of the representatives led, as sanjay said, the vice forum minister, the chief question is what should both sides, in this discussion u.s. and dprk, what should they expect and what should they want to happen early in next year? in the new administration in washington? i think we should could usefully talk about that. we have a distinguished panel here. it is clear to me i've been around the block on this issue. this is not your first rodeo, as they say, with north korea. so we can have a useful discussion with that. what i want to do with my time this afternoon is layout what i think are six key questions that are for me at least the

important important and the most timely for consideration. and all the questions i want to ask are what does the dprk actually believe. and then i'll give the subjects. so let's try this out and see if this works, if this is useful. the first question, does the dprk believe its own narrative on recent history? in other words, what did they think caused the collapse of the agreed framework of 1994 and brought us to the events that began in 2002? they had a narrative. what do they think led to the failure to implement the agreement of 2005 and 2007 and 2008? what happened? what do they believe was the

role, if any, of the dprk in the construction of a plutonium production reactor in syria, which was destroyed by the israelis in 2007? what their explanation of the leak day agreement in 2011 and 2012? now, the question i asked is does the dprk believe its own narrative on this recent history? my answer to that is incredibly yes, they do. let me be clear about this. i have no doubt that the dprk acted inconsistently with the terms of the agreed framework. or to put it in the vernacular,

cheated on the agreed framework with their deal to accept uranium enrichment, cen tri fuge equipment through the next deck raid. that's not their view. that's my view. let me ask, do they believe their own view? i'm saying i think they do. i have no doubt that it was north koreans who built young bon at al qaa bar in syria. they say it wasn't us. i say it is them. i believe that some of them actually think they didn't do

it. i have no doubt they did. i have no doubt that over the last decade or so since i last spoke to you the dprk bears the principal responsibility for both sides adopting pastures that both have characterized as strateg strateg strategic patience. for whatever it's worth to you all, i believe also that some in the dprk believe their own rhetoric on recent history. they believe they have been wronged by the united states of america. what i'm trying to say here is

on the first point, there's room for possible misunderstanding between the dprk and the usa. one of my favorite movies is "cool hand luke." there's a line in that movie where the bad guy says to the good guy, what we have here is a failure to communicate. this is supposed to be irony. because it wasn't a failure to communicate. i am not telling you all that's going on between the dprk and the united states of america and the republic of korea is a failure to communicate. i am not saying that. i'm saying that in this interpretation of recent history there's room for misunderstanding. and i think there is some. that's one of the things i conclude. second question, does the dprk believe that when it achieves the capability of mating an icbm

with a nuclear weapon that could reach the continental united states, it will change everything. answer, i think dangerously, yes, they do think that. they think everything will change when they can threaten the continental united states with an icbm with a nuclear war head. i note here that some in the u.s. defense community would agree. they think u.s. vulnerability to a new third country with nuclear weapons will alter our relationship in fundamental ways. i don't. they do.

i believe the u.s. deterrent will remain credible vis-a-vis the dprk just as it has been vis-a-vis russia and china. i believe that the u.s. extended deterrent to its allies in northeast asia and seoul, tokyo will remain credible just as our extended deterrent in nato remains credible vis-a-vis russia and before that the soviet union. but here comes the interesting part. but what will change is the dprk's vulnerability. ladies and gentlemen, even those of us who are opposed to

preventive war would support, indeed insist, on a preemptive strike, preemptive strike if we judged a north korean strike against the rok, gentleman is pan, or the united states as being imminent. do you see what i'm saying here? preventive war, no. preemptive strike, yes. and what the north koreans will achieve is that they will create a vulnerability that they do not now have when they get that capability. so i'm arguing that the dprk security may be fatally compromised rather than enhanced by this capability that they are so dedicated to achieving. the third question, does the

dprk think that its current nuclear weapons capability, the ability to strike the republic of korea and japan with ballistic missiles armed with nuclear weapons will deter the united states and its allies from responding to provocations in the dmz or at sea? the answer to that question i think possibly, yes, they do think their nuclear weapons capability gives them this deterrent. i believe they are wrong if they believe that. but i think they may believe it. the united states and russia have long experienced going back to a time of the united states and soviet union with nuclear weapons and with deterrents.

but we know mistakes are still possible between us. the question here that i'm posing is what does the dprk think nuclear weapons are good for? besides deterring an enemy attacking them with nuclear weapons? or to put it differently, when is the threat of the first use of nuclear weapons by a state credible, particularly when that state is dealing with another nuclear weapon state? what good are nuclear weapons to the dprk is the question? my answer is that they are only relevant, they're only useful when national survival is at risk. they are certainly not useful

for small gains. they are not credible. they are not useful to protect them against a retaliation for incident dense at the dmz or at sea. but as it turns out, my answer really isn't that important. kim is jong un's answer is important. and i expect he may expect more of his nuclear weapons capability than good appreciation for a deterrence would warrant. fourth question, does the dprk think that if a new administration in washington, and we're going to get one, begins by proposing talks about

talks, negotiations, rather than immediately seeking tougher sanctions, do they believe that would be a sign of weakness? answer, i think maybe. let me be clear about my own view here. i would like to see the new administration in the united states takes office in january 2017. in consultation with the rok and japan, i would like to see that new administration pretty early on, maybe after a policy review, seek talks about talks with the dprk. with only one condition, and that is that while they're talking there will be no tests of nuclear missiles or weapons

even at the very preliminary stage. those of you who are very attentive on this issue will note that one of the candidates, secretary clinton, is being quoted as saying that's not what she would do. and i know some who advise her believe a different course would be more prudent. something i would call the iranian model where instead of seeking talks early on, you immediately seek tougher sanctions earlier on in order to create the right state of mind in pyongyang. show your toughness first so that talks would be a way of releasing that pressure. so that is an alternative view.

it's not mine. i told you what mine would be. but this question is on the minds of those who will be in the next administration. stkpeubl it deserves thought and discussion. and i hope we can have some here. the fifth question, does the dprk believe it can keep its nuclear weapons program, it can keep its nuclear weapons program and still negotiate a peace treaty the end of the u.s. rok exercises and sanctions relief. in other words, does the dprk believe it can take its nuclear weapons program off the negotiating table? i believe it isn't sure whether

it could do that. i would note that some who are in this administration now certainly believe they will, they being the dprk, will never give up their nuclear weapons program. if we went around and we asked everybody here to comment on that idea, i'd say at least half of you would say they will never give up their nuclear weapons program. i believe by saying that you give the dprk hope that they can keep it. my view is that we should destroy that hope. explicitly, we should not repeat not settle for a freeze on their nuclear weapons program unless the freeze were simply a step to

denuclearization. to put this another way, i am opposed to talks with the dprk if they take their nuclear weapons program off the table. i believe to engage in talks that they cannot, by agreement ahead of time, produce the nuclearization would legitimize the dprk's nuclear weapons. and i am opposed to that. sixingth and final question, does the dprk believe it can resist international pressure to improve its human rights behavior. as with the previous question, i believe the dprk isn't sure it can get away with that. i can tell you from firsthand

experience that they are concerned that the phrase improving human rights behavior is code for ending the regime. our position should be the following, we cannot address le is skwreut mat dprk security concerns unless we ultimately reach a political settlement with the dprk, and probably one that includes a treaty of peace. and since i believe that, i do not think, therefore, that a political settlement of that type of that weight is possible unless the dprk adopts basic

internationally accepted standards on human rights. this does not mean they have to accept an american style liberal democracy. it does not mean the end of their whole system. it does mean over a period of time substantial changes domestically. but i think that's the only way out of our current situation by negotiation. ladies and gentlemen, i am going to stop right there and assume that you all now will carry the weight. thank you very much. >> thank you. >> [ applause ]. >> ladies and gentlemen, we want to get into q&a session. where is the microphone? okay. hold on to this. all right.

there was quite a succinct questions, number six through the other way around, one. first crack, joe. >> thank you, doctor, for hosting this program particularly with the honorable ambassador who is dean at the service. it is an honor to participate in the program with bob gallucci despite that i raised disturbing questions for those of us who don't live with this question day after day. i found the answer to your first question, bob, the most disturbing one because it affects all the others. that is their perception of reality. it's one thing for regimes to disagree on motivations,

ideology, that type of thing. but when we get down to raw facts and your impression is they actually believe that certain facts did not occur when the rest of the world knows they did occur, then that means their grasp on reality is highly suspect. therefore, their motivation and their actions and the other context in the questions you raised is quite -- it seems unpredictable and unbelievably dangerous. so i wonder given the fact that you say they have this detachment from reality, how can we rely on expectations in any of the other areas when they don't see the world as the world is. not just the way as we see it, but the way it objectively is.

>> joe, i don't decent from your drawing that conclusion from my comment. in other words, i think this is not good news that their perception of reality is so much different from our perception of reality. i was really driving that question towards one sentence and that they believe that they have been mistreated. they have been wronged by us over these years. so their characterization of this captures that of the aggrieved party. i presented it, my own view, so you didn't confuse me with the dprk. i don't share their view. but after having listened to

them, and we didn't, by the way, spend a lot of time on history because i didn't think it would be functional and be useful. but it was -- we spent enough time in kuala lumpur that i got the message. and you may know that three years ago steve bosworth and i met with the new foreign minister in berlin for a two-day session. and i had the same impression then that, as we say, they are smoking their own stuff here. they really believe the characterization of history. what that should tell us is not, in my view, not that we should not still try to engage them but we need to understand the many opportunities for misunderstanding, for purposeful misunderstanding to be sure at some point. but for honest misunderstandings

too. and we need to be careful of that. if i don't get another chance, i'm going to say we shouldn't, with the dprk or a country like that in which we have a history that is fraught, i don't think that the idea of trust makes a lot of on sense for quite a long time. so if we make any kind of agreement, even tentative ones of some kind, we should be planning on monitoring and verifying, and we shouldn't not simply enter into any understanding with an expectation that everything will be fine. everything between us and the dprk will not naturally be fine. it's going to have to be made that way. so you took this as making the idea of, joe, of engaging the

north with this background as being especially challenging. and i think you're exactly correct. >> thanks. always love to engage the ambassador on the framework. i love to paint that issue. in your talk i must say i agree with almost everything you say here. i would put it a little bit differently, especially this last conversation. to me the north koreans over this long period have been very objective, very rationale, very deliberate from going from point a in 1984 to now. this long, long period of developing an impossible thing in a nuclear weapon under the constraint of the world out to get them. and they are so close to doing

that. maybe they've done it. they haven't really demonstrated quite yet enough. so i'm thinking it is critical for us to see this short gap in which maybe a year or two or five years they for themselves need to convince themselves first and then the south and then us that they've got this capability. at that point then i think you're right. they think the game changes. not quite yet, though. so i think we have a little bit of room to maneuver. my main concern, my question question on north korea that you didn't really address, i think you and a lot of people here when you look at u.s./north korea, i think it is fundamentally a mistake to look at it that way. i think we fundamentally have to look at north and south korea. what are north korea's objectives towards south korea? i don't think they have given up yet. maybe they have.

i don't know that. but they haven't given up, we've got a really big problem. because that's where the what you call the deterrence effect of the nuclear weapons plays a really big role. and you correctly put that. you didn't know. you said you don't know what they're thinking on that. i think that's what we need to figure out and convince them very quickly that south korea is off the table. otherwise, if you remember back in the 1970s when they had a very large artillery capability against seoul, before we really ramped up to challenge that, they were doing all kinds of mischief in south korea, if you all remember. and they were not getting punished for it. later on in the '80s, we showed that we could punish them for it and they stopped. for the last 25 years, they have not monkeyed around in south korea. i'm very afraid that once they get the nuclear deterrence they don't want to use nuclear

weapons. they never will. but i can imagine the south and us being a lot more nervous bricking at them if they have a nuclear weapons behind them f. they're still thinking of the south, what i mean is unifying the country, it's a rivalry. i don't think the peninsula can tolerate two different regimes on the same peninsula. that rivalry, until that is defanninged i think requires much more aggressive standpoint from our side. your last point on the engagement part, i quite agree. i think we should engage them right up front with this but not on sanctions. i think the sanctions -- i'm an economist. i've been watching these sanctions. frankly, they don't work. the north koreans know that. they probably want more sanctions. that's what they have seen coming at them forever.

i would change tactics. i would say you're in danger. your regime is in danger. we're not going to overthrow you but you are in danger of being overthrown. we need a preism active, different kind of military in south korea that can hit them really quick, really fast and pinpoint not a massive nuclear attack on them. but they need to learn that we mean business. and i'm afraid this 25 years, we have never shot at them, we have never done anything top to them and they have gotten used to that. it seems to me we can get much more up front, much more provocative, show if they are thinking of south korea is, it's not going to work. >> thank you. bill? >> so there's a lot there. just a couple of points. the sort of strategic objectives

of the dprk. i have assumed, and i can't defend this assumption. but i have assumed that the long-term objective is the unification of the korean peninsula under a regime centered in pyongyang. i assume that's their strategic long-term oeufb. objective. in the middle to long term, they would like sanctions lifted. i'm pretty sure even though i probably am very close to our position on the impact of sanctions in terms of their, quote, economy, but i think they would like sanctions lifted. i'm certain they would like u.s. rok u.s. military exercises first tuned down and then stopped. i know that, that they would like that.

i think they would like to drive a wedge is what we called it. loosen the alliance. the question about how we should deal with the north under these circumstances, i came out in my remarks in favor of an early effort at engagement. but a fair question that comes from your comments is if that doesn't the work, then what? then i don't have a good answer to that other than containment. there are other words but that means maintain the regime of some kind, keep the dialogue with beijing operating so that

you get some sport for the implementation of that sanctions regime. continue the exercises. make sure that alliances between japan and the united states and the alliance bilateral alliance between the rok and the united states are strong and viable and do that through intensified consultations to deal with contingencies that may arise. i would like to try engagement initially and see whether it could go anywhere. >> it is good to hear dr. gallucci. it's been a long time since geneva 1949. i'm sorry, '94.

it is fascinating to listen to your analysis and assist what north korea might do, what their perceptions are, what can be done about them. but coming down to a specific area of talking the talks say beginning with the next administration will be installed in january. what specific steps, what types of talks would you foresee or recommend for the new people to follow in line with some of the things you have listed? that's what i hear about. as you pointed out, there are some views who might say a new administration might harden sanctions right off the beginning of the administration.

we talk to north koreans and in their view, that is not the way to go. you discussed that. but to capture the momentum of opening dialogue with north korea to eventually go down to say dismantlement over nuclear weapons and the korean peninsula. i agree when you said someone like james clyburn said it is a lost cause of the nuclear program. or he's also right, though when he said north koreans and you sort of agreed to his view, that north korea has to keep nuclear

weapons as the key to survival. it is survival. so i see these things. of course you effect all of your experiences and your insights from kuala lumpur, berlin and other things. but i want to just mention one thing about the south korean fact or and this whole occasion, i don't think north korea believes it can unify korean peninsula forcefully. kim john ill said in 2000 and told secretary albright that he is opposing by south korean

terms or north korean terms. there has been a lot of evidence that, number one, i think because they know they cannot unify south korea, as long as there is an alliance with the united states and also it's too much a different system. it is going to be long term, passed to unification if you will. and commitment to peace on both sides and exchanges and mutual cooperation, what have you. the sort of things that they agreed to but during the administration of south korea under un and yun. we heard the report and your

team is writing up a report on the result of your talks as a recommendation to incoming administration -- or a transition team. and how is that coming along also? and what would you be, your specific recommendation, for the next administration to follow. we don't know about if there is a view if clinton gets elected tonight, then she is going to take a harder -- ironically, not like her husband when he was in the white house. everything proceeded very well. he was going to carry on. and sherman who turned out a hard line now. but one more thing. i think it is also important to discuss the china factor.

joe is here. but i think some -- it is going to be the korean peninsula. and the real problem u.s. foreign policy will face will be how we are going to deal with china regarding the north korean situation. >> so a couple of things from your comments. and thank you for them. i have a tendency to want to warn about expectations for beijing's role in solving this problem. and my concern is twofold. one, that the chinese have up to now figured out that while they are not pleased with everything that pyongyang does, they are

not sufficiently displeased that they are prepared to support sanctions which might in fact, cause such pain that it would destabilize the regime. so there is kind of a thermostat operating here on the role that the chinese will play. and it seemed to me from as far back as 1993 and '94 when i was sent to beijing a number of times with the task of enlisting the chinese to use their influence in pyongyang. the second reason why i'm a little hesitant, there is a phrase that is in my mind and that is we should not take the biggest, arguably the biggest and most important international security issue in the asia-pacific region and

subcontract it to our major rival in the asia-pacific region. in other words, we should take the leadership on this and not the chinese. we will not do ourselves proud. we americans will not certainly with our allies if we defer to the chinese to manage this. getting their help, i like if we get more of their help i would like it better. but there is a limit to how far i wish to go in that direction. that's the first point. second, i think i caught the question in there from kuala lumpur. is there a connection to the new administration. we promised the representatives from the dprk that we would come back and talk to people in washington and share whatever we thought we had learned in terms of insights about the dprk, that

the dprk wished us to take away. and we have been doing that. elise aoeeagle, who lives and ws in new york city and set the logistics for this meeting and put them in place, did do some writing and has shared that writing with various people. i have done some oral debriefing. and so we're trying to be good to our word that we gave in kuala lumpur. so i don't want to overstate anything we might have accomplished. remember, this was sharing views and insights and not more than that. but whatever it's worth, for whatever it's worth, we have done that. >> thank you. >> thank you, kim. mr. ambassador, thank you for your remarks. it is very useful to hear what

does north korea actually believe, instead of what we see rhetorically and in terms of their actions. i'm going to continue and ask you what you think north korea thinks about some additional things. and i take them from the current news, which i think is important. one, josh roggin writes in the post any attempt to increase sanctions, i will say i don't think the sanctions are as bad as they are against iran, or were. he said the chinese will push back on that very hard and it will get nowhere. i'm curious what, again, what do you think the north thinks about that? second, the u.s./china commission will be issuing its report soon. and they say that the chinese modernization of its military is

increasing much faster than what had been predicted by either our intelligence communities or our allies in east asia. and my interest is we rarely hear this. does north korea see itself as part of that effort to enhance and cooperate with china in terms of its military objectives? third, mr. carlin of sais writes that there have been enormous number of what he calls missed opportunities between north korea and the united states since the agreed framework was put together in 1994. and he particularly chastises the bush administration for failing to understand what north korea was trying to achieve. and i'm curious, the extent to which i know north korea feels they have been aggrieved. we didn't build the two power

plants. 20 years down the road, where are they? i wonder do you think north korea believes it doesn't have the ability to put a war head over the united states when it is now putting two satellites in the united states, including one right over the super bowl. and sur repetitious attack in a is submarine means the deterrent equation like in an emp attack from a freighter kind of goes away. i'm curious whether you think the emp commission said that the russians had given, and the chinese had given north koreans very significant help in developing emp capabilities. and so that to me is very critical. the next thing is to what extent

does the missile defenses, whether it's thad, egis, or ground interceptors in onis, affect the north koreans. i find it fascinating, the chinese are upset. they have frozen military relations in south korea oh, over the employment of thaad. why would they want to give north korean unimpeded shot with a nuclear armed or nonnuclear armed weapon? the thad doesn't have any impact on the strategic systems. they know it. i'm curious to the extent -- what do you think internally of north korea if they saw robust -- saying hey let's get this done as soon as possible and get going.

finally, my friend mike dunn was my boss at ndu and afa. and he made a point in interviewing the former tutor kim jong-il in seoul and asked why he thought the north korea ns had weapons. and general dunn said tell me from your perspective as having been very close but being a defector why. he said it's very true. they want to see the united states military with the peninsula. then they will come back to defend south korea should north korea unify with force which this gentleman said was their goal. i'm curious, does north korea

still believe that? because i think that explains it is is not just the exercises they want and splitting the rok and u.s. alliance. i think the fundamental objective, they say often in a lot of communiques and statements, always kind of at the end. and of course the united states should withdraw their military forces from the peninsula. >> peter, that was at least seven questions. >> well, you're right. i miscounted. >> i scrupulously avoided taking notes. i'm going to skip around here because that's the way my mind works. you just cue me on the ones i missed. one of the first questions went to the chinese calculation. i don't have any special insight to that calculation these days

other than the evidence which a number of people have written about that the chinese -- the one of the reasons, if not the chief reason for the sanctions that have been applied to the dprk not having the impact, causing the pain that sanctions advocates might want is because the chinese have not allowed those sanctions to work and indeed have provided the means by which the sanctions can be circumvented. and if any of you have been in the dprk recently, i have never been. but for some reason people think it is useful for people to send me an e-mail when they come back and tell me what they have seen. the last bunch describe a capital city that is unlike what it has looked like before, which

is to say that there is traffic, there are restaurants, there are construction cranes. it is is looking like almost any other asian city from 30,000 feet. now, is it the only place in the dprk that appears to be thriving? the proposition is not the only place but maybe the principal place. this would not all be possible without beijing. so i take from that that we have work to do in beijing, even if i take my view that there is a limit that we can accomplish, there is still work to be done. the second question is do the chinese view the dprk's military capability and maybe particularly its nuclear weapons capability as part of its own modernization. and i would say absolutely not. i think that if the dprk could wave a magic wand and have

the -- excuse me, if the chinese could wave a magic wand and have the nuclear weapons program disappear from the planet, they would wave that wand. that program is a potential source of catastrophe for the chinese. because it could end upbringing the united states of america and military naval forces right to its doorstep. the last thing the chinese want. and if you look at the rationale as the chinese have offered for their modernization program, both for the blue water navy, for what they have done with their strategic systems, the increase in numbers, the increase in mobility, this has got nothing, in my view, to do with the dprk really. it has everything to do with, ironically, the american deemphasis on nuclear weapons that we have asserted but in favor of conventional forces.

both are conventional prompt global strike and our multilayered, as they see it, ballistic missile defense. who goes to another one of your points. that is what are the chinese worried b. they are worried about our radars to begin with. they understand the system is limited. they may think it is less limited than we claim it is against sophisticated inter continental ballistic missiles that have reentry speeds of the kind they have and pen aids and multipled targeted reentry vehicles, et cetera. but they are still worried that this is a system that can be upgraded. and it's a comparable worry to the russian worry about what's happening in europe. and they don't take any comfort in hearing president obama talk building the deemphasis on nuclear weapons. because they look at the words

surrounding conventional prompt global strike forgetting we don't have the capability and they worry about the viability of their strategic systems, particularly when compared -- excuse me, when combined with our ballistic missile defense. this puts at risk their deterrent, their second is strike capability. for me that explains a lot about what the chinese are about and how they could have, if you pardon this expression, the hootzpah about offering ballistic missile defense to our ally after the dprk launches a ballistic missile. instead of complaining to us about that, they might use their influence in pyongyang so there will be fewer missile tests. but be that as it may. the idea that the pulse from a

nuclear weapon is something that the dprk is interested in is actually not something i thought about. but i don't think would be surprised if it's high on the list of weapons effects that are in the minds of the technologists in the dprk when they think about their nuclear weapons. i just don't think that's what they're about. it may be something we want to be interested in, but i don't think that's on their list. when it comes to the deterrent calculations and gets the united states off of the peninsula, he want to say if i wasn't clear in my remarks, i don't believe that american political decision makers in the past or in the future will be deterred from executing their responsibilities

because the dprk has nuclear weapons. the question about whether it could deliver nuclear weapons now with its mrbm capability to the republic of korea and japan, let's, for the sake of discussion here, this afternoon, stipulate, as lawyers like to say, that they can? i think that we will not be -- we, the united states of america, will not be dissuaded from executing our alliance responsibilities and i would want every bit of signalling that we could to go to pyongyang so they don't misconstrue, and that's what i was really talking about. they're misconstruing the effectiveness in what they could accomplish with nuclear weapons. y'all may remember when we first had nuclear weapons in the early '50s, we had illusions of grandeur too.

we had massive retaliation. with the thought we could deter everything with these nuclear weapons. turned out we couldn't. and they still don't serve all purposes because they're not credible. might they want credible if we were launching regime change against the dprk? yes, they might. my point was, at levels lower than that, they're not credible, not to us. but the question is, what do they think? and i don't know. >> thank you. larry? >> ambassador gallucci gave everyone a lot of food for thought. i will try to be brief in terms of my comments and also a couple of questions. now, ambassador gallucci

correctly stated that north korea has borne the major responsibility for what he described as the failure of engagement with the united states. that is correct. but i would add the caveat that the united states also bears some of the responsibilities for the failure to realize u.s. objectives in negotiations. we have been unsmart in many instances in how we have negotiated with the dprk. a naive assumption going back to the 1990s, behind our negotiating strategy that north korea would soon collapse or that there would soon be regime change.

listening too much to the chinese, when the chinese would advise us to ease off on ensuring that the north koreans comply with the agreements they have made with us, 2005, 2007, going into negotiations with the north and agreeing to two unwritten handshake agreements, october 2008 and february 2012. now naive can you get? when you make a handshake agreement, unwritten with the north koreans, which, of course, they disavowed any knowledge of within a few weeks. after our diplomats told us they had made these handshake agreements.

so, there is some blame to go around. and there are some other mistakes we have made as well. now, i want to comment on the pre-emptive strike issue because this is being talked about. both the u.s. and south korea. i'm not advocating a pre-emptive strike, but i will say this, the time, if you're going to do it for a pre-emptive strike, is probably now and within the next year or so. a strike against their nuclear and missile test facilities, so put those out of action and to buy us much greater time before the north could achieve that icbm nuclear warhead capability. the situation which ambassador

gallucci describes, i don't believe if it came about would prevent north korea after a u.s. pre-emptive strike from hitting us back with nuclear weapons. because, frankly, i think at a time when we would pick up, perhaps, legitimate perceptions that they were going to strike us with nuclear weapons, when that time comes, the north is going to have multiple delivery systems, both on land and at sea, that no pre-emptive strike would be able to take out. and a pre-emptive strike under those circumstances also means an all-out war. you're going to accomplish nothing by hitting just a couple

of command and control centers in a pre-emptive strike. the stakes are much, much higher than that. now these are my questions, and this is about the sanctions issue. and generally it's along the lines that ambassador gallucci has laid out with regards to china. there are only really two avenues, viable avenues, to toughen sanctions, that might cause the north koreans to begin to bend in negotiations about their missile issues. one is sanctioning chinese banks. many chinese banks allow the north koreans to move money back

and forth, to support these programs. and any toughening of sanctions i think would require the united states to do that, to start sanctioning an array of chinese banks that we know are engaged in this kind of collaboration with north korea. the second option, this is what i have written about, is to lay a resolution in the security council calling on all u.n. member states, ie, china, to cut off oil shipments to north korea, which i believe would be the toughest sanctions and where i think with a sophisticated public strategy, could put some real pressure on china and least spark a much more open debate in china, within china, about

china's policies towards north korea. besides those two options, is there another option, ambassador gallucci, that you could think of to pressure the chinese other than those two options with regard to sanctions? and finally, i'll make a quick last play. when the north koreans have that capability to hit all our bases in the pacific and the u.s. west coast, they're going to want to negotiate at that point. and they're going to sit down and look us across the table and they're going to say, are you americans going to be willing to jeopardize san francisco so you can defend seoul? and i think the american response right now is in the realm of the uncertain when we get into the early 2020s about

what that answer would be. but in terms of what they would lay on the table to us, what did the north koreans specifically say in kuala lumpur about the peace treaty? that would be basically my second question. did they really lay out what they want in a peace treaty, whom they would want negotiating with them? did they give you any real details about this? and also the priority to the peace treaty and any new round of negotiations between the u.s. and pyongyang? >> larry, thank you. i want to respond to some of these things but one thing principally. and i would like attention. i was thinking of jumping up and running to the back of the room and locking the door before anybody left because i wanted to get this out and i wanted to

make sure nobody left here not understanding what i wanted to convey because i wasn't good enough at conveying it, so let me try it again. there are two different words. one is preventive strike, preventative war. the other is pre-emptive strike. when the united states of america in 2003 moved into iraq, that was a preventive war. the administration at the time used the word pre-emptive. it did because the pre-emptive has standing both in terms of international law and in terms of just war theory, the ethics. you are allowed under

international law and under laws of ethics, you are allowed if your enemy is on your border and about to attack, you are about -- you are allowed to attack him first. you don't have to wait and suffer that strike. that's preemption, if you're about to get attacked. if you get up one morning and look at trend lines in another country and say in five or ten years, that country's going to be our enemy still but a lot stronger, let's go to war now, that's not a pre-emptive strike. that's a preventive war. what i wanted to say and thought i said, but maybe not clearly enough, is i am opposed to preventive war. opposed to preventive war with north korea. i am not opposed, indeed, i

would insist that my government as a citizen, launch a preemptive strike against north korea, if it came to the confident and serious judgment that north korea was about to attack the united states of america, or one of its treaty allies. there is no reason to wait until tokyo is destroyed or seoul is destroyed or san francisco is destroyed. if it's about to happen. ethically, morally and legally, we can strike them. that's why i said the north koreas are creating a vulnerability that they do not now have. did i share this view with them? yes. i hope they got the right distinction here between preemption and preventive war. right now i want to make sure you got this right.

i don't mean you have to agree with me. it's just a distinction is a real one and governments have reasons why they blur the two. so, i'm not for preventive war with north korea. i am for preemption if they're about to attack. unlock the door. now, what is it that i feel comfortable saying about what the north koreas/dprk said to us in kuala lumpur? i think i'm comfortable saying that i was asked rhetorically how could we trust you. you want us to give up our nuclear weapons. how could we trust you not to launch regime change?

look what you did in iraq. look what you did in libya. look what you talked about doing in iran. how could we trust you? so, two things are in my mind. one is, how could they trust us? the other was, what were we thinking back all those years when we were negotiating the agreed framework, which as far as we knew, at least i knew, was going to stop their nuclear weapons program because i didn't know they would engage with the pakistanis for an enrichment program. i knew about the plutonium program. i knew lots about the plutonium program. and we were going to stop that sucker. so, what was my view then about why they would trust us? it was that we would develop after the framework was signed a

political relationship. we would open liaison offices in upon i don't think. they could open one in washington. we would develop cultural ties, political ties, you know, situation would warm between north and south, et cetera, et cetera, et cetera. i have the same answer now. and i said, the only way i can conceive of you trust us is in the context of a political settlement that includes a peace treaty to replace the armistice. that's how i got to the human rights thing. how could we do that? we could do that if you move to accept international standards that transcend sovereign borders with the way governments treat their own people. that does not mean you have to give up your regime.

so, we had that kind of a discussion. and i would say we had a discussion that went into some of the questions i put here in a little bit of depth, but i don't feel comfortable trying to capture their words to me that were said in private. i want to say one other thing here while i've got the floor. and that is that while we were very focused in kuala lumpur on the coming american election today, and a new government, which at that moment i didn't know who was going to win and i don't sitting here in front of you now, but i observed that there was another election that was going to take place towards the end of 2017 in the republic of korea. that was going to be important, too. and that i would not imagine any sustained and serious engagement of the united states with the dprk that was not done with

concurrence in, dare i say, enthusiasm, of the government in seoul. we would also want tokyo to be aboard to those discussions, too. so i haven't emphasized the role of the republic of korea this afternoon, but i don't believe what i have talked about as engagement is plausible if a government is elected in seoul that doesn't favor engagement. our alliance comes first and i think we will take care of that alliance. i don't know of another one of your points, larry, was about how you get the chinese to do what we want the chinese to do, and i don't have any keys to that. what i worry about is the reverse of that in a way. anybody who's been in government knows that governments do not stay in lane.

we might want to talk to the chinese about the north koreans and they might want to talk to us about taiwan. we don't want to talk about taiwan. not particularly. not the way they to want talk about taiwan. nor do we want to talk about the south china sea at the same time as we're asking for something in northeast asia. so, in a way, i worry about the obverse, or whatever that is, of your question of how do you influence the chinese? can you do linkage politics but they can do it, too. you have to think that one through before you start doing that. otherwise you can end up with the shortened of the stick, rather than the long end of the stick, and that's not too good. >> okay. z now, i would open to the floor. any questions from the floor? would you please come to the microphone, the roving microphone? over there in the back.

>> thank you. i'm from nhk. i have a question, this year many senior diplomats and officers defected from north korea and it would suggest that they end up politics is drastically changing within north korea. maybe less stable direction. did you feel any -- anything, which changed compared to before at the conversation at kuala lumpur?

and if the situation is changing within north korea, less stable or more vulnerable situation, what do you think the probability of the -- they're going to run into dangerous adventure is increasing or decreasing? >> it's not a bad question, i'm just not up to the answer, which is to say i don't have much to base an answer on in terms of engagement or even reading tea leaves from the news. i don't sense a particular vulnerability of the regime right now. i mean, what i've heard about the economic activity in -- at least in pyongyang, it sounds as

though -- i don't want to say that dprk is thriving under international sanctions, but it is not apparently suffering as much as some might have anticipated or those particularly who hope the iran model might be applied to the dprk. it doesn't appear that it could be. so, i see nothing in all of that that would suggest a particular vulnerability or instability right now. i just don't. >> thank you. >> hi. i'm with grace quang north korea refugees in the united states. thank you very much for your very insightful comments, ambassador gallucci. i just have a question on a very

out-of-the-box idea. it's a way to greatly increase diplomatic, political and legal pressure on the regime and china without being threatening militarily. and that is to have the international community adopt a one korea policy. you mentioned taiwan and history shows that it is possible to recognize knees a different china than what was originally in the u.n., and it was done through action in the general assembly. and i'm just wondering if the legitimacy of the dprk could be raised as an issue in the

general assembly and as year after year passes, could political will be built up enough with all the countries of the world instead of only focusing on china or the usual states to get the world to accept a one korea policy based on the fact that the general assembly after the end of world war ii stated that korea needed to be independent from japan and united and so this is a way to address this unanswered korea question while putting a lot more diplomatic and political pressure on north korea and china. >> thank you. so, the closest i've seen to that -- an idea like that, which

would, as i understand it, delegitimize the government in pyongyang as a representative of korean people on the korean peninsula is the idea that is floated in council on foreign relations report, and i've seen it elsewhere, which is to consider in a sense, if all else fails, denying the dprk membership and united nations in the general assembly to sort of delegitimize the government as -- but have the international community do it instead of one country denying the recognition. so, i suppose that can be thought about. right now i'm -- i would like -- i'd like generally people to think about policy to be thinking about ways of getting engagement to proceed in a reasonable way rather than disengagement.

if you think about delegitimizing the dprk, that's not way far away from where they are now. i mean, they are the prior state in the international community right at this moment, and they know it and they are thriving. so, if you do -- if you don't do anything in terms of impacting their life and their life goes on right now because essentially beijing ensures that it does, notwithstanding what the rest of the international community does, then i'm not sure how much one could have accomplished. but it's still a possibility. >> thank you. peters, the microphone here, please. >> i would like to raise a little different issue.

recently korea is going through kind of a turmoil as a result of a lady, who has been spreading influence, including tremendous financial problems, and the opposition parties are telling park guen-hye to resign. there are massive demonstrations going on in korea. this is not directly related to our present conference but i'm concerned and -- you mentioned next two years but we have a much more urgent issue with us.

if the leftist government comes out they might well accomplish what kim jung-un tried with korea, together with the korean leaders kind of together government. can't think of the right word right now. so are we going to pursue with president park geun-hye who has been singing same song with president obama and u.s. policy makers, we have a problem even so, but now i'm concerned that we are getting into real difficulty depending on what goes on the next couple months. thank you very much. i would like to hear your comments. >> thank you. i think prudence and wisdom on my part is to stay far away from

domestic politics in the rok right now. i would say that i absolutely do believe, however, that the ultimate election in the rok will bear in very substantial way the outcome of that election in what sorts of policies can be pursued to deal with the dprk. so, i think that connection is real. what is happening now and the difficulties that the president is having in the rok is not something i think i could usefully comment on, so i'm going to let it go. >> ambassador gallucci, i was sort of astounded to hear you say you did not know anything about heu program, while you were negotiating such a successful -- >> that's true. >> -- successful framework. i don't remember you mentioning

heu but in that connection you mentioned mistrust, degree to which mistrust between dprk is so high that they still do not really trust, take whatever we say, washington says, they don't take it at face value. now, with respect to the motivation for north korea to pursue the other paths of developing nuclear weapons by way of enrichment, which administration later claimed all kinds of programs although it did not specify the term heu program in that sense. my point is, north korea still

could not trust the united states even after they signed framework. which they liked it, they will come to geun-hye park become hero and i heard a lot of north korea officials afterwards. now, was it because they still could not trust united states and they could not rely on what the terms provided, for example, targeted completion of the light order reactive projects and they said you have to be done in 2003 and you have not done anything and they were complaining and complaining about that, and explaining to them, you have to remember, this is only target date. we tried to do it by that time,

but we did not promise by that time. that's one question. the other thing, you mentioned preemption, international law and all that, the problem with that is not only the incomplete capability of taking out all the nuclear arsenals in north korea, but more importantly, how are you going to judge? you're going to need some evidence, clear evidence that they're about to attack you with their nuclear weapons. so, how are you going to get that and how are you going to depend on it? the other thing is, the consequences of a preception in terms of damage to south korea and even to the united states, do you consider that also when you do it? lastly i come back to your point of needing for the next

administration to start seeking -- talking the talks. again, washington atmosphere has been for the past 20 years, especially after what it perceived as north korean breaking away or unkept promises that they made in terms of a denuclearization. and there is no atmosphere, no support in this town. either in congress, in the media or politicians or general people, population that would support kind of a dialogue that you and some of the people -- it is really great to have someone like you keep engaged in this issue, very important, because people got to learn from your experience. and how it's going to turn

around and, again, when you make recommendation to the next administration, you want to make a different set of recommendations depending on who gets elected, one for clinton, one for trump? >> thank you. so, on the first question you were apparently shocked or stunned that when i was negotiating with the north koreans in 1993 and '94 that i did not know that they were at the same time negotiating with islamabad, at least with a.q. khan for uranium gas secentrifu.

right at this moment, i still don't know that. in other words, what i'm telling you, there came a time when i did discover that from our intelligence community that there was this ongoing exchange and transfer from islamabad to the dprk. but that, for me came -- and i, by the way, never gave up my security clearances. i kept them, so this is based, even with full access, i did not know about this until -- i think the safe thing for me to say is after 1996. and the agreed framework was 1994. so i don't -- not only did i not know about it, but i am virtually certain neither did anybody else within the american administration. know about it in 1994. and so if you were to tell me that you had evidence that the contacts were happening then, i could easily believe you and say, well, we missed it.

it wouldn't be the first time we have missed something. the deterrence question and the preemptive question, how could we be confident that we knew, that we were going to be attacked? how could we know? how could there be the adequate basis for preemption. well, it's a very high bar. it's very hard, especially when you're talking about nuclear weapons. this is not a bunch of militia on your border and the question is, do you call in an air strike. this is the proposition here, the scenario we're talking about is that a country, the dprk is going to launch a nuclear strike with missiles at united states of america or its allies, the

republic of korea and japan, and we are going to launch an attack on them in advance to decrease the damage they would do by such a strike. well, it's hard to get that information in advance, not impossible, knowing something about the american intelligence community after over 20 years of being in the u.s. government, but it's hard. and we are capable of getting it wrong. and i have been part of getting it wrong more than once. so, i don't say this easily, though. you know, when you take a job in the administration and i've done this a number of times, raised my hand and took an oath, you swear to protect the united states of america from enemies, foreign and domestic, so you take an oath, and i would say --

i said a few minutes ago not only would i support, i would expect, i would insist on preemption, if we had that high confidence. if you don't, then it's not a good idea. it occurs to me that larry questioned whether we could actually succeed in pre-emptive strike. well, what -- your capability is aimed at reducing the enemy capability. it doesn't mean that you completely are confident you're going to hit every mobile missile, every submarine they may have been able to deploy. you may not. but if you think you're going to be struck, you can do serious damage. and unlike other people here, and i think this are people in this room who do not believe the american assurance once we are vulnerable to attack by the

north koreans, the assurance we give in our extended deterrent assurance in our alliance context to japan and republic of korea, i spent over 21 years in the u.s. government and i believe us. i believe we will fulfill our alliance responsibilities. we know what's at risk here. remember, and i know joe at least remembers, when the chinese said you won't trade los angeles for taipei. well, yes, we will. i'm not enthusiastic about the prospect. i have family there. but that is what we sign up for. so, those who would question this, i warn them to be careful and don't assume, don't ever assume the united states will fail to fulfill its obligations, it would be a mistake in my view.

>> well, ladies and gentlemen, let's give ambassador gallucci a big round of applause. [ applause ] our small token. >> thank you very much. >> you verified this. >> i did. >> spelling is correct? >> it is. >> as well as this is our -- >> i do tennis. >> very well. you look great. >> yes, thank you so much. thank you. great session. >> the meeting is adjourned.

the supreme court heard oral argument in two consolidated cases brought by the city of miami against the bank of america and wells fargo. court will decide if miami can sue the banks under the fair housing act, given to african american and hispanic home buyers that resulted in loan defaults and less tax revenue for the city. watch that tonight at 8:00 p.m. eastern on our companion network, c-span 2. we have a special web page to help you follow the supreme court. go to c-span.org and select supreme court near the right hand top of the page. once on the supreme court page, you'll see four of the most recent oral arguments heard by the court this term and click on

p the view all link. you can see the supreme court justices or watch justices in their own words, including one-on-one interviews in the past few months with justices kagan, thomas and ginsberg. there is a calendar for this term, a list of all current justices with links to see all their appearances on c-span as well as many other supreme court videos available on demand. follow the supreme court, at c-sp c-span.org. now, a look of the future of medicaid and the health care system, the national association hosted the event tt 2016. author ian morrison, and professionals from florida and hawaii. this is an 1:35.

it has been a fantastic conference, extremely well attended conference, extremely informative, insightful and hopefully, educational and entertaining conference. and on the last day, which is election day, we still have, it looks like pretty close to 1,000 people here, which is fantastic. which means that the appetite to

learn about -- the opportunity to think about the future of medicaid and the health care system is still relevant and interesting and a entreprenepri all of you. i'm very pleased and happy about that. thank you all for being here. aim goi i'm going to not take up too much time and tee up the next session which i'm really excited about. just as as a preface, similar to the session that we kicked off with yesterday, with sam quinones, the discussion about dreamland, the next one is part of the brainchild of tom bet -- betlack of arizona, do something interesting, and not just a

panel of people talking about an issue. and so he said you know, we should, you know, let's engage with thought leaders and do, think about the future. and so i really started thinking. well, who might that be? and the name and the person who i kept circling back around to is dr. ian morrison, a noted author and futurist and progress kno -- prognostica it. oh. r, and i've been talking to him for a number of months, and fortunately, weighs able to be here on election day. this is not going to be a -- the future of what happens in the election. this is not the kind of crystal ball we're going to do today but we're going to look out to the near and somewhat distant future of a lot of very important health care issues. so he is going to come up here.

has a number of slides he'll talk through, and i remember, i was talking to actually the speaker at the upcoming lunch today, vicky ochonio, and i was telling her what the agenda was going to look like. i said yeah, we're going to start the morning off with a health care futurist, dr. ian morrison and she said oh, he is fantastic. we just had him come over and talk to us. was like, oh, this is great. i'm super excited about this. what we're going to have is dr. morrison will come up here and prognisticate about the future of health care and then what we'll do is turn to reactors to be able to listen to what he said, take it all in, and then either agree, disagree, but ground what he has been saying about the future with the

reality in state medicaid programs today. so our two reactors are going to be justin senior, medicaid director in florida and the interim hhs or health secretary in florida. and then judy moore peterson, in hawaii, and then prior to that, was the medicaid director in oregon. they are both long serving medicaid directors, long serving members of the board. they bring a wealth and a breadth of experiences, not just blue state and red state, not just east coast and west coast, and pacific coast, but also, you know, a debate about who has the best beaches and who has the warmest states and who has the best state to move to. but the two of them will take turns reacting to what we've

seen, and then what we are geeg kind -- going to moderate to take these things forward. so i'm really excited about this. so i'm going to get off the stage and out of your way, and turn the microphone over to ian morrison, welcome, and thanks for coming. >> thank you. thank you very much. what a pleasure and honor to be here on a momentous day. i am a professional futurisfutu. the definition is the one who con handle the calculus basically. i'm in the sweeping generalization business. my major was geographic and economic change in scotland, 1580 to 1830, which is

incredibly useful. as useful training, i've been a student of structural change in society for 40 years. i left scotland in the late '70s, moved to canada and they let me in partly because i had an urban planning degree. they didn't need them in vancouver where i moved to. they needed them in the yukon. i was not going to the yukon. i ended up getting a job with man the engineering unit, 13.1, which is equivalent to the kgb, spent seven years in an academic medical center, doing clinical re-engineering before it was called that, and working on my doctorate. i got offered a job for the institute for the future.

modestly entitled institute for the future to work on a project called look ago head with american health care. i basically have been doing that ever since. i have been looking ahead at american health care at the institute for many years. i ran the health program there. i was ceo in the '90s. i have been a free-floating radical for most of the years. i come in for a day, insult people and leave. it is about like newt gingrich but at a lower price point. i don't consider myself a deep expert on medicaid. i work mostly with the private sector players, whether provider systems or health plans. it is an honor to be here. i care a lot about medicaid. i was on the board of the california health care foundation for a decade. we were interested in that. i currently serve on the board of the martin luther king hospital in los angeles. medicaid is the gold card for

us, mlk. i set on the long-range planning committee at the stanford children's hospital. i do care a lot about medicaid but i don't consider myself a deep expert. let me share with you the basic rules for futureists. you should make forecasts for things that are far off so people can't tell if you are right or wrong. make so many forecasts one of them have to be right. never give people a number and a year in the same sentence. that's a very important one. whatever you do, don't talk about elections the day of an election. it is kind of a stupid thing to do. i'm going to violate that by talking about the election. i want to give you a sense of what i think is going on in the field in health care, more generally. i think we are making progress. i'm more excited now than i have ever been in my 30 years in the u.s.

i will close by giving you my, as an outsider, the takeaways for medicaid and then we will hear from our distinguished colleagues. elections matter. i'm in a partnership with the harris poll and the harvard school of public health for 30 years. harvard always says that elections matter. by the end of the day, which is by the most overused phrase by pundits on cnn. at the end of the day, we will know whether it is a blowout for hillary clinton or whether it is brexit. brexit is particularly poignant for me as a scot, because you will recall that the scot's voted overwhelmingly to remain in the european union. it was the rest of britain, particularly england, that voted against it. i will remind you that donald trump visited turnberry not by accident, i would say, the day after the brexit vote just

arrived in scotland. the place is going wild over the vote. about to take their country back, just like we will in america. no games. you have to remember that the scot's voted overwhelmingly to remain. my scottish colleagues raised the bar in terms of profanity and creative use of the english language. if you go on twitter, i wouldn't read them all. they were not particularly impressed by that. it is instructive to look at what happened with brexit. a vote about the future and the people that overwhelmingly voted for this were old people. they are not going to be in the future very much longer. yet, the vote was amongst young people disproportionately towards remain. what we saw in the brexit was the places with the most elderly people and fewest college graduates and people identifying

most as english, set a nationalism where the areas that went towards brexit. there may be a metaphor and mr. trump has said brexit times five. we will find out by the end of the day. as i mentioned, i've had this partnership with the harris poll in harvard for a long time. my colleague, bob landon, who has this great new project he is doing with politico, did a survey a few weeks ago, which really captures the differences and the deep divide in the country with regard to how the electorate think about the affordable care act. trump voters disproportionately think it is going very poorly. clinton supporters are on the other side of that argument. it turns out according to bob's analysis that the fundamental dividing line is attitudes towards the role of government. if you believe that government should play a bigger role, you think the affordable act is doing okay. if you believe the government should play less of a role, you think it is doing horribly.

it is not like you have made a systematic judgment based on evidence. it is more about the attitudes towards government and the role of government in health care. that spills over into what should happen to the affordable care act. people that are supporting trump generally want to repeal it or scale it back. people supporting clinton want to build on it or go even further. so those are the divides in the country. as bob taught all of us that had the opportunity to work with him over the years, the only time you see major changes in health policy is when you get one team running the table. the question is, is that going to happen this time around? let's just play the extremes. if democrats were to win and win the senate, unlikely they will win the house, you would probably see an expansion of subsidies to shore up some of the affordability issues. you would probably see subsidies

to shore up the health issues. perhaps expansions for groups previously not covered. more funds for prevention and attitudes nationally favor action on pharmaceutical pricing. the cadillac tax interview, the group i work with, basically, is not ever coming back, no matter who is running the country. there may be a lot of talk about public options and single pare but they wouldn't do anything. the real question, i think the question for the country that will be decided by this election. maybe more states will expand medicaid. we will hear from our good colleagues in a second as to whether that is real or not. if republicans were to win and run the table, i think they are going to get rid of obama care. they are certainly going to change the name. i can't imagine trump is going to talk about it. it will not be hugely popular to call it obamacare with trump in the white house. it is hard to know what they

would do really if you want to go on my website, i did some fake interviews with donald trump i found amusing. anyway, again, i think the mandates would be gone. it would be shifted to the state level. we are going to get rid of the lines and it is going to be beautiful, beautiful, beautiful. i'm confident in that. the real question is, are rich people going to keep writing a check for poor people? are we going to see coverage continue and subsidies exist going forward? the best analysis i've seen by reputable sources and if hillary wins, coverage might be expanded by another $9 million. if team b wins, we may lose $20 million uninsured. that would be sad, because i think before ae made significant progress. like it or not, obamacare has reduced the uninsured across the country. i spent a lot of my time in

boardrooms with large provider systems and you can see it depending on which state you go, to the impact it has had across the country, achieved through both exchanges, which have had a rocky time in this third, i guess we're in the third year now, and but mostly, through medicaid expansion. that's the big story. very few hospital ceos will say i've seen a huge number of exchange people coming through. not so much in florida, because as a big deal in florida and texas, what they really have seen is an expansion of medicaid. the other thing we've seen and you've heard from the officials at cms and other experts, this massive move toward payment reform, which i think is ir irrereversable and it is being reenforced by the behavior of people on the ground. the people i work with, the large integrated slir delivery

systems are quite committed to move a way from unfetterred fee for service. let me give you two conditions. the fact at that dan walterman who runs memorial herman is retiring and replaced by about ben considh who runs kaiser. baylor scott and white is retiring and they have recruited jim hinton, who ran presbyter n presbyterian, one of the largest integrated system in the country. that's a signal to me that the boards of these major institutions see a future very different from the past. the other thing we're seeing is this massive consolidation going on across the country. i'll say more about that, both at the plan level, but more important, at the provider level. and we've sometimes forget that there is this enormous long-term secular shift away from inpatient.

my wife had knee surgery a couple of weeks ago. i dropped her off at 7:00 in the morning, i didn't just drop her off. i waited until she was out at the well, i didn't just drop her off. i waited until she was out of the o.r. i had to go to another meeting and a friend picked her up. she was back home by 11:00. if you had knee surgery in scotland, when i was a kid, i would be in hospital for six weeks. so the world has changed significantly. the other big change we sometimes miss that was really generated by the affordable care act -- not the affordable care act but the stimulus bill on the high-tech act was the ubiquitous deployment of electronic health record. we at least got into the 20th century, if not the 21st century. the work that needs to be done in my view is enhancing the consumer and provider experience in health care. what we have seen is a megatrend, particularly in the employer-sponsored insurance market, is the shift toward high deductible care, which is a very blunt instrument in my view and

has not been particularly effective. it has been effective in containing employers cost but it has not necessarily been the best thing for the people who are receiving care. the other point to note is that we in health care, we don't exist in a vacuum. i live in menlo park, california, ground zero of google and facebook and venture capital. a massive amount of money has been put into consumer facing apps, and it's partly because we in health care -- think about how you run your own life. everything you consume or interact with your family or reservations for travel or restaurants is done through your phone. yet, when you have to deal with health care, you have to step back into another century, deal with people who are writing things on white boards in babylonic kuhn -- cucuniform an

faxing things to each other. the fax machine should have been out of business 25 years ago. it is the life blood of american health care. you have to show this in some states to prove that obamacare did work in terms of reducing the uninsured. the biggest reduction in the uninsured since lbj. the uninsured reduction was more significant in states that expanded medicaid than states that did not. that, i think, is the important backdrop on this election day. so from my perspective, here are the stories i'm seeing and hearing in my travels across the country. some of this is just based on what i'm hearing. this partnership, we survey every year doctors, consumers, employers and hospital leaders.

i am foing -- going to give you a greatest hits about those and spend a little bit of time on shallow pocketed consumers. the reason why i think it is different this time with all this health policy stuff is a pretty simple fact. the average american family cannot afford the average health insurance premium. you think of that for eight nanosecond, that's a wee bit of a problem. the average french family can afford the average family because it costs twice as much. median household income is $18,142 in the employer market. does not compute. what we have done is see this cumulative increase in unaffordability of premiums. the green line is workers

contribution compared to the blue line, health insurance premiums generally. the green line being above the blue line means there is cost shift to the employees. the boston two lines are overall workers earnings and inflation and, of course, they are way, way, way less than the increase in premiums. again, the average family, therefore, hasn't had a wage increase, any increment in compensation came in the form of health benefits. this is the point we are at now where the kaiser family foundation, up around 18, 142. that does not include out of pocket softs. if you use the millman numbers, you are up around $25,000. what is corporate america's idea? to shift the cost to consumers. 50% of the workers have a deductible of $1,000 or more, 20% of $3,000 or more. why is that significant? median households don't have $3,000, right? they don't have that in financial assets and that's why we have seen that they forego

care. this is not our data but data from the commonwealth fund. this is people who have jobs, who have health insurance, who are doing it right. they just happen in the case of the dark blue line to make less than 200% of the federal poverty level. if you are in that category, about half of folk in that category have foregone care of one type or another. either had a problem but didn't go to a clinic, fill a prescription, skipped a test or treatment, didn't see a specialist. it would be lovely and convenient for economists and a beautiful thing if they were only foregoing unnecessary care. that is not what happens. when i was on the board, we gave the rand organization $3 million to prove the obvious, which is when people have to pay out of pocket, they don't get stuff. some of that matters to their health. let me just say, when it comes to consumers, i hate satisfaction surveys. just hate them. why? because they don't move. we waste acres of real estate doing these satisfaction surveys

an they don't move over time. why is that? americans are nice people. you want to see dissatisfaction? go survey the french. they're pissed off about everything. the reason we do it is occasionally you see a movement. we did see a significant drop in the last couple of years in the percent of americans that say the insurance plans meets my family's needs very or extremely well. that was particularly acute for exchange folk. by the way, i would point out that people on medicaid are as happy as people on commercial plans with this. they are much more positive than people on exchanges. in fact, when we look -- what we like is not satisfaction surveys. we put together this emotional scale that we ask consumers about and the question is, how would you describe your feelings about the health care you received today, including how much you pay for it and the

benefits you receive. please select all that apply. this is going to come as a complete shock to the men in the room. you can have more than one emotion simultaneously. [ laughter ] >> brock: women. >> women understand that. men have a great deal of difficulty with that concept. they have trouble coming up with one emotion at a time, let alone more than one emotion. you see what you would expect as a social scientist. you see a normal distribution around the stuff in the middle accepting mutual re-sign. you don't see many saying they are empowered. a surprising number say they are powerless, depressed and angry. i put the california numbers to brag about as a californian. the reason the numbers skew more positively in california is we have kaiser. we have hmos, which are generally not high deductible and we have a much higher

penetration than most other parts of the country and we have medicaid that's huge. a third of californians are on medicaid. all of those reduce the out of pocket cost burden which i think tracks to satisfaction and we know when we break this out in our survey by class of insurance it is ironic that the people who skew more positively have public insurance, not private insurance. fewer people with commercial insurance are hopeful and as many are powerless. the numbers for public insurance, rather, tend to be slightly better on the positive side and less negative on the negative side, which may be a function of expectations. one of the things we know from