i know that you have highlighted you're concerned about fiscal matters like the deficit. he said the decline in credit to small businesses reflects sluggish loan demand in that many potential borrowers to not qualify. that is a diagnosis of the problem. what are steps we can take in the short run the that would have a positive impact on the jobs climate as it relates to small business? >> the small business problem is a difficult one. we want small businesses to have credit and make good loans. we do not want to go back to the weak lending standards before the crisis.

as i discussed earlier today, it is a high priority of the federal reserve to work with our banks and examiners to make sure that there is an appropriate balance and loans have to be underwritten appropriately. they have to be likely to be repaid. we do not want banks to lose money on bad loans. .

many years in which case we have provided guidance for examiners and training and asking for feedback. in which case, that loan should be made or given a very careful consideration. we are bank examiners. we are safety and soundness examiners. we are concerned about making sure the banks are safe and sound. on the other hand, we're also very concerned about the overall health of our financial system and the economy and therefore, perhaps more than others, we are focused on getting that balance

right and we want to make sure that good loans it made. -- good loans get made. i talked about some of our programs and our information gathering. we have had meetings around the country and conferences reflecting extra data that we did not use to collect before about small-business lending. we put extra questions into the survey to get more insight. i invite direct feedback from members of congress and their constituents who have suggestions and ideas how we can better meet this need. from the point of view of congress, it is a problem. we discussed earlier some proposals to use tarp money to provide additional capital to incentivize small banks to make more small-business loans. there are issues how to do that. that is one direction that could

be constructive. >> thank you very much. >> thank-you. you testified earlier that we should have stronger capital requirements. many believe we should also limit leverage. some of these financial institutions were highly leveraged, 60%. do you believe the leverage should be limited and if so, what would you recommend and should we have a specific number put the legislation, a cap on leverage? >> in the united states as a first one of defense, we have it risk-weighted cap ratio. we have to hold more capital against risk your assets. that makes more sense. the federal reserve and other bank regulators are working their actively with other

regulators around the world to strengthen the capital requirements. we have already made a proposal to do that. we will get assessments from banks about how big an impact that will have. it is our attention to move forward with more conservative, higher capital requirements. deleverage ratio is a backstop, a fail-safe, if you will. it is just a ratio of capital against total assets without making any distinction between treasurys verses loans to small businesses, for example. the united states has long had a leverage ratio as a backstop to our capital rules. one interesting thing that appears to be coming out of the international negotiations is that the u.s. leverage ratio which was never used abroad now looks like it will be adopted by other countries which is good for us because it will create a more even playing field and create greater safety in the global banking system as well as

here. the leverage ratio is part of the negotiations and discussions we have international. there are proposals on the table. we have not gone through the whole process of doing the quantitative analysis to figure out what the right number is. i cannot tell you off and what the final number will be. we are looking to make a leverage ratio part of the more conservative approach to making sure that banks have enough capital that they can absorb even in a severe crisis. that will be part of our proposal. >> i think you should reach your conclusion by the time was to pass this bill. we should have something definite in the legislation on leverage. i want to ask your assessment on international banking. at the senate banking committee hearing in january, you testified that the fed would look into regarding credit defaults swaps on sovereign

debt. can you tell us what you found? >> we looked at the goldman sachs arrangement with greece. that is where we put most of our focus. we found in the 2000-2001, there was a contract between the greek government and goldman sachs which bike using exchange rates that were different from the market rates have the effect of modestly changing the reported debt ratios that priest reported to the -- the grease reported to the the european union. goldman sachs sold assets to a greek bank. they had the effect of distorting the numbers but there were relatively modest, about one percentage point.

the debt to gdp ratio did not change greatly. this was well before the federal reserve was supervising goldman sachs. it was also before the end run episode where the -- enron episode where we strengthen our rules against the arrangements which are intended to have accounting impacts. they are designed to affect the accounting evaluations. we have discussed this issue with goldman sachs they have a much more elaborate procedure now to evaluate such possible deals to make sure they are not being motivated by accounting and other kinds of appearance issues. we believe that situation is now

well under control they divested that position in 2005. on the credit defaults wha swape have not addressed the question specifically of using cds to manipulate prices which would be illegal and inappropriate. that would be more an sec issue. exposures of u.s. banks with credit defaults what to european governments is relatively limited. >> argues satisfied with a solution that europe has reached text -- are you satisfied with the solution that europe has reached with greece decks will have an impact on the united states? >> it is a work in progress.

it is politically difficult because on the one hand, the europeans do not want to assist greece unless they are persuaded that the grease -- greeks have made a good-faith effort on their own to reduce their deficit and improve their own fiscal position. at the same time, the europeans themselves have to agree how they will share the burden and how they will set up the arrangement. there is a broad understanding that it is important for them to come to a solution and they have made a good bit of progress there. i think there will still be for the discussion going forward. the united states is not directly involved in these negotiations but we have been informed -- i have been informed that they have made good progress and they are quite confident that a solution will be forthcoming. >> thank you very much. mr. brady.

>> thank you. on the issue of small business credit, i think it is an over correction on behalf of the regulators at the banks. i am not a banker or an expert in the area but in commercial real estate, even though they are told these are guidelines, banks know that if they go over by a dime over the concentration threshold, they will enjoy a visitation from their friendly bank regulator. the requirement of setting aside capital reserves were commercial realm -- real estate is far in excess of the limit. this is not just inhibiting growth but creating a more severe commercial real estate

crisis. we know there are real challenges and the way. i really do appreciate your focus in that area among all the other things you're doing. it is critical that the fed is listening and injecting comments wherever possible in the process. let me ask you about the trade- off between inflation and unemployment and also, the question about the balance sheet. we have had a couple people testify recently. one professor advocated raising the fed's target to 4%. he said raising the rate would lower unemployment and raise inflation. unemployment is so dire that maybe we should inflate our way to more rapid recovery ta?

>> at a higher interest rate, nominal rates would be higher and that would give more space to cut during a recession and perhaps the ability to create impotence. that is not a logical argument but it has substantial risks. the federal reserve has established a great deal of credibility in terms of keeping inflation low, around 2%. you can see that in the in flake -- inflation index and treasury debt over the next 10 years. if we were to go to 4%, we would risk losing a lot of that part one credibility because folks would say that if you go to that level then you could go higher.

it would be very difficult to tie down credibly expectations at 4% beyond with low inflation is good for the economy and 4% is already getting up there a bit and would probably have a detrimental effects on the functioning of our market. i understand the argument that that is not a direction we are interested in pursuing. we will keep our of inflation objectives where they are. to% is appropriate given -- two% is appropriate given to measurement -- given the measurements. that is the path we will be following that you have raised the issue of expectations. >> you have said businesses will see higher tax rates and more regulation. do you think that has an impact?

individuals as well, someone has to pay that high debt and how does that affect our economy? one of the areas of uncertainty is the extraordinary balance sheet expansion of the fed. recently, professor john taylor stressed how important it would be for the fed to provide an exit strategy with pacific rules such as to l.a. fears about -- to l.a. fears about inflation -- to allay fears about inflation. are you prepared to lay out a road map to normalization? >> yes, to the extent that we have determined -- we have not determined all the details but i have recently testified before the house financial-services

committee and released separately a another testimony which was laying out our proposed exit strategy and we are developing the tools to do that. this has been an ongoing campaign on our part going back to last summer when i published an op-ed that laid out the strategy. my impression is that early on, there was a lot of concern in the markets about the large balance sheet and a large amount of reserves in the banking system. i am not saying the concerns have been evaporated but over time, we have provided information about the exit strategy and my sense is that it has had a good effect. for the most part, there is a lot of confidence in financial markets that we do know how to exit effectively and we will exit effectively and we will do so in a way that does not lead to any increase in inflation. one piece of evidence is the long term break even in the

inflation index bond market. i don't think we can give pointed of rules at this moment how to do that. i don't think we have enough knowledge. we know that we have all the tool we need. to drain those reserves and reduce the balance the should over time and raise interest rates when it becomes necessary to do so to avoid inflation. >> thank you, mr. chairman. >> chairman, thank you very much. i deeply appreciate the position you have and how critically important, the tickly right now, this is. the relatively candid responses you give which is a revolutionary from this particular responsibility. i want to ask you a question about the housing market. this economy is still very rough. does not secured by any means. there is a whole host of things that needs to be done and a lot

of attention needs to be paid to it. one aspect is the housing market. the federal reserve, under your leadership, has worked with the administration and congress to create an environment to encourage responsible home ownership. that is something that stepped in a positive way to deal with this economic situation. the conditions are about to change. one way in which they will change is the fact that in march, the federal reserve stopped purchasing mortgage- backed securities which had kept interest rates low and helped to stabilize the housing market. can you give as the justification for that and what you think the aspects of that are going to be? >> we have already expended our balance sheet quite considerably and we did not want to create

such a large balance sheet that would create concern about our ability to normal as policy at an inappropriate time. we were concerned about the potential impact of the cessation of mbs purchases for mortgage-backed securities. if we reduced our purchases gradually. we tapered off. i am pleased to see that so far, we have seen very little affect on mortgage rates. i don't anticipate any significant impact a mortgage rate. >> for how long? there have been a number of announcements over the course of the last week or so about the interest rates for mortgages going up and specific elements talking about how they are about to do it. >> in the last couple of days, they have gone the other direction.

the net change since we stopped purchasing is pretty close to a zero. we will continue to watch abothat. there's nothing that says if the economy weakens and the issue is mortgage rates, there's nothing to say we could not resume those purchases. at this point, the main effect seems to be that we are still holding $1.40 trillion in debt and that amount being taken off the market seems to be having the ongoing effect of keeping mortgage rates below. >> no question about it, it has had a positive effect. now that positive effect is being eliminated and we already see issues that indicate these interest rates will go up. as they go up, that will reduce the housing market in the context of the ongoing economic

circumstances that most working people are having to confront. i am deeply worried about this. i thank you for saying that you will be looking at it and considering it and maybe making some changes, hopefully, if it seems to be necessary. there are other aspects of the housing market that are also about to cause some serious problems, it seems to me. the first-time home buyer tax credit is due to expire april 30. the fha has recently tightened its restrictions on loan eligibility. the housing market is not yet stabilized. i wonder what you think about all three of these issues that are in essentially being eliminated that were put into play to deal with the economic circumstance and which caused a positive effect on the housing market but now, those effects are being eliminated. it seems to me that this

situation is likely to get progressively worse and may be rapidly. >> the number of starts and housing has been very low. unfortunately, all the efforts including the low mortgage rates have not rejuvenated new construction very much. that remains a concern. you did not mention one other important aspect which is the foreclosure mitigation issues. one of the most important aspects and the housing market is not just the amount of construction but what happens to house prices. if house prices stabilize, that will help consumer confidence because people will feel that the value of their home is not stabilized and it will help reduce mortgage delinquencies. the concern we have is that foreclosures will continue to put houses on the market and

cause house press the. to faprices to fall. the programs that the government has put in place will mitigate that than i am deeply concerned about the effect of the elimination of these three issues. >> the elimination of three -- these three issues prior to the moment when the housing market is improving significantly. >> that is an excellent point and the gentleman's time has expired and we look forward to the chairman's response. >> i agree the housing market has been a big part of this whole cycle, absolutely. we have to watch that sector very carefully in terms of construction and prizes and foreclosures. those are all the issues for people in this economy. >> congressmanburgess. >> we were talking about jobs

when my time ran out before. we talk about midlife crisis and the beginning of earning years pri it seems like some things we have done recently in the past 40 or 50 months, the health care bill being a big one. i have heard from several people back home, a couple who had an assortment of small businesses and provided roughly 350 entry- level jobs, minimum wage jobs for which they do not provide health benefits. generally, they are looking at the second wage earner and a home being employed in these jobs. they are looking at a $2,000 fine that they will now have and they will not be able to continue. they're not have to stop what they are doing and retire or

something different but they cannot continue to do what they are doing. this is a couple providing 350 entry-level jobs for these people at the beginning of the job market. that scenario is replicated across the broader economy over and over again. we have frightened people with what we are doing with a possible energy tax. people just don't know what to expect around the next corner. the 50 pages of tax cuts also inspired uncertainty. where do we begin to ratchet back to the uncertainty that we are providing to the small business person that prevents them from getting a job right now or worse yet, may make them look at having no work force by

2014 because they cannot comply? >> we have heard around the country about policy uncertainty and what the regulatory environment will look at and it has had adverse effects on businesses because they do not have -- they do not know how to plan. while it is important that these important issues of health care and environment, earlier resolution and clarity is better than the lead. -- then at the leg. -- than delay. >> people are asking us to deal with the problem of joblessness more than dealing with global warming.

you were talking about debt panels that have been created. we control the purse strings. you talked in dallas about developing a credible plan for meeting our long term fiscal challenges. i think that should come from alleges that a body and not from an executive order. are you familiar with a road map for america's future which tackles tax cuts, medicare and social security as one single entity and tries to do with our long term fiscal future from that standpoint? wouldn't that be a better way of going about looking at this rather than the targeted reductions that the commission

will come back with? >> in general, the entitlements, so security and medicare, are the biggest parts of the fiscal issue going forward. creative thinking in general about how to control those costs is extremely important. health-care costs are not just a fiscal issue but anyway we can reduce the cost will help not only the federal budget but will help the functioning economy. i can only agree and encourage and the kind of -- any kind of bringing forth proposals as they come from congress. the trouble is that by its nature, congress is focus on the near term and it is hard to get

the intention of the long-term issues them of this bill we pass a health care, 4000 pages did nothing to reduce the long-term cost of health care other than provide for rationing in the very near future. >> i thank the gentleman andcbo estimates over 20 years the health care bill will save $20 billion. what is the primary source of risk to the recovery at this time and what is your assessment of the risk of a double-dip recession? >> i was always humble about forecasting and i have become even more humble. having said that, i think there is a pretty broad view that we are seeing some building up momentum in fundamental demand.

consumer spending seems to be picking up. equipment and software investing looks healthy and the global economy is stronger which employs more exports. it looks like we are on a path to moderate recovery. the risk of a double dip, while not negligible, is certainly less than it was a few months ago. that being said, there are any number of possible things that could derail this. under the pressure of a weak labor market and up balance sheets, consumers could decide to become more conservative and slow their spending, a financial problems emanating

from greece or what ever so far unknown source that could cause more problems in the financial markets, there are all kinds of scenarios you can imagine. oil prices could be driven up by a geopolitical problem. one thing we do in our open market committee meetings is to look at alternative stimulation and some areas. -- in some areas. it looks like the financial markets are more stable. banks are still working their way out of a period of high losses and financial stress but they're making progress. the consumer looks to be doing better. for all those reasons, the best bet, i think, is we will see a moderate recovery. again, forecasting is not a precise business. >> we are making progress but have not achieved a total

success te? what happens if the unemployment rate does not decline as the economy improves? >> that is a possible risk. we anticipate the unemployment rate is likely to decline relatively slowly. one factor is the pace of overall growth if growth is moderate, that will not quickly lower the unemployment rate. the second observation has to do with the rate of productivity. following the 2001 recession, productivity gains were significant which is a good thing generally but meant that firms are relatively slow in bringing workers back because they did not need to. we have seen remarkable productivity gains in last year or so. we do not anticipate that growth to continue at that rate going

forward if it does, that may reduce the number of workers that firms need to bring back in order to meet demand there is the possibility that unemployment will stay stubbornly high, around 10%. if that happens, that would be a risk we were discussing because that would reduce consumer confidence and make them concerned about their ability to sustain their spending. >> you took some creative steps in creating new lending facilities. the only one still t operating in isalf. operating is talf. how long will this continue? are there any additional actions that will be -- that should be taken by congress or others to protect against the crisis in commercial real estate and where

did you see this going? >> the only remaining facility is in fact to the talf for commercial real estate and we left it in longer because of the extra need there. and because it takes longer to get the mortgage-backed securities deals to market. we're planning to close that on june 30. we are only making those loans on an emergency basis. we have to justify having the americans the program. we have seen improvement in the commercial mortgage-backed securities market. on commercial real estate, that is a very big challenge for small and medium-sized banks. we are seeing a few glimmers of improvement. it will be a few more quarters before banks work through their

commercial real estate book and have gotten to the point where they have complete control and understanding of their losses and risks in that area. in our capacity as bank supervisors, the fed, along with the other supervisors, has issued new guidance on commercial real estate. among other things, we want to encourage work out in the same way that government policy has been there to help residential mortgages and residential bar wars work out troubled mortgages, we would like to see the same thing happen for commercial real-estate mortgages. we believe that is happening in many cases and we want to promote that. we have instructed our examiners to work with banks to try to work out problem loans and maintain the flow credit wherever possible.

is a difficult problem does not justify financing issue, it is fundamental. commercial real estate has fallen by 40% in many places and vacancies are up and rents are down. it is understandable there will be stresses in this market. we can continue to work with banks to try to work through that. commercial real estate in the past has cree the banking problems. and eventually, we do work through it. it will cause the problem for a number of banks in the near term. i don't know what to suggest, frankly, to congress. ultimately, the banking system and the borrowers will have to find solutions and work through this as quickly as possible. >> mr. brady. >> i have about 1000 questions but in the interest of time, two proposals have been floated to increase banking taxes and a

transaction fee on trade. one is to pay back tar thep although the banking set -- to pay back the tarp. the transaction fee is a way to raise revenue. what are your views on those taxes? the banking one seems to be a global effort to increase taxes on banks that have international relationships and connections. what is your view? >> the tax on transactions -- the treasury has rejected that idea which came up and other jurisdictions. i think i agree with the judgment on that. the problem is that by taxing transactions, you would greatly reduce liquidity in markets. people who are ordinary investors would find that the assets spreads had gotten wider.

it would cost them more to buy and sell assets and hedge their portfolios. what would probably happen is so long as there is any jurisdiction that did not have those transactions, everything would go offshore and you probably would not collect very much in terms of taxes. in the current world, i don't think that is a very good way to raise revenue. the fee on financial institutions is basically a tax. that is up to congress whether they want to raise revenue by taxing large institutions. the only observation i would make is that it should be structured if it is done and should not create unnecessary problems. for example, one of the original ideas was to tax based on leverage.

further investigation and discussion revealed that that would cause severe problems in the repo market. that would disrupt some very important markets because it would create a tax on certain kinds of transactions. there are other ways to create the tax base if that's the way you want to go. if congress decides that you want to raise revenue through that particular method and you can't justify it as a general revenue measure as well as a repayment, you should do it in a way that minimizes the disruption of the market. >> i think there's merit in allowing banks to have greater capital reserves which will help them make it through the tougher times. that model works in the banking

sector fairly well. the irs takes a dim view of companies setting aside too much capital during good times. is there merit in congress addressing the issue of banks being able to put aside more reserves during good times, maybe setting aside per category rather than specific loans in order to build up those reserves? >> i don't know if it is best handled by congress or regulators. the basic idea is that many of the reserve policy was governed by the the main purpose of reserves was lost for there is not enough reserving done in advance of the crisis.

i am very much in favor and i think the world is coming around to the view that banks should be allowed to reserve for known losses but as yet unknown but predictable losses they will face in the future. yes, i very much encourage the regulators and congress to look at ways to make sure banks are able to reserve substantially during p goo per goodiods. >> we understand you have to leave but i would like to give representative comings and opportunities to ask questions. he was not able to the year earlier. >> thank you very much. i had to be on the floor to argue three bills, i apologize. i really wanted to hear all of your testimony. i am told that we have gone over

small-business quite a bit. you did say one thing before i left -- when you're talking about the consumer protection agency, you implied that when borrowers were having difficulty getting access to credit, it might not be a bad idea or it might be helpful if the consumer protection agency was inside the fed. is that a fair statement? >> what i said was that there would be some benefit of the consumer protection agency working -- however it is structured, working in a way that is a cooperative with the bank safety and soundness regulators and examiners. the examiners would have an understanding of the implications of the consumer

protection rules for the costs and the business models. back in determine whether credit would be constrained. you don't want to create rules where people cannot get credit. >> there is something going on here. the president, before he became president, said something i found was interesting -- he said we have an empathy deficit. i looked at what happened in the health-care area and what is happening in the financial area. it seems almost that it is ok with some folks that if people feail, let them die or fall off the cliff. when we talk about these small

businesses -- i sat in a meeting in baltimore in my district and literally people were in tears. these were good business people who have had impeccable records. now they can't get a line of credit. they have the business they can do but they cannot get a line of credit. they had won. it seems to me -- i refuse to believe that we cannot help these americans who go out there every day, do the right thing, not try to get a bus, just trying to do the right thing and employed their employees, produce what they're supposed to produce. yet when it comes to them, it is ok to say, sorry, we're going through an economic storm and

you will be collateral damage. that means you die. that means your business does. you may never come back to do this business again. and that is ok. i have felt the same thing when we were done with the health bill. 45,000 americans die, all right. let them go. that is not the spirit of this country. that is not the country i grew up in. that is not the country i believe in. i know the fed has certain powers and certain things and you cannot force the banks to lend but there is something awfully wrong and i know there are some folks who do not have good credit but there are folks who have decent credit and were doing fine and could get the business. the business is there and they

cannot -- because they cannot get the money. as i told my constituent yesterday, sometimes $25,000 is worth $10 million because it acts as a bridge. i have a lot of questions but i beg you to even go further. i have supported to 100%. -- i've supported u.n. after%. i believe in my heart we can do better. i don't know what better is. banks seem to be doing okay and are paying money back but folks are drowning. there is something wrong with that picture. it does not make sense. i notice complicated but we have people like you and your staff to figure it out. >> it is important from an amp the perspective and financial perspective to get business

growing again. i want to reiterate that we are looking for feedback and ideas from the banks and others who will give us more suggestions because we are working hard on this. there are things that congress is doing and can do. there is money that has helped in committed to development. there are proposals to use tarp money to make some all loans to small businesses. there are things that can be done. if congress wants to go in that direction, there are instruments. >> we have to do our part. we know you will continue to do your part. >> the gentleman's time has expired. in the spirit of bipartisanship, congressman burgess has requested one last one minute

question. >> thank you and thank you chairman for your visit today. i hope we will be able to see you back sooner rather than later because there are important things. on that the t issue ofarp. that was supposed to die last december 31. people angered that is still there. it is not supposed to be a slush fund for any activity. people think that is the wrong way to go. two years ago when we were cruising into this rocky part of the economy, a midlevel harbinger was the $5 per gallon diesel and $4 per gallon gasoline last summer. $2.78 for regular gasoline in texas, in one month we get the

clean-air bill where we have to buy special blends and that will go up $1. we will be paying high prices again. is the price of oil and fuel unimportant in the consideration for the global economy? at what price. does it become important again? >> every dollar the price of oil goes up is a dollar out of the pockets of consumers and that makes it hard for them to spend on other things and it gets to inflation. that is definitely a negative. we are at $85 per barrel now. the markets don't expect large increases but we do not know. a lot depends on global economic activity which has been strong. er. we are long way from $145 per barrel which was a couple of summers ago. i don't think the price of oil is a serious threat to recover.

if it moves a lot, it would be a negative. >> it may be very close to what was two years ago. >> i don't understand that dollar extra. >> >> they always check the price up during the summer driving season. the clean air act requires that we use special ethanol blends. i have to believe it will play a role in the recovery. it will likely not be a positive role. >> natural gas prices are down. >> that is not a good thing for our district. we would like to see those backup. >> thank you chairman bernanke for testifying to that. since you testified last may, the economy has shown great progress. the unprecedented action taken by the federal reserve to inject liquidity into our financial system played a key role in the turnaround of the economy.

i look forward to working with you in the future and the committee looks forward to working with you as we continue to build on the economic progress so far and certainly on our goal of employing more americans. thank you so much for your testimony and staying pastor time. we really appreciate it, thank you. >> thank you, madam chair. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> on cspan 3 today, fbi director robert miller testifies about his operations and budget. live coverage of the senate appropriations subcommittee begins at 10:00 a.m. eastern time. later, live coverage of the first of three planned debates between britain's political party leaders. voters will elect a new

parliament on may 6 and the candidates are all seeking to be the next prime minister. live coverage of the first election debate courtesy of british broadcasting i-tv begins at 3:30 p.m. eastern on cspan 3. >> our public affairs content is available on television, radio, and online and you can also connect with us on twitter, facebook, and youtube and sign up for our scheduled alert e- mail at c-span.org. >> this year's studentcam contest as tested is to create a video to do with our greatest strengths or the country's challenges. here is one of the third-place winners. >> it is currently very hard to find these signs and more. people are not hiring.

>> jobless is in your future. >> although we lost fewer jobs than we did last month, our unemployment rate climbed to over 10%. that is a sober number that underscores the economic challenges that lie ahead. history tells us that job growth always lags behind economic growth which is why we have to continue to pursue measures that will create new jobs. i can promise you that i will not let up until the americans who want to find work can and until all americans can learn enough to raise families and keep businesses open. >> know people are filling the jobs where people are packing up and leaving their jobs. more people are losing jobs every day but few are being hired. hundreds of people are showing

up for a single interview because it is their only hope. >> you never expect the people to in this town to lose a job or to be unemployed than i was shocked when i was laid off. it felt like a death in that i had complete this belief. all major companies are reducing their sales force by almost half. if i get back into it, it won't be easy. >> for some people, finding a job is a short amount of time but it is not a job there have wed. people to a good job that they do not want because this is a crisis that will be around a while. >> currently, i am working as a clerk for a law office. does not anything that i am trained for. i don't really enjoy it that much because it is not along

lines of what i want to be doing . >> in looking for a new job, is fairly difficult because one thing you have to do is go back and critique yourself and find out what your skill sets are. in some cases, if you have been out of school for a long time or you worked in one particular sector of work, you are somewhat outdated. >> as the newspaper released numbers, it changes things. >> companies are trying to find new methods because of the waves of people showing up that we did a job there. -- we had a job fair. there were over 200 people.

there is adjusted in a number of different positions in the company. >> more people are being put behind bars, in addition to this. >> we have seen a slight increase. partially, it does because people are out of work and in some cases, they are looking for some means of in come to offset the loss of wages. that income could be stealing for someone else. obviously, that is not an acceptable alternative but we do see that from time to time. when people are unemployed, it brings a sense of frustration to them because they are probably used to working, used to supporting their families, the cause is a bed of depression in some people when they are not able to work every day. >> the development of knoxville is greatly affected.

>> as of october 22, the u.s. unemployment rate hit 9.8%. in our county, it is at 8.1%. i believe the current economy has had a huge impact on development. we are starting to see many more people come to my -- contemplate different businesses. they have been laid off and downsized and made its decision to reinvent themselves. i do not think we will see the same level of massive development of the way was two years ago. if we do see something approaching that level, it will be several years from now. >> the same thing is affecting every corner of this nation as it will for years to come. >> from the moment i took office, i made the point that employment is often the last thing to come back after a recession. that is what history shows us.

since the. last winter when we lost an average of 700,000 jobs per month, we certainly made progress on this front. today's jobs report is a sobering reminder that progress comes in fits and starts and we will need to grind out this recovery step by step. whenever a seat to statistics like the ones today, my mind turns to the people behind them, honest decent americans who want the opportunity to contribute to the country and help build a better future for themselves and their families. our task is to do everything we can possibly do to accelerate that process. i want to let every single american know that i will not let up until those who are seeking work can find work, until businesses who are seeking credit can get credit and drive, until all responsible homeowners can stay in their

homes. >> over time, this recession will get better but it is still a long road to recovery. >> to see all of the winning entries in the contest, visit studentcam.org. >> on cspan to "washington journal day,"is next live with your phone calls. that is followed by coverage of the u.s. house as they work on the cleanestuary act. and in about 45 minutes, we will talk about the federal tax system.