the persian gulf to shutdown will trade, double the price of oil around the world, set off a worldwide recession and hezbollah, which probably has 40,000 rockets, they will attack israel. hamas will do the same from the south. it will involve israel in two very hot wars very easily. it will be very dangerous and difficult for the israelis, a very hard choice to make. nonetheless i find it almost impossible to believe that they will accept 6 million jews living under the threat of nuclear annihilation, particularly given the history of the jewish people. and i think that will trump all other considerations. .

>> two questions on the apocalypse. [laughter] i am not sure if the chinese would do that. it is not in their self- interest.

if you owed the bank billion dollars, you can not bitter the bay controls it. we are not together. i think the threat over time is it they may try to wean themselves off. we will lose. it'll be catastrophic for the chinese, because then they will be holding a lot of dollars. that will evaporate. the wary is that we will inflate our way out of the dead said there will be a gradual loss of the value of what they are holding i think it is clever in the long run and they will try to diversify their holdings. to not show up at the auction

and to unload the dollars is a way of demolishing us and them. i do not think it is a mutually assured destruction. they are a very rational people who have a very long range view of history. the chinese look at this. >> we will be publishing his speech. it will be able lecture. -- be a lecture. thank you very much for being here today. we hope to hear your strong voice for many years to come. i would like to thank all of you as well for coming here today. we hope to be able to see you again at our next lecture series. if i could ask everyone to remain seated for a moment while

we exit. thank you very much. [applause] >> david axe observed military operations at the air failed. >> it is about a 45 minute drive from kabul. it is outside the city. it is a former soviet air base that has been converted into the major at nato logistical hub. all the supplies and people that come into afghanistan passed through here. they either stay there in the kabul area or they get sent out

into the ground convoys. they deliver the stuff or the people to the final destination. , at this sending them out to the secondary help of cantar distribution or out to the nort. they can sustain an issue. when i do an air drop where we get to drop in food immaterial to a village that a scud devastated by a flood that took out their crops and killed some of their people, when we go up there and read them goods and services like food and water,

they trust us. when they get a child they get hurt, the other day a child fell off a row, we to guard helicopters. we picked up the child and brought into the hospital and heels of that child. they will for ever trust us and know that we are there to help. we go out into a village that is being intimidated by the alabama. -- taliban. they leave that village. those people trust us. they are no longer intimidated and coerced by an enemy who is trying to dominate them in a way that is very aggressive and violent. these are way that this base wins the hearts and minds of the people.

>> you got a fast a rate of aircraft to doing things. the orbit around and look for suspicious activity. you have aircraft that fly close to missions. when they get into a sticky situation, and they call those guys in, fired guns, a drop bombs. some combine the two roles. they swoop in and drop the bomb. >> why is the support important to the overall mission in afghanistan? >> it is in the advantage, and eye in the sky to get a certain vantage point. they are stuck in a valley. they cannot see what is on the other side. we can help provide that look. additionally, the firepower is decisive enough to help them get

back to their operating base. it is that combination of increased technology. it is not really affect our job. we are here to support the ground commander. if they decide the situation dictates bonds to be used are not to be used, that is ultimately his call are not his call. by then not following the lead, it does not affect what we do. we bring the bomb to the fight, but we bring our targeting sites as well. it has not affected us at all. >> this is the sniper advanced targeting. this is primarily the center that we use for weapons officers primarily to look at the ground

and be able to give that stated bandage to the ground commander, to be able to see things cannot see. this allows us to track any and all people that we may need to look at. we will be able to check vehicles and people, but the buildings, from a fairly good distance away. this is our primary weapon in this fight. a gift is the ability to look at the ground and get the surveillance on the ground to the commanders that he may not be able to do. we are able to download the picture that we are looking at to the terminal air controller said that all of us are able to get on the same page and have a common operating picture so we can ensure we are targeting the correct thing or looking at the right thing. >> what is the advantage of having to people? >> it allows a division of

duties of one person can be focused on flying the aircraft. meanwhile, the other person is able to focus almost exclusively on the targeting pods used in order to live the enemy. >> began the front flies. the guy in the that uses the bomb. >> he uses the center is available to help find the things we are looking for in the ground. they both play fairly soon begin role in getting the bombs of the ground. >> to use the directly to the troops on the ground or do you have an intermediary? >> we have those on the ground. >> this is a five and a pound joint mission. the technology that we have allows us to target it in many

different ways. one way we use it in afghanistan is to build up and make up the structure around where we may be targeting the enemy. we are able to set the fuse on is fun to float a little bit underground. it allows us to damage the structure and anything around the target area that we do not want to damage. we want to leave as much as possible for the afghan people. this allows us to minimize the civilian casualty damage. >> this is a 20 millimeter gun. what it allows us to do is have a target with low collateral damage.

it allows them to precisely get into where we are going and not worry too much about any damage of around it. this is becoming one of the weapons of choice but the effects -- choice. >> is up to the pilot to use this weapon? >> it can be. this gun was billed for air to air configuration. we have to point of the grunted the vacantly to do that. it allows us to get in close. >> this is our basic survival vest. we carry our 9 millimeter weapon. that is if we end up isolated on the ground. we have our harness. that is slowly pick up to the aircraft with. there is a parachute in it.

at is what is going to attaches to the parachute in the event of an ejection. we have our suits. this is to help us some of the gravitational forces that we will see in flight we are going pretty fast and try to term. we use this during the air-to- ground straight shooting to the ground. we go fast to the ground and pulled away from the ground. this helps us with some physical workout type stuff. that is so we did not pass out in the air from the deforest. it does not happen too much in afghanistan for th. this is the home at the eeoc in

many other air force fighters. we have a built in light to use that night as well as the night vision goggles and attached to the top of our helmets. that is one of the best weapons that we have to be able to see the ground. for some of our night missions, we will take these night vision goggles out. these allow us to amplified the indian light that is already out in -- the ambient light that is already out. the way this will fit is similar to that. looking through this, it allows you to see any type of light from the ground. a lot of times, this will be our

first clue that something is going down on the ground. >> do you ever get a chance to interact the guys you support on the ground? >> asaph the the. a lot of time the people -- absolutely. a lot of time to get people when their mission is complete. they will stop by the squadron and come by to talk to us or think guests are given some feedback on how we can do better -- or thank us or in give us some feedback on how we can do it better. >> sometimes we do nothing but over it in search of the location. there are other times when things really pick up. it is really busy in the short amount of time. >> tell me about your most memorable mission. >> one is that there were our

guys trying to exit out of a location. they are getting small arms fire from the hills. they were getting shot. they had me drop a bomb on the hillside to stop the firing. once the bomb hit, any activity ceased in they were able to get out of there. it was a rewarding mission. another one, i was watching for me when in ied went off where i was watching. the whole platoon was on foot were hit by hitied. quickly went down there and showed a force. that is letting the bad guys know we are here now and you should sell your doing more we will kill you. and you should stop what you are doing or we will kill you. they told me that our show of force was more scary to them

then the ied itself. >> do you often get support? >> this is unique because they happen to come to the hospital here. they do not often make it to this hospital. >> how do you emphasize protecting the civilian population when you are doing airstrikes? >> we do everything in our power to make sure the enemy, who is trying to draw as into this enemy by using enemies as human shields come to never allow them to draw. the enemy will fight from a village. they will bring women and children into a house and shoot

from that house knowing the women and children are there. we do everything in our power to not engage, to avoid those situations where there could be innocent people involved. president obama, rightly so, and general mcchrystal brought a new way of understanding what is going on here so that business as usual with american's way of fighting a war changes. it changes that we take more care to make sure not one innocent person dies if at all possible. but i have to ask this. apparently, fighter pilots like to grow moustaches. why is that? >> i guess it goes back to

vietnam era used always grow moustaches. one guy shape his mustache and in the next day got -- shaved his mustache and the next guy shot down. he shaved beginning got shot down a second time. >> what about guys to cannot grow a mustache? >> [inaudible] >> and saw a woman wearing a fake mustache. >> david axe in afghanistan in october and november. we produce several videos for this. you can find them on our video at c-span.org. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> up next on c-span, election night speeches from senate

candidates in massachusetts. the inauguration ceremony for newly elected new jersey governor chris christie. >> this weekend on a book tv, john mueller believed the chance of a nuclear terrorist attack on the u.s. is all smaller than people think of th. we did get the impact on the automobile on modern society. you can find the entire schedule at booktv.org. >> next to the, president obama delivers his first eight of the union address to congress, laying out his vision for the future of the country.

this is next wednesday january 27 and 9:00 p.m. eastern on c- span. >> of massachusetts voted for a senator today. in a moment, we will bring use of brown's victory speech. first, here is his opponent, democrat martha coakley. >> [chanting "martha"] >> thank you very much. [inaudible]

>> thank you. thank you. i just got off the phone with scott brown. i offered him my congratulations and best wishes on his victory tonight. i wished to him, gail, and his two daughters well. we wished to get better news tonight. we did not. i want to take this moment for all of you in this room and those of you who are probably still out working, you pour your heart and souls into this campaign. there are thousands of you out on the street since september. i want to say a sincere thank you for everything you did it, not just for me, but for the campaign. let's give yourselves a huge round of applause for what you

have done. thank you. thank you. i will not forget the fierce determination with which we approach this, not just about this campaign, but the things we believe in and still believe then and we will still fight for after tonight. i know you will join me in that. we never lost our focus for our determination. you never demonstrated discouragement as far as i am concerned. i know how hard we worked. you were there every step of the way as he went forward in the primaries through tonight and

focused on the issues that i believe everyone in massachusetts does care about and everyone in this country should be focused on as we go forward. i want to say a very sincere and loving thank you to my husband. [applause] i had him out and the campaign trail for the last couple of days. i can tell you there are at least two dogs that are very happy about tonight's vote. we are going to be back with them. i have to think my family, many of whom are here behind me, my sisters are all here, my nieces and nephews, the terrific staff on this campaign. if you worked with our staff and everybody else you gave

sweat, but come in tears, you know how much heart and so we put into it. it was my honor to be working with them and you during this campaign. you have become an extended family for me. i tell some people might in a dysfunctional family. that is ok. i'll never forget the passion and energy. that includes the friendship of everybody who has worked with us. i want to thank those who was

with us here on sunday. he just called me. he said that we cannot win them all. he knows better than anyone. he appreciates what i did and what you did and he extends his heartfelt thanks. as i know from losing a campaign several years ago, i feel very strongly about that if you do not run you cannot win. you do not always win all the time. they put in our best efforts. sometimes it is more important to travel far than to arrive. [applause] we will continue to travel. i know that.

i know that many of you had the pleasure of seeing president clinton as he was on the campaign trail. i want to thank him. i need to send my thanks to vicki kennedy who campaigned with me all weekend. she was the source of dignity and grace and humor. she gave me a good tip. she said i am channeling my inner ted. much love to her and her family in this endeavor. this is the deal.

although our campaign and tonight, we know that our mission goes on. [cheers] i am heartbroken at the results. i know that you are also. i know that we will get up to get it tomorrow and continue this fight even with this result. there will be plenty of wednesday morning quarterbacking about what happened and what went right or wrong. i know that everyone is brutally honest on my own performance. we will be honest about the assessment of this race. although i am very disappointed, i always respect the voter's choice. anyone who is in on the campaign trail has seen the anger of folks who are frustrated and concerned.

they are angry about health care issues. they are worried about inability to properly care for those who are fighting. i had hoped in the best interests of our state and the country to go to washington to address these issues. i hope that as a nation and as a commonwealth that we can do better in the future. i will continue to fight in address them here but everyone in massachusetts who cares about these issues. for me and for you, it the campaign comes to an end. there is plenty of work to do here is massachusetts. we will always remember our trip they senator ted kennedy and his words, "the work begins anew.

the hope rises again. the dream lives on." thank you. thank you. [chanting "martha"]

>> thank you very much.

i'll bet they can hear all this cheering down in washington, d.c. and i hope they're paying close attention, because tonight the independent voice of

massachusetts has spoken. [cheers] from the berkshires to boston, from springfield to cape cod, the voters of this commonwealth defied the odds and the experts. and tonight, the independent majority has delivered a great victory. i thank the people of massachusetts for electing me as your next united states senator. [cheers] [chanting "41"]

every day i hold this office, i will give all that is in me to serve you well and make you proud. most of all, i will remember that while the honor is mine, this senate seat belongs to no one person and no political party - and as i have said before, and you said loud and clear today, it is the people's seat.

[chanting "people's seat"] interim senator paul kirk has completed his work as a senator by appointment of the governor, and for the work he has done, i

i want to thank him. i want him think him very much. thank him. the people, by their votes, have now filled the office themselves, and i am ready to go to washington without delay. i also want to thank martha coakley for her call of congratulations. a hard contest is now behind us, and now we must come together as a commonwealth. this special election came about because we lost someone very dear to massachusetts, and to america.

senator ted kennedy was a tireless and big-hearted public servant, and for most of my lifetime was a force like no other in this state. [applause] his name will always command the affection and respect by the people a massachusetts and i said to be filled the same about her. there's no replacing a man like that, but tonight i honor his memory, and i pledge my very best to be a worthy successor.

i said at the very beginning, when i sat down at the dinner table with my family, that win or lose we would run a race which would make us all proud. i kept my word and we ran a clean, issues oriented, upbeat campaign - and i wouldn't trade that for anything. when i first started running, i asked for a lot of help, because i knew it was going to be me against the machine. i was wrong, it was all of us against the machine.

tonight we have shown everybody now and that you of the machine. i'm glad my mom and dad, brothers, sisters, and so many family members are here tonight. once again, before i go any further, i want to introduce somebody very special... that is my wife, gail.

and as you know, my wife gail couldn't join me on the campaign trail because of her work as a boston tv journalist. but i will let you in on a little secret. she didn't stay neutral today, and she voted for the winner. i rely as always, on gail's love and support and that of our beautiful daughters. they are both available, in case anyone is watching throughout the country.

only kidding. only kidding. only kidding but if arianna devaney isn't. ayla is. this is arianna. this is ayla. i can see i'm going to get in trouble when i get home. arianna will be returning a day or two late to her pre-med studies at syracuse, because she's been giving her all to this campaign. as always, arianna and her sister ayla have been a joy to gail and me, and we're so grateful to them both.

even before her campaign performances, millions of americans had already heard ayla's amazing voice on "american idol." as boston college basketball fans know, she's also pretty good on the court. if the president thinks they've e of basketball courts there. [cheers] when i spoke to the president, the first thing i said was, would you like me to drive the truck down to washington? [cheers]

i ask him to pick his best player in the could take them on a two on two. thankfully, he had eight good sense of humor. i am thankful for the folks coming reaching out. i'm grateful to all those from across massachusetts who came through for me even when i was a long shot. i especially thank a friend who was there with encouragement from the very beginning, and helped show us the way to

victory - former governor mitt romney. i'll never forget the help of another man who took the time to meet with me months ago - who told me i could win, and gave me confidence for the fight. it was all so characteristic of a truly great and heroic american, and tonight i thank my new colleague, senator john mccain.

on a night like this, when so many people mark your name on a statewide ballot, you think back to the first people who gave you a chance and believed. for the trust they placed in me, and for all they have taught me, i thank my neighbors and friends in my senate district and especially my hometown of wrentham. the cause and victory that all america has seen tonight started right let me tell you when i first got the feeling something big was happening in this campaign. it was when i was driving along -- i knew things were starting

to click when i saw a brown yard sign that i hadn't actually put there myself. this little campaign of ours was destined for greater things than went far beyond the name on the sign. it all started with me, my volunteers. it ended with air force one making an emergency run to logan. i didn't mind when president obama came here and criticized me - that happens in campaigns.

but when he criticized my truck, that's where i draw the line. we had the machine scared and scrambling, and for them it is just the beginning of an election year filled with surprises. i can tell you that. they will be challenged again and again across this country. when there's trouble in massachusetts, there's trouble everywhere. and now they know it. [chanting "usa"] in every corner of our state, i met with people, looked them in the eye, shook their hand, and asked them for their vote.

i didn't worry about their party affiliation, and they didn't worry about mine. it was simply shared conviction that brought us all together. and for that i am very thankful. one thing is clear, voters do not want the trillion-dollar health care bill that is being forced -- forced on the american people. this bill is not being debated openly and fairly. it will raise taxes, hurt medicare, destroy jobs, and run our nation deeper into debt. that is not anything to a club about. it is not in the interest of our state and our country.

we can do better. [chanting "yes w2e can"] when i travel throughout the state, i've had a lot of fun. if you guys are all having fun. thank you. we have more of a show coming for you. when in washington, i will work in the senate with democrats and republicans to reform health care in an open and honest way. no more closed-door meetings or back room deals by an out of touch party leadership. no more hiding costs,

concealing taxes, collaborating with special interests, and leaving more trillions in debt for our children to pay. in health care, we need to start fresh, work together, and do the job right. once again, we can do better. i will work in the senate to put government back on the side of people who create jobs, and the millions of people who need jobs - and as president john f. kennedy taught us, that starts with an across the board tax cuts for businesses to create jobs, but more money in people's pockets to stimulate the economy.

it is that simple. i will work in the senate to defend our nation's interests and to keep our military second to none. as a lieutenant colonel and 30- year member of the army national guard, i will keep faith with all who serve, and get our veterans all the benefits they deserve. and let me say this, with respect to those who wish to

harm us, i believe that our protect this nation - they do to enemies in wartime. [chanting "usa"] that make a clear. they do not grant rights and privileges and enemies in war time. in dealing with terrorists, our tax dollars should pay for weapons to stop them, not lawyers to defend them.

i cannot believe i'm on the stage with him. i am telling you. it is just a wonderful to not only be on the state chair, but all of the folks out here. one did make a special thanks to my mom and dad for putting up

with me. thank you, mom and dad. thank you very much for respecting them. i know i am off script. we are talking about raising taxes and giving you right to terrorists the date is the wrong agenda for our country. what i've heard again and again on the campaign trail, is that our political leaders have grown aloof from the people, impatient with dissent, and comfortable in the back room making deals. and we can do better.

they thought you were on board with all of their ambitions. they thought they owned your vote. they thought they couldn't lose. but tonight, you and you and you have set them straight. across this country, we are --if they are covering me --we are to win a majority. if anyone still doubts that, in the election season just massachusetts.

what happened here in massachusetts can happen all over america. we are witnesses, you and i, to the truth that ideals, hard work, and strength of heart can overcome any political machine. we ran a campaign never to be forgotten, and led a cause that deserved and received all that we could give it. and now, because of your independence, and your trust, i

will hold for a time the seat once filled by patriots from john quincy adams to john f. kennedy and his brother ted. as i proudly take up the duty you have given me, i promise to do my best for massachusetts and america every time the roll is called. i go to washington as the representative of no faction or interest, answering only to my conscience and to the people. i've got a lot to learn in the senate, but i know who i am and i know who i serve.

i'm scott brown, i'm from wrentham, i drive a truck, and i am nobody's senator but yours. let me to say in conclusion, thank you from the bottom of me and my family's heart. thank you for your continued support, but i am nobody senator except yours. [applause] thank you prada thank you very much. ♪ i've got a feeling that tonight is going to be a

good night at tonight is going to be a good night that tonight is going to be a good night ♪ that tonight is going to be a good night that tonight is going to be a good night that tonight is going to be a good, good night i feel it ♪ that tonight is going to be a good night. that tonight is going to be a good nine that tonight is going to be a good night ♪ i feel it. that tonight is going to be a good nine ♪ that tonight is going to be a good night that tonight is going to be a good, good night ♪ let us live it up

i've got my money lets spend it up let us take it up ♪ i know that we will have a ball

>> : thanks very much. [applause] >> : mr. speaker, members of the assembly, fellow hoosiers, good evening. this once a year we gather as a family might to take stock of our state's health and to assess the performance of our public duties. the sense of privilege one feels on this podium never diminishes, nor the sense of duty to report honestly and accurately on our family's situation and the health of our public institutionses. it's our way in this state to speak

plainly and to face reality squarely. the plain truth is that life is difficult tonight for far too many hoosiers. an economy booming at full employment a year and a half ago has taken several steps back. one in 11 workers is unemployed, one in six people on medicaid. the average hoosier income fell last year by almost one percent. we are distressed, disappointed, and dissatisfied at all this. i know we are united in this chamber in seeking to do what government can to work through and out of the national recession in which we are enmeshed. but hoosiers are also known for resilience for avoiding self-pity, and for keeping a sense of perspective. we know that we have battled

through tougher times before. we know that the possessions, the technology, even the shrunken incomes in our homes today are still vastly greater than anything hoosiers knew just one generation ago. we know that our jobless rate, though intolerable, is below the national average and well below that of neighboring states. we also know that this is not the only such meeting taking place this month. across america, 49 other addresses are being given, almost all under conditions far more grim than those we confront. the one national study available says that our budget problem is one of the smallest in the nation. our day's most celebrated business sage says "you don't know who's been swimming naked until the tide goes out." well the tide is out, and now we know. compared to its budget, illinois' fiscal problem is four times larger than ours,

arizona's five times, california's six times. out there the governor recently exclaimed in desperation, "how could we let something like that happen?" so far at least, no one in this room has to ask that question. a young seaman sought a veteran mariner's advice, asking what do i do when i find myself in a galeforce wind with a dangerous reef to leeward? to which the old sea captain replied "what you do is, you don't get yourself in that position." through the discipline of legislators on this floor, and the superb, businesslike management of my colleagues in those balconies, indiana stands in a position very different from virtually all our sister states. they crashed on the reef many months ago. they have seen their credit ratings

downgraded and their borrowing costs soar. indiana has a triple-a credit rating for the first time ever, saving millions in interest costs for our cities, schools and universities. we will be using our carefully built reserves to get us through this next year and a half. any reserves most other states had have long since disappeared. they have slashed, sometimes virtually halted, the construction and repair of state roads. in michigan they are grinding asphalt roads back into gravel as though to regress by a century. but here, we are building for indiana's future at a rate twice the previous all-time record. all over indiana, the dreams of decades are becoming real: the hoosier heartland corridor, the fort to port highway, us31 from south bend, i-69, and hundreds of others, all at full speed, under budget, ahead of schedule, taking shape before our eyes. after growing

education spending five years in a row by a total of 12 percent, we were recently, reluctantly, forced to trim it, by some three cents on the dollar. but all across the country, education spending has been reduced by vastly more: by twice as much in places like washington, nebraska, and connecticut, by three times as much in virginia, mississippi, and utah, four times as much in minnesota and south carolina, six times as much in alabama. around our nation, states have closed parks, stiffed vendors, thrown people off medicaid, stopped plowing snow, and released thousands of dangerous criminals from prison early. overnight last night, the

citizens of iowa were protected by 7 state troopers total. we have done none of those things and don't intend to. saddest of all our sister states, at least 40 of them, are doing the worst thing possible in times like these. they are raising taxes, adding to the burden on families already in distress, and making their economic climate even less attractive to new jobs than they were before. michigan, wisconsin, new jersey and at least 11 more have raised income taxes. ohio, oregon, minnesota, and 30 more have raised gas taxes. many states have raised multiple taxes at the same time. i hope you will join me in saying tonight to the people for whom we all work, we will make the hard choices, we will stretch, the available dollars, we will do whatever is necessary, but we will not take the easy way out and we will not make this

recession worse by adding one cent to the tax burden of our fellow citizens. for us, [applause] for us economy in government did not begin with this recession. together we brought this state from bankruptcy to solvency over a five-year period of careful budgets, stewardship, and reform. per capita state government spending in indiana is now the 6th lowest in the nation, an 8-place improvement from a few years ago. state government has two-thirds fewer airplanes, thousands fewer vehicles. we have the fewest state employees since 1982. we have heeded the mariner's instruction. what we did was,

we didn't get ourselves in the position of other states. and yet the gale of shrunken revenues is still blowing. the reef of huge service cuts or higher taxes is still close alee. solvency, like freedom, requires eternal vigilance. we could be michigan in a minute of meekness, illinois in an instant of irresolution. the budget you passed just six months ago may have seemed reasonably frugal at the time, but almost immediately we could tell that it spent beyond our declining means. if we had done nothing, its spending levels would have obliterated our entire state reserve by six or seven months from now. so we have acted, and we will act again as necessary. i thank this assembly and our fellow citizens for understanding the very unwelcome decisions we have made to date. we will need your continued understanding, for more hard calls are probably coming. we

will make those for which we already have the authority. but there are savings measures for which we need changes only this assembly can make. and so my first request is for legislation to enable the saving of some 70 million dollars through a host of new economies. the largest of those would permit us to manage our two pension funds, perf and trf under one administration. absolutely nothing would change in the benefits, or the amount of funding or in the totally separate, independent status of these systems. all that would change is the amount paid out in investment fees, when we bid the job as one large bundle. if someone's wall street bonus is a little smaller next year while we save indiana taxpayers 40 or 50 million dollars, i think we can all live with that. we need the savings this

bill would make possible. they are equivalent,for example, to one percent of our k through 12 payments, or five percent of our higher education spending, or ten percent of our combined law enforcement budgets. far better to reduce nice-to-do expenditures in state government than to make even tougher the must-do tasks of educating our young people and protecting the public safety. i make a second request in the name of some of the bravest and most deserving of all those hoosiers struggling this evening, the single parents of our state. there is no one more contemptible to me than a person who brings a child into this world and then fails to live up to the duties of parenthood. and for those who compound their absence by refusing their court-ordered duty to pay child support, i have even less respect. after five years of hard effort, we have raised the percentage of child support collected from about 50 percent to 58 percent. this of course is still

unacceptbly low. the best states are upwards of 70 percent. we need new tools to make further headway. for instance, allow us to see that a delinquent father who wins money in one of our casinos shares some of the take with his children. every percent of child support improvement sends 7 million dollars directly into the pockets of some of our neediest households. representative linda lawson and senator richard bray have joined to help us. please give your bipartisan support to the bray-lawson bill and let's provide millions of dollars to some of the homes which need them the very most. all of us tonight are rightly eoccupied with the recession and the problems it presents to our public services. but in time these hardships will pass.

what must not pass is an opportunity to continue indiana's steady progress in reforming our public institutions. in 2005 you approved our top-to-bottom overhaul of the ethics rules for the executive branch. we tightened the gift rules, protected whistleblowers, stopped the resolving door between government and lobbying, and stiffened penalties for any violations. we created an inspector general and a new battalion of fraud fighters to police this new era of higher standards. the dog that doesn't bark rarely gets noticed, but let's notice tonight that armed with the tools you made possible, indiana has seen five years of scandal-free government and we are determined to keep it that way. and so all hoosiers

should welcome the excellent initiative of your leadership to bring similar reform to this, the senior branch of our government. mr. speaker, mr. president pro tem, i applaud your proposals to raise the standards to which legislators will now be held. it will enhance the quality of your decisions and the confidence of our citizens in those decisions. thank you for stepping forward so boldly. i look forward to signing this important new law. while you're at it, please respond to the plea of mayors of both parties and all parts of our state, and end the egregious conflicts of interest that occur when public employees sit on city and county councils, voting on their own salaries and overriding the decisions of their own management. how we ever permitted this to occur in indiana is one of those mysteries of history, but now is an ideal time to strike

another blow for good government and end this abuse forever. in another area reform has been well begun, and is ready for a second chapter. from this platform a year ago, i thanked governor joe kernan,a, and their commission colleagues for a superb set of proposals to modernize indiana's pioneer days system of local government. a state committed to protecting taxpayers, and limiting government to the role of the people's servant, has no business maintaining more elected politicians than states twice our size. it's wasteful, it's antiquated, it produces poor decisions, and it obscures the public's ability to assign either credit for success or blame for failure. this assembly has taken the first steps toward cleaning up this anachronism. you have dealt

with five of the commission's 27 recommendations,most notably the elimination of township assessors. you reduced the number of cooks in the assessment kitchen by about one thousand. having as many as 22 different assessors setting property values in a single county was a formula for unfairness, waste, and all too often, corruption. moving assessment to a single accountable county official was a matter of simple common sense. the exact same principle applies to poor relief and fire protection, still handled as they were in 1848. i hope i have seen for the last time new half-million dollar fire trucks bought in fire stations a couple blocks apart because two totally separate township boards were involved. just as you already did for libraries, we can maintain local distribution of poor relief, local identity and leadership of our fire departments while moving resource and taxing decisions to the county level, where they

can be made rationally and for the maximum benefit for all citizens. in the process, we can save millions and delete three thousand more political offices for which there is rarely any competition anyway. and we can put an end to the widespread nepotism which even when good people are involved, simply doesn't pass the test of good government. and as we reduce the number of politicians, let's reduce the number of elections we hold. the commission's suggestion to shift municipal and school board elections to the fall of even-numbered years would not only boost turnout for these important offices, it would save tens of millions of dollars for our hard-pressed local governments. this may be, as we say, a short session, but we can still take a long

stride toward modernization of our top-heavy and expensive local government. in no area is reform more urgent, or more critical to indiana's future, than in education, and here the news is excellent and the momentum even stronger. 2009 was a breakthrough year in improving the way we prepare our young people for the lives and the work ahead. first, this assembly heeded the call of president obama and others and lifted indiana's backward-looking caps on charter schools and on considering student achievement in evaluating teachers. then our professional standards boards, led by our superb new superintendent tony bennett, acted to strengthen standards for new teachers and to open both classroom and leadership positions to those whose hearts call them to teaching from other walks of life. next, we must address the single

greatest cause of student failure, the inability of so many of our children to read proficiently, if a school accomplishes nothing else in a child's decisive first years, it simply must enable him or her to read and comprehended the english language. yet too often failure is masked by the practice known as "social promotion." sending an illiterate child on to higher grades is unfair to the next teacher, damaging to our state's future, but cruelest of all, disastrous to the young life being blighted by that failure. if, after four years, the system has failed in this most fundamental duty, then it will simply have to try again until it gets it right. i ask you to pass our bill to stop social promotion and to say to the world that indiana never gives up on its children, not one single kid. two more

actions can stamp 2010 as a historic moment for better government in our state. first let's set the stage for the fairest, most reasonable and non-partisan redistricting ever seen in indiana. too many times in american history, legislative boundaries have been drawn to favor haves over have-nots, ins over outs, incumbents over newcomers. the worst examples of gerrymandering and politician protection can be found in other states, but a glance at indiana's current lines shows that they are nothing to be proud of. we praise tonight the bipartisan expressions of intention that indiana's next redistricting be its fairest ever. members of both parties have offered constructive ideas

for lines that make more geographic, demographic, and just plain common sense than today's. let's commit to the kind of principles that assure hoosiers that in our state, voters will pick their office holders and not vice versa. lastly, some heartfelt congratulations. just 8 days into session, this assembly has already made history by completing and safeguarding some excellent work you began two years ago. in 2008, you passed the largest tax cut in state history and reduced indiana's property taxes to some of the lowest in the nation. at a time when every penny counts, and home foreclosures are a national epidemic, you lowered the annual cost of owning the average hoosier home by more than five hundred dollars. the

american dream of homeownership is more affordable in indiana tonight than in virtually any other place in our country. but you did more: you provided hoosiers unique protection and certainty, through caps that secure these lower taxes from ever surging out of control again. as we all know, those caps will always be vulnerable to either legislative or judicial repeal unless protected by our constitution. those who favor more government, more spending, and higher property taxes have every right to present their arguments before the caps become permanent. but they must have the courage to make their case before the final arbiters of our constitution, all the people of our state, voting in referendum next fall. at 2:31 pm this afternoon, the "people's branch" of government lived up to its name. you gave the people the chance to decide, as i believe they will, that lower property taxes are

here to stay. thank you for this latest bold move to show the world that in indiana, we trust our fellow citizens and we truly put the interests of taxpayers first. that we gather tonight in difficulty but not crisis, stress but not disaster is small consolation. no one here will breathe easy or sleep well until we return to the full employment indiana knew just a year and a half ago. but we must recognize that the way we do our duty today is about more than just

muddling through the short-term better than the next guy. it's about lengthening our competitive edge. every time another state raises a tax, can't pay its bills on time or sends out ious instead of tax refunds, it slips another notch behind indiana as an attractive place for the next new job, the next new dollar of investment. the better we handle the people's business today, the more business we will have for our people, and the more opportunity for our children, tomorrow. even in this hardest year in so long, signs of strength are everywhere. forced by the downturn to a choice between indiana and some other place, at least 50 companies closed up shop elsewhere and relocated jobs to our state. jobs came from michigan to marion, from pennsylvania to decatur, from wisconsin to auburn, from mexico to elkhart. there's

that long german word i always there eat that long german word i always mispronounce, that means enjoyment obtained from the troubles of others. watching the agonies of other states, we take no delight at this misfortune. hoosiers never do. our first reaction to a neighbor in trouble is to look for a way to help. but if we take no enjoyment, we will take the jobs from companies who know a state built for growth, a state with its act together, when they see one. when the dust settles on this recession, we will have a higher share of america's auto, rv, and steel jobs than we did before. in a 2009 when national business

investment fell by almost one fourth, the number of new jobs committed to indiana actually grew over the near-record year of 2008. 2009 was the year when several young companies who may lead the electric vehicle industry chose indiana for their plants. many of their suppliers are following them. our goal is to be the capital of this potentially massive industry of tomorrow. over the last two years, indiana has been the fastest growing state in wind power, and now businesses seeking to build the equipment for this new industry are coming to muncie, to new albany, and to clinton. within weeks, you'll see us explode on to the solar power landscape. perhaps most telling, 2008 brought the welcome word that more people are moving into indiana than moving out. the numbers weren't huge, but they mark a big reversal from an era in which most years saw a net exodus, sometimes including

many of our most promising young people. one recent ranking identified central indiana as the best place in america for new college graduates. a teabag's strength is revealed in hot water. so far, we have stood up to this recession's heat with a strength reflecting the sturdy character of hoosiers. odds are the year ahead won't be much easier. everyone in the public's employ has a chance to help, and a duty to do so, remembering where jobs come from and who it is that pays for our salaries and every penny we dispense. two years ago tonight, i recalled the toughest question i was asked in my first months as governor, when an east coast ceo asked, what makes your state distinctive. what makes you stand out. no need to ask any more. look at any maps of states still in the black, states preferred new jobs, states adding to their public

infrastructure, states where taxes have gone down, not up. a single bold patch of color below lake michigan, like a peony in a parking lot, is the common feature of all such maps. let's conduct ourselves so that a year from tonight america sees in its fullness what it now sees in part: that there is a special place in our land where hard times are met with resolve, where government is the people's servant, not a privileged class, where bucks are not passed, decisions are not ducked, and where scarce dollars are allocated as adults do, to first things first. by then america will see that same place leading the nation out of its decline, its traditional industries rebounding and a host of new businesses blossoming. a place applying the highest standards of conduct and accountability in its public arenas. a special

place called indiana, to which the bright, the enterprising, the young, the creative are gravitating. it's not enough to stay off the reef. it's our duty, and our golden opportunity, to set our sails and man the helm in a way that separates indiana from a leaking fleet and carries her first and fastest into the sunnier seas aheed. god bless this assembly and this great state. [applause]

>> : this joint session is adjourned.

.

the state of the union address, next wednesday, january 27 at 9:00 p.m. eastern on c-span. >> now a conference looking at the state of entrepreneurship in the u.s. speakers include commerce secretary gary locke and a panel of business owners. the ewing marion kauffman foundation hosts this event. it is an hour and 20 minutes. >> good afternoon. if i can grab everybody's attention for just a moment. thank you very much. i appreciate that. first of all, good afternoon to everybody. i am honored and thrilled to be here. this is my favorite city. i love coming to washington,

d.c. i always get so excited coming down on that train, this morning on my way down i turned around and looked and said is that dan rather. dan, how are you? we had a terrific conversation. that's the great thing about coming here. you meet all sorts of people from all walks of life. i'm alexis glick. i just departed fox business just a short while ago. i was the vice president over there and helped launch a business network that i hope you guys will continue to watch. i have many good friends over there. i'm about to embark on a new venture. i can't announce it yet but i'll be announcing it in the next month or two. anyhow, i am so pleased to be here today. and the foundation have been friends of mine for years now.

without entrepreneurs, we don't have job creation and as married to a small business owner, my father being a small business own , a lot of entrepreneurs in my family, something i feel very, very strongly about and i want us to do more to empower the entrepreneurs and look at their examples. today you're going to see terrific examples who i'm seated with at the table. we have a very, very special guest today. the honorable secretary locke is here with us. [applause]

so we'll get an opportunity to listen to the secretary of commerce in just a moment but before we do that, i want to bring up the president and the c.e.o. of the ewing marion kauffman foundation, carl schramm to talk about the state of entrepreneurship in our country. >> thank you, alexis. i was going to tell everybody that your husband is a successful entrepreneur. i'm sure in the next 30 days you're going to be one too. thank you all for coming. we're meeting here at a grave moment in our national economic life. the recession that began over two years ago has taken a horrific toll on this country. despite green shoots that economists claim to see sprouting up around every corner, the recession is a reality for many americans.

there is no magic solution to this. i want to talk about a possible answer. now in time it took for me just to say these few words, one new business was created in the united states and it has created four new jobs. by the time i'm finished this morning, there will be 30 brand new businesses that will probably have created about 80 jobs. this is the hope and power of entrepreneurship. while entrepreneurs are not the sought after silver bullet, economic recovery will not happen without them. will not happen without them. i approach this as an economist. a class of thinkers notorious for their failure to see the financial crisis and recession yet assistant on their ability to bring us out of it. i also stand here as president of the kaufman foundation, whose daughter ewing kaufman

appreciated what she brought to our society. america wouldn't be america without its entrepreneurs. yet entrepreneurs are too often lost in glib economic policy discussions that center on interest rates, large-scale banks. these polls instruments >> institutions are not the primary engines of economic growth and the advances of human welfare. only new companies bringing forth new jobs and innovations and creative ideas are the bedrock of what our recovery will be. increasingly i am pleased to report policy makers are beginning to recognize the vital role of entrepreneurs. happily their heightened interest is due in large part to the foundation's funding of research over the last six

years. even when policy makers speak of entrepreneurship, it is most often in abstract terms. how much they contribute to this or that indicator. even that perspective can't be taken for granted. the schools down played or ignored the role of entrepreneurs preferring instead to see all economic activity it is a creature of three fundamental forces, big government, big unions and big companies. forgotten in this equation was the fundamental fact that every big company had to start small. there are no -- in the world of business. no companies that spring fully formed out of the head of their founder. they all begin with one person and one idea. the ford motor company was once

henry ford. that person is an entrepreneur and the idea that sets him or her apart from the crowd or compels him to leave a job or her to strike out on her own and take a big risk is in fact the issue of risk taking. when that risk pans out, the result is a fast-growing company. hundreds and possibly thousands of new jobs, new wealth invested in every sector of the economy and spent in every corner of our society and a new products service, or a business mod that will never existed before. nearly everything we take for granted in our daily lives today began its own life that way as the creation of an entrepreneur. think about automobiles. air-conditioning. and more recently software and search engines. it is a very unpredictable process. i grew up in syracuse, new york,

the home of air-conditioning? absolutely. that's where willard carrier did it. what is the state of entrepreneurship today? i begin with the proverbial good news and bad news. first, we know that in spite of everything, entrepreneurs are still the primary engine of job creation in the united states. in the last 30 years, literally all new net jobs in this country have been established and created in firms less than five years old. to illustrate this point better, in more concrete terms, consider one company, ebay, in its first five years of existence it hired 645 people. an average of 228 new people a year. the e bays of the future are out

there doing the same thing right now. when john kenneth gal grate told us that the era of the entrepreneur was over, intel, microsoft and cisco were already underway. a more recent example is mary nailor. she is here today and will be with us on the panel in a minute. mary started her company with a loan from her mother of $2,000 and now runs the nation's largest concierge service. this, ladies and gentlemen, is how recoveries are made. mary's and bills across the country taking risks, borrowing money from mom and pop or rich uncle ned creating a business that creates jobs. second, entrepreneurs are not easily discouraged. we know from our own research that past recessions have not

preventsed the growth of new companies. indeed, half of the 500 firms were started in a recession or bear market. they come in boom times and they come in bad times. roughly 600,000 new entrepreneurs take their risks and create firms every year. about one per minute. that number is surprisingly constant. one might exp expect to see it fall in recessions but it doesn't, in part because of laid off unemployed workers often take the leap. they avoid it in more stable times. third, the age. contrary to popular belief, entrepreneurs by and large are not kids working in their

parents' garage the average age is 40 years. more over there are more people age 55-64 starting businesses now than there are people ages 20-34. these new entrepreneurs are seasoned professionals. they bring the benefits of their experience and their activity to the communities and institutions that nurture their talents and their careers. into their own new companies. so is there bad news? unfortunately there is in a new poll we are releasing today, entrepreneurs paint a particularly grim picture of the world in which they have to work. 1/3 tell us they have had to reduce their head count in the last year. close 2/3 have seen their sales volume decrease. 2/3 have seen their profitability decline as well and in addition, this is very worriesome, over 70% of entrepreneurs don't expect to add additional employees this

year. i might say relative to historic past dats that we have, these trends are, in fact, uncharacteristically negative. worse, with this continuing unemployment, consumers are understandably nervous about spending. it won't just be more government spending to get consumers to open their walt, responsibly of course. -- wallet, responsibly, of course. but we want responsible spending. both here and abroad and it won't happen until consumers are once again excited to spend. not on the things that were around before the crisis but on novel products and services and things that add value. things they need that they can now purchase with more facility. that are easier and better than they used to be and more inexpensive. once these things are developed

and -- a merge with the cycle can begin again as consumers spend more, businesses have reason to invest and hire and the more hiring that occurs, the higher the incomes and spending will be and will support more consumer demand and then we will have the recovery we all want and are waiting for. to get the ball rolling again, guess who? it is entrepreneurs who'll be responsible for most of the breakthrough products that have changed our lives in the past and made it better and will again in the future. we need these entrepreneurs more than ever. we need their breakfastthroughs. only they will develop and commercialize the success of petroleum. we need breakthroughs in. it is only entrepreneurs who'll

continue to provide services such as rosetta stone or zapos. today we could wait for history to repeat itself. to generate the future 500. as entrepreneurs have done in the previous downturns. but with another 85,000 jobs lost just last month, i for one, would be much more comfortable if we had some policies to help history along, to make the good history happen faster. and here, then, are some ideas that go in that direction. our first suggestion from kauffman is let's rationalize the energy policy. factor in first generation americans, the children of immigrants and the percentage rises remarkably the founder and c.e.o. of siemans has created

some 500 jobs in the washington area. reggie is here today and will share with our passenger in just a minute. we should start by offering instant citizenship to any of the thousands of brithes young people from foreign countries who graduate from our american universities. we should change the provision s of the entrepreneur visa. and rather than requiring people who want to invest in american companies, bring $1 million to start their firm or buy a firm in the united states, we should favor those who plan to come and start a firm in the united states and extend their visas once they begin hiring people here in the united states. countries such as singapore already allow new immigrants who bring -- only $50,000. maybe we should make that our

tarbgt or have zero dollar target they come to start companies and hire people. the united states simply cannot afford to lose the global raise for entrepreneurial talent. another high-impact, low-cost reform would be make some of the most important changes to the honors provisions of sarbanes-oxley. why not allow shareholders to vote on whether their companies will fulfill certain stocks requirements. this would permit companies whose shareholders don't feel the benefits newer companies have access to capital markets that would prove much more costly to jump through the government regulations. our third idea would be cheap

but hugely effective. let's exempt firms less than five years old, the ones that historically have been responsible for all the new net job creation interest payroll taxes. on a temporary basis, say, for two years, would strengthen the incentive to hire while limiting the impact on the deficit and in this spirit, we might also consider measures that encourage local banks to steer more money into brand new companies. this would be the single most powerful statement from our government, to entrepreneurs and those thinking about starting companies, that america and its government was indeed friendly to the idea and actually respected the importance of our entrepreneurs to economic recovery. the final three ideas all concern education. let's start from the top with the faculty in our universities. it is time to implement a model in our choice for academic

entrepreneurs. currently professors can choose where to publish the results of their federally funded research but they can't choose what might be a more important role for our economy. that is who is the appropriate partner to help them license and commercialize the ideas and technology that they have invented or discovered. professors are now required to follow one path. one defined by their own university. let's instead find multiple avenues to commercialize our federally funded reform and use the right people and most efficient people to get ideas out of the universities and into commerce. later today, in a few minutes, we'll have frank douglas, one of our senior fellows at the foundation, a partner at pure tech ventures and now at bio innovation in akron ohio, to talk to us about this idea, he

has seen the approach of getting the ideas from the laboratory and into the factory. it is a critical issue. our universities are also teaming with very smart graduate and post grad students. a great many of them also have ideas that can be commercialized but no idea how to go ahead. the fellowship, to enable students to continue their research, perhaps as a route to an academic career is part of the american landscape. we have 47,000 post doctoral fellows in the united states. highly educated talent. particularly in the commercial world. it is time for the federal government to pay for commercializeation fellowships along with special training and mentoring to allow the right ones to become scientific founders. it is pioneering this work and

happily, we have just appointed 13 brand new kauffman fellows to start up new companies. finally we have to make much better efforts to capture the imagination of the young. the earlier we can interest students in entrepreneurship, the better. no country has enough entrepreneurs. praps that introduce undergraduates can open up new horizons for talented kids and unleash a entrepreneurial drive that has been dormant or ignored. it does great work in this area with high school students, primarily in the urban core and at the collegiate level there is a promising new model at the university of miami, which i just visited last week, called launch pad, that is housed in the school's placement center. just a year after putting a sign

on the door, nearly 1,000 students from all fields of study in that university have been involved. they are starting businesses. they are beginning to see their careers as entrepreneurs and not just people with a degree looking for a job in another place. it reminds me of one of mr. kauffman's great axioms to entrepreneurs. create a job. don't take a job. make a job, don't take a job. this list is hardly compleement. i offer these ideas merely to jump-start a conversation. at a time when our country needs jobs and fresh new ideas. happily 85% of the entrepreneurs in our new poll still believe that this is a great country in which to start a business. close to 3/4 of americans want policies that will support entrepreneurship. even better, well, the number is

down, unfortunately, well over 60% of all the students in universitys in the united states wants to work for themselves in companies they start. unleashing these ideas, these innovations, these risk takers are entrepreneurs. these entrepreneurs will become our job creators. it is the best way to ensure sustained recovery and to assure that the state of our union is strong economically and strong entrepreneurly. thank you so much. [applause] it is my great -- it is my very great pleasure to say to you that if there is one person in our federal government who gets what i'm talking about, it is secretary gary locke. the evidence of this, because we're in washington and people say things like that without any foundation, is that not only is gary as a private business

person, as a lawyer, work for entrepreneurs and understands their struggle, one of the first things he did apart from visiting us at the foundation, which we are very, very grateful for your presence, mr. secretary, create a department that represents a historic first. at no other time in the history of the united states has there been a focal point with the words entrepreneurship in a federal agency. with that evidence, let me suggest, as i said before, if our entrepreneurs have a champion in our federal establishment, it is gary locke. i'm very pleased to welcome him up here. [applause] >> thank you for the introduction. thank you for our insightful

remarks. when alexis was introducing a special guest, i thought she was going to introduce carlos gutierrez who proceeded me and did a very good job. carlos, stand up. alexis, being the news person that you are, you tantalized us with your tidbit announcement of some future venture so we're going to be watching the various air waves and publications to find out exactly what that is going to be. good luck to you. i want to thanks host, the kauffman foundation. like all thriving partnerships, the one between the kauffman foundation and the commerce department is a effective because many of our goals are closely aligned. kauffman's chief priority is the promotion of entrepreneurship and the commerce department in this time of great economic difficulty is concerned above all else with creating more jobs

for americans. and there is simply no better vehicle for job creation than fostering entrepreneurship. entrepreneurs create. three million jobs a year and as carl mentioned earlier, over the last three deck aced, startups, firms less than five years old have accounted for nearly all of the net new jobs in the american private sector. as our country continues to work through this trying recession, we can look back on our history and say with confidence that we will get through it. and when we do, entrepreneurs will be leading the charge. at a time of constraining credit and uncertainty, one might think that now is the wrong time to launch a business, but over the past century, american entrepreneurs have concluded exactly the opposite.

i.b.m., disney, cnn, microsoft, whole foods are just a handful of this country's bellwether companies that were founded during periods of great economic uncertainty. with this history in mind, the obama administration is making the promotion of entrepreneurship a critical component of its economic agenda. how do we create the right conditions for our entrepreneurs to thrive? to begin with, we've got to start promoting the right kind of risks. america has always celebrated those pioneers who were willing to mortgage their homes and work 100-hour workweeks and throw caution to the wind in pursuit of an idea. that story is at the very heart of america's economic success. but over the last several years west we fell in love with another type of risk that installed short-term thinking and speculation. instead of working to engineer a

breakthrough technology or build a great company, too many of our brightest minds were busy engineering credit default swaps. america cannot afford to inflate another bubble that enriches a select few while putting everyone else in peril or reward traders who are betting on or hoping for the failure of american companies. we know how that story ends. instead, we need to encourage the right kind of risk taking. the type of risk taking that allows successful entrepreneurs to build companies and discover technologies that will allow people around the world to live more productive, healthier and wealthier lives. over the last year, president obama and the administration have implemented a series of policies that will empower the private sector and entrepreneurs to do just that. for example, the recovery act that the president signed last year had a key provision

enabling the small business administration to increase loan guarantees from 75% to 90% on their largest loan program but also to wave a variety of borrower fees. since the signing of the recovery act, small business administration loan volume is up 60%. in addition, the president's 2010 budget included a provision to reduce to zero the capital gains on investments in small or start-up businesses. it also included a measure to make the research experimentation tax credit permanent. but even as we have striveed to empower entrepreneurs with improved tax policies and more generous loan programs, we need that we need to do more. we must also create a better ecosystem for innovation and entrepreneurship. i was talking specifically about improving a public and private

research development system that right now simply does not efficiently create the right incentives or allocate enough resources to generate new ideas. a system that does not efficiently develop those yads with focused -- those ideas with focused research. that does not connect those ideas with entrepreneurs who can turn them into businesses that create good-by a paying jobs. although we look to our entrepreneurs to rebuild companies, we know that historically, the first kernel for an idea was often spawned in the vast network of public and private research labs. massive federal spending in areas like defense, energy and aeronautics which might have been too risky for public investors. we may have seen the internet come of age silicon valley but

it first came to life in the labs of n the labs. the folks at tmp empurpedi cr are using technology -- tempurpedic use technology first developed at nasa. both of these engines of research engine innovation are running on fumes. take for example, bell labs. today it has just 1,000 employees. even as overall spending and corporate has increased more has been focused on short-term work and more happening outside our borders. american manufacturers for example are now expanding their

foreign research and development spending three times as fast as their domestic spending. look at federal government research. a share of g.d.p., american investment in the sciences and engineering research has dropped by half since 1970. fortunately president obama has grasped the urgency of the problem. his recovery act included $100 billion to support groundbreaking innovations in diverse fields from health care to electricity grids to high-speed trains. last spring the president went before the academy of sciences and committed 3% of america's g.d.p. to research and development which would represent the biggest such investment since j.f.k.'s administration. these are huge steps but they can only be viewed as the beginning because the second problem with our innovation

system is that even in areas where we are alo indicating enough money for r & d, we are not doing good enough job getting these jobs into the marketplace, especially for our entrepreneurs. the way we moved federal r & d out of our labs worked well enough. we gave noun nasa to develop new space technologies. eventually that work would find its way to private sector ino vators. to paraphrase the old line from the movie "the field of dreams" the attitude was basically if we fund it the entrepreneurs will come. it wasn't a terribly efficient system but at the time it didn't matter because the united states was the unquestioned leader of

innovation. there was barely any world-changing technology that wasn't first pioneered in the united states. but those days are over. and today too much of our research, too many of our research ideas never make it out of the lab and if they do, they get lost in that valley of death. where a high-risk idea doesn't have the resources or the funding to make it to market. the united states has not adjusted to a new global markets place where foreign countries and companies have the ability to outpace their american counterparts. the united states cannot continue with the status quo. in a world where innovation is critical to the united states' competitiveness, we must do everything in our power o optimize commercializeation from our nation's vast research

instruments. this is an issue where the commerce department is working hard to find solutions. last fall we launched the office of innovation and entrepreneurship whose mandates is to drive policies and programs to help entrepreneurs translate new ideas into economic growth and to accelerate technology commercializeation of federal r & d. today i want to let you know that on february 24 this office will host a forum with university leaders, entrepreneurs and other key stake holders on the roles of innovation, economic job creation and the commercializeation of federally funded research. we're looking forward to hosting this meeting with important stakeholders including the kauffman foundation, our friends at the kauffman foundation. ultimately we hope to hear about collaborative steps that the

department and the administration can take with the universities and industry to achieve the entrepreneurship goals because while i believe this administration has a valuable role to play in promoting entrepreneurship and the commercializeation of new technologies, we don't have nor do we seek to have all the answers. and as has always been the case, we need to look to america's entrepreneurs to help chart the path to recovery. we're looking forward to hearing more about what we can do to hasten the journey along that path. we need to unleash the power, the ideas, the creativeness, the ingenuity of america's entrepreneurs. thank you very much. [applause]

>> well, our thanks to secretary locke. thank you very much for those enlightening comments. we look forward to that february 24 meeting and some of the things that you're doing for our entrepreneurs. carl is going to come back and join us on the panel. we'll get into the subjects that he was talking about. we'll do that before the main course. then we'll get into the panel discussion. >> just grab a seat for a moment and take an opportunity to listen to some of our experts in the entrepreneur field. they have some terrific stories

on entrepreneurialism. joining me obviously to my left is carl schramm, the president and c.e.o. of the kauffman foundation. as carl mentioned they have over 500 flows the d.c. area. he'll explain, as he put it to me, he is the -- the meeting planners. also joining us to the left of reggie is frank douglas, the president and c.e.o. of the bio institute in akron, ohio. he can talk to us a lot about commercialization, something that secretary locke spoke about. last but not least, mary nailor. the founder and c.e.o. of a

home-based contact center solutions and concierge service. they have a huge client roster. some of the biggest names in the corporate world. 70 blue chip clients. she happens to be six months along with number two. >> a young entrepreneur. >> so first of all, welcome to all of you and thank you for letting us be here and ask you guys some questions. this is something i feel very, very strongly about. mary, let me start with you. as we mentioned at the outset. when you look at some of the polling data, there is a great deal of skepticism right now about where the next couple -- what the next couple of years are going to look like. a real insecurity about it. what kind of storm have you weathered over the last couple of years and what have you learned that you can provide

insight and guidance today for us? >> well, our clients at v.i.p. desk are in the financial services industry. automotive, travel and retail. needless to say, all of those industries have been hit pretty hard and so what webb going through is there is really a domino effect. over the past year and a half, many of our clients, i would say probably 90%, have come to us and asked for fee reductions and we have probably taken a hit of about $2 million in top line revenue last year and we in turn have to go to our suppliers and ask them for pricing concessions and then we've had to go internally but we have had to decrease salaries and in the paid bonuses. not gone to trade shows.

look at every single line item. maybe not bring a new idea we have to market because we're trying to hold the line just in terms of our expenses. the other thing that happened to us and many other entrepreneurs in this environment is that your pipeline for perspective new clients pretty much dried up. small companies and medium sized companies are all ato start spending. my clients are afraid to spend. i have to go to my vendors and supplies just to keep the cycle going. the thing that we have done, you have to become very innovative. watching every expense and line item, trying to keep morale up. being very candid with our team and transparent as to what we're doing to save their jobs. also we have had had to take a lot of investment in our current clients. what can we do to create clients?

fortunately for us we managed to grow a little bit last year, which we're proud of but i've had so many entrepreneurial friends who are very hard hit. >> reggie, you were shaking your head a lot while mary was talking. maybe you have gone through some of the same issues and concerns. what have you learned today? what kind of guidance can you give to entrepreneurs out there who hopefully have survived what you have survived? >> i think to put into context our view, actually mary and i were fundraising back in 1999 to raise money and we have grown with venture money but after the 2001 storm or the recession, we cut down to 26 people. we cut 80% of our staff. it was very difficult to recover from that. that has defined who we are today. to cut 80% of our staff, many of them great people, we have been

ready for the recession. the recession hit for us, it has been difficult, because we're an event industry, about 30% or 40% cut but we have been able to grow because we have been waiting for this time. fortunately for us, we have been able to grow quite a bit and we look at this as an opportunity to establish ourselves more because we learned a lot of lessons that we don't want to repeat in 2010 but we're fortunate that way. that has put in context what we have learned because of what our past experiences were. the second thing is the recession. you can look at it as the glass half empty or full. that leaves a lot of opportunity where they would have branched out to but the entrepreneurs saw that core. they said let's do what we do best and not branch out. the time thing is with the recession, costs are lower to

hire people. everything is less expensive to get commercial real estate. you have less opportunities sometimes in your career so it makes it easier to start a company. i think as carl said it is a great opportunity to start a company. i know with us, it is true. >> frank, i'm curious. secretary locke talked about commercializing, innovation and a lot of money dedicated towardses research and development. explain to people in the room perhaps who don't understand this and how groundbreaking this can be. how this can help grow the economy? >> when you look at commercialization, you're looking at all of the things you need to engage in. to move an idea to the marketplace. where that is going to become a service or a product. it is not a simple step. there are steps in which you

have got to evaluate very early whether there is a market opportunity for the idea, what are indeed the opportunities. who would use it. what you might bring to it and then the different technologies that you will use to achieve that product or the manner in which you go about constructing the service that you're going to get. all of those which we basically put under the term commercialization. >> carl, one of the biggest issues, you and i talked about this at length, sometimes, is there is enormous uncertainty on health care, on cap and trade, on jobs, on elections. how are they navigating through that uncertainty? >> well, it is very difficult because i think it is a level of uncertainty, it is higher than

it has been in a long, long time. history tells us loud and clear, that if nothing else in the economy doesn't work right in uncertainty, it is investment. people will not invest if you don't know what the rules are. the more i thought about this, i sometimes think that we don't understand the economy at all and just in case anybody is dying for the answer, bob lutz and i will have it out in the books. the notion, think about the economy shrinking and expanding, when economists talk about it on television and in policy forms, it would be much more effective to think about the economy in terms of firms. the economy doesn't shrink and expand. firms shrink and expand. and if we began to think about public policy in terms of the

signals it sends the firms, we keep talking about the gigantic economy, there is no economy without firms and the focal point has to be on if i weres so it seems to me that if we were to sort of reduce uncertainty, we would think rather than what i mentioned in my remarks, about signals that say there is more certainty in your life. for example, the regulation, we know it hasn't worked. so why not do an important signal to small businesses that says it will be easier for you to raise money and easier for investors to invest in you if we clarify it doesn't apply to small firms. the same thing around young firms and the reduction of payroll taxes. that is such a signal. it is not the payroll tax, we

about them are revenue to the treasury. if you think about payroll taxes if you're an entrepreneur, they are immediate signals to the firm. i would think about recasting much of the policy dialogue around who is listening that counts. who is listening that counts are firm owners and directors and those who would start firms, namely entrepreneurs. >> i was just down here in d.c. back in november for the "wall street journal"'s c.e.o. there was no doubt in my mind that what we have witnessed through actions in the federal reserve bank, through actions here, is a rescue of corporate america. it is the triple-a-backed blue chip corporations, many of which are your clients that have all the access to the cheap money, but the entrepreneurs, the small business owners, they are getting left on the sidelines

and you're shaking your head. do you not feel that way? >> for us, and my portfolio entrepreneurs, where we have opportunities to bring new products and services to market, and we can't renew lines of credit, we can't easily access funding, investors are hesitant to put money in, it is extremely frustrating because like you said, the big corporate behemoth, they are my team's bread and butter but just to enable us who can create the new jobs, that is passionate about that, that we are being so challenged to be able to get things out on the marketplace, commercialize, as you said, feeling like victims and penalized in much of this. we see billions going out to other large firms. >> let me add to that. as a trustee, a chairman pointed

out to me, entrepreneurs' jobs are to create jobs. if you run a behemoth company, your investors want you to destroy jobs. the reason we're watching productivity go up in the middle of a recession is because giant companies are destroying jobs. it seeps to me the unspoke -- seems to me the unspoken foe -- if you want more jobs, go to zone of the economy where they are created. namely small businesses and brand new businesses. the statistics are 100% on our side. these are the companies, less than five years old, where all the net jobs are created. >> and it is technology. that productivity is in large measure coming about through technological innovation to make the company smarter. something you do every day.

are we doing enough? >> technology is a large part of why we have more productivity. i think you hear a lot and read about the brain drain going back to their foreign countries. i'm indian descent. when i look at recruiting people, the resume is usually someone from a foreign country. very few caucasians go to technology. you want to find people like that. they are interfacing with your salespeople. you want people who have a strong command of english. what's happening is most people you're having english is a second language. if we start cutting off immigration and visas. i don't know, if you ask any entrepreneur, with a technology company, they are not finding enough qualified people in technology, which is why they go to other countries also because

you can't find them here and the ones you can find are extraordinaryly expensive. kids out of college are asking for $70,000 in the recession. that is just not market in career jobs. there is a scarcity of qualified engineers being generated out of the u.s. >> frank, how do you fix that? >> i think in the real sense, some of the responses you have gotten, unthe hints, one is the immigration policy, which carl addressed is really encureging. i myself am an immigrant which you may not realize. i am an immigrant. there was a time when immigrants came to america and wanted to stay. one of the things that is happening in china, singapore, india, which has a very detailed program to recruit back their

sons and daughters who are coming to the u.s. to build at home. many of those who come abroad and reggie can speak to this, tend to be entrepreneurs by nature. you have to take a big leap into the unknown and when you get here, you have to navigate in a world you're not accustomed to. you tend to be entrepreneurs so it is not surprising that many of the entrepreneurs in technology turn out to be the registeries of the day. so it is immigration. it is indeed the government, the administration investing in the small companies and something you said, carl, which i think is extremely important, the economy is about firms. and so if you want to solve a problem, you have to go to the source where you can solve it and where the solutions will be made.

and so the investment in small companies that are transfering ideas, whether they be service ideas or private ideas into commercial entities which create jobs, which speak to needs people have, that is the way to stimulate the economy. >> carl, something that secretary locke talked about, gist following up on frank's point, was the level of investment in manufacturing activity outside the united states opposed to inside the united states. i had a conversation with carl a couple of months ago. he said the biggest danger to the economy of the united states is that it is becoming -- it has forgot how to make products, how to ino vate and produce in its own manufacturing plants. how do we get back to doing the basics? we created some of the greatest products in the world? >> i mentioned nifty earlier.

we have to start early on. if you're a student in high school, manufacturing never even comes across your radar. if you go to our great universities, you can go through four years and never -- i have a kid just out and i have a child in university. the chances that you will ever hear about manufacturing are slim to zero. ok? and even if she were at a university that had an engineering school, there was little chance she would ever see the laboratories where machine tools are made so you can make stuff on production lines. it is just outside of our consciousness. so if i were to do this, you know, i would reform basic education such that people actually understood how things were made. once upon a time we knew that. there was a whole day where we took telephones apart. i was just in regular school. each of these pieces is made

>> like dissecting the frog? >> yeah, but god made them. anyway, i think that is a really critical issue to get back to. >> mary, just going back for a second, i think a lot of people in this room maybe have seen the bottom line but haven't really read the whole story. you started with a couple thousand dollars. >> it was a loan my mother gave me. that was a while ago. she has never let me forget that loan. just getting going and starting and you know, it was a world of opportunity, i think, one of the key drives in why entrepreneurs are going to be one of the leaders out of this recession is incredible optimism. obviously cash is king but before that, the first step was getting that first customer and landing that. if i had to think back what was the biggest challenge, that

would have been it. that is critical to validate your business model. is someone willing to pay money for my idea or creation and also helped to attract investors. i'm sure your experience is the same. once you had someone who was willing to pay you, investors were more willing to take the risk and talk to you. back in the early days, you were scrappy. you had to do a lot to get a little. it serves you well in this environment too because you realize you can be creative and do more with less. there are some good lessons out of coming up from nothing but it can be done. i am still optimistic. this is the best country to start a business in. there are phenomenal resources that are available.

local chamber, trade associations because really, next to me getting that first client, it was all about developing a network of people because that is really how business and ultimate fundraising gets done. that is the advice that i would give to someone getting started today, working very hard putting a strong network in place. >> one of the things a so many entrepreneurs did is used their home to piggy bank fund their business. many of those homes are underwater. much more challenging. with all the lines of credit. what kind of advice do you give in terms of the financial knowhow to keep your business afloat even though you go through a recession? >> when i started the business, i knew i was an attorney before i started my company. i knew there was something i wanted to do entrepreneurial. i lived at home for a while.

i extended that stay. i lived at home until i was 34. i was kind of the indian george costanza. >> good for you. >> it is kind of hard getting dates when you say your roommates are older. the sacrifice you crov to make is a lot of entrepreneurs don't realize when you start your journey that is the sacrifice you have to make. everyone has a different story, whether it is a friend who lends you money. i think people think they will get a loan from a bank. they won't do that without collateral. you're doing it with the money you saved or you get friends to give you money to start your business. the biggest advice i would give you is that frankly when you start a company, you're out there without your family and friends, if they don't give you money and seggedly, everything

takes longer than you think. it is a 10 or 20-year journey. it is not a two or three-year journey. when you look for your first customer to fund you, you only get a customer to fund you once you have an idea. it is usually through your own standings and friends and family. it is rare that you get money from a bank or something. >> geat. >> i was in england last week. somebody told me that they had forbade people to run a business from their publicly subsidized house. i thought, man, if you want to watch a government be wooden-headed, this is how you do it. now the opposite side of it is we took a lesson from something we saw in singapore and it has worked. we're very heavy contribute ofs to the kansas city public library system and the closest is called the