that that is somehow of the ninth fact is also crazy. they are coming here next week sometime, and i believe they will agree to modest sanctions on iran. i think they will offer a little bit of currency fluctuation, flexibility, in return for cuspus doing a private agreemeno not sell arms to taiwan and a whole bunch of things that they want. the president would not let the dali lama in the front door. he used the back door which he reserves mostly for israelis. [laughter] i worry about that. we have stalled putting out a report called "currency manipulators." i think that was a mistake, but

it is a very delicate situation. as for india, you noticed the president has not included india on his itinerary. that is because it is a friend. if you are great britain and a friend, he comes down on the side of argentina and the falklands. if your israel and a friend, he comes down on the side of the palestinians. if you are india and a friend, he goes to china, which rivals them for power. i think the recommendation here is to become an enemy, and then the president will treat you nicely. [laughter] >> over here, and then behind you. >> thank you very much for a very interesting lecture. the part which struck me as the best is the part where you talk about the need to have an opening from the bottom of new

enterprisers, new competitors, always rising. new forms should be challenging the all the ones and therefore destroying them -- the old ones and therefore destroying them. could you say more about what we ought to be doing to make sure that america, which is quite unusual and special in its openness, presenting the advantage and that nature. -- is maintaining that advantage and that nature. >> do you want to start a business? but a key in the door. you have to take some chances. i would tip public policy to

remove impediments. i don't believe in subsidies, but i believe in removing impediments to establishing a business. then i would stop doing stupid things like this health-care thing that makes it very expensive for new businesses appeared big companies love a regulation. they can come -- very expensive for new businesses. big companies club regulation. they can cope with regulation. if you are a small refiner, you cannot cope with it. the fact of the matter is, you have to be very careful. regulations favor incumbents. also, remember new businesses are financed by venture capitalists. the first question venture- capital must ask when you go to them with an idea is what will microsoft do?

the answer is, they will cut its price on any product like mine down to zero. the venture capitalist says, get financing from your family. i think we have to stop predatory acts by incumbents. >> i am not short if peter is here, but in his absence, i wanted to bring of your suggestions to resuscitate fannie mae and freddie mac. if indeed mortgage securitization business is an economically viable one, why can we engage with that with appropriate regulations? >> i think they would. what i was arguing for was

whatever system we can come up with, it should relate to the positive externalities' of home ownership, which are not reflected in the price of home ownership. when i buy a house, the value of reduced crime rate is not fully reflected in the price of the house. i would not -- i would try to get the politicians out of it. they have an incentive to make houses available. i would prefer the market, but i would prefer the markets with some form of subsidization that does not go as crazy as fannie and freddie. >> isn't the mortgage interest deduction arguably something in

the the nature of what you are talking about? >> they might be, and i do not know the magnitude. they could be, although i would be inclined not to relate it so much to the advantage of it to the income level of at the recipient. i would catch it somewhere so that it is not just a gift to somebody who is buying a house anywhere. please understand this. i was hoping peter was here, because he is the most coherent pinata hitter in this business. i was trying to make the point that conservatives can not content themselves with saying that fannie and freddie are evil. i am not in favor of imposing the moral standards of charlie rangel on the housing market.

i always thought conservatives or for home ownership. economists or against it, because it makes the labor market less flexible. if you have a house and you are out of work, you are all lot worse off than if you are in -- if you are renting an apartment and you are out of work. this is a very complicated business. i am taking the same position that conservatives have been taken -- and been taking. >> you can come in front. >> i agreed with everything is strategically if not tactically pipit -- tactically. there is an argument to be made

that things have changed a lot in the united states. you have been around ceos, senior executives for a fair number of years. >> thank you. [laughter] >> i would just like you to reflect, have you observed changes in terms of, yes, i could do this legally, but i am not going to do it for other reasons. >> that is a very good question. i have worked with and for a random sample. as you can tell, my views are not mainstream corporate. one corporation i worked with, i was at a meeting at which accountants came up with a perfectly credible way in which this majority -- this minority shareholder could screw the

majority, and he said, it is wrong. it is legal, but it is wrong, i will not do it. what i have found is that there is an upward spiral of self- reinforcement. how would you say it? they believed they really deserved all of this stuff. they attacked shareholder groups that oppose them. they called them sharks and creditors. these are people who owned shares. they wanted to get heard. and don't know if compensation is better than what it was before. i cannot go as far as saying, that is enough. you ought to be ashamed of a

hundred million dollars. i would like a system where, if you learned into -- if you earned it -- and that is a separate question, i would not be embarrassed by $100 million. i am in favor of rules and incentives, preferably a incentives. the government has a role to play in indicating what is shameful. i think president barack obama has gone a little overboard. he should tone down his rhetoric on this point of bankers and shame and so on. i would say it got a little worse in the compensation area, but a lot of people i know,

especially in closely held corporations -- that is the interesting thing. i was always against anti- capitalism, because look at what it did in italy. on the other thing, it does something that publicly owned companies cannot do. i have not quite puzzled out in my mind where i come down on this. i am sorry. >> i would like to ask a question that perhaps is hazardous lead one of intellectual -- is a hazardous one of intellectual history. i am curious as to what conservatives you are in tacking -- you are attacking. your message sounds very similar to the message upper economists

and sociologists in the 1970's. at that time, it was essentially a critique of the state. are you suggesting that conservatism has shifted from that perspective and is somewhat now problematic in ignoring important incentives, or it was it falls in the beginning -- falls in the beginning? -- false in the beginning? >> i am not sure. i think that the bush and obama administration's were such a shock to the sensibilities of the conservatives. on the one hand, the spending of the bush administration, the

mindless spending. on the other hand, well, we do not have time to list the obama stuff. it was such a shock to their sensibilities that, the phrase that comes to mind is nattering nabobs of negativism." they went on the defensive, and they are not good at it. it is similar to what duke might do tomorrow. you have to go on the offense about this. in a sense, i have regressed. you know, you can pull out your copies of "the public interest." a lot of what i said is there, although not in such an inflammatory way.

george will and said i like to poke fingers in the eye with short six. i don't really. i think that some conservatives are in such coshocton -- such shock. the conservatives now have a knee-jerk reaction to anything that goes on in the board room. this is just as libertarians have a knee-jerk reactions when the government gets involved in the bedroom. we have to take these the knee- jerk reactions and say, what is really here? what do we know empirically? what are we really for? are we for short sellers of the canon drive a company to bankruptcy?

i do not think so. maybe all i should have done it is come in with old copies of "the public interest," and handed them out. it would have saved you a speech. way over there. >> there was one topic that you barely glanced upon. >> well i have 100 pages. >> that was health-care. you are interested in the carving out a conservative position. here is a thought experiment, a quarter baked idea. how about, just throw in the

towel on catastrophic? my doctor is sitting on my left and i heard him grown -- heard hampshire groan -- heard him groan. >> you'd better not get sick soon. >> the argument could be made that everything else could be restored through the markets. i recognize it is not perfect. >> what would you think of this? and give money to poor people so they can have health care. no forms to fill out, nothing. and if they choose to not use it

for health care, too bad. >> many of them will get themselves into a position where they are desperately sick. >> we know better than they will know themselves how they should be cared for. that is a bad road to travel down, my friend. we used to give people something called wic. remember this? this was a program for women infants and children. they used to get coupons to go by, we thought, baby food and other stuff. well, they went and bought cigarettes and alcohol. i know this because i worked

with a company that had given out a lot of coupons but not moved a lot of the baby food. we want to be able to afford something. if it means that i have to pay more taxes so that people can have a decent living who are the deserving poor, and i am perfectly to tell you where i draw that line, because i have been in britain for a long time now and i can tell you that that line has to be drawn. there is an old joke that ends with "and if she dies she dies." that is where i would leave that. do we have one more question? how could we have another question? i have solved all of the problems.

[laughter] >> i was wondering if you could say a little bit more on your views of inequality. are you looking over a life span or in absolute numbers? do you think women should not be allowed to work and outside the home because that would reduce inequality right there? >> if you think i would say a thing like that, you are mad. i think inequality, as you know, because you are an expert on this, it's what you do not want to do is reduce it by matt kids and to the extent that it discourages the initiative of high earners who create the wealth that i do believe it does trickle-down. but i think that when you divorce higher earnings from economic performance, you have

made a very serious mistake now, over what time do i looked at it? we are in a very strange time at the moment where there is an adjustment demanded of low income workers who have to get more educated. they are going to what used to be called vocational schools. that is not allowed any more, so they go to community colleges. i do not collapse at the prospect of the marginal tax rate going up a point. the way the money is used offend me mightily. if you're going to use that money to give out vouchers for community schools, and would not get upset. if you tell me it is going up 10. , and would get upset. -- and going up 10 points, i

would get upset. anyhow, thank you very much for your attention. [applause] >> thank you for a very provocative lecture. please join us for a reception outside. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> tonight, a rise in executive

on the recently released national broadband plan. she called on the government to take a fresh look at communications policy. that is tonight 8:00 p.m. eastern on c-span 2. recent congressional hearings on the toyota recalled have brought up the question of safety standards. we will have a talk with the ceo of the alliance of automobile manufacturers. coverage will be on c-span television, radio, andand c- spam.orn.org. >> what top winning documentary

videos every morning on c-span. for a preview of all the winners, visit our web site. >> a state department spokesperson said that hamid karzai should it choose his words carefully when making statements about his relationship to the united states. this was after he threatened to join the taliban if he continued to receive pressure from officials. >> we have finished the holiday week, and now the place is packed. good afternoon. welcome to opening day. it is a great day to be a baseball fan. it is a great day to be a red sox fan in particular, given what happened last night. the president will be over at

national park here in washington later. baseball season is underway. it is a great sports week if you are a baseball fan or a hockey fan. we have several things to talk about before taking your questions. secretary clinton and the nigerian secretary will inaugurate a binational commission tomorrow afternoon. at the department of state. . this is designed to expand mutual cooperation across a range of shared interests including government transparency endpoint integrity -- transparency and integrity. there will be a number of

working groups formed as a result of this inaugural meeting that will meet here in washington and in nigeria in the coming months. deputy secretary jim steinberg believes this evening for a visit to the the falcons. -- the falcon islands. -- the faalkans. alkans. he will have a meeting in sarajevo. he will commit to u.s. support and engagement as bosnia works through its reform agenda. in belgrade, he will renew the

commitment to work with the serbian government to foster stability in the region and to encourage cooperation with kosovo. he will reaffirm our commitment to pose a vote's sovereignty -- to kosovo's sovereignty. the under secretary will be in the vietnam this week for a bilateral pre -- bilateral meetings. he will also give a speech at the china institute for contemporary international relations. assistant secretary arturo valenzuela is in ecuador today.

tomorrow he will deliver remarks at the university about the state of the world economic forum. he will finish up his trip in aruba later this week. -- in peru later this week. assistant secretary johnny carson will give a speech later at harvard university. that speech is open to the public and press. our special envoy is back in khartoum. he continues to work with the national elections commission and various parties regarding the upcoming elections in sudan. these are the first multi-party

elections in sudan since 1986. we have seen over 16,000 candidates from more than 70 parties running for races at the national, regional, and state level, including legislative seats where 25 seats will be for women. this is a critical milestone within the framework of a comprehensive peace agreement. the government of sudan and the parties involved are taking all possible steps to ensure that the elections proceed peacefully and are viewed as a a credible budget the sudanese people. restrictions on freedom have led to the ongoing uncertainty surrounding the electoral process. it is important for restrictions on political parties to be immediately lifted.

sudan must ensure that all voters are able to participate in the election by improving conditions on the ground, including in darfur and elsewhere, and by providing access to polling places. we will judd these elections based on whether they reflect the will of the sudanese people and whether they meet national standards for an election. we are obviously looking -- in mexico, we have thankfully seen in a report of u.s. injuries or fatalities. there were a small number of deaths in and around the area, and we offer our condolences to the families affected. we continue operations today at the u.s. consulate in tijuana. likewise,