citizens of all faiths can live together in safety and live together any freedom. let us pray for a future of harmony and peace. let us ask god to forever shine his goodness and blessings upon us. and let us continue to work together to build a future filled with hope and goodwill for our children and for all of the people of the world. with that, i would like to wish every muslim in america and around the globe. ramadan -- it's a great honor. we're going to have a good meal. if it's not good, blame me, okay? thank you very much. thank you all.

c-span's newsest book "the presidents" rank america's best and worst chief executives, providing insight into the lives of of 44 american presidents through stories gathered by interviews with noted presidential historians. explore the life events that shaped our leaders, challenges they faced and the legacies they have left behind. order your copy today. c-span "the presidents" is available as a hard cover or e-book. in about half an hour or so,

former new hampshire republican senator judd gregg and former north dakota democratic kent conrad will testify on the budget and spending process. live coverage starts at 2:30 eastern. you can watch it online at cspan.org or listen in live with the free c-span radio app. our guest is karen mills. she served as the former administrator fro the small business administration, has a book on the topic of small business. karen mills, thanks for joining us. delighted to be here. >> could you remind us, what's the the goal, the purpose? >> the sba is really one of the jewels here in washington. we uniquely in the united states have an agency like this. the flagship program is about getting loans out to small businesses, and this was particularly important. i actually got this position ten

years ago right at this time i was unanimous ly confirm by the sense. and that we were in a credit crisis, banks had stopped lending. we were able to raise the sba guaranteed rates, and get banks back to sba lending at the time. they also do a whole set of things around device, counseling and small business contracting. how would you describe the current state of small business? what is the larger factor? >> not is a very good time for maul businesses. in the last most or so. we saw a bit you optimism. small businesses are like the canary in the coal mine. they might be feeling a recession first, but the numbers

say they are still hiring. in fact they're having trouble finding people. i would say business is still good on small business front i suppose as they grow at getting access, what would you say is the condition as far as getting loans from banks they days. >> right now credit markets are very robust. in fact one of the things i'm here to talk about is this new transformation. it used to be you would cyr ox on pile of paperwork, go down to the banking wait three weeks and then can you give me a personal guarantee. some of that is still true, but about five or six years ago, the fi fintechs came on the scene don't think the banks gore going to lose right away. this is a fun and exciting

playing field, so we'll talk about who might be the win irs and losers. >> what does fintech for? it's a general worse for financial technology, it covers everything from bitcoin to bl k blockchain. i don't talk about that. i talk about a particular threat, how technology will change small business lending. how about it but still have a good experience, good rates, good products, and how banks will do that that kind of technology to service their small business customers better. >> give me an example, how does it work? who made both consumer and small

business loans, and that was a digital experience now, small businesses had good things to say about that, but the costs were very high, partly because these were not banks. these were new companies getting money from hedge funds. small businesses were paying very high prices for these loans. the banks, however come back on the scene and now fintech relate banks taking technology into their own environments in various ways. but this is where it's evolving right now. >> the book is called "fintech and small business. the author is karen mills. if you want to talk to her about these concepts, you can call us on the lines.

for those of you small business owners out there, it's 202-748-800. for everyone else, 202-748-8001. when you look in your book you talk about three myths. the first is most small businesses fail and most should not be financed. >> yes, in fact the small bit myth that most annoys me is small businesses aren't very important to the economy. there are a lot of economists who believe this, that really it's the few silicon valley firms that would be google, they're important, and also big business, but half the people who work in this country own or work for a small business. that's half the jobs. it's two out of every three net new jobs. it's also the path to social mobility.

so when small business doesn't get a seat at the table and doesn't get attention, we are missing out. i call it the political paradox. everybody is for small business. bipartisan issue, but nobody does anything. i say what do you think of the small business act of 2019? people say i don't know about that. i say, that's because it doesn't exist. nobody is putting forth real proposals, even though you can't get bipartisan support. the statistics tell us 80% of businesses who start their first year will survive. are those consistent numbers. if i'm a lender,s thor good risks?

as you point out, a lot of small businesses don't make it. if that is kroet worthy, the desire of the marketplace is to make sure they have capital and funding. the trick is, how do you know? this is called opacity. it's hard to see in a small business and figure out if this is a good one or not. technology will remove some of that information at opacity by claiming lots and lots of streams of new data that inform the credit decision. >> that goes to the second of the three myths. if i'm a small business owner, where do i go to?

>> the dinosaurs are going to die. that hasn't happened, though you know what? they were declining. there's all finds of structural reason why they banks are getting gobbled up. big banks still make small business loans, but this is any technology providers did change the game. then goliath got up and whacked them back now big tech has entered. amazon and paypal and square. so we don't actually know yet who will be the winners and losers. i have a theory about it.

>> then your third myth, you kind of hinted at this as well. when it comes to the decline of small businesses, the post-financial crisis maybe had something to do with that. >> i'm very sympathetic to small banks for feel they have suffered in the last few years. it was much more costly for them, but right now what i say to the small banks is don't look backwards you are just digging in your heels the answer is that it has to be smart regulation. the questions are really complicated, like how are you going to figure out what's in the algorithm? who owns everybody's data? are we going to have open banking where you can submit your data to anybody you said

the way they have in europe and the uk? those questions require a different mindset, and by the way, they required or seven regulators who all oversee bit so i want to you know, it is too difficult for a bank right now to navigate the world of its regulation. one regulator may say a, the next one may say b, they might have conflicting guidance the concern is they will say i'm not going to do just small business lending.

so, for instance, i get a whole box, if i want a truck for a landscaping business, i get nothing. i'm supposed to be sophisticated numb. why don't we have the same disclosures? let's here from a small business owner. teresa? maryland, you're on with karen mills. go ahead. >> caller: i wanted to express my concern for mobile companies. we are struggling to secure loans, because we don't have assets. we don't have this -- these buzz words like collateral. and what is the future for mobile companies that don't have brick-and-mortar building and heavy machinery and large equipment pieces? >> well, first of all, the future for mobile companies and

non-asset companies is very much helped by the fact that these new fintechs have come online. why is that? a bank wanted collateral to make your loan, but the new fintechs said we will take all the data that we can about your business. we don't have to touch that machine. we can look into your bank account, yew quickbooks account, all receipts you take in through square or your payment system, and we can figure out whether or not to give you a loan just based on your cash flows. >> so when it comes to the cash flow-based lending, when do you know it's a succeed?

we are he data comes now through apis, through these data pipes that didn't exist. >> what does api stand for. >> application programming interface, i think. everything is an acronym, as you know. if we get all this data that we didn't have before to assess you maybe we don't have to rely so much on collaterals. we need to get funds to them, too. banks are just figuring out how to take in this data. i think things will get better for these kinds of loans. they'll be available in more the traditional banks over the next year, 18 months, two years, three years. it's coming. >> she talked about being a mobile business, what do you

think the future holds when it comes to in idea of online businesses versus brick and mortar businesses. >> well, the good news for small business is, you know, amazon is here, and we can sell online. the bad news for small business is amazon's here and, you know, they control a lot of the online selling. i would say on the net of it, it's a good thing. a business now can reach markets that it couldn't before. so i would feel positive about small businesses. >> let as hear from joe. >> caller: good morning. i have been real lucky, but mostly government was getting in my way. we had problems, like up in

connecticut, you have to pay what they call a just being there tax. if i'm a small business, and two of the businesses are not doing much right now, and i can tell but those in a second, but they charge me 250 a year just for they call it business or identity, and that's the same tax that they charge general electric before they left connecticut, 250. it just -- if i don't do any business, i've got to send a check to the state of connecticut, the secretary the state for $250 even if there's no sales that year. i call it -- i don't want to lose my llc, so i just pay it. i heard a lady talking about, some girl called up and said we need to be able to get bank money. let me tell you, you know, unless you're buying buildings or something, anybody that has to go to a bank for your small business, you're doing the wrong

thing. i always started my businesses with a telephone, a good idea, know what i'm doing, enthusiasm, and don't -- and don't overspend. >> where did you get the initial capital from? >> caller: i started a music business, found an old artist who was very good, and never recorded. you just saw him playing, and i'm going to start a record company around this guy. i used my own money, recorded him, and it worked. you know what? i sold that one cd -- i didn't have a lot of cds, this one cd and i sold it for two years. first i'm going into little record stores, and it's like a consignment business, you plead, please put this record in your

racks for me. >> joe, thank you for the story. >> i love the story, joe. you are a great american entrepreneur. you come up with an idea, you have a lot of hustle, a good eye for talent, you made it into the cd, you made the cd sell, and then you made another really important point, close that you cannot get ahead of your cash flow. it's okay to take a loan for something that, you know, you can pay back, maybe you have a seasonal problem you've got to be very careful when you take out debt that i know how you'll pay it back. that's what some of the fintech dashboards and forecasters will help people doing, which is see into the future and see what is the loan that is right for me. on your first point, i

sympathi sympathize. every state has a business tax. point taken, good one. question numb better one, branding, like donald trump, how good is nowadays -- that's still as your old classic branding? and second question is, which state is best and more leaning towards the small business? actually there's some interesting questions whether you should put your name on the small business. trump put his name on it.

martha stewart put her name on it but sometimes you want to pick another business. first off, if you decide to sell it, you may not want just uses name on it not putting your make on a business means that you have grout ideas they say business names that don't have names in it tend not to grow. i think it all comes down to you, is this brand something that communicates you and your product and your customer value in a way you field proud of. >> by the way, matt smith says it was application it's basically a commune case plate

form. so another viewer had this to offer, saying our sba loans for just new businesses, how do you show cash flow if you need a loan to start your business? >> this is the hardest thing in the world to do you to do. how do you start a business and prove you have a track record. occasionally an sba loan will be made to start a business if you have some collateral to put up, but most people start their bus with his friends and family money. some people max out their credit cards and takes a lot of risk that way. but it's hard to get a bank loan, because you don't have history. less rep michael walsh, joins us for the first time on "washington journal." you're a freshman in congress. >> i'm a green beret by

background, army forces officers, still serving in the national guard. 23 years of service now my day jobs was with secretary rumsfeld and gates, and then ended as vice president cheney's adviser. i helped build a company up to about 400 employees. we main by went after bad guy assets all over the world, so supporting treasury and other folks with sanctions enforcement, or if you want to find the bad guy, follow the money. very proud of being an entrepreneur, recently stepped down as ceo in order to run for

office. i thinks having served in washington, and being a combat veteran, you know, bringing all of that to the table to serve the people of north florida. >> with all that background in mind, what is your general approach to foreign policy matters, particularly when it comes to the matter of counter-terrorism? >> by leadership it doesn't mean we have to have half a million troops on the ground. there is a lot of space between completely pull everybody out and go home, and, you know, the invasion of iraq. at a green beret, we typically have a very small footprint. we operate by, with and through locals. we bring all elements of military power this global world order has been led and ensured by american leadership abroad.

area where the united states stays engaged, good things to tend happen. >> there's a story on the front page of "new york times" and others dealing with iran, possibly a plan looking at involving troops not necessarily on the ground, but if the situation increases from where it's at, what is the best approach? >> well, i think what the. understands, iran's achilles' heel is its economy. it's propped up and with the sanctioning back in place noun, with the waivers having not been enacted anymore, iran's economy is struggling. over 50% inflation, billions are spent abroad, and that is really coming unravelled.

i think we need to keep up the pressure. the more iran is focused inward, the less it is engaging in mall feesens across the region. >> i think we need to send a clear signal. john bolton has done so, that we have received indication that iran is thinking about lashing out at u.s. assets, and they will be held responsible. this isn't like in iraq where surrogates killed over 600 soldiers. this isn't beirut where they need to hear that message loud and clear. >> was pulling out -- >> i think that was the worst. we got very little, iran got everybody, and got it up front.

if you go back to 2011 and 2012, the reason iran came to the table is we finally got all those sanctions in place and the international community to buy in as well, and then we gave it away. i think it's about creating that leverage again and driving around back to the table where we have a good deal in place. michael waltz is joining us. if you want to ask questions, you can call on the lines it's 202-748-8,000. 202-748-8001 for -- giving your time in afc, there were discussions among various factors about -- what's your assessment? >> well, interestingly al qaeda just released a video, i believe yesterday, reinforcing its ties

to the taliban. so, one, i don't buy for a second that the taliban -- which is not a monolithic organization, intends to completely divorce itself from al qaeda, and even if it does it does not have the capability militarily to keep al qaeda out of afghanistan. we have to remember, half the world's terrorist organizations still exist there. i understand there's a lot of frustration, but i frankly don't believe we have a choice but to stay engaged and to lead. we need to there's a higher literacy rate. that's going to take a long time. meanwhile, we have to keep a shorter term, kinetic, direct action posture against al qaeda

and isis and other actors in the region. look, eventually we have to drive to some type of political peace agreement, but we have to do it from a position of strength. if we have to fight our way back in, that would be far, far more expensive. >> people will cite the years of investments we have already made. >> i would cite back to them that we still have 50 thousands military members in japan, post-world war ii. we still have 30 mow military members in south korea. look at the investment there? germany, colombia, the philippines, so the united states is invested in countries around the world and taken a long-term approach. i would argue that the country where, again, half the world's terrorist organizations exist and struck the united states is worth an investment. >> given your military background, is there a better way to train, get more effective results? >> yeah, we have to resist -- we

have to resist i think the temptation, wherever this is blue on green attacks, which the taliban have done a very good job of trying to infiltrate. the north koreans tried to do the same thing with the south korean army years ago, and pulling back and not engaging. i've been on the ground. you have to build a level of truth. you can't do that with an armed guard over your shoulder as you're trying to have tea. it's a nuanced response, but you have to be out there with them on the ground, but it comes with rink. >> caller: my only quick thought or mention would be this. with john kerry, whenever he was talking to dana perrino on the

daily briefing a while back, he mentioned a thing he might have said a while ago about waiting trump out. my only question was this -- people say that's against the logan act. it sounds kind of fishy considering iran doesn't want to do anything with the trump administration until they -- they probably want to wait until he gets out of office. but hopefully our troops overseas stay protected. i'm glad president trump is sending over an aircraft carrier to protect them. you have my support. thank you very much. >> thank you for that. i do agree and do believe, and have talked to a number of foibles that the iranians are trying to wait the president out, but it's not just iran. i think china is looking at the same thing, north korea is looking at the same thing. there's a lot of folks with a -- back to your comments on the

military. we're at a record low in terms of combat vet advance in the congress. -- in the foxhole about party, race, relation, but it's about mission, getting things done. the more veterans on both sides of the aisle, the better. i can tell you, whether you're sitting in the armed services committee, and you close your eyes and hear the questions being asked of the defense secretary and others, you couldn't tell which party they were coming from. very different from judiciary and oversight and those other committees. that should give you some

optimism, i think. from buffalo, new york. >> caller: good morning. >> good morning. >> caller: 700 billion, you're okay with that? i'm 5 years old, father of three, i'm not doing that well. i know about 20 or 30 people just like me that are really struggling. we have had just two studies come out on global warming. republicans are the only ones in the world who don't believe in it. you know, the military's trying their best on their side, but 700 billion for one year? i'd like to you make a comment on that. thank you. >> well, thank you. yes, it's a tremendous budget. it's huge. and one of the things that my task, sitting in the house armed services committee is to get our arms around it, my mind around it. it is a tremendous budget. i talk to pentagon officials all

the time. they have to spend it how do we continue to combat islamic extremism, which is spreading in my view, coupled with china, cup you would with russia, overlayed with 22 trillion in debt and growing. they need to make the investments incredibly wisely. one of our jobs is to ask those tough questions of where they're putting those dollars. that said, i do think the united states has to lead around the world, and putting those monies into the united states military to make sure we are trained, equipped and ready to defend not only the united states, bur our eye lies and friends around the world. on global warming, though, look, i grew up in florida. i can tell you the beach is smaller now than when i was a child. i've joined the american flood

coalition, i think this is a national security issue as well. we have reports from the pentagon that certain bases are consistently flooding now. sailors can't get access to the base because some of the access roads are consistently flooding. we need to take a hard look at resiliency. i want to get past this -- is the earth warming or is it not? and get to a conversation of how to deal with it. i don't agree with massive government mandates like the green new deal. i think there are market-based solutions in terms of energy diversity, and renewables that we can get to that really make sense in terms of dealing with the problem, but i'm committed to help deals with it. there's a report, including in "the washington post" that the pentagon plans to shuffle money from the blitz immissile program and drone program to the border wall. is that a good investment? >> if you real a sentence or two

a lot of those were excess monies. they're looking for places where there are gaps in efficiency. look, at the end of the day, i do think border security is national security, a pipeline, a tunnel, a pathway that can move immigrants, move drugs, can also move weapons, can move terrorist organizations, and can move, you know -- the bottom line is smugglers really don't care, they'll work with whomever will pay. hezbollah has infiltrated people through or southern border. two are sitting with the southern district of new york. but separately this is a humanitarian crisis. it truly is. when you have over 100,000 people a month, those are just the ones being detained. the nature of