today. >> what will happen in 2010? you said this is one of the questions. what will get started then? >> many of the clinics that we will be establishing -- we are getting the individuals there right now. .

so, there was a very healthy discussion throughout. there were good questions about what was in this in terms of alternatives. what is it that is in here that is preventative? how are we going to make sure that we provide an idea that there has to be scanned in the game for everyone and the fact that you have to take care of and empower yourself if we are formed to combat a different kind of lifestyle. i think it was helpful in that standpoint to see, in the various sections, how they are interrelated. how the education and labor bill relates to the ways and means

committee. that does not mean a heck of a lot. when you are able to go back home and say that this is what it means, that you have individual responsibility, and you'll go have to -- you will have to go and see the doctor. prevention is something that is encouraged and helped drive down the costs. that cannot be scored. we know that it is going to happen because of all the scientific and imperiled data that supports it. >> thank you, very much. bucs those that start in 2010? -- >> does that start in 2010? >> that will be part of the supermarket and some will call up the exchange when it goes into effect. it is interesting when you talk

to people in the industry. they said that wal-mart is driving a lot of these issues. it is because that they have different benefits. for those that say that this is not going to cost competition -- this is not going to cause competition, this exchange of a level playing field has people competing. it has already been scored one way, and i come from an insurance every up. the they say this will create much more than just that. in fact, it will be driven as we gear rupp. in something as big as this when 47 million-a million people are involved -- 80 million people are involved, you see that competition already moving business and industry in that

way. that is a good thing for america and that will help drive down the cost and bring more people in. it will provide the money that we know can lower costs. we score health i.t. at 50-$20 billion in savings. do you know what they tell me is out there? 500 billion. can we come together as a nation and put an or in the water and make this happen? yes, we can. how different are those ideas from the ones that we have proposed? already, a lot of the ideas that people on both sides of the aisle agree on are being incorporated and moving forward. this is war to happen on behalf of america because it needs to happen for americans and everybody gets it. >> in a few moments, house

punishes committee chairman barney frank talks about the bill. in about one hour, president obama talks about u.s. relations with china. after that, the new america foundation post a discussion of u.s. relations with the arab world. >> tomorrow, the city judiciary committee vote sunday nomination of soreness of my door -- on saunas so mayor -- on-site sotomayor. the supreme court, this fall on c-span. >> house financial-services committee chairman barney frank says a financial regulation bill will pass congress by the end of the year. he spoke of took questions at the national press club for about an hour. tomorrow, his committee will consider new restrictions on

executive compensation. >> good afternoon and welcome to the national press club. i am a reporter with bloomberg news and the vice-president of the national press club. we are the world's leading organization for journalists and we provide informative programming and journalism education and foster a free press worldwide. for more information about the press club, please visit our web site. on behalf of our members worldwide, i would like to welcome our speaker and our guests in the audience today. as well as those who are watching on c-span. we are looking forward to today's speech and afterwards, i will ask as many questions from the audience as time permits. please hold your applause during the speech so that we have time

for as many questions as possible. for our broadcast audience, if you hear applause, it is not the journalists. it may be from the guests and members of the general public to attend our luncheons, not the members of the working press. i would allow -- i would now like to introduce our head table. from your right, steve, a financial editor from bloomberg news, jeannie, staff director and chief counsel for the house financial-services committee. jerry, washington bureau chief of the buffalo news. >> marilyn, steve,

communications director for the house financial-services committee, mark, business editor for a broadcast. kevin, who oversees to pleaders magazine and kevin, the chief regulation correspondent for reuters. [applause] as chairman, congressman barney frank has been epicenter of 10 in the financial crisis. the democrat from massachusetts is often described as a creative deal maker, a skill necessary when attempting to unite liberals with free-market conservatives. his committee oversees the federal reserve and the securities and exchange commission. whether the question involves

restraints on compensation for top executives or new protections for average consumers, his committee is at the center of capitol hill debate. he was educated at harvard and received a law degree from harvard law school. he taught at several boston area universities and also served as a massachusetts state rep. a member of congress since 1981, in 1987, barney frank became the second openly gay member of the house of representatives. please welcome congressman barney frank. [applause] >> thank you. i very much appreciate the forum the press club offers for these kinds of discussions. let me reinforce what may have been entirely unnecessary admission. no one who has been familiar with the media in america could

ever think hearing applause but it came from members of the media. [laughter] : 2 first address an issue about financial reform -- i want to first address an issue about financial reform. something about president obama -- whether or not he is asking congress to do too much, which is a refreshing change, i think, from the past. if the answer is no. in particular, there is no validity to any suggestion that because many of my colleagues are so deeply engaged in trying to deal with health care or cap and trade or other important is huge -- important issues like labor law reform, to enable men and women to bargain collectively about their own job situation or to improve education. these are not conflicting.

nothing being done elsewhere is retarding our efforts to deal with the financial system. those efforts are essential. we are in the midst of a debate about who is responsible for what in the past. i will touch on that because having some sense of that is important in deciding what to do in the future. our primary goal is to not undo the past but prevent its occurrence. the role of congress today with our committee having a major piece of it, is to try to prevent things from recurring. the financial crisis that we have had. our general view, and by that i mean the members of our

committee and the people who work with me on the staff and members of the house in general and our senate counterparts is that the problem was non- regulation. it is very important to stress it is non-regulation and not the regulation. there was deregulation, a bike part -- by product of the clinton administration and i voted against it. our problem was that of non- regulation. we have a healthy phenomenon in this free enterprise country in which the private sector innovates and the innovation is very important. by definition, only those innovations which provide a value added it will survive because it is voluntary. if someone comes up with a new idea that does not work, it doesn't work and it goes away.

the only innovations that thrive are those that attract people's money in a free enterprise society. that is a constant process. but there are times when innovation reaches critical mass, when there is such a combination of new things, new technology combined with new ideas, that the existing regulatory framework is left behind. the role of the public sector is to come up with regulations that allow the society the benefit of those innovations in the private sector while curtailing some of the abuses. the problem with the current situation, i believe, is we have before too long a dominant ideological viewpoint that rejected that. it rejected the notion that innovation of a very, very substantial sort, innovation that was turning around a lot of previous assumptions, and that very much changed existing

patterns, that the not require new regulation. one of the arguments we have today from some people is was the cause of the problem, assuming there were things that should have been regulated that or not, was the cause regulators or ideological opposition to regulating or an inadequacy of regulatory structures? the answer is very clear -- yes. it was both. it was people who did not believe in regulating and deregulatory structure that facilitated their ability not to regulate. yes, it is true. there are two extreme cases. you can have the most complete regulatory powers given to individuals who simply did not believe regulation is ever useful and it will work. as alan greenspan and knowledge, it came close to refusing to use the regulatory balance given to the federal reserve. the federal reserve led other

bank regulators into becoming a born-again consumer advocates. it has been one of the most interesting convergence we of seen recently in the united states. it is made easier for those who believe firmly in never regulating, never to regulate, when no responsibility is fixed on who should do it. the more you disperse responsibility, the harder it is to overcome that aversion. on the other hand, it is true. if you have wonderful regulators firmly committed to trying to propose rules that have stopped the bad things or what could go, they could overcome regulatory and efficiency. but we cannot legislate on the

assumption that we will either have people totally opposed or wonderful super regulators. we need to regulate for normal human beings. that is what we hope to do. we think is important both that it be regulatory structures that provide focus responsibilities for the right kinds of regulation and the appointment of individuals to do it. it is best to have both, but it is better to have at least one fan to have neither. as we say, we can structure it so you do get both for the near- term. it is very important when you get new regulation, and this is something we should not lose sight of, by definition, the new regulation is going to come under the aegis of people who believe in the first set of regulators will be good ones. that is very important. franklin roosevelt led the united states into a new set of regulation for finance capitalism and appointed people who would run it. for those who have criticized the obama administration because there are people in the administration had participated

in the financial system we are now trying to change and improve and regulate, think of the example set by franklin roosevelt when having established the securities and exchange commission, he appointed as his first chair someone who knew what he had to regulate -- joseph p. kennedy. he was a very effective chair of the sec precisely because he knew what had an illegal, was no longer legal, and will along reproved. we will be going forward setting up that kind of structure. i mentioned to the new deal. to me, we are in the third iteration of this phenomenon of innovation that is qualitatively different than what had been before in terms of its system and the need for regulation to catch up. the first example came in the night -- in the late 19th century when the american

industry created a large industrial enterprises. if we did not have that, we would not have had the wealth created and spread the way it was. it was the time of large enterprises. people who did it in the financial and manufacturing areas, finance, steel, railroads. then came theodore roosevelt and woodrow wilson who spent their time coming up with regulation not to cancel out the innovation but to contain its excesses'. you got the anti-trust laws, the establishment of the federal trade commission and the federal reserve. that was a good system. decades later, franklin roosevelt found the need to do it again and create a framework for mutual-fund companies securities and exchange commission, the fdic. for those who want to combine history and current events, if you want to read predictions that efforts to regulate innovation, efforts to rein in the views are foredoomed and will in fact denies the benefits

of innovation and curtailed the ability -- curtail the ability of the financial system to provide benefits, you can either read today's congressional record when you come to my markup or you can read what they said about roosevelt and wilson or franklin roosevelt. there is a pattern that people argue that any attempt to set rules for these innovations will destroy the economy. we reject that. we think that, in fact, the most pro-market thing franklin roosevelt could have done is what he did do. setting up the sec, setting a fool for mutual-fund, setting up the ftse saved capitalism and allowed to go forward. we plan to do the same thing. -- set up the fdic saved capitalism. this wonderful system can go forward. we do reject one argument

coming from the conservatives. there is an element of partisanship here. i do not understand why partisan is always a bad word. it least it has always been a bad word since the end of road work to win the partisans in yugoslavia fought the not cease. in everett -- under every other context, it's a bad thing. political parties are good thing for democracy. partisanship becomes a problem if it is excessive because there are issues in any democracy that will be legitimately partisan with two different part seize having to

different viewpoints. the parties are not sides are randomly picked, they're people with different viewpoints. whether or not there should be inappropriate regulatory intervention, to cancel innovation but channel it. there are those who thought theodore roosevelt and wilson got wrong, there are those that fought franklin roosevelt got it wrong, and they think we're doing it wrong today. just leave it to free enterprise with all the goods and bad. others think it is tough and difficult and you have to have humility about how you do it and listen to everybody, but you can make the system better by reducing the bad while not diminishing of the good things.

the parties differ on that. the republican party in the house has a different view than the democratic party and that is called democracy treed we had an election. we have elections in 2002 and 2004 in which the people who did not believe in regulation one. they did not give any regulation and nothing was done. then we had elections in 2006 and 2008 which were different. i say that because i want to raise the stakes for myself and my colleagues. we have now for the first time since 1993 a democratic president, democratic house, and democratic senate. we have the responsibility as democrats to come up with a system of rules that allow the free enterprise system to flourish and provide all the benefits it can provide while diminishing abuses, while protecting consumers, while encouraging investors to feel safe about investing, and to give us the benefit of the function of the financial system. it is up to us. i will tell you that i believe my republican colleagues had a responsibility. they had four years when the had the presidency and both houses of congress and nothing was done in the regulatory area. i understand there was a theory that says -- this was my fault

and christopher dodd, and some others -- the view was i had a secret hold on tom delay that i wish i knew about. [laughter] if i were to made a list that would have deterred him from doing, it would have been a lot larger than simply derivatives. [laughter] but in fact, we had a different viewpoint. there were some that the problem was we were too good to poor people. the problem was a democratic approach that said let's try to help lower-income people. let me be very clear and measured -- utter nonsense. [laughter] the community reinvestment act is what they blame. talk to community bankers, people who run smaller, locally based banks who justifiably object when people announce banks and they get swept then, getting blamed for things that

were not guilty of doing. if only financial institutions subject to the community reinvestment act made mortgage loans, we would not be in the crisis we are in today. the overwhelming majority of those were made in institutions not covered by the community reinvestment act. there is not a regulator who would say the cra -- there could be one -- it clearly did not happen trade look at the loans. what happened was an explosion of loans outside the regular banking system. by the way, that ties in with my thesis. the banks covered by the community reinvestment act who did not cause the subprime crisis were the regulated ones. it was the unregulated and under regulated sectors that did. we now have our response ability and here is what we believe needs to be done.

we want to make it clear that the financial sector is an essential intermediary in our economy. the phrase intermediary is important. in times when cash has disappeared or credit has disappeared from the system, it is called disintermediation. that means the financial sector no longer performs its important intermediary function. that function is to gather of money in fairly small amounts from large numbers of people, and bullet, -- bundle it, and make it available to people who will use it for productive purposes. that is the financial function. financial activity is not an end in itself, it is a means to an end, a means by which we gather up the savings of individuals and their need to invest and provide for their own personal income. and make it available to those who will invest in larger

amounts and in productive activities. i believe one of the problems is over the past 20 years, a certain amount of financial activity became the and rather than the means. i do not expect anybody in this society to do important work for nothing. obviously enterprises have to make a profit. financial activity has to have a profit. but the purpose of the profit is to enable them to be the intermediary. so i have had people come and complain to us that if you do that, i can't make any money. the answer is that is not our job. we're not here to help make money. we are here to help have a system in which he will make money as an instance of your

providing funds to those who use it productively. to some extent, there has been financial activity that has been an end in itself. that is what is behind the denunciations of speculation treed there is an element -- denunciation of speculation. there is an element of people doing things only to make money on them. a society is no worse off than people were doing it and if they want, making get real jobs and it would be no loss to anyone else. [laughter] a large part of this came from innovation which is a good thing. securitization -- 30 years ago, most loans were made by people who expected to be paid back by the bar were. that means you had to pay -- had to wait for them to pay back. securitization is money outside the system meaning it there is new sources of liquidity and you did not wait to be paid back. you sell the right to be paid back by other people. then you have a whole range of instruments involved that took those rights to be paid back and magnified them and cut them up into a whole range of very

innovative financial devices. securitization is basically a good thing because it means money turned over more quickly. if i have to wait for everyone to pay back, i can make as many loans. the more good loans that are made the better. the problem is securitization had two in packs -- in a lot more good loans to be made and more bad loans to be made. very simple human truth got lost -- if i lend you money and expect to be paid back, i will be more careful than if i lend you money and you payback someone else. securitization has weakened that bar or-wonder discipline. -- that our work-lender discipline. it seems to me the rating agencies are trying to over compensate for weakness by excess. when you say on behalf of the working press, they may enjoy this phrase, but i'm reminded of a great phrase by one of the great editorial writers of all-

time who said his job was to come down from the hills after the battle was over and shoot the wounded. [laughter] i think you see that with the rating agencies. when millions of loans are made by people who did not have the discipline of expecting to be paid back, i don't know how anyone can write them. here is the lineup we think you need to do. he'd put limits on securitization. people should not able to lend money without having risk retention. we think there needs to be somewhere in the system, and ability to limit leverage and put maximum leverage roles into place so that people do not wind up owing not only much more money than they have, sometimes we have more money, people owing more money than there is.

you have to limit leverage. you have to come up with a way to put ailing financial in this -- financial entities out of our misery. it is called give resolving power. -- it is called the resolving power. we did not have a decent way to do that with aig, lehman brothers, or merrill lynch. all of them cost problems. people of goodwill, ben bernanke and henry paulson, tried to avoid terrible financial harm from what happened. we need to contain derivatives. yes, they play an important role, but they have gotten out of hand. we need to protect consumers because protection of consumers now is dissipated in ways that result in a lack of activity

because there is no way to focus responsibility. we deal with executive compensation. the problem with executive compensation is essentially a price estimate standpoint is against perverse incentives. if you are a top decision make there or somewhere else down the chain, -- if you are a top decision maker, or somewhere down the chain, you are incentivize to take a risk. if the risk pays off you suffer no penalty. heads you win, tails you break even. it is like selling lottery tickets only cost money if they pay off. he would tell a lot of tickets but not raise much money. that's the problem. there's also a problem with salaries being excessive. we will work on this tomorrow -- our view is the regulators, the securities and exchange commission, should prevent their from being systems that allow person sentence. we think it's up to the shareholders. we have the radical notions on the democratic side that the shareholders ought to be beset limits on pay because the notion it will be done by the board of directors is fruitless because boards of directors and ceos are inevitably the closest of collaborators. there is not and should not be

an adversarial relationship between a ceo and the boards of directors. it's impossible to structure one in a well-run organization. but it's a mistake to go to arms length and the labor and management. we want shareholders to be involved in setting pay. that's the package. i have a challenge to make -- and until you the package has broad support in congress. -- let me tell you the package has broken -- broad support in congress. we have the responsibility to put a systemic risk regulation into place that would limit the leverage that got us to trouble with people being overextended. that will allow us to deal with aig and lehman brothers and put them out of business in an orderly way without shocking the system or having enormous public funds going into them. i believe we can curtail expectations in derivatives with reducing the real economic function they provide to society.

i think we can impose risk retention rules on originators of loans so that we still get the benefit of higher turnover but to not lose the lender-bar or discipline treed i believe we can content -- we can protect consumers. if we had protected consumers better, we would have had a more sound system cannot less sound system. we are going to do those. it's a responsibility for us as democrats to do them and we are convinced this is the way to prevent these abuses. i invite the judgment of failure if we are not able to deliver. i am not politically inclined to take on responsibility i do not think i could handle. i'm giving us this responsibility because i'm confident we will be it. i believe you are going to see during this conversation by the

end of this year, a package that does this. one last point i want to make and want to offer advice, unpaid, to my friends in the financial community and the rest of the financial community. because their first category -- a first category is actually cyclical. maybe i didn't have that many a few years ago and then i became chairman of the committee and made a lot of new friends without getting any nicer. [laughter] we worked together last year when ben bernanke and henry paulson came to us on behalf of the bush administration and said we face serious financial collapse if you cannot

collaborate. none of us thought would be a popular thing to do, but we did it in a bipartisan way. democrats and republicans in the house and senate work with the bush and attrition. there were many in the financial community were grateful for our help. but i think some have forgotten that. not everybody, but some in the financial community who remind me of the restored monarchy in france after napoleon. they have forgotten nothing because they learned nothing. let me go back to my youth, to the days when radio had a function other than the spewing of venom. when fiction on the radio was labeled as fiction. [laughter] there were people in the financial community, some older people here will check the reference, they want to return to the thrilling day is of yesteryear. [laughter] let me make one and a man -- want to return to the thrilling days of yesteryear when the

loan rate route -- loan arrangers will write again. it will be accompanied by their faithful and submissive companion, the government. that is not going to happen. [applause] we're going to put those rules into effect. let me say for the sake of my own metaphorical consistency, there was an old unpleasant joke when i was a kid, and may be relevant now. we may have to give them a new definition in the context of key mossad. -- of kemosabe. i'm making this response to the financial community.

i want them to work with us. they need to understand what i talked about -- sustaining beverage, -- restraining leverage, some risk retention, protection of consumers, and a single, effective agency, those are all going to happen. i can guarantee you, not because i wanted to be, but because i have had a series of conversations with people and i know that's what's going to happen. i know of the financial community or people who believe in total deregulation, if they want to make a national debate, i welcome it. they will lose the debate. it's a good debate have. just as we had the debate in the early part of the 20th- century and in the new deal, we will have it again and we will win it. we will prove the best thing you can do for capitalism is to have rules that give investors the confidence to get back in the system, that protects the great majority of decent people from abuses. that does not mean there is no role for them. i believe we should be containing derivatives. there are couple of ways to do it. on the table is banning naked credit default swaps.

there alternatives to that. a tighter regime of openness and price discovery that comes to putting them on the exchanges. we will talk to them and hope to talk to them about that. but there are some tests they have to meet. tomorrow, there will be a meeting about one of the great failings of my friends in the financial community to date -- their unwillingness to help us reduce mortgage foreclosures. it is not in their own interests. the casket foreclosures -- it will make it worse. i am glad we did and implement compensations and i was pleased when ben bernanke said last week in response to republican question that if it had not been for the bill, and employment would be higher today. but you cannot pay your mortgage out of unemployment compensation. we face the potential of more foreclosures with disastrous effects for individuals and it -- and communities and the economy. the financial community was successful and it will lead in creating bankruptcy reform. the garden was we did not need that to reduce mortgage foreclosures, but -- the argument was we did not needed

to reduce mortgage foreclosures. we need much better cooperation. we need people in the major financial institutions to understand how angry the american people are, that people who are in many cases, the cause of the crisis, and the beneficiaries of serious economic activity on the part of the government to help them get out of the crisis. we did not do the rescue plan. i did -- i long for the good old days when a tarp was what was used to cover the infield when it was raining. helping the banks was the inevitable byproduct. you cannot restore the credit system from a minute collapse as ben bernanke and henry paulson accurately said. you could not have done that without helping the institutions. you cannot get a whole new set of institutions. having done that, for them to return to the thrilling days of yesteryear is a great mistake. i do have to say to my friends

in the financial community to think about what you say about your character when you tell us you have to have enormous bonuses to align your interests with those of the people who pay your salary. in other words, you get hired for this prestigious job and get a salary and now we have to give you extra money for you to do your job right? i must say that does not speak well of the character of the people there. i think they are unfair to themselves. i think if you cut their bonuses by 90% they would work just as hard, but that is not what they have done. we will have to deal with this in legislation, to curtail the overall amount, but restructure them. i am asking the financial community to cooperate and ask us the best way to do derivatives. except the reality of this regulation and work with us. that applies to community banks. community banks were not the one to did subprime mortgages or

credit card use. another example in the financial sector is salary increases, compensation increases, not helping in mortgages, and we passed a credit-card bill and they said we need more time. that was the reason for the delay, not so they could jack things up in the interim. they are inviting a much harsher response of their not willing to cooperate on these. tarp recipients say we should not curtail excessive use of derivatives because of my produce their profits. they are putting themselves outside of the face we have and i would much rather they be in it. they cannot stop it. to the community banks, they have been unfairly reduced because there were a problem, but they need to be careful to not allow themselves to be used by some of their big, big brothers who would like to have sheltered them.

we can set up a consumer protection agency that will respect the role of community banks. they were not the perpetrators of the abuses and they will not be the subjects of the corrections. they need to work with us to help do that. we are ready to go forward with a set of regulations that respond to these innovations that we believe will give us the benefit of the innovations and diminish the abuses. our models are theodore roosevelt, woodrow wilson, and franklin roosevelt. we invite the financial community to participate with us, given what we believe is necessary, but it will happen one way or the other. the debate will be, i believe, in terms of history, as important in the -- as the one in 20th-century and i think will be as beneficial to the american economy. thank you. [applause]

>> thank you, mr. chairman. we have no shortage of questions this afternoon. the first comes from a person who says as an executive in the banking industry, i agree that lack of regulation was key to the financial crisis. how do we now wait for elation that hinders our ability to compete in the global economy and serving customers' needs effectively? >> one thing i forgot to mention -- then you can tell me to shut up. that's fair. he said you're going along. we do face a problem of international cooperation. nothing in the world is as mobile as capital.

it can move anywhere in the world instantaneously. we are working very hard with our major financial competitors and partners, the european union, the guided kingdom, which is a semi-independent entity -- the united kingdom, japan, we are determined to make sure when i talked about our rules adopted by identically and not by the same entity, but sufficiently similar in all those places so there will not be any competition treed i have met with european union's marketing commissioner and i've met with people the same jurisdiction from the european union and canadians. i apologize to my constituents because they have not seen as

much as me, but we have been dealing with exactly that to make sure we have and a harmonious set of regulations so don't have that international competition. when i first became chairman in 2006, i was told we had to be regulate in america because everyone was going to go to england to the financial- services authority to be subject to their light touch regulation. the financial service authority said a couple of months ago explicitly the era of light touch regulation is over. everything i have talked about, derived its come compensation, is being talked about in very similar terms by this entities and we have to do one more thing and this will be the end to the bell. -- is to be in the bill. we'll write into the bill instructions, not authority, but instructions to the secretary of treasury and the federal reserve that any country anywhere in the world which holds itself out as an escape hatch for these regulations will be denied any access to the american financial system. i believe we will be able to work with all the other allies to do this. as far as banks are concerned, there was overreach in some of the consumer products. one proposal was people are going to have to offer a plane, with all product.

-- a plane, then all product. i don't think you can force people to operate generic product. liquor places that had to serve food served most inedible food. i remember jars of pickled hardboiled eggs sitting on the counters of some bars. we're not going to make bankers offered people hardboiled pickled eggs. i don't think that will be a problem. to the community banks, they are unlikely to see much change. do we need central regulation? yes. is there such a thing as stupid regulation? yes. can we avoid it? >> yes. i think it is important we register hedge funds. but hedge funds are not mutual funds. there's a fear of registered had sought -- hedge funds, they would have to register the same as mutual-fund sprayed know, they won't.

we are determined to come up with a form for hedge funds suitable for hedge funds. we want to treat them as mutual- fund. >> the federal reserve chairman, ben bernanke, said friday that 25 companies would be deemed too big to fail under the president's proposal. should that exist and does that change the competitive playing field for large as opposed to small institutions? >> it should not exist. if we do this job right, it won't exist. part of our major core set of principles here is first, to some up a set of regulations that will keep people from getting too big to fail in part by severe limitations on leverage. there will be at several places in this system as a systemic risk regulator and [unintelligible] the ability to say you have to raise capital and you are overextended. the requirement to raise capital will be disproportionate. the degree get, a higher percentage capital you will have to have, not just the amount. that could have kept a ig from getting overextended. secondly, lehman brothers failed and there's no mechanism

to do anything. then when into bankruptcy. the judgment of the bush administration brought the system to a halt. even though a conservative republican -- conservative republican witnesses was brought forward, he said it would of been different because people have different expectations. the bush administration believes letting lehman brothers go bankrupt almost brought the system to its knees which is why they rushed in to provide the funding for aig. those are not choices we should have. either pair of nobody and have a collapse or pay off everybody. you have this, where banks go under, we have a good system under the fdic possible leadership. -- the fdic's leadership. we will have the same rules for other institutions. one thing i asked the financial

community to work with us on is to have a way to put these people, these institutions to sleep. one question is how sharp should the sanctions be? should be the rule that any company that is that, the ceo is gone and the board of directors is gone? we want to be very unpleasant to be an entity that has done that. the second part is because we don't want to see too big to fail, there will not be that list. the administration has proposed to be a list of systemically important companies and the general sense in congress is out of the opposite effect. the administration sees it as a way to discipline the companies, but many see it as it would be a license to do well because people think you cannot fail. there will be no such list. the administration thinks creating a list of systemically important institutions would be a way of severely disappointed -- severely disciplining them. others think the list would be

brer rabbit and the briar patch. but there will not be predetermined list to avoid that problem. >> one of the big issues right now is over-the-counter derivatives on the exchanges. the white house wants to have the treasury define what is a standard derivative. clearing houses will have to step up and want to trade them. what happens if they don't want to do it? does the federal government have the authority to be able to make exchanges put over-the- counter derivatives and standardize them if they don't want to? >> that has been raised and i've talked to the nasdaq about that. i don't think we will force them to do it, but these exchanges are money-making operations, so they will want to do it. we do recognize there will be an occasion, a derivative that

cannot be traded on an exchange. people doing that will have to pay a price in the much higher capital charges. we expect these to be on exchanges and clearing houses, and we understand they are ready to do the great majority of them. they may not be able to do a couple. or several. in those cases, the regulators will have the ability to require much higher capital charges, which means those who want to engage in those derivatives will have an incentive to fit them on exchanges. there are two parties to a derivative contract -- buyers and sellers. one party has an incentive to make it more expensive and the other has incentive to make it less except -- less expensive. we believe there will be great

market pressure to tailor these things so they will go on to exchanges. there is also some concern -- and this is one of those things we will look into -- there are companies for whom the hedging is a major part of the business. people not in it for financial reasons purely because they have a business. we will talk about different versions. for them, collateral not need to be cashed in some of these ongoing businesses. but the answer is they will not be forced to take derivatives they do not want. those engaging in transactions will be under great footage of pressure to design and so they can go on exchanges. >> financial regulatory overhaul is only one of several major initiatives on the calendar.

have health care, climate change -- a busy agenda. given that, when is this legislation that you say will pass this year actually going to pass? >> i wonder what the effect is of people writing up their questions before i talk. c9gthey asked me a question thai answered. there is no conflict. our work has not been slowed up in the slightest by the fact we're working on climate and health care. there was some overlap between climate and health care because of the committee, even that did not turn out to be the case. i expect the house to pass this in september or october. we have done a lot of work and focused on it. let me just say -- by which the american people understood what a bargain the get -- i wish the american people understood what a bargain get from the people who work in the congress of the united states. [applause] they have been working hard and

i think it will continue to work hard and we will get this to the senate by a fall. what happens with this and in the senate, we have done a number of things collaborative way. tough regulation on fannie mae and freddie mac. the republicans could not do that. took us all a little longer. we have done some work on other areas. there are certain amount of the disputes that will get resolved. the house will begin this work. a number of issues, some of which i mentioned, they will never resolved until both houses vote. others are more specific and get results. we will send the senate package where we will have arrived at consensus on a number of issues. there will be some important issues. it's overwhelmingly likely that the senate will get the bill in october and us -- and the president will sign the package before the end of the year. >> the federal budget deficit is rising rates we have not seen before. where can you see cuts made in

the federal budget that will slow down the pace? >> let me give you a couple. first, i thought george bush's plan to send people to mars was very strange given the budget deficit. [laughter] that was hundreds of billions of dollars a want to spend. i believe we should not send people to mars. the problem is not sending people to mars, it is bringing them back. you can send their cheaply. but we care about human life. space is very important and we should be spending a great deal of money because we can learn a lot from. most scientists i talked to would diminish and not expand manned space missions. i thought president was right on agriculture. it is striking that the most conservative people in congress want to cut the budget and cut out subsidies and make people stand on their own 2 feet and keep their shoulders to the

wheel and noses to the grindstone and cut back on government intervention and must be pro-consumer and free- market. apparently, in the great free market taxed -- great free- market text, there is a footnote that says except for agriculture. none of this applies to agriculture. the footnote may be in german which is why it's hard. [laughter] german can be a difficult language. but the president proposes cutting back on agricultural subsidies and it both parties killed that right away. substantial savings on the military. let me be clear -- if we have not waged what i think is a damaging, war in iraq, we would not be worrying about how to pay for health care. let's be very clear. [applause] the money spent on the war in iraq would have paid for health care.

sometimes when i'm looking for the money, have one idea. i was in congress on september 10, 2001. there was no money in the budget for the war in iraq. apparently he had sources none of the rest of us did. a very important thing to happen and i give the press and a great deal of credit. he defeated the f-22. it was conceived to defeat the soviet union in the cold war atmosphere if it ever got hot. it had no current military function. it has never fired a shot in anger and almost certainly never will. many of my congressional colleagues, including budget hawks who were ready to cut back on medical care for children and ready to cut back on aid for homeless wanted to go ahead with a v f-22.

the press missed something. they have been doing a story about is they're going to be a second stimulus? this was a weapon whose sole justification was keeping people at work. it was important for the president to defeat that. i believe america is to be the strongest nation in the world. we could be far stronger with a significant reduction of $100 billion a year in the military budget, including providing a protection screen for everyone in the world. many of our allies say we're tired of the dollar being there reserve currency. i'm tired of the pentagon being the reserve military. they cannot say you're spending too much money but we will not have much of the defense budget.

without any way endangering the added states, we can substantially reduce the military budget. reduce manned space travel, cut out agriculture, and you are saving well over $150 billion a year. [applause] >> there are several questions about the consumer financial protection agency. what sort of jurisdictional issues which you see that having with other regulators and what sort of person which like to be in charge? >> jurisdiction only, i believe the fdic, the comptroller of the currency, and the fed should lose their consumer protection jurisdiction. when any agency in heron's the consumer protection tools of the fdic -- when any agency inherits the consumer protection tools of the fdic, you will be getting a very good set of tools. there will be almost new because they have been rarely used. [laughter] the difficult jurisdiction

issue comes with the federal trade commission. i think we need to readjust that. when we're talking about financial products in order to go to the consumer of financial product agency, there are a couple of things they talk about taking from the ftc that i would give back. the other one is the community reinvestment act. it's not an individual consumer function. i agree to strengthen the community reinvestment act and extend its reach. but i would not put it in the consumer protection agency. the other area is with the states. from the standpoint of community banks, they should welcome the consumer financial protection agency once they understand how we are going to do it. they are suffering from unfair competition and reputation damage from all lot of unregulated people out there like check catchers, pay lenders, and others. we plan to give the consumer product agency authority over a

number of the early unregulated entities. there are things the bank regulators, but there are greater abuse is coming from the early unregulated industries. if the states are doing a good job, there's no need to intervene. . .

>> but the notion that this implodes is military co hearns ranks presumably the israeli defense forces as a indefenseless. he or she would be freaked out that they would be gay or less byian. i believe in next year's con -- congressional session, we have this bill, but i believe we will get the bill through to

repeople it. there's no question in my mind that there's a majority in the senate and a present committee doing it. and i think we will be getting rid of don't ask don't tell to the benefit of the military next year. >> we are almost out of time. there are a couple of important matters to take care of. on july 29th, we'll have senator john kerry and a senator of foreign relations. second, would like to present our guest with ow coveted traditional national press club mug. >> thank you. i appreciate it. and i will now be able to say without contradiction, i've been mugged by the press. >> and we have one last question, and it's about this timeline. president obama would like to take this august recess off.

does congress really need to take a break in august? >> yes, we do spend a lot of time with our constituents. and i will be doing some of that. two, people who do not have time to reflect who get overworked, their judgment isn't always the best. third, there's a lot of studying to do. there are people who work with me on my staff and others, i will be spending a lot of my time -- as i take the time up with of the advantages is i will no longer have to spend a lot of my time learning about things that are very complicated and wholly boring. but that time hasn't come yet. so i will be learning a lot in august about things i never cared about as an individual than i should. so yeah, i think a reasonable work schedule is a good one.

and it will not require -- retire the the best of legislation at all. >> thank you for appearing for us today. we'd like to thank national press club, linda nelson and pat boone. the video archive of today's luncheon is provided by the broadcast operation center. our events are available for free download on i-tunes as well as on our websites. nonmembers may purchase videotapes by calling us. for more information check out our website at www.press.org. thank you. this meeting is adjourned.

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> on washington journal tomorrow morning we'll look at the debate on health care with

marilyn werber serafini. and jeff flake of arizona joins us to discuss his opposition to the earmark process. and we'll focus on the relationship between the u.s. and china with gary hufbauer. "washington journal" is live on c-span every day at 7:00 a.m. eastern. >> tomorrow the senate judiciary committee votes on the nomination of sonia sotomayor live on c-span 3, c-span radio, and c-span.org. and to america's highest court. the supreme court this fall on c-span. >> on c-span radio, in 1968 l.b.j. phone calls with his secretary of state dean ross. richard nixon and evangelist billy graham.

saturday at 10:00 a.m. eastern on c-span radio. >> president obama, secretary of state clinton and secretary of state geithner smoke on relations between the u.s. and china. this 50-minute event began a two-day meeting between u.s. and chinese officials hosted by the department of state and treasury. >> i'm so pleased to see all of you here. so many members of our cabinet. we are excited to begin this strategic and economic dialogue between the united states and china. it is a privilege to open this inaugural meeting. i'm especially pleased that secretary geithner and i have been able to welcome state counselor dye and vice premier wong. >> we are looking forward to resuming the very fruitful

discussions that we've already had both secretary geithner and myself and particularly president obama and president ushantau. this is a culmination of actions taken by our predecessors 30 years ago when the united states and china established formal diplomatic relations. what followed was a blossoming of chynezz economic growth and diplomatic engagement that has allowed our nations to reach this place of opportunity today. but this dialogue also marks the beginning of an unprecedented effort to lay the foundation for a positive, cooperate and comprehensive u.s.-chinese relationship in the 21st century that so many members of president obama's members are here reflects our belief that a stronger relationship will yield

rewards, not only for our two nations but indeed for the world beyond. we believe that in the decades ahead great countries will be defined less by their power to dominate or divide than by their capacity to solve problems. it is this reality that no country can solve today's challenges alone that demands a new global architecture for progress. although past relations between the united states and china has been influenced by the idea of a balance of power among great nations, the fresh thinking of the 21st century moves us from a multi-polar world to a multi-partnered world. and it is our hope ha the dialogue will enable to shake -- shape a common agenda. we know that our face i nation faces common global threats to climate change, clean energy,

pandemic disease, global poverty, north korea, iran, afghanistan, pakistan and beyond. so to meet these threats we must find common ground and work together in common purpose even as we may disagree on certain issues. as we'll hear later from the president, the obama administration will work with governments to solve regional and global problems. when i was in china in february, it was my first time back in almost a decade and i was struck as many visitors are as many people are. driving in beijing, i felt like i was watching a movie in fast forward from a few high-rise buildings on my last trip to a gleaming skyscrapers today. from million of bicycles navigating the streets to cars

of every model traversing modern thorough fairs. and for those traveling to shanghai soon to add the shanghai expo. all our testments to this, we welcome this. over the past 30 years the united states has helped to foster security in the region. and that has been a critical factor in china's growth and an important strategic interest of our own in the future we will remain actively engaged in pro-poeting the security of asia when misunderstandings or disagreements arise we will work peacefully through dialogue. this dialogue differs from past dialogues in scope, substance and approach. it is comprehensive by design. meant to enlist the full range of talents within our government and to include cross

cutting challenges that are neither bureaucratically neat nor easily compartmentalized. we are laying brick by brick a stronger relationship, improving communication, setting priorities and create a work plan. our agenda will focus on several years, first as secretary geithner and vice premier wong will certainly demonstrate the economic priorities that needs to take action. second climate change and clean energy as the world's strotwo biggest emmitters we have to demonstrate that clean energy and economic growth go hand in hand. we already have promising partnerships. when i was in beijing i toured a gee yo thermal plant that is a true u.s.-chinese

collaboration. general electric will produce electricity with half the emissions. and chinese businesses build the steam turbines that help to power the plant. this plant saves cost and provides clean energy including heat for the united states embassy. third security challenges -- i just astended the conference in thailand where the north korean regime were a subject of great concern. china and the united states both appreciate the dangers of escalating tensions and a perspectives arms race in east asia. and we both are going to work against the proliferation of weapons of mass destruction. already we have corporated very closely together and we are grateful to the chinese government and their leadership in establishing the six-party talks and is close corporation with us in response to the

north korean missile launches. we will discuss our concerns with the nuclear weapons with iran and promote stability in afghanistan and pakistan. fourth we will talk about development because we think like diplomacy it is an equally important pillar. we now that many of the world's threats emanate from poverty, social erosion and political instability and inturn contribute to them. by addressing hunger, illiteraly, disease, in ahearns to the rule of law, we believe we can wyden opportunity and prosperity for more people in more places. now none of these problems even with our closer cooperation will be easy to solve. and results will not happen over night. and we will not always see eye to eye. this is the case in certain instances with human rights

where the united states continues to be guided by the ideal of religious and other freedoms that must be respected. still solutions to many of the global chalings -- challenges today are within reach if we work together. where our interest enter sect. and where we cannot, we will be honest with each other. a well known chinese saying speaks of a sacred mountain in northern china. near confucius' home. and it says when people are of one mind and hard, they can move mount thai. now we cannot expect it to be united on every issue at every turn. but we can be of one mind and one heart on the need to find this common ground as we build a common and better future. the obama administration has embarrassed this dialogue with china early and energy jetically because we want to see it bring fruit.

this is an issue of great importance to me as secretary of state. and i look forward to the discussions today and tomorrow and to the follow-up work that we will do together. it is now my great honor to introduce vice premier wong. [applause] >> secretary of state hillary clinton, secretary of the state timothy geithner, dear delegates, we joined by the head of state by china and the united states is an important move to develop a u.s.-chinese relationship in the new era. i'm delighted to get into

dialogue as a special from the president and president obama. secretary clinton and secretary geithner. the president attaches great importance to the realm of the dialogues. it's any great honor to read the message from the president. on the occasion of the opening of the first round of china-u.s. strategic in dialogue, i wish to give warm congratulations and best wishes. to set up the mechanism as an important agreement that president obama and i have reached, it is also a stroo strategic move aimed at strengthening the mutually benefit corporation between two countries in various areas and promoting a sound, steady, and

indepartment development with china-u.s. relations in the new era. since the launch of this mechanism in february, the chinese and the u.s. teams headed by special representatives of the two ps have madea careful preparations and tremendous efforts to implement the agreement of the leaders and ensure a smooth convocation of the first round of the dialogues as scheduled. i highly appreciate your efforts. as two countries with significant influence in the world, china and the united states shoulder important responsibilities on a host of major issues concerning peace and development of mankind and enjoy extensive common interests and broad space for cooperation. in the face of the complex and

changing international, economic and political situation are two countries should expand common ground to reduce differences, strengthen corporations through strategic and economic dialogues. this serves the common interest of the two sides and will help advance a positive, cooperative and comprehensive relationship between our two countries. it is also of great importance for peace, stability, development and prosperity of the whole world. i hope that the two sides will conduct presentations in an equal manner and engaging indepth discussions on the strategic and issues in our relations. and i hope the two sides will be innovative in thinking, adopt a pragmatic and enterprising approach, seek,

win-win progress. and seek other methods beneficial for our -- with our cooperation. the smed mechanism will keep improving and growing and inject new die na mism and make new -- dynamism and to grow our relationship. i wish the first round of china-u.s. strategic and economic dialogue a crowning success. later relationships between our two countries and the friendship 2000 our two peoples grow even stronger. 27, july, 2009 in beijing.

ladies and gentlemen, in his congratulatory message, the president raised high expectations and requirements if the first round of the strategic and economic dialogues. in a while, president obama will join us and make an important speech. it's an important agreement reached for two presidents. as core element is to strengthen cooperation an issue be oriented towards the 21st century. the current dialogues are a major reflection of this agreement. we're keenly aware of the great responsibilities on our shoulders as required by our two presidents which make full use of the dialogue platform,

build con sess sus, expend convergence of interest and work to achieve mutually beneficial results. at present, the world economy is at a critical moment of moving out of crisis and towards recovery. the chinese government adopted a serious policy measures to respond to international financial crisis. and this measure has paid off. china's g.d.p. grew by 1.7%. thanks to the measures adopted by the u.s. government the u.s. financial markets are also stabilizing and it's real economy is showing science of dawning. during the economic dialogue under the theme to restore

economic growth, strengthen, china-u.s. cooperation, china and the united states will have intensive dialogue on making further efforts to tackle the international crisis, building a strong financial system, and promoting sustainable economic development. further sent out the positive signal of china and the u.s. joining hansdz to overcome -- hands to overcome difficulties and promote the economic recovery and our growth in our two countries and our world. mankind's pursuit for peace and progress never ceases. and mankind has always been progressing in difficults. i'm confident this crisis will finally be over.

china is in the process of accelerating industrialization and urbanization. we will continue to carry out the scientific development, deepen reform and opening up and combine the current efforts to tackle financial crisis and maintain fast and steady economic growth with advance economic restructuring and transformation of an economic growth pattern and endeavor to achieve a fast development of our national economy. a more open and more dynamic chinese economy. -- will bring opportunities to all countries in the world including the united states. with the furthering of china's reform opening you, china and the united states will have eavepb closer economic

cooperation and relationships. and china-u.s. relationship will surely keep moving forward at a new starting point at which this round -- new starting point. i wish this round complete success. i now give the floor to secretary of the treasury timothy geithner. >> thank you vice premier wang. it's a great pleasure to join secretary clinton and your entire delegation. president obama and president wu called on us to build a comprehensive bi-lateral relationship. this is a testament to the importance of that relationship and our commitment to strength g it. i had the privilege of studying

twice in china almost 30 years ago. and if you look what china has achieved since this the leadership in that country has brought about some of the most remarkable transformations in modern economic history. no one can look at china and not be convinced by the basic fact that when china commits to reform it is able to deliver remarkable change. this strategic and economic dialogue breaks new ground by bringing together senior officials across the full range of economic, diplomatic, strategic policies and interests between our two countries. the breadth of this dialogue recognizes that many of our issues of our time from economic reform and growth to addressing climate change require sustained political commitment and unprecedented cooperation between the united states and china. our joint response to the

global financial crisis mark as turning point in our cooperation. this crisis will be remembered not just for its severity and its global reach, but also for the speed and strength of the international response and the actions taken by the united states and by china that made a very substantial contribution to our collective success so far in blunting the force of this economic recession and beginning to restore confidence. in both our countries and this is critically important, both our countries made it clear our commitments to maintain strong policy in support of economic development. we anlt acted to together. to use the chinese phrase -- [speaking foreign language] , as china and the united states have both the united states and the opportunity to

act not only fur the benefit our our -- economy but for global improvement. we need to lay the foundation for a more balanced global growth in the future in a smooth transition to a more green global economy. the united states, we are moving to repair our financeable system to put in place a more conservative, more effective rules of the game over our financial markets. all right private savings are up. and our deficit has fallen. and we are committed to take the necessary measures to bring it down to a more sustainable level once recovery is firmly established. the president is committed to making development in these that will help our fumpe. these policies will help ensure

more sustainable growth in the united states an a more sustainable growth. china has made plans to spur the growth of household consumption. measures to raise household incomes will be instrumental. china's success in shifting the struck tchur of the economy towards domestic growth including a greater spending by consumers will be a huge contribution to our global challenge in bringing act a more rabid but more balanced and more sustainable global economy. and these are shared environmental goals. towards a more service oriented economy away from the type of export led growth of the past will be critical in moving china toward a less carbon intense active and more energy

efficient growth path. china and the united states have been among the biggest beneficiaries of the global trading system and we share a special responsible to ensure that they will remain open and rules base. we are both members of the g-20. for expand trade between our two countries. we meet at moment of opportunities in reshaping the global economic and financial architecture. this is no liss true in the area of economic. the institutions that were created that time have helped bring about remarkable improvement in incomes across emerges economies. trading eninvestment across nations and have helped bring hundreds of millions of people out of poverty. china was not central to those talks. but today we are working with

china to ensure their full engagement and representation and design of the key multilateral agreements and groupings such as the g-20 the financial stability board and the nble financial institutions. these are huge and hugely important tasks. they will not be accomplished in a single meeting of this dialogue. but we can begin this task today and tomorrow and we will build on it over the course of the months and years ahead. thank you. i want to introduce state counselor dai. [applause] >> secretary clinton, secretary geithner, vice premier wang, ladies and gentlemen and dear friend, just now the three

special representatives made broad and important speeches. i think they -- that should be said. and what i am going to say? following the principle of responsibilities, i wish to make a few remarks. the president and president obama made the decision together to establish a china-u.s. and strategic and economic dialogues at the g-20 summit. and the dialogues opened today. i think this is a big event. probably at this moment attention of the whole world is now on this hall.

the president, as you hear sent a congratulatory message pull of expectations and good wishes. later on president obama will honor the opening ceremony and make an opening speech. and this shows that the dialogues are of important and special value. vice premier wang and i as you know, come from an oriental country which is both far and near to you. it's a civilization. we come from the four ancient civilization that produced confucius and many other great men.

we come from a country that produced four great inventions of the world. and we come from a country who's 1.3 billion people is focusing on development and who is committed to seeking ha monious co existence and common prosperity of the rest of the world. we come from a country where the human rights under takes have achieved tremendous progress in a few decades. why are we here? i think we came here in a separate of mutual respect treating each other as equals, mutual benefits and progress to have candid dialogue with the united states to discuss strategies that are essential to people's existence, peace and development. we came here to discuss with

our american colleagues ways to build a positive, cooperative and comprehensive u.s.-china relations where drastic changes are taking place and we came here to seek better understanding, mutual trust. common understanding and cooperation so that we can make the case of our common sbrens bigger and more beautiful to the peoples and to the planet we live in together. can china and the united states build a solid edifice of a positive cooperative and comprehensive china-u.s. relations in the 21st century? i have spent 68 years of my life and i have done some research and thinking with my mind, changes that have taken place in this world. and i wish to look at the

future of china-u.s. relations with optimism. first of all, nine years into the 21st century we're now in a completely different world compared with the 20th century. today china, the united states and other countries are all living in a smaller global village. and we all face more and bigger global challenges that we cannot handle sing-handedly. we've actually -- we're actually in the same big both that has been hit by fierce wind and huge waves with our interest interconnected, sharing, and what we can do is to follow the trend of the development of the time try to

cross the wears together as passengers of this boat to seek harmonious co existence. secondly, thanks to our joint efforts in the past decades, huge progress has been made in our relations. although we have differences in many areas, united states will never become china and china will never become the united states. but the living fact is that china and the united states interactions have never been so frequent. our interests have never been interwoven so closely. and mutually cooperation has never been so broad and the driving force, the china-u.s. relationship has never been that strong. the two great peoples have tens of thousands of reasons to seize the historic opportunities to improve a strategic mutual trust,

actively enhance our relationship and even build a more beautiful communication. there's a saying in choib. in the past few years i have worked with the two deputy secretaries of state mr. sellic and negroponte have fruitful strategic dialogue. and today i am happy that i wo can work with secretary wang, secretary clinton and secretary geithner for the benefit of china-u.s. relations. i'm honored to work with secretary clinton to co-chair the china strategic dialogue within the framework. and we must live up to the expectations and fulfill our

mission to make this good beginning of the dialogue. ladies and gentlemen, dear, friends, i think we're now taking a part in building a history of two country tw different social system, ideology, working together to tackle challenges of the 21st century. we're now taking a part of building the history in new type of relations between big countries with mutual respect, in a globalized the 1st century. -- 21st century. can we manage to do that? my answer is we must work hard to make it happen. >> translator: yes, we can. that i and yes, we can. [applause]

>> translator: tha you. >> ladies and gentlemen, the president of the united states. [applause]

>> thank you. good morning. it is a great honor to welcome you to the first meeting of the strategic economic dialogue between the united states and china. this is an essential step in advancing a positive, constructive and comprehensive relationship between our countries. i am pleased that president wu shares my commitment to enhance our shared interest. president wu and i both felt that it was important to get our relationship off to a good start. of course, as a new president

and also as a basketball fan, i have learned from the words of yao ming, who said no matter whether you are new or an old team member, you need time to adjust to one another. well, through the constructive meetings that we have already had into this dialogue i am confident that we will need dowse standards. i want to acknowledge the remarkable american and chinese leaders who will cochair this effort. hillary clinton and tim geithner are two of my closest advisers, and they have both octane extraordinary experience working with china. and i know that they will have extremely capable and committed chinese counterparts in state counselor and tranone. thank you much both for being a. i'm also looking for to the confirmation of an outstanding

u.s. ambassador to china, governor john hudson who is here today. [applause] >> john has deep experience living and working in asia, and unlike me he speaks fluent mandarin chinese. he also happens to be a republican who cochaired senator mccain's campaign, and i think that demonstrates john's commitment to serving his country and the broad bipartisan support for positive and productive relations between the united states and china. thank you, john, for your willingness to serve. today we meet in a building that speaks to the history of the last century. a national memorial to president whoa drew wilson, a man who held office when the 20th century was still young. it is named for ronald reagan, a man who came of age during two world wars and who's presidency helped usher in a

new era of history. and it holds a piece of the berlin wall, a decade's long symbol of division that was finally torn down unleashing a rising tied of globalization that continues to shape our world. 100 years ago in the early days of the 20th century, it was clear that there were momentous choices to be made. choices about the borders of nations and the rights of human beings. but in woodrow wilson's day, no one could have foreseen the ark of history that led to a wall coming down in berlin, nor could that have imagined a conflict that came in the worlds between. the 20th century was a time of great progress. but that progress also came with a great price. today, we look out on the horizon of a new century. and as we launch this dialogue,

it's important for us to reflect upon the questions that will shape the 21st century. will grow to be stalled by events like our current financial crisis, or will we go operate to create balanced and sustainable growth lifting more people out of poverty and creating a broader prosperity around the world. will the need for energy free competition and climate change or will we build partnerships to produce clean power and to protect our planet. will nuclear weapons spread unchecked or will we forge new consensus to use this power for only peaceful purposes. will extremist be able to stir conflict and division, or will we unite on behalf of our shared security. will nations and peoples to find themselves solely by their differences, or can we find common ground necessary to meet our common challenges. and respect the dignity of every

human being. we cannot predict with certainty what the future will bring. but we can be certain about the issues that will define our times. and we also know this, the relationship between the united states and china will shape the 21st century. which makes it as important as any bilateral relationship in the world. that really must underpin our partnership. that is the responsibility that together we bear. as we look to the future, we can learn from our past. for history shows us that both our nations benefit from engagement that is grounded in mutual interest and mutual respect. during my time in office, we will mark the 40th anniversary of president nixon's trip to china. at that time, the world was much different than it is today. america had fought three wars in east asia in just 30 years, and the cold war was in a stalemate.

china's economy was cut off from the world and a huge percentage of the chinese people live in extreme poverty. back in our dialogue was guided by a narrow focus on our shared rivalry with the soviet union. today we have a comprehensive relationship that reflects the deepening ties among our people. our countries have now shared relations for longer than we were estranged. our people interact in so many ways, and i believe that we are poised to make steady progress on some of the most important issues of our times. my confidence is rooted in the fact that the united states and com country and china share a mutual interest. if we advance those interests through cooperation, our people will benefit and the world will be better off. because our ability to partner with each other is a prerequisite for progress on many of the most pressing global challenges. let me name some of those challenges. oeste, we can cooperate to

advance our mutual interest in a lasting economic recovery. the current crisis has made it clear that the choices made within our borders reverberate across the global economy, and this is true not just in new york and seattle, but in shanghai and since then as well. that is why we must remain committed to strong bilateral and multilateral coordination. that is the example we have set my acting aggressively to restore growth, to prevent a recession and to save jobs for our people. going forward, we can deepen this cooperation. we can promote financial stability through greater transparency and regulatory reform. we can pursued trade that is free and. and seek to include an ambitious and balance agreement or we can update international institutions so that growing economies like china play a greater role that matches their greater responsibilities.

and as americans save more and chinese are able to spend more, we can put growth on a more sustainable foundation because just as china has benefited from substantial investment and profitable exports, china can also be an enormous market for american goods. second, we can cooperate to advance our mutual interest in a clean, secure and prosperous energy future. the united states and china are the two largest consumers of energy in the world. we are also the two largest emitters of greenhouse gases in the world. let's be frank. neither of us profit from a growing dependence on foreign oil, nor can we spare our people from the ravages of climate change unless we cooperate. common sense calls upon us to act in concert. both of our countries are taking steps to transform our energy

economies. together we can chart a low carbon recovery. we can expand joint efforts and research and development to promote the clean and efficient use of energy. and we can work together to forge a global response that the climate change in copenhagen and beyond. and the best way to foster the innovation that can increase our security and prosperity, is to keep our markets open to new ideas, new exchanges and new sources of energy. third, we can cooperate to advance our mutual interest in stopping the spread of nuclear weapons. make no mistake. the more nations acquire these weapons, the more likely it is that they will be used. neither america nor china has an interest in a terrorist acquiring a bomb or nuclear arms race breaking out in east asia. that is why we must continue our collaboration to achieve the denuclearization of the korean peninsula and make it clear to

north korea that the path to security and respect can be traveled if they meet their obligations. and that is why we must also be united in preventing iran from acquiring a nuclear weapon and encouraging the islamic republic to live up to its international obligations. this is not about singling out any one nation. it is about the responsibility of all nations. together we must cooperate to secure all vulnerable nuclear materials around the world which will be a focus of our global nuclear summit next year. and together we must strengthen the nuclear nonproliferation treaty by renewing its basic bargain. countries with nuclear weapons will move toward disarmament, countries without nuclear weapons will not acquire them, and all countries can access peaceful nuclear energy. abound of terror cannot hold. in the 21st century, a strong and global regime is the only basis for security from the world's deadliest weapons.

and forth, we can cooperate to advance our mutual interest transnational threats. the most pressing dangers we face no longer come from competition among great powers. they come from extremists who would murder innocents, from traffickers and pirates who pursue their own profits at the expense of others. from diseases that know no borders and from suffering and civil wars that breed instability and terror. these are the threats of the 21st century. that is why the pursuit of power among nations must no longer be seen as a zero-sum game. progress, including security, must be shared. through increased ties between our military we can diminish costs is for dispute while providing a framework for cooperation. through continued intelligence sharing we can disrupt terrorist plots, dismantle terrorist networks.

through early warning and coordination we can check the spread of disease. and through a determined diplomacy, we must meet our responsibility to seek a peaceful resolution of conflict. and that can begin with the renewed push to end the suffering in darfur and to promote a comprehensive peace in sudan. all of these issues are rooted in the fact that no one nation can meet the challenges of the 21st entry on its own. nor effectively advanced its interests in isolation. it is this fundamental truth that compels us to cooperate. i have no illusion that the united states and china will agree on every issue. nor choose to see the world in the same way. this was already noted by our previous speaker. but that only makes dialogue more important so that we can know each other better and communicate our concerns with tandoor. for instance, the united states respects the progress that china

has made by listing hundreds of millions of people out of poverty. just as we respect china's ancient and remarkable culture. its remarkable achievements. we also strongly believe that the religion and culture of all peoples must be respected and protected. and that all people should be free to speak their minds. and that includes ethnic and religious minorities in china as surely as it includes minorities within the united states. support for human rights and human dignity is ingrained in america. our nation is made up of immigrants from every part of the world. we have protected our unity and struggle to protect our union by extending basic rights to all our people. and those rights include freedom to speak your mind, to worship your god, and to choose your leaders. these are not things that we seek to impose, this is who we are. it guides our openness to one another and to the world. china has its own distinct story

that shapes its own worldview. and americans know the richness of china's history because it helped to shape the world and it helped to shape america. we know the talents of the chinese people because they have helped to create this great country. my own cabinet contained two chinese-americans. and we know that despite our differences, america is enriched through deeper ties with a country of 143 billion people that is at once ancient and dynamic. ties that can be forged through increased exchanges among our people and constructed bilateral relations between our governments. that is how we were narrow our divisions. let us be honest. we know that some are weary of the future. some in china think that america will try to contain china's ambitions. some in america think that there is something to fear in a rising china. i take a different view, and i

believe president who takes a different view as well. i think china is a strong, prosperous and successful member of the community of nations. a future when our nations are partners out of necessity, but also out of opportunity. the future is not fixed but it is a destination that can be reached if we pursue a sustained dialogue like the one that you will commence today. and act on what we hear and what we learned. thousands of years ago, the great philosopher mencius says a trail through the mountains if used becomes a path in a short time. but if unused, becomes blocked by grasp in an equally short time. our task is to forge a path to the future that we seek for our children, to prevent mistrust or the inevitable difference at the moment from allowing that trail to be blocked by grasp your it

will always be mindful of the journey that we are undertaking together. this dialogue will help determine that the ultimate destination of that journey. it represents a commitment to shape our young century to sustain cooperation and not confrontation. i look forward to carrying this effort forward to my first visit to china where i hope it comes to know better your leaders, your people and your majestic country. together i am confident that we will steadily in the direction of progress and meet our responsibility to our people, and to the future we will all share. thank you very much. [applause]

>> in a few moments, the new america foundation hosts a discussion of u.s. relations with the arab world in a little more than an hour, fortunatelier president bill clinton talks about preventing childhood obesity. after that house financial services chairman barny frank speak as the national press club. later we'll re-air the comments by president obama, secretary of state clinton and secretary geithner. on "washington jourge" tomorrow morn, we'll look at the debate over health care with marilyn we areber serafini. and john larson chairman of the democratic caw cushion. representative jeff flake joints us to discuss his opposition to the earmark

process. and we'll focus on the relationship betweenist and china with gary hufbauer. "washington jourge" is live every day on 7:00at -- "washington journal" is live every day on 7:00 at c-span. >> tomorrow is the confirmation of sonia soto mo or. and tour the home of america's highest court. the supreme court this fall on c-span. join the conversation on civil rights and race relations with m.p.r. juan williams. that's live sunday on noon eastern on book tv's "indepth." >> now a forum on u.s. relations with al-jazeera and the arab world. hosted by the new america foundation. this is about an hour and 15

minutes. . c-span2. >> over new america foundation's web site. i've been hopeful of having wadah khanfar in our program series for quite a long time. he is one of the most interesting journalists that's been covering the middle east in sort of new and direct ways. and before i even get into the and before i even get into the question of al-jazeera and al-jazeera's growth, its growth in the u.s. market. recently al-jazeera english has gone 24-hour, 24/7 on important cable networks around the united states, but it's one of these phenomenons where you've seen emerge in a rapidly short period of time a major global sprawling news network. i was just recently in israel,

recently in athens, greece, and you see al-jazeera everywhere. and i think at the time when i became interested before the iraq war, the u.s. government would commend al-jazeera as the sort of growth of civil society and great of expression in the region, but then you began to notice as well that a lot of governments were uncomfortable with al-jazeera whether it was saudi arabia, israel, what later became the united states, and to some degree i do think it is the role of think tanks and proadvtage tours and journalism writers to eventually bite the hand that feeds them. you've got to walk a balance between reporting, dealing with things coming in, and i've been fascinated and impressed by the growth. and i'm one of the people in the united states who has long been supportive of al-jazeera's activities around the world and in the united states and had been disturbed by the discrimination that has been written about in terms of giving

access to al-jazeera and others. but let me tell you a few things about wadah khanfar. wadah khanfar is managing directer of the al-jazeera network. in doha he was, interestingly, head of the baghdad bureau in 2003. luckily not in the office when it was bombed. there was a controversy at one point where george bush in a discussion with tony blair allegedly joked about and talked about bombing thal ya al-jazeers office, and i at the time was fascinated by the revelations of this and wrote quite a bit about it. mr. khanfar wrote a great piece saying, mr. bush, why are you trying to bomb me or along those lines. some of you who follow our activities will remember the man who was active in this and who was in london. the u.s. government talk at any level, joking or not joking, about bombing a news bureau of

the arab world's largest news network. so we're at a new point. wadah khanfar has been trying to come to the united states every once in a while and has had visa challenges ever since this piece in the guardian. and, luckily, i think the obama administration is pushing reset with al-jazeera, pushing reset with wadah khanfar, he's here in washington, and we have a rare and useful opportunity to hear from him about how running the al-jazeera network matters, why it matters, where it's going and how he looks as an analyst and as a newsman as well as many of the challenges that exist in the middle east today. so it's a great pleasure for me to introduce wadah khanfar. i look forward to his presentation and then we'll have a discussion. so, please, welcome wadah khanfar. [applause] >> >> thank you very much for this introduction. normally people say this is the directer general of the most controversial channel in the world, you know? so luckily, you have not

introduced me like that. actually, i don't know why the controversy. and looking back atal al-jazeera which started in 19 # 6 -- 1996. from 1996 until 2001, al-jazeera was regarded as the foremost of freedom of expression and democracy, and we were celebrated actually by many circuits including the american administration at that time. in 2001 things have changed dramatically and immediately because al-jazeera had the only bureau in afghanistan when the events of september took place, and al-jazeera continued to report, the same professional standards that existed before 2001 actually were post-september, but we were faced at that moment in time by great criticism in many western sectors and many governments

including mr. rumsfeld who in many of his press conferences mentioned al-jazeera. you know, we tried to correct, we tried to write to him and to send messages that al-jazeera never, never shown any, any frame of big gotting. he continued to talk about al-jazeera. al-jazeera has never, ever broadcast anything -- [inaudible] and always used to play major role in defending journalists, especially those who have been kidnapped and tried to introduce something on the screen that might lead to their release. and we talk very open and frank situation and position on issues related to kidnapping and especially civilians and journalists. anyway, that's not the point. the point is during the last eight years from 2001, now we

are in 2009, i would like just to look back and say media failed people in general. i think a lot of news channels, broadcasting corporations and journalists did follow the official line on issues related to the middle east, iraq and afghanistan in particular. a lot of people were overwhelmed by patriotic feeling, and for a while they brushed professional standards aside, and they started, you know, defending official policies of government. i understand that journalists are great and brave when it comes to issues related to domestic politics, but on foreign politics a lot of news corporations followed the same line that spokesmen and women and that military and politicians actually introduced regarding the middle east. and, therefore, we were in front

of new type, huge one where journalists who like to take a side, where journalists are introducing the news with analysts and commentary that undermines balance and objectivity. al-jazeera did not do that. we continued with the same philosophy and professional standards that we had before 2001. the opinion and the other opinion. the opinion and the other within was the motto that al-jazeera launched in 2006, in 1996. the other opinion is important for us to listen to not because we like to sympathize with, not because we would like to defend, but because once we listen to the other opinion, i will be able to better judge the situation. i cannot understand the sociopolitical, you know, dynamics in the middle east if i only listen to those who i like or those who stand pro, you

know, certain kind of policies. it will make wrong judgment if i only listen to one kind of thought, you know? and this is why, i think, a lot of mistakes regarding iraq and afghanistan, political decisions that were made in washington emerged from the fact that people wanted only to listen to one voice, that they didn't want to listen to variety of voices, they didn't want to accept diversity within the middle east. because what we see today was actually spoken about eight years ago, but it didn't reach here because most of the western media didn't want these voices to appear on the screens. and it will appear. it will be as a marginal condemned kind of analysis, you know? so this is why we resorted to much more simplified understanding. we reduced the complexity of history for thousands of years in iraq into a slogan, removing

saddam hussein, englishing democracy. and -- establishing democracy. if you question it, you are not with us, you are against us. so there was some kind of atmosphere actually that led to regard al-jazeera as something from the other camp, you know? against us. and we are hearing, started to hear from washington and from london and from many other governments in the part of the alliance, we started hearing them talking about al-jazeera as the cause for destabilization in iraq and inciting violence in iraq. what happened to us actually when we were in baghdad? i was the bureau chief. one of our correspondents was killed. few were injured. twenty were detained in guantanamo, in -- were detained

in abu ghraib prison. some of them were tortured. we did speak about the torturing that was taking place in abu ghraib long time before any other western media spoke about it. it was not taken seriously even by journalists because they thought, you know, these guys are just propagating certain kind of propaganda against the americans. it was not at all. our journalists were tortured in abu ghraib, and until today the bombing of our office in baghdad and in kabul, we did not receive any result of any investigation or any apology as if the matter did not happen, and it continued as, you know, something normal. of course, for our audience and for our journalists and for the entire arab world, it was not normal because people were killed. i think i don't know if you have witnessed that, but the amount of sympathy, anger and frustration that day was

unbelievable, you know? why i'm saying so, i'm saying so because i'm not saying, you know, we are the only people who got it right, but we tried our best to act as journalists, not politicians. we did not want to take sides. in a moment of time when everyone was asked to take sides, and if you don't take side, it means that you are against the good people, and you are pro the evil people. i think we did not look at ourselves as judges of who was good and who was bad. we wanted to analyze, to understand, to report. we were not given that opportunity, but we continued with all this kind of difficulties, and today i stand in front of you and say that most of the issues that we reported about in iraq and afghanistan during the last eight years i can say and i argue that nothing was proven wrong since then. and i think a lot of people from the fallujah when we argued that there are certain weapons used, you know, and that was the night

later on we discovered it was right. the killing of civilians in afghanistan, now everyone talks about. the torture in abu ghraib, everyone talks about it. we were the first to raise these issues. we are not anti-american, and i'm sorry to say so because, unfortunately, a lot of people would like to see al-jazeera takes anti-american light. i don't think the arabs or muslims are anti-american. i think the arabs and the muslims love the american venues, they love the ideas that this country stood for: democracy, freedom of expression, liberty, all these kind of issues. we love it. al-jazeera itself was a result of a western technique. when we started in 1996, 70 of our journalists and editors who actually founded al-jazeera came from bbc originally. the last four interviews in al-jazeera arabic came from bbc.

so we did express this philosophy, and we're supposed to be part of this thinking and these values that all of us love and appreciate. so i don't think people are anti-american in the region, i think that people were anti anti certain policies and structures that were implemented without proper consideration. beside that, i don't think that really there is american sentiment whe and that is what aljazeera was trying to do. there is frustration. our region is going through a huge transformation. there are many hot spots, the most in the world. iraq, pakistan, somalia, yemen, palestine, it iran. that is our audience -- palestine, iran.

these are our audience. they sit in their bedrooms and their living rooms and watch what is happening next door, so here, aljazeera is speaking and talking to those people who are actually affected by this. so you would imagine that there is frustration, and bill anger, and that would be projected through aljazeera, -- and of little anger. -- and a little anger. i wish the day will come without having a headline on aljazeera news where there is no attack no killing and a frustration. on a daily basis, we are seeing these kinds of issues, and we,

as journalists, cannot brush aside and hide it and say the reality is magnificent. the reality is not magnificent. we continue to have a lot of difficulties. these kind of issues. how are we moving ahead? where are we going from now? mr. obama, did a great speech and he did end of the great speech in cairo. and the amount of response was overwhelming in the arab world. people fall for the first time they have a choice. they have new vision in front of them. before, they used to have no choice. they were asked either to take a side with me or against me. and now they have someone who is, franca, would like to hear your voice is. who would like to extend a hand. we are not anti-muslims. we're not anti-arabs. that was magnificent, beautiful.

following the opinion, that created a window of opportunity for dialogue. of course, there are people who would argue that this is magnificent speech, but in reality nothing has changed. some others will defend and say, you know, let us wait and see. you cannot demand from the man to change things overnight as this is a complicated change that will take place. but at least there is a debate of discussion. what does that mean for us? it means that there is an opportunity of healing, not only the relationship between the united states of america and the arab, but also healing the wounds from inside, inside. during the last eight years we have seen rising conflict,

between hamas, we have seen domestic problems in darfur or. we have seen rising tension in yemen. we have seen war in somalia. people are killing each other in pakistan. all of that is happening. it is not between the muslims and the americans here it is within. the crisis is now actually fragmenting. is deepening to an extent that we are in need for a time of the. we are in need for sorting out these problems to see what is left, otherwise day after day we are seeing casualties. and that would be very difficult and complicated to deal with if we do not open new chapter of relationship between the americans administration and the muslim world. so there is a need for us also,

and a lot of people who have been harmed by these kind of difference are not americans. we know that we don't want to continue living our lives and our children's lives in the shadow of killing and civil wars and conflicts. that is not the choice for a human being eventually has to live his life and look forward to a much more peaceful life for his children. media can play a major role of bridging the gap. but what kind of media? media that takes cooperation. media that can simplify think, refuse it, check point and a list of slogans. media that understands the social and cultural societies. media that knows the history, because history in the arab world is very important.

it is a huge issue. it is a very big. it is not something that has happened in the past. we can forget about. it continues to, you know, create new ideas, creates an atmosphere of thinking for all of us. and unfortunately, more and more journalists are bent on the media to understand the competent conflict that has taken place over the last thousand years. the next day they are on experts, analysts of the great conflicts that have been taking place for centuries. that is not the choice for media to be informative and to be excellent and understanding for the audience. we are not empowering people. we are giving people some data, fragmented ones that do not really create talents, you know. it doesn't create a local, you

know, understanding. the middle east, i look at the news. and i have been watching news during the last few days here. if you look at the middle east as the blackbox, people are killing people. everything is going wrong. you know, if i were an american i would say i don't care about. these guys are crazy. i think they are humans. they are not aliens. they would also love to live their lives, you know, like americans would like to live their lives ear we are like anyone else. we have children. we have a life. we would like to go back and enjoy our life and enjoy peace, but there are issues that are happening. and unfortunately, the important factor is very important. the fragmentation that is taking place in the region was a result of many things, but the most

important one was intervention without consideration to the interest of the people themselves. so that is something that should be looked at. it is not because we are crazy and make suicide bombing. it is not. it is because there are -- we are very complicated situation. since the first world war, this region did not see. it did not. supported by the west sometimes for certain metal interest. these regimes were undermined people do not see that the other is presented. they see them as puppets rather than leaders who have vision. so therefore much more balanced paradigm thinking. they would like to see something that would preserve them. this is why pro-arab nationalism

emerged and islamic movement merge and a lot of people emerge that kind of feeling that is a collective mind in the region. after the collapse of the empire we are now having fiftysomething states. and that keeps changing, you know, because sometimes there is separation. journalist should look at it carefully. to continue covering the region the way that we are covering, we are not serving the audience, neither are we serving political leadership or analysts. we are giving them or misleading and sometimes. it may be wrong decisions. i wonder if we really cover the middle east as we are to cover a. would we have a liberal system? what we as journalists be able to introduce knowledge about what is happening that could

really lead to something that might not have created this kind of violence? that we have to go through all the discovery at this moment in time in iraq and afghanistan. have journalists really been open to other avenues and indifferent to all kind of society factors and try to introduce understanding. we do not do that. this is why became partners with politicians. i do not accept politicians to lead the way for journalists. that is wrong. that has never been. during the last eight years it is the case. politicians have drove in the editorial lines for a lot of us, and that should cease to exist actually and we should start fresh. there is the possibility that we have in front of our audience. anyway, al-jazeera today we are lucky that people can see us

here in washington, because we are available. and for years now, we are here. you know, a lot of rumors were created about al-jazeera. i think now people can see for themselves or judge for themselves. we demand for the people to see al-jazeera and judges. judge us. it is on the screen. go watch it and see if what algeria's broadcasting something that you really has knowledge and give you with proper understanding. that choice, i did it for everyone. thank you very much. [applause] of course, my microphone is not working.

>> thank you so much for your outline and stimulating comments. time magazine, another publication that radially said you are one of the great arab leaders envision in the region, and i am interested in just posting this first question to you. when i am on al-jazeera shows i am often compared with clerics or scholars or other people from the region, you know, i do do see a different world views. there is a lot of doubt about the united states, even while there is fascination about obama there is doubt about his ability to achieve things. so as a leader, with visions in the region, what advice would you give up a barack obama, u.s. government, with what it's objectors are around the region to try to overcome some of those doubts? what are the measuring sticks, the benchmarks that your world needs to see to take the united states more seriously?

>> i think i warn against the micro involvement in the region. i have seen that people are trying to revisit the policy, the strategy. they are just beating about things, not the overall. i think the region is important for american, for many reasons. one of them we have rising powers now in the world, and the americans have to understand who could they deal with. the problem is if we were put in use just enhancing the data without looking at the overall picture, we might even be looking at things that we would not achieve much. people have, you know, they really appreciate the speech or the speeches. a lot of things have happened here. it was really something great. however, that might not continue forever because people have left to see something underground. we don't want to be caught again and semantics.

on issues that are lesser to palestine, palestine and iraq. we need something important and something with substance. and that's what i would say at this. >> right now i was just over discussing at a conference in europe israel palestine issues and settlements being a large part. i would be interest did in any thoughts you have on settlement. but one of the things that seems to be clear is that many, not all, but many arab muslims don't believe the united states is a fair broker, and less they see israel pay a cost or if they see some negative for israel. and likewise, israel in terms of talking about the very term pro-israel almost requires there to be a zero-sum loss for air of interest. did you see, does the network promote the notion, or do you see developing anywhere in the

arab world a notion that you can have a win-win solution that is not based upon one side getting a tilt from the united states and ultimately leads to a cost to the other? this is one of the biggest issues that perplexes me. >> we can take the issue, we can forever argue about the issue of settlement and then we can be caught in details. how many meter without talking about the big picture. the big picture is about the palestinians and the peace process. if you take right now the amount of suffering on the ground and the amount of economic crisis, and the fragmentation of the west area, it does not give a magnificent picture about what the peace process should be about. i think, you know, people are negotiating for how many years?

it is not getting much better. second, people do not see that this process is actually moving towards something that could maybe materialize. not the peace. we're talking about the process. the process should continue. that is something solid. and lack of vision with describing what exactly is the process -- a lack of vision. they are not brave enough to confront this, so we would like to go from fragmenting the scene. yes, i argue, a lot of people in the region that some people would argue we need something that is workable.

there is the balance of power. power. the most extremist through the region would see the news and understand that things are changing. and they do change. sometimes we look at those as aliens who do not understand anything and they are just one way or another. i think that is wrong. al-jazeera has been doing for the last, you know, 13 years in introducing all opinions, and i think the politicians should look at all openings, with everyone, speaking to everyone. all people who are influential should be, you know, included in discussion. that will be to something, but if you feel that people are excluded, i don't think that there would be part of any peace process. >> thank. let me open the floor. >> thank you very much for your

presentation. did you meet or would you meet with any american officials, and if so who and why? and second part,. >> i didn't plant that. >> focuses about algeria played in the identity, the feeling of being arab. any political movement in history to contend a single air, do you agree and if so was it the intention of al-jazeera? >> my visit was to speak at this form and choose the add some others as well. intercommunicate with our colleagues on the broadcast. as you know, we have the biggest broadcast an air of an english. and also to speak to some officials, some journalists. yes, we have of course certain meetings. and we are arranging some

meetings. regarding al-jazeera, we have never put our services as a politic movement. we have never thought of ourselves as a movement that we have thought of ourselves as a journalist. would like to tractors based on universally accepted practice, you know, provision of standards. however, if i interpret what you are saying, just to be clear, it was not us who demanded that position. it was not algeria that were to be the voice of the arabs. it happen that there was vacuum, this trust between the public and governments. and people who are looking for something to symbolically represent them, maybe they come to algeria as the voice of, you know, independent of government that really could do something. so the vacuum led to the status

that al-jazeera is enjoying as the entity who is coherent. people who watch the headlines, and that may lead to certain priorities as well in their minds, understand the region. but we have never really introduced ourselves as players within the region. we want to act only as journalists thank you. >> sorry? [inaudible] >> we have many officials in the white house, and we hope very soon to see some. >> i will be blogging about it later in the week. this gentleman right here in the microphone, please. >> i am a political analyst. in the arab american community, and american muslim community. short comment, any question. i am here is the press on your

hand to say you are filling a void, a needed void onward, onward. thank you very much. >> thank you. >> my question is we are community is concerned these days about something that the american administration seeking peace in the middle east seems to be promoting, which is normalizing a relations between or asking for normalizing relations between arab countries and israel. where the arab initiative is to do that after israel abide by relinquishing. your information and opinion. thank you. >> again, as i said, you know, i'm afraid that people will concentrate on the issue.

and people had hope and they still have some hope that what is happening in washington will lead to a change. and this is an opportunity and will not be for ever, you know, deliver is important on these issues. so far, what we are seeing, there is no, i would say a lot of people and journalists at least in al-jazeera would argue that they don't see very much of change, you know. what we see is magnificent discourse, but without action. and we are going through same stories we have been living through the last 30 or 40 years regarding the peace process. regarding the naturalization issue of israel, in my opinion that will never materialize that might change the region. >> right here in the middle.

>> i want to know what the reaction has been to your reporting on iran and whether there's any type of plans to have al-jazeera. [inaudible] >> first of all, we didn't report the elections of the iran as many other networks for both arabic and english news. >> will you put under the same restrictions? >> and eventually, immediately after the elections finished that same day, our reporters were asked to confirmed, and of course we continue to report through our field which has iranians working in iraq. unfortunately, i would say the story we still face on the story in iran. agile, images that were sent to judicious and we were not

allowed. and that was a problem. and we did like many others. on twitter on covering images. however, we have an excellent network within iraq from various groups covering the information that we may not be a good tool, that is regarding iran. in principle, al-jazeera actually is brainstorming the idea of expansion in general. i mean, we would likely have al-jazeera english now, but we would like in the future maybe to concentrate on certain other languages and mainly in the region, but i cannot say that we have a definite decision on that issue. >> i wonder first how, you know, i follow al-jazeera very

closely. i think you are very biased in reporting about when it comes to iran and syria, and hezbollah. you are pro than. you don't have even a second opinion allowed to appear on the issue. most of the time you are dished. >> let's get to the question. >> second, why this bias? why do you take all over the world to opinions except when it comes to these three issues? secondly, how can you sustain yourselves if, you know, you are establishment is zero, you have only the advertising, how can you sustain yourself? >> interesting questions. >> number one, the issue of iran. up i of course, disagree with you. that is not true entirely. we have taken very clear coverage on the issue of iran.

we monitored minute by minute. if you would like to say we are biased to other networks that cover the story of iraq, it is up to. but when it comes to us, when we have conservatives, we have to balance them at the same time on the same news politick. five minutes, five minutes. that is an establishment that we follow. unfortunately, others do that. some people did, they have taken again on the issue of iran, i have seen some kind of coverage in other media where people have, you know, just supporting one way of thinking. we cannot afford to do so. that would be a departure from our norm. the gardens of what we think of conservatives, for example. we have a choice. our relationship with iran was never a relationship between a tv relationship. twice, the first time al-jazeera was close because we did report about the only coverage of the

arab minority, or the people that iranians in the south was in al-jazeera. and a huge protest against al-jazeera. and then the second time it happened when we did start reporting about certain kind of conflicts in the inner society. and again, our deal was close in the 96 for one year. so our relationship with iranian government is not the most smooth but that did not lead us to take a stance against the iranian process, pro-muslim with more coverage. some people will judge us because they want us to take the same whereby okay, we are pro-muslim reformist. that is not the way we do things. when it comes to other issues like syria, our relationship with syria has never been the most smoothest and there will be many times we were a month to tv

stations that gave coverage inside syria and outside you. just two weeks ago, he was classified as the arch enemy and he was on our tv for one hour. and many other leaders -- [inaudible] >> i don't imagine any leader from the syrian opposition or any human abuse, that was not covered by al-jazeera. again, as i said we do not play a role of being the campaigners for certain opposition groups in order to wage war against the government that that is not our position. that is not what the cantu and will report about the good but they cannot ask us to be the campaigners against the region. >> i happened to notice what al-jazeera anchorman was arrested in syria. and so, you know.

but in any case, yes. right here. no, i'm sorry. we have rules. [inaudible] >> okay. >> is not a secret al-jazeera was sponsored and funded by government, you know. but, you know, my choice i would say that we are not very keen that commercializing al-jazeera. especially news channel. why? advertising in the region is controlled by government. they will not put ads on al-jazeera and as we have good relationship with government. we have to be friendly with all arab governments in the region. and that would be the end of al-jazeera as we know it. so therefore, we do not accept to be, you know, fully to put commercial standards. the agreement that we have has

been respected for the last 13 years. it does not dictate the policy of al-jazeera. qatar has benefited from us because it has hosted al-jazeera and al jara is also in the connection because it really made that are obvious on the international and region scene, but that does not mean that al-jazeera took a line or to be the spokesperson of their politics. that is not the tool. if it wasn't true we would have because many other channels in the region were established with billions of dollars, much more than was spent on aljazeera, but they could not really match aljazeera and its credibility. the always continue to be the mark of certain government. that was a red line that we did not cross over. >> my name is christina.

i am a unconsultant. i have lived and worked in the middle east for 10 years, and as such, i have a special knowledge with the american people. i have been a follower and admire your of aljazeera ever since you began, -- and admirers of aljazeera. -- an admirer of aljazeera. i do not just get my sources from the west. i really want to commend you. the service that you provide for the world community, not just for your own region. my question is, at the moment, do you have foreign journalists are working on your staff? >> yes, mm-hmm. >> and what is the editorial

policy regarding their coverage of the news? >> great. thank you. >> we have, actually, the most divorce newsroom in the world. -- diverse newsroom in the world. we have about 30 nationalities working in our newsroom. some are from america, from britain, from latin america, africa, asia. our policy is to look at the applicants regardless of his nationality, religion. nality, religion, culture, whatever the case because and by the way such kind of diversity in a newsroom is difficult to streamline in a certain direction. if there is a conspiracy established that would like to impose to bring all these people, diversity in al-jazeera is actually an assurance in that

we are independent because every journalists that joins al-jazeera was never pressured at all and we have people from all walks of life with us. never never dictated to them how they should be otherwise we would have been. >> the gentleman with his hand up. i'm blinded by the allies like plant -- can pricier but that's the right guy. >> i have a question, you mentioned in that based on al-jazeera coverage you don't want to your children to grow up in the shadow of guns and if you want everyone to have a peaceful future and things like this, but i was al-jazeera and i see things like the birth of celebration for the terrace from lebanon end uncertain -- similar glorifications of this type of thing and that i wanted to know how you can balance that with

what she said today. >> thank you very much. issues related to the concept of terrorism and principles, we have difficulty understanding or dealing with maybe there are certain issues regarding terrorism has not been clarified percolate especially the definition of who is a terraced into is not. this is why the policy of al-jazeera since the beginning was not to use the word terrorism unless it is qualified, the so-called terrorists. so-called terrorism. if we would like to take certain standards in describing who is a terrorist and is not we will be judges so via our arrive describing things as it is, we do say terrorist movement and we say the name of the movement. we don't say terrorists, we said the name of the leader and a group they are leading simply.

so if you come to the region, the issue of terrorism is littoral. a lot of people who remains for some people may not think there are terrorists and they will go into huge arguments. we as a media argumentative not think we should go into that discussion, we describe the story as it is without getting involved in giving judgment. is politically and i feel much better to distance ourselves from men's and by the way we are not in the only network for media organization in the world that seized from -- stops using the word terrorists so there are relative stories that we can cover and could look sometimes like the issues of promoting or not promoting. we were accused of promoting some of the day's end that was not the truth, we did cover some of the speeches as we cover every other incidents and newsworthy issue that happened in the region based on certain

professional standards. and we think that it is our duty to do so. a lot of people argued especially in the west that once you are promoting the terrace ideas and so forth, we thought it is not true. professional standards say that there is evidence when someone's basic is news and recover its but that does not mean we support and sometimes in did a brief have this kind of discourse because it would be followed by analysis have followed by a lot of discussion and a lot of people would have been doubtful about the issues we are teaching people to be rational in stories like that and speeches like that and allow them to have some kind of time to complete think about this so-called terrorist or that so-called terrorist. >> this gentleman here. >> thank you, center for

american progress. though the obama administration has recently engaged with the syrians and brushed the possibility of engaging with the iranians its stance on an engagement with hamas has pretty much mirrored that of the prison administration. do you think the time to engage has come and is this intangibles of the arab public sphere is looking for? and if you could time in as well tim and thank you, i like to say in journal i feel and that's wish to speak to all. i will give due from al-jazeera, when we started in 1996 arab media did not oppose the israeli as and took a stand because they think that hosting them is normalization and al-jazeera was the first tv stations to allow them on the screen including officials, military and including analysts. we were condemned at that time because this is not practical, we were going against the arabs.

when i stand in electro in cairo orç any other cabinet in the ab world as a media issue dow be confronted with issues. i think as a journalist and someone who has been in this reason that we need to talk to everyone. simply, and i think in order to talk to everyone you need also to think of them as someone who could a all unchanged and people do change. when you put someone on the screen regardless of how extremis is a, when you put them on the screen he behaves this way end of this course becomes more modern and general and i have in my mind is something that i say all is that the camel has in effect on extremists and many other people because it leads them to be a little more rational in their thinking

because they are not to breezing in their corners for their converse. they're reaching for the public and to sound a little more reasonable soul is talking to the people and allowing them to speak is important. in media and in politics. >> since you ask me to make a quick comments, i am probably quite publicly aligned him with brent scowcroft and the number of other people, carla hills, even a paul volcker and others have not called for the united states necessarily to buy latter linkage with hamas right away but to end the isolation of hamas and the penalties and other allies of the french come to mind in particular. my view is in the political terrain in the region want to allow one not to enjoy deal with this sort of -- it doesn't mean you abuse bad behavior's but not to have engaged and to me doesn't make sense in terms of driving our policy for the so i do believe in ending the

isolation of a hamas. of me say one thing about the obama administration, the folks that matter in making these are struggling over this themselves and a lot is going on right now this week as we speak. some have come from the center of american progress, folks want to try to make others have illegitimacy and looking like winners because they have been so undermined whether israeli governments or the u.s. and various points, the legitimacy and credibility has been undermined so they're trying to show the negotiations in moderate players can be winners and deliver positive public as to their people. my problem is in the current environment i call that the two much too late strategy. and fundamentally it depends upon it you not taking into account at all was has happened and of the bush administration and how that group collapsed in terms of legitimacy in the eyes of their people so i don't know

dealing with hamas is not a quick fix anything by not finding a way to look at its probably continues the incrementalism and inertia that has been preventing any sort of leave for the and i believe there is no incremental his way to sell many contending issues and you've got to begin in a very nixonian way, began imagining things to change the way prominent facial forces take us and that requires statistically it's something is the same pride impossible today but you've got to begin thinking about a different vision so i am definitely in danger. this gentleman here. i also want to ask, fox news, cnn, bbc, all have moved into the blogger arena and i am a blotter and you see anderson cooper has his blogging and other people, are you guys excited -- i should know this but i haven't seen is on al-jazeera inglis sides, are you

promoting bloggers, do you have the al-jazeera routers that are bloggers? how does blogging fit into your medi awareness? >> actually new media in particular for us is an opportunity and al-jazeera it is known in the region that is a tv station that defends the brokers because most of them come from difficult racemes, some were arrested and some of the blogs were deleted and so on. always we hold them for that and encourage this and we have a lot of the most active use of the new media and the region and encouraged a lot of this. there is a free web sites that al-jazeera supported from the beginning call the al-jazeera talk, regarded now as the most popular blogging side in the arab world and is open for journalists and the public a man. it is not associated with al-jazeera because what is written there is not necessarily a representation of al-jazeera, it is for people to say they

want to say but it is definitely an opportunity for al-jazeera. al-jazeera talk to, bill in itself has a website by the way one of the most popular in the arab world and al-jazeera inglis, we are in a process now of delivering our blogging within those sites so very soon we are going to have integrated in al-jazeera english. >> thank you. >> i wanted to ask if a source of the anti shia movements in the al-jazeera and especially in iraq and who love and on, what is the source? is your policy? second part of a question regarding the saudi relationship, you talked about the opinions and the fact that you don't receive instructions from the politicians but everybody knows and arab media and not sure about the americans

falling the saudis relations, you don't support saudia arabia, you don't derive any critics. your coverage actually is given much softer than the saudi press is also where is that sort of come from? from the top premier or --? >> is adjusting u.s. and that we have a t i sentiments, exactly so we are up to indicia erebus. and then i can listen to a lot of things and what is interesting about al-jazeera it has created so much diversity of opinion about itself that we are not i think we have been criticized by all kinds of people. you said that we are anti shia and arabic world, not in the iraq. you say that we are proa shia

and pro -- >> it looks like you are doing your job. >> of course, i say that but we are not and a lot of people working in our news from our shia and a lot are associated through shia and i myself when i was in baghdad i did not actually know who was shia and sunni and later i was educated. when he decided to have a the sectarian government's council we started discovering who is sunni and shia. the issue of saudi arabia, in the past i so the only source that we had was opposition people. right now, there is saudi arabia. whether it is enhancing or deteriorated, at least we have the