great saying that the internet interprets censorship as damage and routes around it. that was john gillmore, who is an engineer, not a lawyer. and it w we have discovered that in the last 15 years, the government has learned how to exert more control and it will take a lot of work to combat that censorship, but we are optimistic that human nature demands information, that people will seek information, and that ultimately, the internet freedom will be something that will achieve this. but we need your help. >> what do you think his godaddy speech relationship with china -- what you think is godaddy's

future relationship with china? >> we have been doing this for six years. again, we have to have a reasonable expectation from officials in china as to what will be required. if they want to go ahead and repeal new roles, we could open up .cn within the next day. it is discouraging to us that we have helped people in china get their message out for six years, and then suddenly with the staff of the thinker, the service has to become unavailable because it looks like we need to operate as the agent of the chinese government, and we are not interested in being that. . and we're not interested in being that. we really exist to enable people to share their thoughts openly, and we agree that the internet

demands the open exchange of ideas. some of them are good, and some of them aren't. but nonetheless, they're all ideas and they need to be shared. so we -- we would strongly urge this commission to work with the authorities in china to repeal that rule. and if you can accomplish that, and if you can accomplish that, we'll be happy to switch and turn it back on. >> well, thank you, very much. let me thank all of the witnesses, and senator, thank you for your participation. i'm just looking at the piece of information that our executive commission is putting in the record today. of political prisoners in china, their photographs and data. and these are people who have gone to the internet and published articles and journals. and for that are sitting in a dark prison cell somewhere in china. so this -- and it demonstrates this issue is not just some theoretical issue over which we should just have an interesting discussion or debate.

it is, in some cases, life and death. and especially freedom. and this commission wanted to have a hearing to try to understand and develop much more information on what is happening in china, especially as a result of the google decision. and, again, i compliment google and compliment go daddy for making decisions that i'm sure are difficult to make, but yet companies that are willing to make the right decisions. and it is our hope and that things in china will improve. it's not our lot in life to decide that we should just beat up on china every time we have a hearing. but china is going to be a big part of our future. a significant, important part of the world. it's going to be a significant, important part of future of the united states. and it has always been our intention, especially through trade and travel and also through information to pursue what is called constructive engagement with china, and

similar countries, believing that constructive engagement would move them towards greater human rights. and yet we find ourselves in 2010, march of 2010, still talking about a country that sensors the internet, and throws people in the dark cells of its prisons, because of what they think or what they publish. it seems so out of touch with the modern world. and what we wanted to do is see if we could put all of the spot lights on one spot and have a discussion about internet [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> janet yellen discusses the u.s. economy but to this week's conference of the american public affairs committee. that is followed by a congressional black caucus discussion about haiti's relief

effort. >> and public hearings we are covering to tell you about the house oversight committee votes a treasury department programs pointed to prevent home foreclosure. they will hear from secretary of state clinton and defense secretary robert gates. how he can watch both of these live on c-span3 in online and c- span.org. >> our commitment to israel's security and israel's future is rock-solid, on lettering and unwavering come in during, and forever. you can search it, clip it come and share it, and more. there are 160,000 hours of

video >> on tuesday, she talked of the u.s. up the economy and the potential for future interest-rate hikes she is being considered for the post of federal reserve. this event is an hour. hello and thank you for coming. i'm very grateful to town hall los angeles for organizing this event. it gives me an opportunity to explain to you how i see the economy shaping up in the months ahead. i will also use the occasion to talk about several issues that are high on the public policy now, federal budget deficits.

deficits and the proper place of the federal reserve in our system of government. specifically, i want to address a concern that i hear people more and that massive fiscal deficits could lead to high inflation. i will lay out my reasons for believing that such fears are misguided. i should say that colleagues. let me begin with an executive summary, that is the u.s. economy bounced back remarkably over the past year, but we still have

a long way to go. at the end of 2008, the entire financial system was on life support, the housing market had collapsed, consumers and businesses were at the edge of panic, and the nightmare of a depression seemed like a real possibility. just a little over a year later, the financial system has stabilized, panic has subsided, and the economy is growing again. but we face important threats to the recovery. in particular, the job market is turning around only slowly, prolonging hardship for millions of americans. the unemployment rate was 9. 7 % in february, down from its recessionary high, but still in very painful territory.

my forecast is that moderate growth will continue, inflation will remain subdued, and unemployment will inch down. the past few years have been extraordinarily difficult for many americans. for a while, it felt as though every morning, we at the fed woke up to a new crisis. by late 2008, financial markets had seized up and incoming data showed the economy spiraling downward. around the middle of last year though, the tide began to turn. in the second half of 2009, production picked up, home and auto sales revived, and businesses and households started spending again. now, in especially welcome news, the labor market too is

showing signs of stabilizing. our economy has a natural dynamism and it tends to bounce back after periods of contraction. but the downward spiral we faced a year ago was extraordinarily dangerous, resulting in the most severe global recession since the great depression. in response, the u.s. government and the federal reserve, like their counterparts around the world, acted decisively to rescue the financial system, bring down interest rates, and provide a range of emergency support. these policies played a key role in breaking the downward momentum, thereby allowing the economy's natural dynamism to

reassert itself. on the monetary policy side, the fed has pushed its traditional interest rate leverthe overnight federal funds interest rate at which banks lend to each otherclose to zero. and, in order to provide further stimulus, we put in place an array of unconventional programs to speed the flow of credit to households and businesses. i'll say more about those monetary actions, as well as the contribution of tax cuts and spending increases, later. in many past recessions, such as the very deep one in the beginning of the 1980s, a sharp

downturn was followed by a surge in growth and rapidly falling unemployment, a classic v-shaped recovery. this time around though, i don't think we can count on such a robust v-shaped recovery. a number of factors underlie this outlook. in a nutshell though, it reflects the financial backdrop to the recession. growth in the past a kid -- especially in the overheated housing market -- fueled by easy access to credit. now credit is harder to come by, which is restraining consumption and the overall economy. the current quarter appears on course to post a moderate annualized growth rate of around 2½ to 3 %.

the economy should gradually build up strength during the course of the year as households and businesses regain confidence, financial conditions improve, and banks increase the supply of credit. for the full year, my forecast calls for output to rise about 3½ %, accelerating to about 4 % in 2011. surveying the economic landscape, most recent data show consumers coming out of their hiding places. retail sales rose three-tenths of a % in february, better than

expected. recent gains in consumer spending have been notable in electronics goods, but have been spread widely across many types of goods and services. my business contacts tell me that consumers are clearly in a better mood. but they remain cautious and focused on bargains, which may reflect ongoing concerns about jobs, income, and household finances. before the onset of the recession, the household saving rate was approaching zero as tens of millions of americans funded consumption by taking on debt. since the recession began, saving has picked up and households have been reducing their debt loads. it's not clear how much of this reflects the reluctance of banks to lend and how much of it may

be due to a more conservative mindset among consumers themselves. but either way, i don't think that the uptick in consumer spending portends a return to the pace of consumption we saw during the go-go years in the middle of the past decade. it was housing of course that led the economy down. the great bust wiped out some $7 trillion in home values. in the second half of 2009 though, housing showed signs of stabilizing and i became hopeful that the sector would provide a significant boost to the economy this year.

now the market seems to have stalled. home prices have been more or less stable since the middle of last year, but new home sales have resumed a downward slide and are at very low levels. existing home sales spiked towards the end of last year in response to the homebuyer tax credit and have receded markedly since then. the credit expires this spring, removing an important prop. with sales still weak, builders have little incentive to ramp up home construction. the continued high pace of foreclosures also creates risks to the recovery of the housing sector. mortgage delinquencies and foreclosures are still rising as a consequence of the plunge in house prices over the past few years combined with high levels of unemployment.

despite the return to growth of the broader economy, we've seen no let-up in the pace at which borrowers are falling behind in their loans. further additions to the already swollen stockpile of vacant homes represent a threat to house prices and new home construction activity. it's not always easy to understand the dynamics of the housing sector. last year, for example, the share of mortgages that was 30 to 89 days past due declined. on the face of it, that looked like a hopeful sign. unfortunately, when my staff examined the numbers more closely, it turned out that the

drop actually represented a worsening of mortgage market conditions. what you want to see is delinquent borrowers becoming current. instead, what happened was that delinquent mortgages moved in the other direction to an even poorer performance status. many wound up in foreclosure. all in all, i expect that the share of loans that are seriously delinquent will continue to move higher. i am also concerned that we had a temporary reprieve in new foreclosures as the federal government's trial modification program got under way. but not all of these modifications will stick, which means that some borrowers in the program could find themselves

facing foreclosure again. at the end of this month, the fed will complete a large-scale program of purchases of mortgage-backed securities issued by fannie mae and freddie mac. lenders sell mortgages to these two agencies, which package them as securities sold to investors. last year, the fed began buying these securities as part of a series of extraordinary measures to promote recovery. at the time the program was announced, mortgage spreads over yields on treasury securities of comparable maturity were very high, reflecting in part the disruptions that had occurred in financial markets. i believe that our program worked to narrow those spreads, bringing mortgage rates down and contributing to the stabilization of the housing

market. financial markets have improved considerably over the last year, and i am hopeful that mortgages will remain highly affordable even after our purchases cease. any significant run-up in mortgage rates would create risks for a housing recovery. business investment also presents a mixed picture. we've begun to see a rebound in business spending on equipment and software, and recent indicators point to solid growth. at the same time though, business confidence remains fragile. it's very positive that business leaders have shed their bunker mentality. but they remain wary and exceedingly cost conscious. especially for small businesses, uncertainty continues to weigh on them.

access to credit has improved somewhat, but it's still a significant problem for many businesses. my contacts speak of a "new normal," in which companies open their checkbooks for necessities, but not for items considered discretionary. this of course is much better than a year ago, when many companies deferred spending even on essentials. but it's not a recipe for robust growth. so what does all this mean for the job market? that's something all of us worry about greatly. the u.s. economy has lost 8. 4 million jobs since december 2007, equal to a 6 % drop in payrolls, the largest %age-point

decline in more than 60 years. we should never forget the people behind these numbersfriends, families, and neighbors who are struggling to make ends meet. i'm happy to see evidence that the job market is turning around. the pace of job losses has slowed dramatically. had it not been for blizzards back east, we might have seen payrolls expand in february. temporary jobs are growing, and that's usually a signal that permanent hiring is poised to rebound. i was heartened when the unemployment rate dropped in

january to 9. 7 % from 10 % the month before. i was further encouraged when the rate remained at 9. 7 % in february, suggesting it was not just a flash in the pan. in the months ahead, we could get a bump in employment from census hiring. but that, of course, would be temporary. given my moderate growth forecast, i fear that unemployment will stay high for years. the rate should edge down from its current level to about 9 % by the end of this year and still be about 8 % by the end of 2011, a very disappointing prospect. in light of these continuing headwinds in the financial system, the housing market, and the job market, i expect that the economy will be operating

well below its potential for several years. economists use the term "output gap" to refer to an economy that is operating below its potential. we define potential as the level where gdp would be if the economy were operating at full employment, meaning the highest level of employment we could sustain without triggering a rise in inflation. obviously, with the unemployment rate so high, we are very far from that full employment level. in fact, the output gap was around negative 6 % in the fourth quarter of 2009, based on estimates from the nonpartisan congressional budget office, or cbo. that's an enormous number and it

means the u.s. economy was producing 6 % fewer goods and services than it could have had we been at full employment. in view of my forecast of moderate growth and high unemployment, i don't expect the output gap to completely disappear until sometime in 2013. this idea of an output gap has important implications for inflation. we have a tremendous amount of slack in our economy. when unemployment is so high, wages and incomes tend to rise slowly, and producers and retailers have a hard time raising prices. that's the situation we're into today, and, as a result, underlying inflation pressures are already very low and trending downward.

one simple gauge of these trends comes from looking at the u.s. commerce department's price index for core personal consumption expenditures, which excludes the prices of volatile food and energy products. these prices have risen a modest 1.4% over the past, months, that below the 2 % rate that i and most of my fellow fed policymakers consider an appropriate long-term price stability objective. i just predicted that the output gap might not disappear until 2013. if the economy continues to operate below its potential, then core inflation could move

lower this year and next. i'd like to switch gears now and talk about federal spending, fiscal stimulus, deficits, and inflation. recent federal budget deficit numbers have been startling. the cbo estimates that in both the past fiscal year and this one, the deficit will amount to almost $1. 4 trillion. for 2010, that equals about 9 % of gdp.

2 i've been a critic of large and persistent federal budget deficits throughout my career. i've worried, in particular, about the growing federal deficits that are projected after the baby boomers leave the workforce. if health-care costs keep rising at the pace we've seen in years past, the federal debt could rise relative to gdp in a fashion that would eventually become unsustainable. such long-term deficits pose a clear threat to our economic well-being. when the federal government borrows on such a massive scale over a long time period, it drives up interest rates and sucks up savings that would otherwise finance productive private investments, potentially eroding living standards. but it's important to keep these concerns in perspective. in times of recession, when private-sector demand is insufficient to keep

unemployment from rising too high and inflation from trending too low, it's appropriate for the federal government's deficit to increase. at such times, reduced taxes and increased expenditures provide crucial support for the economy. that was certainly the case in 2008 and 2009. indeed, during economic downturns, much of this support occurs automatically. recessions always bring lower tax receipts and extra spending for unemployment insurance and other social insurance programs. the cbo estimates that in 2009 such automatic stabilizers added about $300 billion to the federal deficit.

but, in a severe and protracted downturn such as the one we just went through, these automatic stabilizers were judged to be insufficient. in both 2008 and 2009, congress enacted major stimulus packages that have added hundreds of billions more to deficits. the 2009 stimulus, for example, directly added about $200 billion, or just under 1½ % of gdp, to last year's deficit. stimulus programs took a variety of forms. so far, most of the anti- recession stimulus has come as individual and corporate tax cuts. there have also been sizeable temporary increases in transfer payments, such as expanded unemployment insurance, and grants to state and local governments, as well as

increases in direct federal spending programs. assessing the effects of this fiscal stimulus on the economy is, of course, challenging, since we need to figure out what the economy would have looked like if we had not had the legislation. economists use a range of approaches to do these calculations. for example, they look at previous examples of fiscal stimulus, or analyze other variations in spending and taxation. and they develop computer models to perform simulations. each method has its strengths and weaknesses, but hopefully, taken together, they capture the plausible range of effects.

the cbo recently used a range of approaches to analyze how the 2009 stimulus legislation has affected the economy. 4 it estimated that, in the fourth quarter of 2009, the stimulus raised the level of gdp in the range of 1½ to 3 %, and reduced the unemployment rate by ½ to 1 %age point. that is a very considerable effect. it's important to remember how dire conditions were in late 2008 and early 2009, and how rapidly the situation was deteriorating. the economic environment at that time was as terrifying as any i have ever seen. if the fiscal stimulus helped avert a catastrophe, then i would deem it a grand success.

now, it's a year later and the economy is in the midst of a moderate recovery. much of the stimulus spending is still coming on line, so it will continue to boost gdp for a time, but the effect won't be as pronounced since we are comparing this year's level to last year's already boosted level. the cbo estimates that the effect on the level of gdp and the unemployment rate peaks this year and then fades. so we can't rely on the stimulus to power an ongoing recovery. rather, i am counting on a handoff from government- prompted demand to private demand as we go forward. in the next few years, as the economy recovers, the budget

picture should improve. tax receipts will rise and stimulus spending will wind down. so i'm not alarmed by the current enormous deficits. i see them as transitory and recession-related. what i do worry about is the long-term structural deficit that will remain and grow even after the output gap has closed. as i mentioned, much of that long-term budget gap is related to the aging of the population and health-care cost trends. i was born a few years after world war ii and people my age represent the leading edge of the baby boom. tens of millions of people are following close behind. as a result, social security and medicare spending are

projected to soar. the cbo currently estimates that social security and medicare will rise from about 8 % of gdp in 2009 to 13 % by 2035, eventually reaching almost 20 % of gdp by late this century, based on their benchmark assumptions about trends in health-care costs. now, many people are thinking about these long-run deficits, and considering alternative ways of reducing them. but what different solutions have in common is that they inevitably require us, as a society, to make tough and painful choices.

the recent protests in greece, where a tough fiscal austerity program has been imposed, make it clear how difficult these decisions can be. there is one count, however, on which budget deficits should who lead innocent -- that is the charge that the deficits will ignite runaway u.s. inflation. i simply don't believe that's the case. concerns that deficits cause inflation have a long history. and, indeed, in developing economies, there is plenty of evidence showing that deficits are often inflationary. the logic is that a government can pay for its purchases through taxes, borrowing, or money creation. in countries with limited ability to collect taxes and

where financial markets may be poorly developed, printing money may be seen as the only way to pay for the activities of the government, that often has a dreadful consequences. however, in advanced countries with independent central banks, government deficits do not cause inflation, either in the short run or in the long run. these links between fiscal deficits and inflation have been studied extensively and the evidence is clear. japan is case in point. that country has run enormous fiscal deficits for many years and its government debt has risen to very high levels. yet japan has been the recent textbook case of persistent deflation, not inflation. here's the rub though.

i've just asserted that there's no link between deficits and inflation in advanced countries with independent central banks. the word independent deserves special emphasis because it is essential to a central bank's inflation-fighting credibility. as long as monetary authorities have the freedom to fight inflation without interference, then deficits won't pull them off course. when we examine the evidence from countries around the globe, we clearly see that independent central banks have been more successful in delivering lower inflation. 7 indeed, the purpose of independence is to insulate central bank decision makers from pressures that might distract them from their core monetary policy objectives under our system in the united states, the federal reserve is an independent body shielded

from interference from other arms of government. it is assigned two objectives by law: maximum sustainable employment and price stability. the president appoints members of the federal reserve board in washington and the senate confirms their nominations. the terms of fed governors were set at 14 years so that appointees to these posts would take the long view. in addition, a decentralized system of regional federal reserve banks was established in order to ensure that we hear a broad range of views from around the country when we set

monetary policy, while at the same time buffering us from political pressure. why does independence matter? a decision to raise the fed's short-term interest rate target may be unpopular. it raises the cost of funds for businesses seeking to borrow, invest, or hire, leads to higher mortgage rates, and boosts the cost of government borrowing. and here's the connection to deficit. in the future, with large and persistent federal budget gaps, some people might hope that the fed would help finance all that fiscal red ink by boosting the money supply and tolerating a higher level of inflation. an independent fed would find it much easier to stay focused on its statutory goals of maximum employment and stable prices. an independent fed would allow interest rates to rise if needed to address inflationary pressures and resist calls to monetize the debt.

by contrast, a central bank that wasn't independent might succumb to demands to keep rates low, even if the economy were in danger of overheating. to my mind, this is one of the greatest arguments for preserving the fed's independence. i have seen vividly how independence works in practice. at meetings of the federal open market committee, the fed body that makes these interest rate decisions, we have always framed our debates exclusively in terms of how policy moves might affect our objectives of maximum sustainable employment and price stability. we do not take other considerations into account. if economic circumstances call for higher interest rates, we act appropriately.

indeed, i have personally supported an increase in our target for the federal funds rate on 20 different occasions. that said, independence comes with responsibility. we are, quite appropriately, accountable to the government and to the country's citizens for our performance. in regular reports to congress as well as prompt releases of minutes of our meetings, in speeches and other statements, we aim to provide the information congress and the public need to understand how and why we came to our decisions. future fiscal deficits are not the only source of inflation worries these days. to some people, inflation dangers also lurk right on the federal reserve's own balance sheet. our special programs to stabilize the financial system

and stimulate the economy have pumped up our balance sheet from its pre-crisis level of roughly $800 billion to its current size of more than $2 trillion. in broad terms, the main way we expanded our balance sheet was by buying assets such as mortgage-backed securities, paying for them by crediting the sellers, and ultimately the banking system, with reserves, that isn't at the federal reserve. those reserves are the electronic counterpart to cash. so why isn't creating all this money inflationary, setting up a situation in which too much money chases too few goods, as the saying goes? let me into this and to raise

the into this in two ways. -- let me answer this in two ways. first, expanding the fed's balance sheet has not, in fact, led to a surge in credit. lending has been quite restrained. banks have been cautious as they seek to return to financial health, keeping much of the money created by this expansion in their accounts with the federal reserve. second, that balance sheet growth and money creation have taken place at a time when the economy has been operating with enormous slack due to insufficient private demand for goods. in other words, the pressures pushing inflation lower arising from underutilization of the economy's resources have more than offset any upward pressure from our special programs. the net result has been that inflation has trended down.

as the recovery continues, the fed will eventually have to make sure that this balance sheet expansion does not lead to inflation. this means that we have to get the timing right for tapering off and ending our expansionary programs. in other words, we need an exit strategy designed to remove some of the monetary accommodation that is now in place. the question of how we will go about that has been the focus of a lot of commentary. let me outline for you how we are thinking about our exit strategy. traditionally, the main tool of fed monetary policy is the federal funds rate, which is what banks charge each other for overnight loans. we have pushed that rate to zero for all practical purposes. this is as low as it can go. such an accommodative policy is currently appropriate, in my

view, because the economy is operating well below its potential and inflation is subdued. consistent with that view, the fed's main policymaking body, the federal open market committee, last week repeated its statement that it expects low interest rates to continue for an extended period. as i noted earlier, in addition to administering standard monetary policy remedies, the fed has put in place an array of unconventional programs to bolster the financial system and stimulate the economy. among other programs, these have included secured loans to banks and other financial institutions, and purchases of mortgage-backed securities guaranteed by agencies such as fannie mae and freddie mac. these programs were vital in preventing a complete financial breakdown.

but as conditions improved, the need for such extraordinary support diminished. accordingly, the fed has already closed many of its emergency lending programs and will soon close the rest. i don't believe this is yet the time to be tightening monetary policy. but as recovery takes firm root and economic output moves toward its potential, a time will come when it is appropriate to boost short-term interest rates. the size of our balance sheet raises some technical issues as we begin this process, but these are manageable. when the time arrives to push up short-term interest rates, we won't have to sell off the assets we have acquired, thereby shrinking our balance sheet. we can instead boost short-term

rates by raising the interest rate that we pay to banks on their reserves held at the fed. a hike in the rate we pay on these reserves will cause other short-term money market rates to rise in tandem because banks will be unwilling to lend in the money market at rates below what they can earn in their secure fed accounts. eventually, i would like to see the federal reserve's balance sheet shrink toward more normal levels. and i'd like the bulk of our holdings to be treasury securities, as they were prior to the crisis. selling off some of our assets could play a role in this shift, but my expectation is that the fomc will reduce the size of our balance sheet only gradually over time. the message i hope i've conveyed is that i don't think we're due

for an outbreak of inflationnot in the short run as a result of the fed's economic stimulus measures, and not in the long run as a consequence of massive federal budget deficits. if the fed acts responsibly by unwinding its recession- fighting programs in a careful and deliberate manner, then we can avoid an upsurge of inflation in the near term. and as long as the fed remains an independent central bank free to pursue its objectives of maximum employment and stable prices without interference, then there's no reason why it won't be able to keep prices stable in years to come. thank you very much. i would be happy to take a couple of questions. [applause]

if you will just wait for the microphone to come to you, toyekllen will be take -- dr. yellen will take your questions. >> i have to questions from. did you think the impact will be of the recent medical legislation? do you think outsourcing of production will contribute to a long-term job business? >> thank you for the question. , on the first question with respect to the impact of the health care, i have not yet seen in the very detailed analysis of the macroeconomics impact. the cbo has scored the overall

package, and reducing over the next 10 year horizon. most of the provisions affect spending over time burda my best to get off without having ketose to do without having done detailed analysis is that it will not have submitted impact over the next several years. did you say state and local government spending? outsourcing more broadly, you mean jobs to other countries? ououtsourcing has been a trend that we have seen in our economy that has been going on for a very long time.

it will continue to shift in the u.s. economy in terms of how paper is deployed across different sectors. in terms of jobs, if you think about it, before the crisis struck our country, the unemployment rate in the united states have fallen to bystryn the low levels. that was true in spite of the fact that outsourcing-a long trend. i have confidence that the u.s. economy is important. we can continue the demand.

there has been some thinking about the rules that outsourcing might have played. it is a form of technological change. it has had an adverse consequences. we have seen a rise in the gap between what skilled workers are in and those with louis phillips earned. i think outsourcing in trade could have played some impact on that.

speed for being very hard hit. i believe the issue be even worse than last to the there has been some relief to to the economic stimulus package. there is a tough time ahead. that is one of the sources i see on the recovery. >> this is also a two-part question. how does or should the body of the u.s. dollar factor into monetary policy tha? would you respond to the argument that full employment has been lowered.

>> those are excellent questions. he asked how it does or should in fact monetary policy. in normal times, as long as the dollar's movement are moderate and not destructive, it factors into monetary policy of the and its effect on the performance of the u.s. economy. what is it doing to the level of output for jobs that a decline in the dollar tends to stimulate

demand. it makes our exports more competitive it tends to move domestic consumers the dollar does tend to boost output. it has a mixed effect. it can raise the price. it can have an impact of the price of commodities. both of those things need to be taken into account. on your second question of the

gdp and what happened, i guess if i would say that the crisis has had a whole different effect. to some extent, it is causing face stiff -- causing a shift in the demand to move across different sectors. the full employment rate could be boosted a little bit. some of my colleagues have estimated it might have boosted the unemployment rate in the debate, made the birdie may be

to a round -- to may be around 5.25%. even if it were as high as that, that is not the actual level of unemployment. it would not change my view. with respect her's that affect output, that comes down to one factor, how much investment funds are there. recession has been bad. this boosts productivity. investment has fallen so much. that has been negative. the overwhelming thing i see is

that they became totally focus on what we can do to reengineer. we do business. not only do they of the of workers, they tell me it was read a lot to prove -- rethough.

. .

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> this was brought together by the nation's and into the national culture. this was leading to the insurrection. this is symbolic of everyone else.

from 1791-18 04, we have the revolution. one thing i like to hear about this, in france, they have taken the color of white out of the flag of haiti. this is a rejection of -- this is not the rejection of humanity, but this is the rejection of the white this. there was a phrase that was used 15 years ago. they said that this was loyal to humanity. we have to get past this question. in the constitution, everybody is black. we're going to get rid of race. but this is a big challenge. between that time and now, you have the government's -- people have to eat food.

but how you constructed this state, where this never existed? you see this with the entire western world against you. this has not changed. i will continue but we will stop on any thing in history. the fact that the american government was helping a little bit. he is alleged to have participated in the 1779 battle in said that that was mentioned, where he spoke about the support. they helped us get our independence. this did not include us, because most of the black people were trying to get away. as many black people were fighting for the british as the americans. the french were able to assist. this was a matter of geopolitics. it would take until 1862 to see

this as a state or a government. as a consequence, you have the relationship that was stretched with a group of leaders that are supported or undermined by the americans based on the political interests. let me finish. we will talk about the relationship of africa and the united states. in the rebellion of nat turner, the trial records showed that some african-americans said that we could go to charleston, there would be a boat from santa domingo. frederick douglass, he would not support the united states on the columbia expedition. the haitian government gave them a place at the world's fair. this is where he gave a speech. this is where the connection

with the congressional black caucus is very deep. there was a book called "the unbroken agony." it spoke about how we have always taken the leading role on the pan-african area. this is not the spanish caribbean or the french caribbean. new orleans is the outer rim of this. this represents africa to the western hemisphere. you see this with the rest of the united states. the response to hurricane katrina has been compared -- has been compared to haiti. there is a cultural and racial difference. we cannot make light of that. what do we need to do. the bill has passed and this is very important. we have contacted the price to restore haiti to the memory of the united states. and finally, prevent and do not enable the predator.

i think about the book by naomi klein. we will stand in open defiance to the people who are waiting to think about what they will do next to haiti. thank you very much. >> thank you very much. >> first of all, let me thank you for thinking about the discussion and the focus on haiti. i would like to say, good afternoon. and also, [unintelligible] and mr. joseph and all of the distinguished guests. i am here to talk about the

history of haiti in seven minutes. i do not know if i should go ahead and give you the major things that have taken place during haitian history, or just speak about the relationship between the united states and haiti during that time. and how we will implement some change to make certain that the policies in haiti will work much better than they do right now. let me give you the major impact of history and haiti. in 1492, they were discovered by it -- christopher columbus. and in 1697, the spanish took over control, and with this tree, they actually divided the island in half. there was the french, and the

dominican republic. in 18 03, we had -- between 1791-18 03, we had established slavery in haiti. and during that time, we had a protracted, 13-years of liberation in haiti. and during that time, the army of slaves -- they were eventually betrayed by their officers, including christopher, because the policy was to have some sort of association with the french.

in 18 03, the blue and red flag was the symbol and ultimately we with the winner of our own independence in 18 04. of course, in 18 06, in 18 07, there was a civil war. this would last until 1821. and they would invade the santa domingo, to declare independence from spain. and the entire island was controlled. 1838, the french never recognized haitian independence.

and also, in exchange for the independence, for 150 million -- most of the nations, including the united states, did not recognize the independence until 40 years later. they were afraid that the example of what happened to slavery would spread around. over the next few decades, they were forced to take out 70 million to pay for the independence. 1862, the united states family granted them recognition, and the ambassador, frederick douglass, was sent to haiti. woodrow wilson ordered the

occupation of haiti for a custom house and a port authority. the national guard was created and the marines -- they went into the labors, building the roads, and also, to work against this -- there was assassinated by the marines in 1919. in 1934, the united states finally withdrew. and then from the armed forces. this was near the board of the dominican republic. this was under the order of the president. and that is in 1957. they were moving forward, democratically.

and then you have the president of haiti, and in 1964, he was declared the president for life. there was terror all over haiti, as well as corruption and everything else. he died in office and he named his son his successor. that was the successor for another 15 years. in 1972, they had this in florida.

this was the first negotiation with haiti. let me highlight the order. i have one minute that is left. i would like to say that in 1987, he left and actually -- they had a new constitution. with the new constitution, the military control, we have this also. we first elected him into the presidency. we have turned this and this is anti-ended. in 1990, there was a new

president of haiti with 60% of the voting. he was there until the to the top -- coup detat and in the energy and then he returned to washington. he came back in 1994 and would stay until 1995. he was inaugurated in february. he was there for five years. he was there for the history of haiti, for the entire term. we had another presidential election, where he came back into power. he resigned in february 2004.

and he was taken to south africa. and the last thing that i have to say in the history, we have recovered from the disaster and this was a daunting task. in conclusion, they were going back to haiti and we have to have a good partnership. we have this between the united states and a sustainable partnership. within this framework, we will prove to the serious recommendations that will show some of the constraints for the future of haiti. we also recognize that there

would be a new partnership. they would deliver the services, and the united states -- there will be negotiation between these countries. we should all step forward. we should look forward to the day when they are free. thank you. >> thank you. we will be taking a break, because we have the majority leader who is here with us right now. this is a good place to go with the leader, because he will be with the leadership team, leading the way to the new haiti.

>> thank you very much. i apologize for interrupting the distinguished panel. i was delighted to hear this. i would like to thank all of you for being here. and i would like to congratulate the doctor for her leadership. she is a good friend, and from a neighbor of haiti. and i would like to thank one of my close friends as well. this is an extraordinary leader of the congressional black caucus. during the first trip that i took as the majority leader, we went to darfur. this is an extraordinary job leading the caucus. the administration just sat down the $2.8 billion supplement.

we will be addressing this, as soon as we get back. we will play our part in responding. there was an article in the los angeles daily news, talking about the fire fighters who were going to try to save lives. they were weary after going through the rubble on sunday. this was like a shot of adrenaline. usa. usa. there were large crowds in the street, talking to them. this finally collapsed -- she was finally found under a building she had collapsed -- that had collapsed over her.

the first reaction to the earthquake was shock and sorrow. for the shattered lives of so many. particularly the country that has seen some much pain and suffering throughout their lifetime. beneath those reactions, there was the reaction of men and women, they have helped haiti rebuild. this is part of the role that they have played and will continue to play. the former president, bill clinton, and hillary clinton have a very special relationship. he spoke to the caucus here. you know, about the greatness of haiti. for the most part, this is not seen by most americans.

this is part of the quality that they have contributed to in this picture. the military medical personnel have treated many patients, and they are training the engineers to do the same. underwater construction is helping and they are restoring things -- and i know that dr. shaw was here early on, and he was speaking. he is doing a very excellent job. the words that we say here cannot rebuild the zone, or bury the dead, we still have a share of work to do. the house has passed -- the legislation from congress and waters, cancelling the $800

million debt of haiti. and the $290 million is included in the debt for the forgiveness. i am happy that the development bank answered the call yesterday. they will forgive $475 million in the haitian debt. the house has just received the disaster supplemental request. the substance -- the substance of this is powerful. but also powerful is the thought of congress urgently responding to the needs of a neighbor, that once joined the world -- it once joined the world in shunning, because this was covered by slaves who won their freedom. this is at the can often tragic but this may have a new beginning.

in my district, there was a town with a tornado that went through this, this is about half an hour south of where we are right now. this took down the entire school, the churches and the office buildings. luckily, there were a small number of people who lost their lives. three or four of them. but this was a devastation. there was a shock. this happened some three years ago. if you go there right now, they are rebuilt and reborn, and reinvigorated. this will happen in haiti, if we remain focused. and the congressional black caucus is focused, and we will remain in the leadership, not only in our own country but the international community, not forgetting the devastation that has taken place and staying with

this until they have the opportunities that they have to have so they will have a successful partner in america. thank you for your leadership. we have a vote on this. i have to get out of here. thank you very much. >> thank you very much. they were going to allow the panelists to go [inaudible] thank you very much. >> thank you for moderating this panel. each and every issue that we are talking about here in congress, she makes certain that the caribbean is included. this is in all the foreign policy efforts. i want to recognize when she has done in health care reform. she was working on behalf of the

entire congress to make certain that the provisions were all included. give her a round of applause. i will be very brief. this is a very important moment in u.s. relations and foreign policy. i want to thank you for your leadership, and for staying the course. we have expressed this to you on numerous occasions, the congressional black caucus and the government will stand with you. and the people of haiti as you rebuild your country. thank you for being here today. i want to thank all the panelists for offering their insight, and their experience and understanding for the challenges facing haiti, as well as the opportunities for confronting these challenges.

many of us have been working with the people of haiti for many years. oftentimes, we worry, because haiti, the issues around them are never on the front page. people really do not understand what has taken place, the resilience of the people of haiti, and their beauty, and their strength, and how their policy has not really been what this should have been, to support haiti, and the people of haiti, in a way that helps the people of haiti move forward in terms of their development of the country. we will continue to work on issues relating to this tremendous earthquake, and this disaster that has occurred. it is important to move from emergency relief. we have to work to the long-term

recovery and reconstruction. some of us have put together the marshall plan. we have to have a plan like this, and we are working on the $2.8 billion supplemental. this is just to get through the emergency. the government needs to have a sustained effort to help haiti live. we are working very hard with all the members in a bipartisan way, to make certain that they are not put on the back burner. this is a wonderful historical relationship. members of the congressional black caucus were wanting to do this. there is the special relationship that the united states has with haiti. this focus on haiti really is the focus on haiti, but this is also another focus on haiti because i think that we owe the people of haiti gratitude

because they stood with the united states. in terms of the history that has happened when it comes to 80 supporting the efforts of the united states. this is so important to recognize this in the foreign policy. and i want to thank you. i want to thank all the panelists, thank you for coming. the congressional black caucus will continue on the development and the trade, the reconstruction and the recovery. canceling the debt. the leader was talking about championed this, and we are moving forward. we will do everything that we can do, to make certain that once and for all, they receive the kind of commitment that they have deserved, not only now, but historic plea. out of this crisis, we will turn

this into the opportunity and the memory of all the people who lost their lives. thank you again for being here. [applause] >> thank you. i was actually surprised to hear that i was invited to talk about this on a panel of the history of haiti. but this was a pleasant surprise, because, as many other speakers have spoken on, you cannot understand their crisis without looking at the ngo. and the political developments. you may miss a major part of the picture. you have seen that they are planning a huge role in their response to the earthquake, and this has also been happening for

many years. you can go to port-au-prince and you can drive around. you have people healing the sick and feeding the poor. this is a good thing that people are getting food and getting shelter, but this would be a much better thing if all of this work was done, or at least organized, by the entity with the legitimacy to implement a national plan. and that would be the government of haiti. some of the arguments against empowering the government of haiti to provide basic services have focused on the critique of the inability to deliver. we may have heard too many of these. and you have to critique the existing situation. you have to ask how we got here.

it is obvious that one of the reasons why the government got to the place where they can provide basic services without the support of everyone is that they are always paid to do these. they have the financial power to do this. and the government of haiti has always been denied the financial power. this goes back to what the doctor said about the debt of france, and the way that some of these loans were given to the dictators in haiti, and the democratic government was forced to pay them back by cutting public services. there have been many different ways that the haitian government has been prevented from providing basic services with the policies set in washington and new york. and the big cities not in haiti. this is one of the good things. one of the close connections was

between 2000 and 2004. this was articulated that we were not giving money because of the economic policy. we have moved on, fortunately, and this is one great sign of this. and there are others, and at the donor's conference, every speaker got up and said that we have to empower the haitian government. we have to reach this in haiti. there is the current decision with the earthquake crisis. there are people without food or shelter or health care. you cannot spend a lot of time developing the infrastructure

before you start to feed the people. i do not think that these are mutually exclusive. you will be able to do both of these. the red cross is distributing the food, and they do this, but you have another system with them so they will know how to do this even better, next time. we have to have the opportunities for a haitian capacity. we have to have this with the response. this is not a systematic integration. we have people who are too busy to think about these things. it is also important that everyone who engages in the earthquake recovery, every foreign government, has an exit strategy, and a plan where they will no longer be necessary. i was asked to be on the

advisory board, for a fund- raiser that was -- george clooney was organizing this. they were asking a few of us to give them advice on how to spend the money. they were talking about why they were qualified. they had to show that there were a qualified to do these things. they say that they had been working in food relief in 8440 years. this shows the certain problem, that anybody who was doing this was doing this for years ago and they are still doing this right now. and they may think about doing this differently so they will not do this 40 years from now. another thing about responding with developing the capacity is the question of money. i am at a u.s. taxpayer. i am happy that the members of

congress are worried that the money may not be spent well. i know how corrosive the government is. we certainly have to have accountability. and we have to watch the money. but we were at a hearing on the commission on human rights, about the consequences of the earthquake with human rights. and one thing that the government had said was that they were involved with billions of dollars in relief. they have $10 million. it is important to make certain that the money has been spent well. but if you cannot find them the ability to provide $1 for each person, you are not looking very hard. it should be alarming that there is not more money going to the government of haiti. this should not be a blank check that you can certainly find more things for them to do well with more than $1 per citizen. i would like to make three

points about accountability. the first, one more capacity has to be developed. this has been starved, for 30 or 250 years. it is not surprising that this government that has been starved does not have the accountability mechanism. the solution will have to be built. and that should be one solution that the national committee is offering. that is to give us this mechanism. accountability is a three-way street. the government of haiti will need to be accountable, but also, the ngo's and if anyone has been falling the money in the last three months or the last 10 years, this is a difficult proposition. the third way that the

accountability -- there is the accountability with justice. and as the doctor has mentioned, and as reverend jackson has mentioned, the debt that is owed it to haiti can be quantified with what france took out of them, which was calculated at $21 billion. this would go a long way to build them back together. if this concept was restored. the third thing i will say about accountability is that this should be political and financial. and that means that there should be an election with the constitution, and the government of haiti should be supported and we have the international aid that we have to empower the government to comply with those constitutional limits. there is always a good reason not to have an election. one reason to look for the

guidance in 1864. we had more people killed in the civil war than the earthquake. we managed to have the election despite being in the middle of the civil war. this actually went a long way to resolving the problems of the civil war. this was moving the country forward. there is one more reason why this is a good idea, to have a little bit more less work that is done and coordinated by the government. this is in addition to the big pictures that many people have mentioned in terms of building the government for the own democratic -- democratic principles. as part of the hearing yesterday, there was a report talking about the difference between the very different --

very generous support that has been promised, and the lack of this that has arrived in certain places. this is a major challenge. but when the investigators are talking to people, they very quickly mentioned these problems, but they also said that they have solutions. they know that they can distribute this better, but nobody is asking them. with everything going on in haiti and the response to the earthquake and development. thank you. >> we would like to thank the panelists. we are over time right now. i did not get a chance to ask you. but if we are able to hold questions until the end of the next panel, we can have everybody reconvene. please give them another round of applause. we will bring in the next panel.

we would like to shorten the presentations to about 5 minutes. >> as we are setting up, i would like to say that kendrick meeks came by, and i saw him in the middle of the panelists. i wanted to make certain that you knew that he was here. and that he has a great commitment as well. and as we are assembling, the panelists this afternoon, this is the panel, the pathway

forward. the policy communications and we have heard a little bit of this from the members of congress and also the other panelists. this is where we go into the new haiti, that we have envisioned for the future. you have already met his excellency, who is the ambassador. he is from haiti to the united states. a journalist and a pastor. and also, there is the coordinator for the u.s. agency for international development task force. reporting directly to the administrator and he is responsible for coordinating the recovery effort in washington. we also have the president of

the transafrica forum. doing where in the african, and that when she has learned about passion rights and -- human rights and activism. we have the advocacy policy director who began working there in 2001, with health advocacy and policy efforts, related to hunger and socioeconomic needs. we have a leading figure in all aspects of urban design, with one of the leading authorities in urban housing. this has become an important part of the architectural curriculum, everywhere. there is richard, who joined the urban design lab in 2008.

he brings in experience on issues affecting urban development. did i miss anybody? and there is joseph. i did not? he has managed the bureau of advocates, international. and i have lost my page. he has practiced human rights and criminal law since 1993. he has been called the most- respected human-rights lawyer. those of the panelists. we would like to have them --

policy at thehief of central bureau for crisis prevention. he has extensive experience working on the developing issues in the horn of africa and the caribbean. is that everyone? this is a very large panel, very late in the day. i will ask if we can try to keep this to about 5 minutes. and we will speak in the order in which we are seated. >> i will try to be very short period i already spoke a little bit. first, we are fast lee -- fast- moving to recovery. and as i have mentioned before,

the government and the prime minister presented a plan, which is a vision for haiti. why will tell you about this vision is that decentralizing haiti is the part of that. to give you an example, in the plan, we're looking for the international airport. we are looking for another airport that will be international. this is in port-au-prince and this is there already. and another international airport that is to the southwest. this may be the fourth but this is in the plan. the plan, also, would have an emphasis on agriculture. this is because haiti was, at

once, one of the most fertile places, producing food for a good part of the caribbean. and early on, we produced half of the sugar, and the coffee, that all of europe was consuming. we have this within 80 to develop our agriculture, to do this together with a big program and reforestation. the focus for haiti will not be a republic at port-au-prince. some of us have mentioned this before. this is true. this is the vision that we have. decentralizing haiti will also involve the schools, hospitals,

sports, so that not everything is concentrated here. one-fifth of the country was hit by this earthquake. and the economic damages were about 80%. the minister of finance -- they met about 10 days ago with the president in washington. he gave a presentation in congress, and this was in front of 75 members. he also mentioned it to president obama, we collect only 20% of the revenue that was projected for the month of january. one-fifth of the country, only

20% and we have a shortfall of 80%. that is why we were asking for budget support. the people of intervened today mentioned support for the government of haiti. we are still having this idea about the non-transparent country. but if we had been like that, the international community would not have forgiven the $1.2 billion from last june. and now they have almost all of this. we have met the benchmarks. we have done everything right. we are meeting the benchmarks on

transparency, and on corruption and all of that. the last thing that i would want to say about the government, looking forward, i know some people believe that power is a swift thing. but this is also very heavy. the one thing the president was pushing for, all the time, this to have the elections before his term is over in february, 2011. he does not want to see this going back into the interim, where there will not be a legitimate government. we are asking the international communities, and the united

nations, to help us. we have the preparations for the elections. so that we will continue on this -- with this government. this has been elected, democratically. the president of haiti forcefully commands this. frankie. >> good afternoon to everyone. i would like to thank you for hosting us. the long-standing interest of the congressional black caucus is something that makes this job easier. we have this kind of partnership in dealing with these challenges. the administrator spoke and said the focus was necessarily on the recovery in the aftermath of the

of quake. we are still focused on the race against time to get people under shelter before the rainfall. it is very clear that the attention of the international community has returned to the detailed reconstruction planning. there was a technical meeting last week in santa domingo. a group of multi-lateral donors and institutions came together. and they were trying to put a number on the costs, and the impact of this disaster. there was a meeting in haiti and we are moving to the donor's conference in new york. we are focused on this and trying to get the voices heard. and we will let them influence us, so we know that we are doing reflects the desires of

the haitian government. the sectors that people will be working on in reconstruction are very clear. people are aware of these needs. the large numbers, the 1.2 million, the displaced people. there will be an urgent need going forward. dealing with rebuilding the infrastructure. haiti has had some concerns with food security. the issues of food security and rebuilding the agricultural sector, this is paramount. we have spoken about strengthening the government of haiti. we said we would be working in this. the other area is reestablishing the essential services. these sectors are clear. well we have to do, is precisely within those broad sector. this will depend on the deeper consultation going forward with

the government of haiti, but there are a couple of principles, that from these perspectives, are going to be paramount as we move forward. the ambassador was talking about this with others, the recognition that they were on the good pathway. there were a lot of positive things happening with political stability and economic growth. the job, as we see it, is to get back on the path. they will build on the success that they have had in recent years. the second thing, you have to work towards strengthening the government. we are firm believers that the state -- sustainability will be there on the government. we believe that these are important, worldwide. they will play the important role in society. this will depend on the government institutions that take part in moving this.

going into the diaspora of haiti, i think that -- i have worked in a lot of different countries. haiti is not unique in this respect. but this is one of the few places with such a skillful community, recognizing the united states. it is important what happens in the energy of that community. transparency is obviously very important. you think about the research that we need to move forward. we have to generate confidence in the outcome. we can demonstrate that the money is spent for the intended purpose. we will not get the confidence or the research and this is important. the ambassador spoke about this. we have met the environmental challenges and we have to make

certain that this is integrated. we were also talking about disability, and the role of women, and there are other principles that will be important. i think that this transformation -- we have heard this from the other speakers. this is the opportunity to build back better. how can we have these goals that are aspirational? how can we use this to help -- to help for them to leapfrog into the 24th -- 21st century? thank you very much for this opportunity. [applause] >> thank you. i may have to step out and go over to another speech. we are honoring charlie rangel. i have about half an hour to get to this. i will step out but i will try to return.

>> ladies and gentleman, i would like to thank the congressional black caucus for this. i would like to say a few words on the humanitarian tradition, the role of the united nations, calling to the march conference, and a few words on some of the things that they are doing in the current situation. as you are all aware, we are not out of the woods. there has been a lot that was done, and many challenges -- there had been a lot that has been achieved. there is an outpouring of support. currently, there is contingency to plan for the next humanitarian catastrophe. this is the rainfall. this has already begun.

and the hurricane season. this is over 433 sites. with 680,000 people living in small camps. the shelter is really the first, top priority. we see how to be coherent, with the need for temporary shelter. with the traditional housing, to force people to go back, for many of them, going back to where they came from. there is still a lot of support on the humanitarian part of this, and the un is only 50% funded. this was largely underfunded, particularly in the shelter.

the labor -- the'lle able to return to the reconstruction discussion. haiti is very dear to the united nations. and we have been heavily involved for many different years. and we have been involved and we work very closely with the people of haiti, and a different part of haitian society. the international partners, particularly in the united states. and former president bill clinton. the u.s. is involved, with the security rule of law, to the un mission. there have been several missions over the last 15 years. and they're very critical with the national police, maintaining security.

the united nations is involved in humanitarian rights. they are trying to coordinate all of the sectors and the un is very involved in pushing the agenda, and the early recovery. they see this in the humanitarian operation. this is from the first day, you are starting to work on the recovery and reconstruction issues. this is becoming involved in the support for the international capacity. a few messages from the united nations. it is absolutely essential to support national leadership and ownership. in the big crisis, it is easy to forget that somebody is in charge. you have thousands of actors, many of them are new actors,

because of the magnitude and the size of the response. i just came from there. many of these people were sitting on the fence. they did not know or did not want to really engage. it is very important to recognize that they are in charge, they may be weak, and they may be in bad shape after january 12. but they are in charge and we have to respect to the ownership. we have to be forceful and we have to work through the national tradition, and we have to support the haitian private sector. they are not only on the fence, they feel isolated and left outside of the big response. they should be brought into this, and we should begin to work with them and support them, so we will be creating

jobs, locally. coordination is a major challenge. so all the actors -- they should be part of the leadership of haiti. the international community, the people of haiti. this is a very important element. and the other major disasters -- this is a very key element. to make certain that the women of haiti are building the future of the country. a few words on the meeting -- the ambassador has said that the government presented their idea. there was the first presentation of the vision. the focu