in to that notion. >> this is almost more prevalent on the right than the left. >> i think there's the whole question of motivation for work as well. i believe theologically and socially in the value of work and nobility of labor and the need for a drug free workplace. i walked past a construction site this morning. the first thing you see is a ladder down to a 20-foot pit and next to it is, this is a drug free workplace. i think for the vast majority of people, in the area of 1950s to

1960s, low tax, booming economic growth, a democratic president cutting taxes, family formation through the roof post-war. the motivation for work, while it was noble to make a good jet engine for ge, noble to make good soap, most of the people who went to work went to work because of what happened at 6:00 at night. they brought home a paycheck to a spouse, to a family and they viewed their lives and their work lives as serving these almost hired guns, maybe hired guns of family, of church, of community. i think when a community lacks this kind of broad resilience -- we have communities in the country where the single motherhood, are they out of wedlock, birth ray te is 70% pl, it becomes inspiration and

motivation. while we do noble things at work, i think the tradition is what i get is my other life, what i bring home. there's deficits there tied to culture to economic opportunity. >> you mentioned the communities and what ties communities together. i think one thing that has been in the news -- heather you wrote about this, about how you think about crime and kind of many different areas. but you don't think about what the reverse of crime is, safe neighborhoods. if you want good communities with opportunity, you need to have a place for safety. i see writings again, by partisan issue where they say great social programs, doesn't work if societies aren't safe and communities aren't well policed and crime rates down. what's the story on crime? >> it's mysterious, puzzling, fascinating. because it contradicts both the liberal and the conservative

means about how to fight crime and how society works. the liberal story about crime is that it's a product of inequality, of poverty, of racism and that you cannot solve crime, you cannot lower crime unless you get rid of poverty, racism, inequality. therefore, we need large social programs. the left is always pushed back against law enforcement, wanting to do big government instead. conservatives, such as myself, will say, we cannot expect to live in safe communities when you have this catastrophe of family break down, when you have boys being raised without any expectation that they will be expected to show the basic, most fundamental aspect of personal responsibility, which is racie i

raising their own children. both sides were wrong. we have had the largest and most sustained crime drop on record. nobody predicted it. it has defied every expectation. what did not change radically was the level of inequality and poverty in this country, nor did family breakdown improve. so both liberals and conservatives were wrong. what changed? primary in my opinion what made it -- the difference was effective policing. this came out of new york city that held police commanders accountable for the crime in their neighborhoods. they studied data every day. they made policing efficient. they went after crime patterns when they broke -- when they were breaking out. they took care of quality of life, which is civility offenses, what's happening on the city streets that make people feel like they are living in a chaotic, disorderly

environment. and we did have a prison increase. this is a very controversial topic now. there's a lot of discourse about the negative affects of mass incarceration. conservatives are on the bandwagon here. i would caution them. because i think that the inka s incarceration did play a part in dropping crime. the way this plugs into opportunity is now you have businesses that are able to open up in neighborhoods without worrying about the safety of their employees. you have people able to shop at night. restaurants opened up. new york city was transformed. the crime drop is what preceded the economic activity. the one thing that conservatives are right about, it's not that you need the booming economy to get rid of crime. you lower crime and that allows economic activity to flourish. that's what we saw in new york.

that's spreading in other cities. >> just one kind of point of clarification. you are right, there's a rethinking of fighting crime on the right. that's a big deal now. but it seems to me that has to do with non-violent criminals. it seems to me there's a thinking about should we treat a drug user differently than we should a robbery, someone inv e invading -- that was an interesting debate, whether the criminal justice system is creating a class of criminals, people who are 19 years old and were involved in some kind of non-violent offense. the jury is out on that. but i agree with you, whether it comes to people who are convicted of a violent crime, put them away. that's one of the best ways of cleaning up the streets. i wonder whether you would make that distinction between non-violent versus violent criminals?

>> prison remains a lifetime achievement award for persistence in criminal offe offending. it is not the case that there are harmless marijuana smokers that are in prison. you have to work very hard before a district attorney says, okay, i'm actually going to throw you in the slammer. it's extremely disturbing as a layperson to hear the world view of district attorneys and what they consider serious and non-serious offenses. the non-serious are the ones they're not going to prosecute, such as stealing a car. now, i submit, if your car is stolen, that's kind of serious. but in the district attorney's eyes it only becomes serious if you actually use a gun to steal it. in other words, hijack it with somebody in the car itself. the fact of the matter is is that the vast majority of people in prison are there for violent

and property crimes. the increase in prison population for at least the last ten years has been exclusively from violent and property crimes. and i would also just bring up something as a -- prophylactically, the other element of this is the idea that drug laws are racist and that they are -- they are responsible for the disproportion of blacks in prison. well, blacks are 37.5% of the state prison population, which is where the majority of prisoners. 88% are in the state prison population. if you remove all drug offenders from the state prison population, the percentage of black offenders in prison drops from 37.5% to 37%. so there's not much affect there. and when you go to an inner city

police community neighborhood, this is what you will hear every single time. we want the drug dealers off the corners. you arrest them. they are back the next day. why can't you keep them off the streets? the reason the police are enforcing the drug laws is because that's what the community wants. >> i will say though that to me it's plain. the most parents will want their children to avoid having to have the police be their source of inspiration to abide by the law. this is really where the home functions. with both the mother and father in agreement on general rules like not being out at 2:00 in the morning because nothing good typically happens at 2:00 in the morning. we want children to internalalize the rules. to the extent that my children were involved in the police, they were told what to say to the officer, please and thank you, basically. they didn't have their rights violated. they internalized the rights before the encounter.

in too many communities, the father and mother are not there in the home when the moment of inspiration to commit a crime happens. >> let me touch on a point i think heather you talked to about the idea that you had a breakdown in communities because there wasn't enough -- a little bit of economic opportunity with big spending. so, chuck, you hear a lot about this is that if there's more economic opportunity, would you have more marriageable males that the family broke down because there wasn't enough economic opportunity. is that a fair kind of critique of the economic prosperity of the nation, that we didn't create enough jobs and that's what led to the down turn of the family. >> steve cited the number of jobs at there. they are at a skill or commitment level where the individuals are not poised to take advantage of it. i think it's a question of two too chickens and too few eggs. the ability to seize an opportunity is about resilience. it's also about a little bit of

push. i mean, my parents -- not to get too personal again. but the idea that we could spend a day out of the home and not have done something useful or that would be reported back that we had been rude to the person at the grocery store, they wouldn't have had to hear about that directly from the grocery store owner. they would have thaerd frheard the other customers in the store. the community has to have coherence so there's level of self-control and self-restraint that combines with an inspiration to work and the duty would work and a responsibility. somebody who depends on you. they say among soldiers, for example, that when you go out on the battlefield, nobody dies for the country. they die for the guy next to them. they fight for the guy next to them because they have that bond. i'm afraid with the fraying of family and community, we're asking people to become these insular individuals who somehow see achievement in the workplace

as something they can self-generate. i don't think that's how people work. >> not working is a learned behavior. right? and so we see that -- we know this second generation children of parents on welfare are more likely to be on welfare. dependency is a learned behavior. the one thing that i just -- i had to get out there is, for those of you who know me, you know i'm critical of obama. i'm critical of his economic programs. there's one thing that is admirable about obama which is by all accounts he's a great father and husband. i just -- i get so frustrated that he doesn't -- we need more role models, especially we know that family breakup is more p f pref

pref ale prevalent in the black community. i think he can change lives in a productive way if he would do that. our culture glorifies single family households. look at tv and the movies. that does have an impact. >> on your question about the conventional argument that it was the lack of economic opportunity that led to crime and other problems of the inner city, i think mr. donovan started to rebut that. i would add that what we saw in the great depression was an economic can a as it trophy ca have not -- horrible joblessness, poverty. crime was very low. in the 1960s, you had a very robust economy and crime started going through the roof. crime really is a cultural

issue. it's about the rule of law, whether people have been given the values to respect the rule of law, whether they have the family orientation of that self-control and deferred gratification and the family structure that will say, no, you do not steal just because you want something. we're all agreeing very heavily on this panel. but i still think the message is not out there enough that family structure is the most important thing. america is suffering from it more than other european countries. and i think that unless we can figure out a way to rebuild the family at all income structures, we're going to have a very hard time with our economy. >> before we conclude and leave -- i want to leave time for questions. let me just ask one question for each of you. if you could look at one trend

that we illustrate that highlights culture or opportunity, what do you think would you like to put your finger on and say, this is a good indication of where we are going? are you optimistic or pessimistic about the future? >> i'm going to go with labor force participation. i think it does get to the issue of people not accepting the whole concept we talked about, about the dignity of work. i want to put one kind of fine point on this. i think it would be a good thing if younger people worked more. it's interesting, if you say this -- i remember in maine the republican governor wanted to make changes to the work rules to make it easier for young people to work. teenagers. the left went crazy. oh, my god he's trying to repeal the child labor laws. i've been looking at the statistics on this. it turns out that the younger someone starts working, it's a

pretty good indicator of how successful they are over their life. this idea that we shouldn't have 15-year-olds and 16-year-olds and 17-year-olds working, that's crazy. it's a good tlihing to get them working instead of in front of a computer screen or a tv screen. it gets to the idea of why the minimum wage is a horrible, horrible idea. you are actually denying the work opportunities of people who are young. one last thing on this. i know we're running out of time. i have said this a million times. i think everyone can -- the most -- one of the most important jobs i ever had was my first job. you know? it was a minimum wage job. you learn basic skills. you learn how to show up for work on time, how to be nice to your boss, how to run a cash register. those things stay with you for life. this cultural idea that it's a bad thing for young people to work is completely wrong. it's a good thing. parents out there, get your kids out there working. it will pay off in life in

spades over time. >> the minimum wage and the impact on youth unemployment. a study came out, higher minimum wage. >> i would keep an eye on crime. we have had this extraordinary crime drop that has freed up more opportunities in poor inner city neighborhoods. and we should be able to keep it going as long as we keep policing strong. we're living now in a moment of very scary delegitization of policing with the idea that cops are racist, which i reject entirely. there are bad cops. there are impolite cops, cops with an attitude that need retraining. but by and large, they are going where crime is and they are going to help people that are being most victimized and that's in inner city neighborhoods. we're seeing now shootings across the country against cops because of the reign of al

sharpton and a very poisonous rhetoric out there. when people start shooting at cops, that's a real worry sign for the rule of law in civilization. >> shooting at cops literally or figuratively? >> both. that being said, just to repeat myself again -- i think if we could reverse the rise of out of wedlock childbearing, that would be the most important thing we could do for our culture. it seems to be just unstoppable. but if we could get more people to say, the best thing -- more mothers to say the best thing i can do for my child is to give him his father and more fathers to say, i have a responsibility to raise my child, that would be the best thing that could happen for our country. >> to me, it's absolutely the marriage rate.

brad's article in the index makes it clear, there's been a ten point reduction in the marriage rate in the last decade. what astonished me looking at the numbers is that it has been 50% from the 1970s. we all talk about out of wedlock childbearing. it's not the problem. we are below replacement rate birth rate in the united states. only two years of the last 42 have we been above replacement, even with the influence of immigrants to the country. it's the out of wedlock thing. i will add one last point to that out of personal experience. i imagine there's some in the audience. when young people come out of college and they are pursuing the american dream in the right way and their initial experience is a debt we have a problem. i think the romantic and cultural ones are bigger. but it's among the reasons why marriage is becoming more difficult. it's forcing people i think to

consider they might have to make it on their own when in truth we make it better with a partner. shakespeare, every drama ends with a marriage. there's a reason. >> fantastic. i would like to open up for questions from the audience for any of the panelists or any topics we have discussed today. are there any questions? >> i'm general council for americans united for life. i want to thank you and the heritage foundation for this fine publication and focusing on culture and economic opportunity in america. i was struck when i was reading the index by what i believe to be a root cause of the moral decay we have experienced in america over the last 40 years. that's america's extreme abortion policy. i think it's error by omission

if we don't look at what's happened with respect to our abortion policy and see the unintended consequences to undermine the family unit, to undermine what we consider to be traditional american values. so i would ask you to comment whether or not you think changing the abortion policy -- chuck, thank you for writing the piece about trends on abortion specifically. whether that can help to strengthen the family, strengthen our culture and thereby lead to economic prosperity in america. >> look at the statistics in the book. i think you came up with some of these. the abortion rate has been declining and the number have been declining. i think obviously i think everybody would agree that's a very, very good thing, that the number of abortions is on the decline. the point i would make about that, the laws haven't changed much in the last 25 or 30 years with respect to abortion.

i think where conservatives are winning -- you may disagree that we are winning the moral fight. i think it's because the way we will win the fight is to change the hearts and minds of the american people. i think we are changing the hearts and minds of the american people. the idea of abortion stops a beating heart. that's a message that has resonated with people. there was the campaign a number of years ago, just life, what a beautiful thing -- i forget lou it went. showing pictures of babies. maybe i'm wrong, but i think this is an area where we are improving culturally. am i wrong on that? >> you wrote the indicator. >> the indicator shows a 20% decline over the last ten-year period studied. the report, it's a little bit bigger than that over the longer-term. i think it's a good thing. obviously, a good thing. we have a radical abortion

policy. we are one of four nations on the planet you can include among the four north korea and china to get a sense of the regime that endorses it that has a policy of legal abortion until birth. i think it influenced the judgment of men not to take up their responsibilities, because after all the woman has a nine-month period where she can relieve him of this responsibility. this life of a human being which hangs in the balance is a subject of barter and debate. we have battles over the child in the womb. if we can do that, we can have battles over everything. you talked at the beginning, i think it was david about securing the blessings of liberty. what has made us less secure than abortion on demand? what has made relationships between men and women less secure, less significant in some way than abortion on demand? it's her problem. the statistics in many respects

are grim. 50% repeat abortion rates. imagine if they were added to the out of birth wedlock rate. those numbers would be 60% to 70%. we haven't been brought to a place of peace or prosperity by this policy. we have brought to a place of irresponsibility to that. >> there are other questions. yes, sir, here in the back. >> this question is for steve moore. it's for the panel. but as a libertarian and an economist, the drug war, when you look at -- when you hear conservatives talk about, well, if we increase more drug laws, that will take drug dealers off the street, do you see it as a hypocrisy on the right? we can say to the left, gun laws aren't going to stop gun violent crimes.

we laugh at them for that. do you see the same case in the conservatives when they say increase drug laws, that's going to reduce the amount of drugs we have in our society? >> that's a tough question. i am kind of libertarian whether it comes to drug laws. i've always strongly supported decriminalizing drug use. i have to say, what's happening in colorado has given me some pause on this. it's not a good story what's happening in colorado. more and more young people are using drugs. it's disrupting their education and so on. i mean, look, i'm still for decriminalizing most drug use. look, the one thing i would say when i would describe what happened in the great depression and the fact that the crime rate fell dramatically, well, that's in part because we had prohibition. ending prohibition had a huge

impact in reducing crime rates in the united states. i don't know. i'm actually quite of a mixed mind on where we go with this right now. there's a number of states -- in november that will vote on legalization of marijuana. i'm kind of undecided. how about you guys? >> this is a copout. i'm agnostic about drug criminalization. most police chiefs and officers who i know are not in favor of it. that's because, again, they are channelling what they hear from their communities. now, the libertarian can always say, well, the reason people that live with open air drug trade feel that it's so threatening to them and they want the dealers in prison is because we have criminalized it. if we can decriminalize it,

everything will go away. that will solve the problem. i'm just not so sure. i also do not buy the argument that somehow we are forcing poor minority men to sell drugs because that's the only opportunity available to them. that's simply not the case. that's an insult to people -- the many, many thousands of law abiding inner city residents who are opting to work in the legal economy rather than the illegal economy. and, again, it's a matter really as far as i'm concerned of values and self-control. do you believe in work? do you believe in pulling yourself up through the proper channels which are still available? >> i think that's a great question to end the panel on. my research on economic mobility said there's two things that cause people in the middle class or higher to fall down.

those two reasons are drug use and the second is a breakdown of the family which brings back to we talked about the opportunity and culture do go hand in hand. we look forward to figuring out how are policies to look at creating more economic policy through reforms in the tax code, labor laws and working as chuck mentioned to say, how can we make sure that what where he not doing harm to marriage and say, how can we encourage people to form new families through the institution of marriage and continue the great success we had during crime. thank you for event for the first annual index of culture and opportunity. we look forward to see how things have improved and changed next year for the new 2015 report. thank you for your attendance. thank you to the panel. [ applause ]

tonight on c-span3, the vice chancellor for academic affaired at the university of illinois on education issues.

all these events at 8:00 eastern. with the 2014 midterm election next week, our debate coverage continues.

c-span campaign 2014, more than 100 debates for the control of congress. there was a debate last night. it was the first debate between the candidates. here is a pors tion of that. >> one thing on a lot of folks' minds is medicare. how do we keep it going, as some of you have mentioned for your

children, for your grandchildren. how do we sustain medicare for the future? senator scott. >> thank you. one of the first ways that we could help sustain medicare is to take a look back at obamacare where we saw $716 billion siphons from medicare in order to encourage young people to buy insurance. i don't think our seniors should besubsidizing the healthcare costs of young americans. you have to look at medicare, the number of -- waste, fraud and abuse is 9%. the average in america is 2%, 1%. if we look into medicare and look for ways to reduce waste and abuse and fraud, we would see a path forward. what we know is that the healthcare cost -- >> thank you. mrs. bossi. >> as far as healthcare, we need to protect medicare.

my two parents were -- 1915 and 1922, they were dependent on medicare. it's a good program. it's a sound program. we need to keep it going. i think that we need to look at the holistic issue of healthcare in america, whether you call it the aca or obamacare, we need to look at that. we need to look at our veterans. they deserve not to be homeless, not to be hungry and to have the healthcare they deserve. we need to look at it holist holistically and bring everybody together and bring the insurance companies to the table, the medical experts to the table and come up with a plan that provides the kind of insurance that all of america needs. of e. >> mrs. dicker son? . >> one thing i hear is the privatization of medicare. this is something that i don't think is -- i believe we have to really make sure that we protect our seniors, protect their investment. some people call that

entitlement. i made this mistake and i said medicare. some people call it entitlement. i believe when i got my paycheck, mrs. bpaychec paycheck, we saw that they deducted that. how can you say that that is entitlement? you earned it. i think you deserve it. i will support medicare and make sure that we protect it because it is vital to all citizens. >> south carolina has both senates seats on the ballot this year. see this entire debate and over 100 others any time online at cspan.org. remarks from federal reserve board member daniel tarullo on recent banking scandals and corporate culture. he spoke earlier this month at the institution of international

finances annual meeting here in washington. it's half an hour. we were talking about, it's a weekend food festival. we picked a great -- it's not my food festival, but it's a great day for a food festival. i apologize for challenges of getting in. we have our special guest this morning, a good friend, an old friend, someone we have dealt with for i would say years, but it has been decades. governor dan tarullo, who i would say certainly the most important intellectual force in setting the regulatory agenda in

the united states and the post-crisis period. but i would argue maybe one of the most potent intellectual forces globally. that makes you a very important person and a special person in what you are thinking, what you are working on, your agaenda impacts our members globally. i know you are limited. we appreciate you being here. why don't we just get started. we have the g-20 summit coming up in a matter of a few weeks. it has been described as a watershed event, maybe the termination of the g-20 agenda launched in pittsburgh in 2009 with respect to the regulatory agenda. the sense that maybe we can declare victory on too big to fail. i know there are a number of technical issues to be worked out. is it a watershed event? will we be able to declare too big to fail ended? what's left to be done? >> i don't know that ti would declare it ended. i would not.

i do think that with the proposal that we expect to be coming out with the summit, we will have rounded out a set of proposals and now a number of agreements covering capital andand liquidity. it's intended to assure recapitalization without tax pay area sis ta er assistance. we are coming along in having country around the world put in place mechanisms that would make it possible to resolve even the biggest institutions in an ordinarily fashion without taxpayer assistance. but there's obviously an agenda

that remains there with a number of cross border complications. that's why the work that has been going on has been so important as well. but that resolution work will continue for a while, because as all of you know, it's not just a matter of having legal authorities in place. it is a matter of on a frm irm firm basis making sure the structure of the organization, the funding and other characteristics of the firm are susceptible to resolution. then i think it's not so much a pivot but an additional emphasis over the next couple of years in the fsb. first i think on shadow banking. as i said before, to the extent that we have put in place a more vigorous set of liquidity and capital and other requirements for the large regulated firms that the chances of migration

out of the regulated sector do increase. that's something that we're all going to need to keep a watch on and make sure that risk is not building up in other places in the system. and second area, which i know a lot of large firms have themselves noted, is the potential concentration of risk in central clearing parties. the promotion of central clearing parties is actually a very important pro-financial stability advance. but we need to be cog any distance of the fact that as more trading is being done through the central clearing parties, their stability needs to be assured as well. for example, a stress testing regime designed to -- for the particular characteristics and roles of central clearing parties is i think a pretty important thing to do. >> we had a session yesterday on central clearing parties. it has been on our radar screen. we had a session in june as well. usa think about -- as you push

risk out of the banking system into the shadow banking, do you have the tools to target that risk where it exists? how do you think about it in context of use of macro-potential tools? >> a few things there. i think first, as some activity has just not come back and won't come back and is probably to the good. secondly, when activity does seem to migrate from regulated institutions to the unregulated sector, central banks and regulators need to ask them servi self-s the question if there are risks comparable to those that existed when the activities were in the large institutions. so, for example, if institutions that are essentially non-leveraged are conducting the same activity, you may not have

concerned. it may be a matter of people who want to take certain ris kz. they are capable of baring the risk. they don't have vulnerable funding structures. everybody should have a shot at doing that. but where the funding and/or total leverage of the new actors is of a sort that suggests a replication of vulnerabilities, then i think we do have to begin with some analysis and potentially take action. the issue of the tools and the efficacy of the tools is i think probably going to be one of the great intellectual and policy efforts of i would think the next five to ten years. this is -- the world of systemic risk financial stability macro prudential is a new one. it's not that long since the term macro prudential was coined. it's less time since it was

internalized and people began thinking about it. one of the initiatives that will come out of the fsb coincidence is for a minimal margining of securities financing transactions even as between unregulated entities. and that's a first step towards trying to generalize prudential, in this case i would say pricing requirements to make sure that you don't have unstable structures in funding. but there are obviously areas that are not easily reached. and part of what we are doing at the fed and what the fsb is doing internationally is cataloging the things that can happen, the tools that are available and then at least getting ourselves to the point where we can begin to do the analysis. >> we have a session at the conclusion of our discussion

focusing on systemic risk. if you have time to stick around, maybe you should. i didn't hear your comments, but it was reported that you said you can have systemic risk without too big to fail. it's the connectedness of the system which you think is a problem. how do you think about that -- how do you deal with systemic risk if it's not about the size of the institution ? >> two things which are interrelated. one is funding structures, runable funding essentially. the sort of thing that gary gorton writes about so much. second would be correlated asset holdings. as i say, those two things are frequently related with one another. but those are at least two of the lens that one wants to put on or look through in examining what's going on in the system more generally even if it isn't concentrated in large financial

institutions. and, again, i think the policy response will vary depending on the business models of the firms engaged in things, even if they have funding issues, how much leverage. i can't say with precision what the response ought to be. i think that's the way to begin looking at these activities. >> you mention leverage a couple times now. you gave a speech in chicago a few months ago where you talked about regulatory capital. it sounds like you were proposing back to leverage ratios and moving away from -- is that where you think we should end up? >> basil 3 builds on 2. i would characterize 3 as strenennenthing the quality of capital that needs to be held, focusing on common equity,

making sure that what is said to be capital will be there to absorb loss. 2 is a more complicated matter. i think the length of time it took to figure out the formulas and all the detail that would need to go along with it, the problems in monitoring, the problems of consistency may well out weigh the benefits that come through -- that could come through more gran ooh lairty or more risk sensitivity in the modelling. as i look at things, tim, stress testing, as we have developed it here and as other countries and jurisdictions, the ecb are trying to develop it now, i think holds greater promise as a capital tool, a risk sensitive capital tool for for big institutions, but also taking a

macro prudential look because of the multiple scenarios applied to everybody. so i would say leverage ratio, set a standardized risk and then a risk sensitive stress testing model are complimentary forms of capital measurement that together provide a pretty good basis for setting capital standards for microa and macro prudential reasons. the future of internal modelling is something that will need to be debated internationally. i think if you look at the preliminary work the committee has done some very useful market analysts work on the variance in risk weightings of similar assets across different firms. you do see a lot of the problems

that the 2 irb model created. we had hoped for a process that would have scrutiny by people from many countries of the modelling within firms. that's not something we have been able to get. but i think that probably under scores the need for a different approach. >> we have been working dilly gently on trying to understand the variances and the outcomes and see if we can't find ways to narrow the differences. we were compiling over 70 different proposals. some have a small impact on the variances, others large. we hope to come back with some suggestions. if we go to a standardized model, doesn't that engineer into the system potentially systemic risk if everyone is using the same model? >> the standardized risk weights? >> yes. >> the standardized risk weights and even a stress testing with similar loss functions obviously

do create some risk that you have a correlated assessment of potential losses. but i don't -- i don't think that one could say that in the absence of that approach to capital regulation you have taken care of the problem of correlated assets. i mean, look, correlated assets -- correlated assets holdings in the funding structures in many sense is at the hard of the financial stress precrisis. it was driven by some regulatory ash troj. but i think it was driven beyond capital holdings. >> you have spoken frequently about wholesale funding. i know it's an issue for you. where we in the process? what comes next. >> as i indicated, there will be a proposal, paper coming out of the fsb which builds on the one that came out a while back but extending the scope somewhat.

i think that is the -- that's an important step forward to get people's comments and see whether we can get common minimum margins for securities financing transactions. we in the u.s., as i have indicated previously publically, we're intending to strengthen the surcharge aaccomplishable by reference to the short-term vulnerable built of the large firms. although, that will not be that blunt an instrument. it will be calibrated some depending on the kinds of wholesale funding. i think those are two steps forward. one applicable to the biggest firms, one trying to generalize to markets. money market reform measures enacted by the sec at home. but this is -- this is an area

of, a of, as i said, continued interest and emphasis by the fed and by the fsb. and, tim, part of it, again, is a question of what happens dynamically going forward. forward. right now r, it looks very different from seven, eight or nine years ago. i think woe would delude ourself it is we didn't expect that over time, there will be new inknow acres have there will be new business models and there will be a growth of different kinds of shadow banking and that's why these forward-looking processes, as i indicated, will be important. >> to that point, i brought the cover of bloomberg market, entitled bank busters, peer-to-peer lenders and lenders in the move tomorrow up end finances as we know it the

silicon valley brothers, taking bit con mainstream, big data knows your score, mark andreessen, tech fronts, new york and london. how do you think about these new technologies and new business models? >> that's, i think -- i'm not sure there is enough to think about yet. there is talk about what could be done than what has been done is not scaled up in a big way. that gets you to ask the same questions before is there, in fact, migration of the activity, and if so is it migrating in a healthy way or in a way that's just going to repeat a vulnerability? the technology issue, particularly in payments, are gonna be another really big part of both the regulated sector and

the efforts within the up regulated sector to capture a part of what we thought of as traditional banking business. and those -- you know, the number of technology, not a single issue or single problem, just a whole stream of technologies and here again, i think we again, the fed, we have been trying to start analytically by looking at what is happening and gathering comments on what is happening, but i don't think this is going to be a single response because it's not -- gonna have mobile apps the one hand and have whole different systems of trying to lend outside the sector on the other. so, i can't say what the response will be right now because, as i say, we don't have scaled up activity. i do know that both bankers and regulators are quite vigilant as to how these things develop. >> let's -- got a whole host of questions, don't have a lot of time, maybe take a question or two from the audience and a couple follow-up.

we have microphones right here, questions from the audience. right down front here. we have got a microphone coming to you, sir. >> my question is about the qe in europe, whether you view that as a sort of challenge for currency wars, thank you. >> so i think, you know, this has been a period in the crisis and post crisis period in which central banks around the world have had to turn to unusual and in many cases, unprecedented measures to try to fight deflationary risks and also to try to provide some -- enough accommodation to support renewed growth in an environment in

which a set of global problems has meant that it's not a one-country response but instead, many countries dealing with low aggregate demand and thus, having less support from their neighbors, might be the case with a more idiosyncratic sense of problems and i think the ecb is -- has been moving forward for a couple of years now, trying under president draghi's leadership to craft the right set of responses and i think this is obviously an ongoing issue for them. and something which, you know, we are quite interested in because good growth in europe is obviously good for the united states. worried about growth in europe? >> europe -- worried about growth around the world right now, tim, to tell you the truth. i mean, there are more downside risks that upside risks. i think where the u.s. appears

to have some momentum for what is still moderate growth, it's not fabulous growth, but right now, other major economies are tilting or at least showing risks a little bit more to the downside than to the -- than to the upside. and this is obviously a set of things we have to think about in our own policies going forward. you're serving on the administration the 1990s a period of remarkable economic growth and activity, prosperity. what does it take to get back to that? what is inhibiting a return to that period of time we saw when you were wearing a different hat in a different administration? >> well, it's -- i'm sure there's no single answer and things evolve structurally and don't turn around and go back to those things, but i think for the united states, in particular, we are gonna have to address some pretty fundamental

problems? an aggregate demand problem is not unrelate because of marginal propensities to consume. i also think there's no way around confronting the productivity issue and this is a matter of fiscal infrastructure and physical equipment spending but also obviously, human capital spending. you know, right now, the physical capital stock is about as old as it's about in the postworld war ii period. some of that may be because the machinery being used now is better and more durable than -- just like your automobile than the stuff made 20 or 25 years ago, i don't think it can be entirely that. and since much of the spending over the last few years has been software-type things, which as we all know, whether you want to or not, you have got upgrade your software regularly, that suggests an underinvestment

there, i don't have to tell anybody here about the challenges of, um, making sure that people have the right set of skills and education to do new jobs. i do think a focus on productivity has got to accompany a focus on an aggregate demand and those two things really need to be pursued together. but this is -- there's not a quick turn around. i mean, there -- there will be a debate for some time, a long time, as to the degree which the crisis amplified things that were happening, accelerated trends that were already in view or created wholly new problems, but i don't think there's any question but that the net result of all of this has been a period in which that, you know, much awaited nike swoosh never did happen and very unlikely to happen at this point. >> with real implications for

policy, take another question. right down here on the right. so the fed is preparing your tours to potentially interest rates when the time is right because of the shrinking fed funds market so could you comment on the risks of the new tools since they are -- i mean now really tried before? >> sorry, comment on the what? >> new tools to raise interest rates when the time comes. >> oh, well -- >> because, yeah, the shrink fed funds market and yeah. >> yeah, so i just -- you know, with i think it's important with respect to our own monetary policy and all of its implications to recognize that we are very much in a data-driven, data-dependent environment right now. i think, you know, if -- if the economy continues to improve and

shows that it really does have a lot of momentum, this is going to be a case in which we can all happily say, yeah, we have got strength in the economy, of course, interest rates are going to be rising. but i certainly don't regarding any as on a preset course. i think that we are gonna have to watch what happens in the economy. i was just alluding to downside risks a moment ago. i think, again, what's gonna be important in terms of communication with markets is, you know, for markets to listen to chairman yellen. in her speeches, in her -- >> i listen to her. >> well, that is -- it is -- it is -- if you look -- if you look at what she says in her press conferences and in her testimony, she -- she does really give a framework for thinking about how and when we are gonna move and she does

emphasize the data, the kinds of things that we are collectively looking at. as markets listen and can make their own judgments as to whether the economy is moving the way we expect it to move, then you have a better sense of when liftoff is likely to occur. but to the degree that your assessments differ from our current assessments, you may think that we will find ourselves having to move either earlier or later, which is why -- why it's important to keep in mind, it is something that's based on our expectations of what's going to happen rather than some preset sense of, well, here's how we are gonna go for the next three or six or nine or 12 months. >> last question. conduct and culture. new york fed president bill dudley, i saw him recently, got a exercise going, looked at conduct and culture. i think our ceos, firms would say there's been a real cultural shift in the boardroom and throughout these institutions. what needs to be done?

what's the -- what are regulators, what are you looking for with respect to conduct and culture going forward? >> well, that's to -- there's a role that regulators can play. culture, a slippery concept. culture, the culture of an institution is set by many things, including the preferences and values of the people within it, the people who are in charge of running it and those of us, markets, regulators who have some outside influence upon it. i think the regulators are setting expectations with respect to risk, setting expectationses with respect to conduct and setting expectations with respect to compensation, which is one of the most important incentives, important ways of firms signaling what is valued, what is not valued, what is acceptable and what is not acceptable. i think, tim, that the problem

at this juncture is that there are so many problems and for all the -- for all -- for all that i think has changed, the way people have reoriented, you know, put yourself in the position of the average american or the average european or the average japanese reading the newspapers and seeing, at least with respect to the u.s. firms, the mortgage, the legacy of the mortgage problems, lie bore issues, the forex issue, you just can't be telling yourself it's a few bad apples. there's something about the structure of incentives and expectations within firms that needs to be address and i think a lot of boards and management know that it does need to be addressed, but this is almost surely the classic case of needing to take some changes that in some instances are not gonna manifest themselves

immediately. wonderful. thank you so much for coming here on a rainy saturday morning. >> thanks, tim. [ applause ] we also heard remarks from reserve bank of india gaffe nor at this meeting at institution of national finance. he talked about india's economy, financial reforms and innovations in the banking industry. this is half an hour. welcome back, everyone >> i hope everyone enjoyed their lunch. fascinating insights our ceo panel. we are gonna get started here shortly. i'm delighted to reintroduce to you tim adams, who you all know very well from the iism f.

he is going to host an in conversation session with dr. raj ram rajan, the governor of the reserve bank of india and i will turn it over now tim. >> great, thank you. thank you, ben. governor, welcome back. good to see you. you hold a special place for me because your -- i always remember you as the guy in 2006 who told us we had a housing problem in the united states. we wouldn't listen to you and we paid for it. so, for me, you're the soothsayer, you're the guy who can see into the crystal ball. so i want to peer into your crystal ball in india and let talk about the future, but i will say the prime minister was here last week, he was in new york, modi mania has swept through washington, d.c. there's enormous enthusiasm and expectation. we at the ii fit upgraded our forecasts for india going forward. the expectations are very, very high. how can india meet those expectations going forward? >> i think the first thing is to bring down expectations. [ laughter ]

seriously, think we are in the beginning phases of a recovery, which i hope will strengthen over time. it's still an uneven recovery, my guess is this quarter is weaker than the previous quarter. i think the course of this year, we will be solidly in the 5% growth range and by next year, we should be solidly in the 6% growth range and beyond that, i think we will groerk depending on what we do over these couple of years. w, depending on what we do over these couple of years. we have to do our basic homework. the good thing for india is there's lots of low-hanging fruit. we have got to pluck them. the big question is why we didn't do it before. but i think there's environment and there's a willingness at this point to do what it takes.

what that means i caution people on is not -- is not at this point grand sounding announcements, because that's not what we really need. we need to fix the plumbing. we need to do the basic stuff which will get the economy back on track. from -- on the real side, it means getting the projects that are stalled going again. it means fixing problems in coal and gas, which are not the stuff of headlines, but are quite important. and it means getting, for example, businesses or government departments to make payments on time. >> right. >> we have learned on the financial sector, we can talk about it, but at this point, execution is important. and i think the government is engaged in that. certainly, the financial sector

side, the regulators engaged in execution. since you were here last year, you have been incredibly busy. you have a new inflation regime in place with a form a.m. inflation target and inflation is down and expectations continue to drift down wards. you have got a macrostabilization framework, which appears to be working. you have been busy. how do you build on that and then looking on your five pillars reform, how do you take those to the next level? >> so the inflation path or the glide path that we've proposed has wide acceptance, but it's still not enshrined in the law. and what the finance minister has proposed in the budget is that there be a proposed conversation between the government and reserve bank to create a more structured inflation flame work which will then give us explicit objectives, a, you know, monetary policy committee and all that. so, that's gonna be discussed

over the course of the year, but for now, i have what i need, which is a glide path, which has at this point, i think, convinced the financial markets that we mean what we say and we will do what we say. now, apart from that, apart from clarifying the monetary framework, which is one of the pillars we are focused on, the second is creating a more vibrant banking sector. we have licensed two new banks. we have proposed to license a number of different banks, what we call small finance banks, which will have the ability or the mandate to lend to individuals and small enter price. the payment banks, which will perhaps be biocorpse retail funds that can actually take in deposits in remote areas and send it by mobile every were so, there a he is a whole restructuring of the banking

sector that's going to happen. gonna deepen the financial markets. that's an ongoing process it implies bringing in more investors, including foreign investors, into those markets. the fourth is fixing financial distress. we need to bring more indians into the financial fold and also lend to most enter rise in don't have access to credit. lots of plans on all these. i can elaborate if need be, but this is really our framework for the next few years. i want to come back to financial ininclusion, because it is on our agenda here. 2.5 billion adults around the world don't have access to formal financial service, i think there's a great growth story buried somewhere, bringing them into the formal financial service, one thing you have done is built a high level of

official reserves, over 300 billion, i assume some is anticipation of a change of interest rates next year, how are you thinking about what the fed maybe planning next year and other interest rate monetary policy changes around the world? >> well, if the fed starts raising interest rates, as i presume they will, when there is significant since of strength in the u.s. economy, and that's what they have signaled time and again, it will be good for the rest of the world. the rest of the world will benefit from u.s. growth and there will be confidence else were it will create some modernity for the emerging markets, as people suggest we have got 550 billion worth of overflows, new imf term, into the meerming markets, over and above what would otherwise go there. so, you would expect some of that to reverse. my hope is that after the initial volatility, there will

be differentiation and the financial investors will try to see where there is sois stomach stability. we have fiscal deficit on a glide path to 3% in 2016. i think, as i said in the beginning, we are in the beginning part of much stronger growth. >> go this morning we talked about macroprude depps tools. how do you think about using -- how do you think about macroprude dep -- macroprudenti

tools? how do you think about it in india with respect to interest rates? >> we use it on managing flows. we have, over time, pushed the dealt flows into government securities into the longer maturities by asking people who come in to reinvest at the longer end and that was precautionary because we saw last summer, the bulk of the outflows came in the debt markets at the shorter end. trying to push them out, not because we think people can't sell and walk away at that point, but because somebody investing for three year may spend more time reflecting on their investment than somebody who has an overnight or a few week position.

reserve buildup is a macroprudential tool. we are not trying to manage the exchange rate. in fact, by many sort of metrics, the rupee has kept pace with the dollar even though our inflation rate is somewhat higher. so, we are not overvalued at this point, but what i'm saying the reserve buildup hasn't come at the expense of the value of the rupp pill. it h -- rupee. it has maintained its value. one of the areas applied moderately successfully is the housing sector. prices going through the roof and loan-to-value ratios are

falling, -- >> mumbai is pricey. >> in the city where space is at a premium, where permissions to build are premium, prices are highest, so, new delhi, one of the most expensive places in the world. mumbai also. but i think more broadly in the country, you know, it's more moderate. over time, what we have to do is expand the sun plif housing so that house prices rise a bit. >> good monsoon, food price well behaved, oil prices are low. how do you as a central banker try to see through the volatility of found oil which can vary from month to month, season to season, year to year? do you try to look through that cycle and how do you do that, especially with respect to the politics of food prices? >> food prices have been very

high for quite some time and the first readings of the months would be very bad and there were some price pressure there also. since then, it's come to be mediocre but not terrible one. as a result, more expectation that harvests would be good. one of the reasons better than one might think the monsooner the places where there's been liquid rain is the places well irgated, for some -- there's some correlation, not perfect. so, as a result, we expect next year there will be some -- perhaps some reduction in food production relative to this -- the previous harvest, which came on the back of a very good monsoon >> it won't be terrible. i think disinflationary forces are under way. one can never rely on oil prices

staying low because of geopolitical concerns. but i think the supply sort of increases have been considerable and demand relatively weak, looking at the demand is up blind balance, there is a rationale for it to perhaps be where it is. i don't expect a huge trending downwards much beyond this. at some point, people stop producing high-cost shale and so on. i think that these forces are helpful. the reduction in the price of oil from let's say 110 to 90 adds another percentage point for the year to gdp because that's so much less -- so much more net exposed. so, those are good developments, let's see howl they establish. document want oil to fall too low because that implied medium term supply disruptions, because

people don't unvest a moderate oil price is good for india. all together we look at temporary fluctuations, including vegetable prices but food price on a more permanent climb upwaerksd can't look through them, we have to embed them in our forecast. the good news there is i think they are moderating, especially because a number of food commodities in india reached price. not much more they can go up. . >> there are supply side issues with respect to innation. you mentioned energy, in great demand. certainly sustainable, dependable energy.

>> these are big issues the government is tackling what is the appropriate price for gas and appropriate price and flexibility to produce for coal? i think the next few months, these big decisions will be made. and i think that will create a more -- a much clearer environment for investment in energy, which needs tremendously. we are very open to other forms of iffing from the rest of the world, including private equity financing following provide risk capital, but of course, we have to do our homework blow vigd the environment where the investment feels the project will not be held up for a variety of reasons. the tax late remain relatively stage and so on.

>> right. right. >> and those are statements that the government has made and is working of ton clarify the environment. >> infrastructure has been a topic four the g-20 with -- under australia's leadership. mckenzie study says we need something between 57 and 67 trillion dollars worth of infrastructure by 2025. issues with respect to the funding from traditional sources such as insurance companies because of regulatory changes. do you think that there is a regulatory component to keeping more long-term funding going into infrastructure and if it is, what can we do about that? >> no, i'm not sure it's -- well, there is a -- some regulatory component in the sense that the regulatory authority has to allow more investment by insurance companies a structure when it feels more comfortable, eval quakes appropriately done by insurance companies. typically, you would assume for long-term projects insurance companies would come out with

takeout finance or sit behind the banks with the banks doing the construction finance and knowing how do it another component which is the expansion of fund-directed investment and insurance which will bring in more capital and bring in more long-term finance. some long-term financing will be available but my sense is we will still need risk capital from the rest of the world and open to it >> developing capital market, you have the capacity to funnel channel savings from the domestic population into long-term investment. that is a key opportunity for you as well? >> absolutely. in capital market,, equity market,, especially for big

firms is fairly well developed, state-of-the-art liquid technology. the real issue is with the corporate bond markets. government bond security markets very liquid, very well developed. we need to increase the liquidity across the spectrum of bonds. right now, focused on certain maturities, but my sense is that will happen. there's nothing standing in the way. real place we need development is the corporate debt market. we have set up yet another committee internally to see what do the committees say we haven't yet done? can we do them? we hope women do what we were counseled on the but one thing more that we need for vibrant corporate debt market and that one piece is a good bankruptcy court. this why could would somebody invest in risky project, bwa and so on, some chance it lands up in bankruptcy and don't know

where they stand in the priority structure, seet cetera. the ministry of finance looked at creating a new bankruptcy court. there is a bankruptcy court embedded in the company law which got into a little difficulty with the supreme court. we need to figure out how to remedy that. my hope is that it will have a solid, well functioning bankruptcy court in a relatively short period of time that will have the corporate bond market. >> you have heard the phrase cap stall a coward, grows it's treated well. the more you can give it legal protection through protected property rights. come to financial inclusion and then a couple of questions from the audience. i know it's priority for you, tell me what you are doing with respect to financial inclusion. >> if you want to reach everybody in india with the big distances, sometimes difficulty in communication because the road network is not that well laid out, tough work with

technology. often, that means mobile technology, but means tough work with new institutions. you have to figure out a way to create 100,000 branches without actually putting 100,000 brick and mortar branches in place. so this is why we are thinking about how we use a new approach to do financial inclusion. how we involve the cell phone companies, how we bring them together with the banks and always doubted as model but we need a mold which has security embedded but also has the ability for people to access the wider financial system, not just traps officers and small accounts. so we are pushing the banks to work with the mobile companies, but we are also offering the mobile companies an opportunity to get into some limited banking through these payment banks. but there's lots of innovation going on in india, so today, for example, there is a entrepreneur who has done an overlay on existing banks, where by, somebody can go to an atm from

their account. they can basically send money to any telephone in the country. that telephone will basically get a number, which they then take toon. atm personal number and get out money. you don't have to have an account elsewhere, so long as one person has an account, he can send it using the atm to somebody else who has a cell phone. there are innovations like this that are coming up, which would allow easier -- but also easier savings, cash in, cash out and so on. my hope is that when you couple savings accounts and easy access to them with a unique i.d., which we are rolling out, direct benefits transfers of subsidy, do you many things at the same time. first, you bring these guys into the financial system, you give them a reason to have an account, which is they will get the direct transfers.

the bank's profits, get some share -- a commission for every transfer they make and then once you have got these guys into the system, they don't see leakables as they get their subsidies, nobody takes 10% off the top. >> right. >> you don't have to distort prices to give subsidy, don't have to subsidize kerosene. the guy buys kerosene, send some money into his account. i think technology and new organizations are key. we need to make them happen. we are in the process of doing that >> i completely agree. open up to the audience for a couple of questions and come back and close. right down here, the very front. >> thank you. united bank for africa.

are there companies, and specifically bank fairly valued right now in the market? >> you are asking a guy from the university of chicago. s fairlyd right now in the market? >> you are asking a guy from the university of chicago. yes, they are fairly valued. what people have in mind by fair value sometimes there's a condition. fair value, given something. and i would say there's a lot of scope for certainly the public sector banks to increase their valuations, if the government structure was strong and more transparent, including the range of things that the committee report has suggested, separate chairman and managing director, give the map naminging director longer tenures, strengthen the quality of the boards, all this thing if we do valuations will go up, basically because money is safer. >> right. great. someone else? out here, bless.

yes. thank you very much. you have touched on the extent of the environment, the likelihood, of course that the fed would start raising rates. the other big thing which is going to be happening is quantitative easing from the ec about most likely. europe remains very weak and outside of the u.s., external environment remains very weak. how do you assess the prospect for the indian committee given -- given -- given those developments as well as the idea of geopolitical risks? >> well, i mean, what one thing it says money will continue to be relatively easy as opposed to when everybody is tightening at the same time. but it also means we will see exchange rate developments, which, you know, it's easy to say that the dollar will get stronger, vis-a-vis the euro, some of that has already

happened. i don't know how much and whether there's more to come. but it also means that there will be, you know, volatility in how emerging market currencies behave relation to industrial kur rep circumstance closer to the dollar or closer to the euro? so i think there will be some adjustments that will need to be made on that basis. it will have effects on the direction of trade and so on. but i think to the extent that the stronger economy's currency appreciates, it can draw in imports from the rest of the world, can be helpful for growth, and can be helpful for the weaker economy and i think it's in all our interest that the euro area also pick up in good measure as also japan. so, let's hope the exchange rates do the right thing. we will see. we had martin wolf on the stage yesterday, larry summers, brad delong and others. larry written a new book and one of the central points of the

book and we have a op ed the ft this past week, the postwar era, had a history of credit booms driven by the political cycle, political economy, you have written in fault lines very similar to that. what do you do about it? how do you overcome the political desire for faster growth in an era in which we are in the u.s. growing well but only 2 1/2%. how do you keep the political economy from creating yet another global credit boom? >> so, two aspects to it. one is the domestic boom that is created and the other is the cross boarder boom created by economies in different statements. so i would say both are important, that we have seen in the 1990s there were emerging market credit booms, funded partly by low interest rates elsewhere. and reversed and then the emerging markets started building up big accounts at the

time that you and i were talking when you and the u.s. treasury and that yee the aa billion of another kind. the global savings, chairman bernanke, referenced to it, and now that that boom has collapsed, we have yet another boom which built up in the emerging markets, yet another credit boom. so, not just within country, but cross country. the cross country is not political, but maybe driven by the domestic political cycle, which is -- >> spillover affects. to the growth point. this is why i keep saying the real problem is margin policy, we central bankers are trying to do too much. and we should say at some point, you know, that's all i can do, now it's your turn do it and push me however much you want. that's true independence. push me however much you want, i can't do anymore. and write all the op eds you want this is write stand and i

won't move. >> final question, because i know we have got to wrap this up, we tend to be the glass half full in india, there's some who think the glass is half empty. what do you say to the skeptics who say we have heard this before, heard the promises, what's different and what can you personally help do to promote growth in a different era of growth in india? >> see, talk is cheap. i think what we have to do is deliver. so i have said this before. we have to start delivering. i think we are in the process of doing it, but, you know, watch this space and see the results and hopefully that will cop vince you. but i agree, we have -- as japanese friend once said, the problem in international conferences is getting the japanese to start speaking and getting if the indians to shut up. [ laughter ] >> i guess we should end on that then. governor, thank you very much.

round of applause. [ applause ] tonight on c-span3, vice chancellor for academic affairs at the university of illinois at you shall bana shafrp pain on education issues. then, a discussion on war and civilians. after that, a look at the legacy of former afghan president, har mid-karzai. and type lakers papal talks about ways s ts t s ts t s ts panel talks about ways to find jobs for veterans. with the 2014 midterm leeks next week, our campaign debate coverage continues. tonight at 8 eastern on c-span, live could have ram of the louisiana senate debate between three candidates, senator mary lan drew, representative bill cassidy and rob maness. at 9, the main senate debate with susan collins and shep nah

bellows and at 10, the texas senate debate between john corn and david a lameel. thursday night at 8 eastern, the illinois governor's debate between governor pat quinn and bruce russianer. at 9, the new york governor's debate with governor andrew cuomo, rob astorino, howie hawkins and michael mcdermott. and then at 10 shall the new hampshire senate debate between senator jean shah heap and scott brown. at 8 p.m. eastern on c-span2, the new hampshire governor's debate between governor magon hassan and walt havenstei net. . see.

thank you especially secretary hagel for joining us. let's start off with one bit of this. there is some ebola order today, tell us what the significance is. >> what i signed this morning was a memorandum to the chairman of joint chiefs of staff in response to the memorandum of recommendation i received from the chairman and the chiefs yesterday to go forward with a policy of essentially 21 day incubation for our men and women who would be returning from west africa. that policy was put in place by the chief of staff of the army a couple of days ago for general williams, and 10 of his

associates who are now back at their base in italy. and what i said in response this morning was, give me within 15 days the operational specifics of how that would work. and then i believe we should review the policy within 45 days. the fact is the military will have more americans in liberia than any other department. that's number one. number two, our people, our younger cohorts are different. they are not volunteers. and this is also a policy that was discussed in great detail by the communities, by the families of our military men and women. and they very much wanted a safety valve on this.

we heard remarks from the u.s. immigration service who spoke about his personal connection to the immigration issue by discussing his family background growing up in miami and his work as a federal prosecutor. this is 40 minutes.

>> he was confirmed by the senate in june of 2014 and sworn in july 9th this summer. he previously served as the director for the office of civil rights at the department of health and human services and he held that position from 2011 to 2014. from 2010 to 2011, suffered as the chief of staff and the deputy assistant ag at the department of justice. his other federal service, of course, he was -- done more than this in private practice and worked at montgomery county as well, his other federal service includes work at the u.s. attorney's office for the western district of pennsylvania from 1997 to 2001 and he was a trial attorney at the civil rights division at the department of justice from 1994 to 1997. and in that capacity, he was heavily involved in prosecuting human trafficking cases, which is a little nope fact, i think. he was actually the lead

prosecutor in u.s. v florez. his co-counsel in that i believe, was ambassador lucy deback ka and that case involved the enslavement of mexican and guatemalan farm workers in south carolina and florida and it resulted in a 15-year prison sentence for the person who was behind that he was also, a number of would you be interested to know, a board member of casa of maryland for many years. he has a remarkable family immigration history. he was born in brooklyn, the son of cuban immigrants, but his grand parents actually migrated to cuba from turkey into pole land to escape anti-semitism and oppression. so, director rodriguez is going to talk, he is going to walk around and talk about 2025 minutes and then take questions. we are going to ask you at that time to line up and he will call on you and he has to leave here

prompt late promptly at 9:45. i would like to have you join me in welcoming director rodriguez here today. thank you. [ applause ] >> so i'd like to begin this morning, can everybody hear me okay? with a little bit of a confession. how many of you here are george up to law student s? actually nobody. a couple there in the badge you will appreciate the following anecdote. i have -- this is actually my second opportunity to speak in this room in the last few years. prior to that, the last time i was in this building was roughly 28 years ago when i was waitlisted at george up to university law center and i came here to meet the deep of admission and pry to persuade him to actually let me in and he

looked at my undergraduate transcript, he looked at the rest of my file. and he said, it's actually miracle that your even on the waitlist. so, forget about actually getting admitted. i wanted to come back azle director of a federal agency and i wanted to tell this story, i'm thinking to myself what is the relevance of this story, why does it matter to the discussion that we're going to be having this morning and the discussion that you're going to be having? and i realized that it actually is a great metaphor for immigration. because what we do in immigration policy is decide who we want to admit to the united states and who we don't. and it's based on a whole set of factors that i want to talk about a little bit this morning but the basic idea is that we are predicting that this

individual who we admit to the united states will be good for america. that in some way, they will promote our values, they will promote our objectives. i now pose the rhetorical question, looking back, george up to, would you have admitted me, had you known this information? would you have had different policies if you would have known whatted outcome was? i really just wanted to tell that you story. [ laughter ] the you can stance of my speech, thank the center for my great lakes studies, the migration policy institute clinic and georgetown itself for putting together and hosting this conference. institute clinic an itself for putting together and hosting this conference. this has been going on a decade and has become one of the key

for rah for discussion for discussion and exchange on immigration policies. i really thank you all for creating this sort of forum for us. i also want to recognize doris meissner, who was the director of immigration and naturalization services back during the clinton administration. now with the migration policy institute. if you come to my agency, and i know i have a couple of examples here with phyllis coben and chris bentley. phyllis coben is the director of the new york field office, chris is our bent prest secretary, one thing that people speak of with plied is that they are "legacyism ns" that they were in the agency back in the ins days and i think that really owes energy great part, to the kind of leadership that you provided during those years. and we not only have federal

official officials former federal officials part of this dialogue. we have someone from the new york city mayor's office, engaged with an ambassador in el salvador, opened an office in texas. gives you a flavor for the broad spectrum of individuals, of organizations, that really play a role in this critical, critical issue. i have three personal experiences that really inform my vision of being the director of uscis. first of all, you heard as part of my bioth that i'm son of cub immigrants, the grandson of turkey and poe la fleeing anti-semitism. because of those experiences, i understand the aspect of immigration based on seeking

refuge. fleeing a situation that has become in some way no longer tolerable and coming to where the situation can be better. miami i grew up, although born in brooklyn, i actually grew up in miami, the miami of my childhood really provides a case study, not just in what it means to be seeking refuge, but also in what immigrants do for america, this point i was talking about immigrants are good for america. and the miami of my childhood was really this amazing cauldron of energy. it wasn't just people from cuba where my parents were from but people from all over, jewish immigrants or children of jewish immigrants from eastern europe, people from all over the caribbean and what it made even then and it's only continued until now, miami, with all its

chaos with all its craziness, was also one of the most economically vibrant cities in the united states. so i'm actually a real believer in the notion that immigrants are really what energize our economy, what actually make us the kind of powerful economy that we are and it's not just the software engineers, although we love them and we want as many of them as we can get. but it's alsole guys that laid the railroad tracks, the welders, the agriculturals, the broad spectrum of individuals who really have created and then really energized our economy. there's a second experience that informs my work as well. really really energized our economy. there's a second experience that informs my work as well. as a law student at boston college law school, i was the coordinator of something called the holocaust human rights research project and what we did in this project was to analyze

the precedence of nazi war crimes law, litigation, to other situation of human rights abuse. and a big part of the discussion that we would have about nazi war criminals was the role of the immigration process here in the united states and the denaturalization and deportation proceedings of those individuals. and they were really vea very early lesson before we were really talking about september 11th and talking about all these examples of terrorists abusing our immigration system of the fact that our immigration system could be abused by bad people, by people who in this case, had engaged in harm in the past, or as we have learned all too tragically, individuals who

could abuse our immigration system to come and in some way harm the american people. and that it means that asrefuge energize our economy, we always have to worry about the fact that there are people who can abuse our immigration system and come to do us harm. and there is a third experience, in fact, that professor showen holtz underscored. and that is comes from the -- my prosecution of human trafficking. and you there the florez case, i spent a lot of time with a number of individuals who originally came here undocumented from guatemala and mexico to work in the tomato and cucumber fields of south carolina and also the citrus groves in florida.

and as people talk about individuals, like the victims in this case, there are two dominant far this rat it was and i want to offer a third one about those individuals. the first narrative is what i would call the law enforcement bureaucratic narrative. these are individuals who have broken the law, and they have. they have come to the united states illegally. we have a responsibility to enforce that law. there is a second narrative, which is a social justice narrative, also really important, which is that these individuals have fled circumstances in the countries from which they come that are intolerable, both politically and economically. and frequently saw themselves as having no choice but to come here to the united states, where many would argue, they continue in many respects to be victims

where they are abused by abusive employers, where because of their undocumented status, they live in the shadows. again, all things that are true. but as i got to know these individuals, i saw a third thing. i actually saw potential americans. because these individuals will two core val news their life that seemed very, very familiar to me. the first was work, typically, these individuals would engage in back-breaking labor for 14 hours a day. as i met them they did not impress me as victims, but they impressed me as people just like

my parents whose lives were really built around the same exact values as those of my parents. so as i leave the agency that is responsible for you a jid immigration benefits and give my voice to the development. these three experiences are frequently ones that i see in my opinion mind as we engage in this discussion. at uscis, we touch just about every aspect of american life. marriage, work, education, public safety, national security as i underscored before. the environment in which we work is constantly shifting. it's also growing. we're at 18,500 professionals now, in 250 locations. most of those here in the united states, but many of those abroad. and really, i have to say having

now been in the agency for about 100 days, a fantastic, passionate, very professional group of workers. people that we really can be proud of as americans. and i view my role as to ensure that we apply the laws fairly, that we do our work professio l professionally. that my folks have what they need to do their job well. but at the same time, that we do it with a sense of justice and a sense of customer service. you heard that i used to work for montgomery county. and i was actually the county attorney in montgomery county, more or less the general council for montgomery county. and before i came to that job. really my entire profession had really been in some version of the criminal justice. i had been a prosecutor, i'd been a white collar defense

lawyer. and so now the largest part of my job was actually land use, was zoning. and i will tell you that i loved zoning. i thought zoning was extremely interesting. people laugh. i heard a couple of chuckles out there. and, in fact, when i interviewed with janet napolitano, then secretary napolitano for this job, i said, i can make you love zoning. i think i can make it extremely interesting. and she looked at me, of course, like i was crazy. but here is the reason. and there's an analog to immigration here that i want to share. zoning when you think about it implicates every single value that we have as a society. zoning requires us to think about economics, how we want to develop our economies. do we want to have zoning that provides opportunities to low

and middle-income people. it's about the environment. we have to think about how the zoning affects the environment in which people are going to live. it requires us to think about how we think about families. most of us in the county had the sort of traditional suburban view, there should be a mom, dad and two kids. except a lot of our households in montgomery county weren't looking exactly like that anymore. and there could be an uncle and grandparent who would come from another country in the household. it would require us to think about everything we value, everything we think about ourselves as a society. and i would suggest immigration is exactly the same way. and the reason there's so much to talk about about immigration, the reason we have such an

intense debate about immigration, although i would suggest there's more consensus than people think. about immigration is exactly because just about everything you think and feel -- it begins with humanitarian notions. to whom do we want to provide refuge? that's the first -- that is a core american value that we provide refuge. the challenge comes that we don't necessarily agree on refuge from what? what we are providing is refuge from torture. sponsored in jail torture. refuge from that.

and then it starts getting more complicated from that. how about intolerable economic conditions. conditions that none of us would ever tolerate for our own children. should we provide refuge from that? then the debate gets more intense. the government has done failed, is failed to protect its people from the kind of harms we here in the united states would ordinarily expect that our government would protect us. is that a situation from which we provide refuge. that's one value. another is economic development. we want a vibrant economy. everybody agrees that the more vibrant the economy, the more everybody benefits.

we don't necessarily agree on what fuels a vibrant economy. right now, as we picture and you certainly if you talk to university presidents, the one thing we don't want to be doing is educating people in our universities and then having them go back where they came from. and not benefitting our economy. we agree people with a high level of expertise benefit our economy. how about if you drive down kennel worth avenue, you will see this amazing level of economic vibrancy, restaurants, shops. we don't have a category for small business people. yet what has energized is the small businesses. another issue.

family, obviously, another big thing we look at. educational, national security. all of these are different values that we hold dear, but which we all look at differently that really all go into immigration policy. when we talk about a nation of immigrants, we realize that what that means is actually in the eye of the beholder. one of my favorite documents, the annual statistical tables, fascinating document. one of the things you learn is the fact that most migration actually occurs in the southern hemisphere. so while we picture that the sort of primary vector of migrations, people really moving east to west, either coming here

to the united states or to western europe, in fact, most migration sort of people moving around in the southern hemisphere of the world. but still, with that the single place per capita people migrate is the united states. . so we ask ourselves, why is that? there's nothing like the values of america. my time is -- uh -- going faster than i thought it would. i want to get to a couple of things. deferred action.

i was introduced to 20 kids, all of them from los angeles, they were all students and they were all recipients. many of them classic case were recipients who spent a great part of their life not knowing they were in the united states illegally. they actually assumed they were here illegally, they came here that young. this was an amazing group of young people. a young woman who was getting ready to graduate from harvard. there was another young woman who had started medical school. and, in fact, was trying to decide what field she should go into. she was considering becoming a gynecologi gynecologist. so i shared that advice with her that my wife would say you should go into dermatology. one of the things that occurred to me is that amazing as these

young people were, and query if there is not a fundamental problem. if there is not a path for this society to take advantage of what the young people have to offer. but they're not the only part of the picture. because for as many kids like that as there are, there are kids willing to break their back and work hard in a number of fields. kids who want to be really good plumbers, really entrepreneurial plumbers opening businesses, restauranteurs, shop owners. all of those represent a potential. what that experience really reaffirmed for me is that we have to approach immigration in a way that