have had on the economy. from the nation's capital, this is "washington journal." . . . host: we will be talking about that and the state of the economy with two economists with

two different views. we begin this morning with a decision yesterday by the supreme court to limit life sentences for juveniles. it will affect the lot in 37 states, the district of columbia, and the federal government. -- it will affect the law in 37 states, the district of columbia, and the federal government. we will ask your opinion for that. democrats, 202-737-0002. republicans, 202-737-0001. and our line for independents, 202-628-0205. good tuesday morning to you. the supreme court's decision yesterday, considered by court observers to be an important one. "the new york times" this morning says the supreme court

ruled juveniles may not be sentenced to life in prison. the ruling marks the first time that the court excluded in entire class of offenders from a given context. two editorial pages agree this is the right move. and also, "the washington post" of greecagrees host.

this affects the laws in 37 states and the district of columbia. we would like to see whether or not you think the supreme court made the right decision with your telephone calls. the president is traveling to ohio today to highlight a firm that received some of the stimulus money. he will be visiting a company called z &m. tell us about this particular firm, what kind of money it received, and what the president is hoping to highlight. guest: it is a large steel company that works with the oil and gas industry.

they announced in february there were making a six and a $50 million expansion, -- $650 million expansion, which is huge. also, it is a manufacturing company. as you are probably aware, youngstown was a huge steel city in the 1950's and 1960's, but devastated in the 1970's. this was huge for the city and the area. part of the $650 million came from a federal stimulus package to use for roads and to relocate some railroad lines. without obtaining that property, without approving the property,

it would have been a difficult challenge. the stimulus money was seen as one of several factors that helped this side that the company would expand here. host: it sounds like it must have gotten some capital from the markets as well. guest:, it d yes, it did. it is a french based company that decided to build here. it could have gone anywhere in the entire world. they have a presence in germany, france, and brazil, throughout the united states, in oklahoma, texas, and here. it became a huge coup for this area. it's one of the largest ongoing

construction projects in the state of ohio. host: what does it mean for the region in terms of the state of jobs? guest: the company now employs 400 people. the average salary is around six $60,000 per year. when the new plant opens, there will be 230 permanent jobs and some contract workers. host: how public is the president's visit today? guest: not at all. it is closed only to people who work at the company and some local politicians. some local politicians have had to beg borrow and steal to get into this event, including members of the youngstown city council, which were instrumental in working out a deal with the sister city over land.

the land most -- of the land for the expansion is in the next county over. the company was insisting that youngstown take the lead. there was a big conflict between the two cities. basically, the next county had to have land basically and next in to youngstown. company officials have said that if it wasn't for that agreement there was no way they would have come here. there have been ups and downs. host: thank you very much. we have to run. since you cover politics, what are your views about the way this was organized?

guest: i think the president wants to go to a friend location. youngstown and its county have been strong democratic areas going back for decades. he only received 60% of the boats during the general election. for the most part, -- if you go anywhere else and win 60% of the votes, you've done quite well. he is well thought of in this area here is this is his second trip since he was elected. he was here in september at a large general motors complex in a nearby town. he received a very warm welcome. he comes to this place because he is received well.

obviously, it is a friendly crowd. host: thank you for the update on the methods from the white house on stimulus funds. thank you for your time. guest: thank you. host: let's go to your telephone calls. we're asking your thoughts on the supreme court's superseding the laws in 37 states and the district of columbia on a life sentences for juveniles. they say it constitutes cruel and unusual punishment. a big debate in this country over crime and punishment. we would like to hear from you, especially if you live in one of those states where your law will be affected by this. let's begin with a call from

clinton, north carolina. caller: i have a two-fold question. when will this decision to go into effect? will it affect the people who are incarcerated now in jail? will it be grandfathered? host: yes. according to the newspaper, 129 juveniles are serving such sentences. 77 of them are in the state of florida. this means they will have an opportunity to have their sentences revisited in those states. you can expect that there will be follow ups. what do you think it is aof the decision?

caller: i think it's a good decision. when will it going to affect? host: it is now the law of the land. caller: ok. host: thank you for your call. salem, ore., david on the line for independents. caller: my brother is in youth corrections. i think this is a good change. youths become adults, and they are still around other youths. it makes youth minor offenders into larger offenders. any thing that separates these major criminals from these

minor youth criminals, i think it is important. life terms for youth is silly. unfortunately, when we are young, we are able to be influenced by things that we do not realize may be a wrong influence. host: david's comments reflect some of the thinking of the court, which reflect that juveniles thinking and reactions mature over time, and that is why they should be treated differently as a class from others. we are asking your reaction to the supreme court limiting a life terms, except in the case of murder, a forger of an afor e offenders. we will move on to marino valley, calif., monica.

you are on the air. caller: yes, my question is -- host: we are moving on. caleb on the line for independents. caller: good morning. my thought on the matter is that i think it should be left up to the states and not become a federal mandate. host: you are reflecting the views of the dissenters in the case. 37 states have laws on this. is that generally your view of the role of government? caller: yes, i think somebody in richmond has a better idea of what is calling on then somebody in washington.

host: thank you for your call. here's some of that thinking from "the wall street journal ." we would like to hear your thinking on this. 128 juveniles have been incarcerated with this type of light sentencing. let me read from "the new york times" editorial.

but th

host: that is what our question is for you this morning. let's go back to telephone calls. thomas on the line for democrats. good morning. caller: good morning. host: please mute your volume. go ahead with your comment. are you there? caller: yes. host: do you have a comment for us on the supreme court ruling. caller: yes, i feel that they should give them a chance. they should have a chance. juveniles should have a chance. cruel and unusual punishment.

kids should have a chance. host: juveniles should have a second chance, says thomas. next, russell on the republican line. caller: i agree with thomas. this is not a state's rights issue. his is a national issue. at some point the federal government has to show responsibility for the country as a whole, and the people have to agree with the will that put out there. they have to believe that the federal government does have rights. otherwise, we are nothing more than 50 individual countries. that is not the way the framers of the constitution wanted the country. they wanted one central government, and that is what they have. host: more from "the new york

times" on this. host: we are asking what you think. next is a call from washington, d.c.

caller: i really agree with the opinion of the court. what we know now about how juveniles brains develop -- your brain does not stop developing until your early 20s. i think that should have greatly affected the court's decision. the founders of the constitution never wanted us to take into account the knowledge base that comes after hundreds of years -- i definitely agree with the decision. host: you do not feel like you will be any less safe? caller: absolutely not. in some states, children can be charged as adults as young as 13 or 14. to take a child that young and say that you have to spend the rest of your life in prison -- there's no other definition of cruel and unusual punishment.

host: do you work in the field? caller: i am an attorney. host: thank you for adding to the conversation. we have a columbia, md. call next. ty on the line for independents. caller: regarding the ruling on the juveniles, i do understand how we hate to see our children incarcerated with such a sentence that really gives them no chance of life. i somewhat agree with that. some of these kids have already been introduced to some experiences in the judicial system. when they do get their sentence reduced, how will they be realigned to society again? our children are more and more

aggressive. parents are not really instilling into kids' the respect for law. if you bring them back into society, how the realign them back into society to be good citizens? host: thank you. in "the washington post" editorial, they write --

host: next phone call is from jacksonville, alabama. barbara on the line for republicans. caller: good morning. my opinion is the children watch too much violence on tv. i think children should have responsibility, even when they're little. they should have responsibility. parents do not give them any and they have too much free time on their hands. i do not think people should put them behind bars for 20 years or

for life. host: thank you. next is east chicago, indiana on the line for democrats. you are on the air. caller: you can have all the laws if yoyou want, if you're not going to use them. a person can be an accessory to murder in a gang. he did not pull the trigger. you cannot just say yes or no to a life sentence or not a life sentence. that this to heart of a question to answer yes or no. i think you have to consider what happened in the murder. you have a gang of guys and they go by and shoot down a 5-year- old.

should all be held for life. thank you. host: kathy on the line for independents. your reaction to the supreme court's ruling yesterday. caller: what are the crimes? what are the crimes these 129 youth offenders have committed? are you aware of what the crimes are? host: the case that came to court is an example of one of them. a 16-year-old helped rob a jacksonville restaurant. an accomplice beat the manager with a steel bar. the next year, --

air is the case that came to the accord. does that help from your reaction? -- this is the case that came to the court. caller: i've heard of situations in which older offenders asked the young offenders to commit what would be considered the more serious part of a crime for the very reason of not having the same severity of punishment. it concerns me that the criminal mind is a very hard thing to understand. i think you can have situations where people will use that lot to their advantage. i think that would be unfortunate, and probably not what the supreme court had in mind. host: another interesting fact story. this is another 5-4 vote.

observers are watching how this is lining up. the overall vote was actually 6- 3, although, that was a little misleading. we are talking about the supreme court's decision yesterday to limit life terms for juveniles. next phone call is dennis on the line for democrats. caller: good morning. thank you for c-span. thank you for this subject. i'm a former deputy u.s.

marshal. i worked in the d.c. court system. i have handled juveniles with all kinds of cases, even murder. i applaud this decision. i have mixed feelings because of clarence thomas and his dissent. i think this decision has brought america into the 21st century. that rule was so terrible. it was such a blight on the american justice system. working with juveniles, the first thing you learn is that they are kids. you look into their eyes and you see the innocence when you work with them up closely.

they are afraid and that kind of thing. it just seems unbelievable to me that you would lock up a 12- year-old for light for a non murder -- for life for a non murder. clarence thomas never ceases to amaze me. i'm an african-american. i think, clarence thomas, if there was a way to in peach this man, he should be in teach. -- if there was a way to in mpeach him, he should be. his politics are so right wing. if you go into his background, he has never been a high achiever at anything he has

done. the whole situation when he was nominated would be the anita hill thing and his attitude toward that. people remember him talking about that, pubic hairs on coke cans and that sort of thing. everybody knew that she was telling the truth. this man is dangerous. he has always been dangerous. being a black man in america, to rule the way he did, it is insanity. i'm not just saying for black people, but for all people. those four dissents -- just too

cavalierly sentence these children to licenselife sentencr crimes other than murder, is i t t is insane. %fñ?ñ?ñhost: let me give more oñ justice thomas' decision. this is in "usa today."

response to the supreme court decision limiting life terms for juvenile offenders in cases other than those involved in murder. next is trenton, new jersey on the line for independents. caller: i hear all these people calling. a lot of these kids are locked up because they've done terrible things, and some of them deserve to be locked up. he was not the only dissenter. host: that's correct. it was a 5-4 decision, or 6-3.

caller: that's the way these people think. i am black. that is the way these black people think. if you do not think like them, something is wrong. host: the court also released another decision that has gotten a great deal of attention yesterday. let me tell you more about that. this is from the front page of "the baltimore sun." this is david savage's story.

host: if you are interested on how the supreme court operates, c-span has a new book out. ]ññ?ñ?ñtonight, several of the e ó.8i1 lawyer who are used before the

host: next is a call from florida. richard on the line for independents. caller: good morning, c-span. host: good morning.

caller: in my opinion, there's no real justice. when that young woman structured two young children into the backseat of a car and drowned them, she did not get life in prison. she killed her own two children. in this case, i think the supreme court acted right. i do not care too much for the supreme court. why should nine people have the right to tell me and 300 million other people in this country what they can and cannot do. they are just political hacks. why are there so many 6-3 and 5- 4 decisions? i would like to have someone explain that to me. host: next is fairfax, va.. robert on the line for republicans. good morning.

caller: good morning. as far as the ruling goes, i agree. i think what he was referring to was the justice system. everyone out there bad mouthing clarence thomas -- the only reason why you do not like clarence thomas is because he is a black man who is a conservative. yes, i think the african- american community in this country -- most of them are liberals and they are bigots because he is not one of them. host: more on justice thomas' point of view in "the new york

times" this morning. right here, he added -- next telephone call is chicago. this is jerry on the line for democrats. good morning. you are on the air. caller: it is very complex. i am ambivalent about the ruling. pardon me understands that -- part of me thinks that some of the crimes that the youth are committing our of regis. i wish the accord would have

expanded their view on doing things like outlawing things like grand theft auto, and take on the aclu. to a certain extent, it correlates with the types of crimes that are being committed. i hope the court takes that on. you cannot have kids and watching these movies and playing these games and it not have an impact. on the other hand, it is unfortunate that kids are being sentenced to life without probation. down the road, they could matured. -- they could matured. there are so many things happening in urban america. people living in these cities feel hostages in their own communities. something has to be done. i know smart people and good people are trying.

for some reason, for the last 20 years, the youth appeared to be out of control. as an educator, you see it on a regular basis. in response to clarence thomas, what people do not understand -- his life story -- his rationale for the decisions he makes. his experience do not seem to indicate that he would come out with these views. he is a very intelligent man. that should not be questioned. he is well accomplished. because he is so accomplished, he has a reason to do what he does. this is a very tough court decision. i am in bed went about the ruling. i understand both sides. . -- i am ambivalent about this

ruling. i understand both sides. so many crimes would give one pause to think that this person should ever be let out of jail. you have to look at it case by case. host: thank you, gerry from chicago. to clarify, this does not guarantee that the doors open guarantee that the doors open and they are out. it gives them the possibility of parole when they reach adulthood. in other words, imprisonment without possibility of parole for lifetime is what is being changed here. they will have an opportunity to have their cases revisited. gary duncan tweets us. we are asking your reaction to the supreme court's ruling yesterday limiting life sentences for juvenile

offenders in cases other than murder. wichita, kan., kathleen on the line for independents. caller: good morning. i agree with the last caller. this is a case by case situation. i agree that they should limit the terms. thank you for my call. host: also from the newspaper this morning, the senate getting ready to act on financial regulations. yesterday, the democratic leaders of the senate gave notice that they intend to wind down the weeks long debate over financial regulations. next is a call from maryland. vince on the line for

republicans. caller: good morning. i agree with the chief justice that it should be of a case by case basis. more importantly, these things should be left to the state. it sounds like the individual who was the subject of the decision received unusually harsh punishment, but it's not really the place of the supreme court to fix that. 37 states out of 50 have these laws already. the system is working. host: let me add a further argument they made. the fact that it is so infrequently that young people get that sentence suggests courts are moving in the area of doing that it is too harsh. what is your view of that? caller: many times at the local level, you may stumble upon

these individuals. the system has rightfully recognized a sociopath or something like that and wants to keep them off the street. now the supreme court give them the opportunity for these people to be let out on some sort of a technicality. let them handle it at the local level. where there is a problem, i think the people will fix the lawss. . i was a little bit surprised that you let that one gentleman go on about clarence thomas. although he broke the dissenting opinion, he should not be the embodiment of what everybody thinks is wrong about that decision. host: after his comments, other callers weighed in. it is an open forum here.

thank you very much for participating. last comment from twitter. thank you for an interesting discussion with lawyers and people who work in the juvenile justice system. we'll take a break. our next discussion will be about politics on primary day in four states around the country. ♪

>> a couple of live events to tell you about today. the senate foreign relations committee hears from secretary of state clinton and defense secretary gates about the new strategic arms reduction treaty. on c-span to me, another look at the gulf of mexico oil spill. the senate environment committee hears from ken salazar. that is lifve at 2:30. also, a forum by the supreme court. live on c-span 3 at 7:00 p.m. eastern. >> supreme court justice clarence thomas on the confirmation process. >> i do not wish that on anyone.

i do not have found experiences up there. also, something justice white said it has stuck with me. it does not matter how you got here it that matters. it matters what you do after you have gotten here. >> with a new supreme court nominee headed into the confirmation process, learn more about the nation's highest court in c-span's latest book, "the supreme court." it is available by mail in hardcover and also as an e-book. >> "washington journal" continues. host: this is josh kraushaar, national political reporter for politico, which has as its headline today, "bracing for

turbulent tuesday." why is that? guest: arlen specter is in serious trouble as he faces a challenge from congressman sestak. in kentucky, mitch mcconnell's favorite candidate is trailing badly. host: we welcome you. these are primaries in kentucky, pennsylvania, ark., and oregon. it has national implications. we will open up our phone lines and talk national politics with you. democrats, 202-737-0002. our line for republicans, 202- 737-0001. our line for independents, 202- 628-0205. a late decision by the white house not to go to pennsylvania

to support senator specter. guest: the white house seems to have been burned. you go back to the campaign stops he made for former gov. john karzai n corzine. the white house has spent a lot of political capital and it has not paid off. they are looking at the poll numbers. they see that specter faces a tough time. they know the mood of the electorate in pennsylvania. the fact that you do not have obama or biden headed to pennsylvania is a real telling sign. host: this is how tough it gets. i read that vice-president joe biden was in philadelphia last

night for another event and he did not use that time. guest: and the president flew over pennsylvania today. they see those poll numbers. it's a tough time for somebody like senator specter. he said he was switching parties to get reelected. those famous words have been played over and over on the pennsylvania airwaves. that has hurt him very badly. host: in politico this morning, your colleague highlights the ed your colleague highlights the ed rendell machine 9 pennsylvania. why is that? guest: he understands where the votes are. he was very instrumental in winning an upset in his primary back in 2002. this is not an election year where the political machine seems to be nattering as much.

even ed rendell -- they go back quite a long time. ed rendell recognizes that this will be a tough road for senator specter. host: senator specter's primary opponent is joe sestak. how many terms has he been in congress? guest: he was elected in 2006. host: this is from "the philadelphia inquirer." how much do endorsements like this matter today? guest: they matter. usually, when you are a longtime

incumbent, you can deliver federal funds. that's a huge asset to half. in this political environment, we've seen the normal advantages of incumbency not pay off. they have served to backfire. in west virginia, one of the senior appropriators in house badly lost the primaries to a little-known state senator. arlen specter is running on his clout and seniority, but that might be enough. host: here is what the front page of "the philadelphia inquirer" looks like. there's also a special election in the 12th congressional district to replace john murtha. guest: this is a special election. this may tell us the most about

was going to happen in november. we're talking about a blue- collar southwestern pennsylvania district. it is also a district that does not view president obama very favorably. he only won 49% there in 2008. the republican is running an anti-earmark agenda and he supports repealing the health care bill that was just passed. if he wins, it signals of the environment is very bad for democrats. host: there are other states to talk about, but we will start with your phone calls. let's begin with a phone call from amsterdam, new york. joe on the linn for democrats. caller: good morning. thank you for c-span. i'm so sick of the democrats

killing democratic agenda us. that has never happened before in american history. these democrats are not really democrats. we could get rid of them. i would rather have 51 strong progressives or 48 strong progressive than 59 spineless democrats. host: explain what a smaller democratic tent -- philosophically, what does a true democrat look like? caller: someone who follows the democratic party platform is pro-choice, pro education, pro progressivity in the tax structure. that's what a real democrat looks like.

someone who is for working people, who stands up to the banks and special interests. host: it sounds like a boulder that may not be looking at arlen specter very favorably -- guest: it sounds like a bou voter that may not be looking at arlen specter very favorably. look at his past votes. if there are a lot of voters like that in pennsylvania, he may not be able to win. guest: he is 80 years old. he is in remarkably good shape for his age. it is interesting. some of the problems he faced lately on the campaign trail --

he has been at some democratic county meetings and he still does not remember he is a democrat. that has raised some questions and certainly fuel the fire. host: davenport, fla., chuck on the line for independents. good morning. caller: good morning. i think what is really going on with america, we are trying to change here. term limits is the way to go. you could talk about arlen specter be 80ing 80 years old. host: isn't an election a way where people get to decide that? caller: yes, i think it is. that is why independents are

gaining and the democrats and republicans are in so much trouble now. it's time for america to change. host: when you argue for term limits, under your suggestion, arlen specter should not even be on the ballot. caller: yes, that should be the right way. same with the presidency. over 65 or 70 years old, you need to step down and let someone who has a stronger coming under--- stronger, younger mind run the country. our country is in grave danger. we need to change things now or there will be bad consequences for our country. host: probably 10 or 15 years ago, there was a big term-limits movement in the united states. is there any of that still on the docket for voters?

guest: there has never been as much anti-incumbent sentiment as there is today. the percentage of people who do not want to let their own congressman is usually quite high. it is abnormally low. one of the more fascinating statistics, 16 members of congress -- we've only had seven states vote in primaries. 16 members of congress have one less than 7%. it's a very low number. it shows that a lot of people are willing to protest against their own member of congress. host: let me move on to arkansas. the headline caught my attention in "the financial times" this morning . guest: she is one of the more conservative democrats. they were upset about her vote

against a bill that labor actively supported. she was not the most ardent supporter of health care, even though she voted for it. .

it will be an interesting test. in a state like arkansas where a lot of farmers are enjoying that clout, it could be a benefit. i think they will have no trouble winning the nomination. there will be a challenge in the election. host: an opinion on twitter. we are talking about politics on primary day. next is pennsylvania on the republican line. caller: it morning.

i would say that's i met him years ago. i talked to him about spending, the federal budget deficit, and he told me he did go back to washington and do something about it. he expanded it as a republican. he said what does a true democrat look like? a true democrat looks like arlen specter and has for a long time. i wish tim burton's the best of luck out there. -- tim burns the best of luck out there.

[unintelligible] i always knew arlen specter would be defeated by a democrat, i just never thought he would be defeated by a democrat in this manner. this is why he changed parties in the first place. there were a lot of conservative republicans that would not vote for him in the primary. he is finding the democrat party is not as fickle either. it is a very tough place to be. >> talk about what kind of match up cover candidate will have. he was once -- guest: he has been a very good campaign under the radar. the democrats have raised quite a bit of money. with the political environment, it looks like he will assess that.

financially they are spending a lot enormously. what does that have to do with the financial aspect of it? host: specter able to raise more money if he is a nominee. one of the reasons he has been so competitive is he began the senate campaign with some money in the bank and was a fairly able fund raiser over the next few months. in pennsylvania, you will see a lot from here until november. lot from here until november. host: a common from twitter. we are talking politics. birmingham, alabama on the democrats' line is next. caller: good morning.

he was endorsing hillary clinton during the presidential race. there was something about him. he seemed very honest. i think he switched parties once the democrats got control of the congress. first of all, if they do when, president obama would still be the president. i do not see what is up with the republicans taking over everything. they still have not done

anything for the country. thanks. host: our next phone call from cape coral, fla., independent line. caller: my question is, we need people with experience. i am afraid when we put new people in congress -- these people would be like entering your freshman year in college. i think it will further back up the process of getting things done and bolting out incumbents. people that have done a good job and then it's a little more

moderate. that is what concerns me. putin party people in there and what not -- putin party people people in there and whatty not. we would have too many people that may not know what they are doing, because it takes a while for them to adapt to a new position. host: let's move on to kentucky. guest: he was best known -- he has shown he has political clout on his own. his father got the libertarian wing of the republican party.

he has energized the grass roots base in kentucky. he has the support of some leading national public figures. he has energized the party. some have increased spending and want to see the air merk -- earmarke process reform. he could be the next senator from kentucky and has political aspirations of his own in the future. future. host: the most when a loose in kentucky. here is what he writes. among the democrats, almost

every power broker is behind it. even with vocal support in fundraising and senior democrats, she is a bit -- he is even in the polls -- that is a lot going on. what is the bottom line? guest: one of the few national figures to get behind him. she is backing some underdog candidates across the country. if he wins, it is a big signal to the energy that she provides to make campaign. most of the national democrats are behind his campaign.

this is going to go down to the wire. host: the polls close in kentucky at 6:00 p.m. next is fort wayne, indiana. caller: i have a comment and a suggestion. i am a college student. i am a college student. with all due respect, i think your assessment grossly under estimate who the american people are into the message they are trying to send. trying to send. the way we see it is ,

constituents consistent internationalists, rank-and- file, and not american patriots, but people who have basic principles [unintelligible] principles [unintelligible] established myself as a republican. but i am a conservative, and i reject on both parties the brigance and the fact that they say they know what is best for

us. we do not know what is best for us. we do know what is best for us. that is the message we are trying to sen. and he made a comment about the elections. host: my question on term limits? caller: the people's voice in this election. the people gigot, and that is ever a chance to hold our leaders accountable. in the elections -- the people's voice does not stop on november 5. the election has been taking place for the past year. it is the rejection of what we wanted.

our representatives are not listening to us. it is more of an agenda than about what we want. host: thanks. he was expressing his point of view outside the beltway. guest: republicans and conservatives are much more energized than democrats are. that is a stark difference from what we saw in 2008. obama was able to build a strong coalition with young, african- american voters that showed up in numbers. those young voters do not seem as excited to show up in the midterm elections. there are a lot of tea party activist conservatives that are very excited to vote their displeasure towards the white house and the administration. that is fueling and lots of republican candidacies across the country. host: networks will be bringing in the winning and concession speeches. you will see live coverage on c- span tonight with those speeches and results.

kentucky and arkansas primaries. guest: i disagree a little bit. she is an exception because she is facing a difficult election. her poll numbers are about as bad as in a democratic senator. she is still facing a lot of challenges. she may not lose the primary. it will be tougher in the general election. the arkansas democrat elected -- electorate -- there are many blue-collar conservative voters. it is a very white, blue-collar electorate. he will not necessarily see the base resent the incumbent as much as you would in other states like pennsylvania where arlen specter is in serious trouble. host: syracuse, democrats line.

caller: i'm a worker from upstate new york, and i have a question for the guests. arlen specter, when he was a republican, came out against an employee's act. one of voted for this employee free choice act. i am curious as to why the labor movement gave the endorsement to balance -- arlen specter? guest: that is a very good point. he backtracked on his initial opposition to the employer free choice act. there was a close relationship with him. one of the few republicans that work closely with him -- that relationship, had a good relationship with labor union voters who supported him in

large numbers in the past election. that should help read the endorsement. endorsement. host: betty white reacts to the -- this person reacts to the young voters response. guest: young voters do not show up as older voters traditionally. that incredible turnaround, record turnout does not look like it will be replicated in 2010. host: fourth primary is in oregon. a democrat senator is seeking renomination. people and not talking as much about the senator's race as the governor's race. guest: that is right. the governor's race is interesting, because one is trying to make a comeback.

he is likely to win the nomination. it looks like he is the front- runner in the primary. he is hoping he can win a bigger percentage of the votes. host: what makes the race interesting other than the personalities? guest: it could be interesting test to see if the republicans can sweep democratic states across the country if the anti- incumbent sense is so strong. but dudley has proven to be a fairly decent candidate. if he wins the nomination, it could be a very interesting race. host: independent line, pennsylvania. caller: i am a green party member after being a democrat. i switched my party in february,

before this ongoing oil disaster, which i hope makes people think about the green party again. my husband will be voting in the primary, because i cannot. he will vote against the incumbent. he is a good alternative. a lot of democrats are trying to vote one person out because of his going against the health care reform. i will be voting for the green , rty candidate for senate' there will be qualified to run. host: fangs. the role of third-party and

independent in this election cycle? guest: third parties and the green party activist maybe but dissipating to try to elect more liberal alternatives to certain areas of congress. one is likely to win renomination, but will face a serious challenge issue, because the chandra could win as much as 35% of the vote. -- the challenger could win as much as 35% of the vote. host: a bill, north carolina. ayetville, count -- fete fille north caroline. caller: people are voting and

there is no need for any legislative mandatory in -- to the voters will turn you out. no need for and necessary legislation. i'd like to hear his comments on that. guest: it was not that long ago where there was a conventional wisdom that it was very difficult to unseat an incumbent. they're only about 20 competitive house races and who will control congress was not a big question. this year, at least 100 races that are somewhat competitive. almost one-third of the races in the country, the seeds are in play and could slip. that suggests the power of incumbency is not what it used to be.

it may effectively need to have term limits or some form of campaign finance reform. host: here is a comment on twitter. twitter. guest: there is a correlation between the enthusiasm of democrats and republicans and how it translates into the november elections. democratic turnout was down significantly. democrats are not as excited to show up and support their favorite candidates. all indications are that republicans are more excited than democrats to show up in the polls. host: are you going to the

polls? caller: yes, and i am supporting arlen specter. i hope you give me as much time as you have given the other callers. him, but don't trust he has been on the other side. he knows what all the bodies are buried. anything that has gone on with the republican party, he knows about, because he used to be run. he could be more beneficial to this president's agenda then joe, who is a new kid on the block. for the lady who said, it does not matter whether or not the republicans take the house or the senate, because president obama can veto everything, she does not understand that they can also -- they would have the majority and tie his hands behind his back and never passed and the agenda that he wants and make him an effective president.

you would have a president vetoing everything they want, and then not passing anything that he wants. this country will go down the tube. they cannot be allowed to take that senate and take that house. president obama to get america up and running again, he needs democrats who have experience, who have the knowledge of what has gone on, years before in the other administration. in the year 2000, when an election was thrown right in ever faced, there was no tea party. but on february 29, 2009, the tea party comes into existence, one month and nine days after barack obama becomes president of this country. you tell me that is not racism? thank you. guest: the caller is coming from

philadelphia which is key in the primary from inspector in a primary today. african american voters need to get to the polls on his behalf. he has been campaigning vigorously in the city. he needs a high turnout and overwhelming support. host: some election stories on the front page of the "washington times." the first is on spending. what does this mean?

guest: the recession is having an impact on campaigns. not enough money going around. some are getting the most bang for their buck. some candidates did not spend a lot of money and defeated a senator. and one was not in the race and lost against another restarted a campaign with no money and quickly raised enough to unseat the incumbent. not as much money in the election cycle this year. host: here is another area of the front page. guest: earmarking is very

powerful today. one democrat is running on his connections with someone to bring federal funds back into an impoverished district. another is running a traditional campaign that she would not think would resonate in a certain district. certain district. allen was a senior appropriators and lost the primary. host: there are pictures of bill clinton campaigning in a special election. but what about the role of the former president and his

influence? guest: president obama the son play well in the 12th district of pennsylvania. of pennsylvania. a very socially conservative, pro-life district. host: the next caller is from columbia, md., in a pennant line. caller: i had a few comments to make. i was a democrat, now i am an independent. i really do not like either party that runs the whole system. system. the majority of the country is anti-amnesty not anti- immigration. the democrats do not seem to care that we need more jobs that

do not involve a master's degree. there is nobody looking out for this kind of man anymore. many republicans want cheap labor. we need a better way for people to speak out about what they believe in. i do nothing the tea party is racist, but a frustrated sense of helplessness that may get to a dangerous level. guest: the caller is talking about immigration ever since arizona passed a tough anti- immigration law. look at the polls that show widespread support for the arizona law, even though the elites in both parties seem to have concerns about the legislation. host: here's a comment from twitter.

guest: john mccain was running against a classic conservative against a classic conservative without a lot of baggage, i think he would be in serious trouble. he is still in some trouble. he is still in some trouble. this is not going to be a walk in the park for john mccain. he is hoping that his time in the house will help. host: republican line, new york. caller: you have become my favorite moderator. i think he'd do a great job. and will lead to comment on the pennsylvania senate primary. arlen specter goes back to the warren commission and the

congressmen came on the scene fighting congressman with a program that would embarrass bill clinton. god help america. host: to you know about the roots of his candidacy? guest: 2 been a very good year for democrats, but he had a when that was decisive. clinton was one of the biggest supporters. he knew him back in his presidential days. he is one of the favored candidates of former president clinton. he has not gotten involved in the senate primary. he has stayed on the sidelines. host: we will start knowing

results beginning 6:00 eastern time from kentucky. how will the night progressed? guest: the eastern part of the state is going to be an interesting test to see whether jack can be competitive since some of the role parts of the country. he has been barbel on energy issues. he could face challenges on a general election. suburban pittsburg county has been given a big swing county in the special election. look at the turnout in the city of philadelphia. if arlen specter does not win big, he will have trouble winning the primary. host: a very interesting and important day in the political process. we want to thank our guests for being here this morning to set the stage for the elections in some key states today. we appreciate the information. we will turn next to an international story briefly.

we have a bangkok correspondent for the "new york times." on sunday, the newspaper had a big piece headlined with this. he had the horrifying experience of having one of the people shot in the head as he was interviewing him, just a mark of the ongoing violence in that city. he is on the line with us to tell us how things stand. what is the situation with the violence? guest: decelerating. it has been waxing and waning for the last few days. i do not think we can draw any conclusions from that. there were injuries not a debt today, as opposed to the 35 people who have been killed over the last few days. host: explain to americans why this story matters. guest: this is a country in debt

is held together pretty well compared with other developing countries in asia. this is where america staged its campaign against communism in the 1970's. this is the base for those operations. it was chosen as a base, there is a monarchy that helped solidify the democracy and snow will ethnic problems except in southern thailand, and strong tide i didn't see an economy in the 1990's. now, things several and ravel. host: other wider implications in asia? guest: i guess it does. there is a question of what it symbolizes. maybe that is the main thing.

what asia has a weak " of law. it is the attraction of a lot of countries for people, because you can get things done quickly. you do not need environmental permits. i am being a little facetious here, but the flip side of that is that the rule of law is necessary when you are in a crisis situation. what we are seeing now is maybe a cautionary tale in other countries the rule of law is weak. thailand has done very well for many years without that kind of strong, legal system.

now things really seem to be backfiring. host: what is the hope of a resolution? guest: it is very dim. we hope to get through this stage of the crisis, but there may be many more chapters to come. the country is very deeply divided. it goes back to a military coup four years ago. the prime minister was very popular and very wealthy, and very popular among the poor. the portion thailand are not the poorest people in asia. they are fairly well off. they saw a glimpse of a better life under this prime minister. life under this prime minister. his removal was very -- a very bitter experience for them. host: over the past decade,

thailand has been a popular spot international terrorists with fancy restaurants, luxury spas. as tourism stop with this crisis? guest: i saw arrivals at the international airport has been cut in half. about 40 million tourists a year, a lot for a country of 65 million. great beaches, and double tracking, the nightlife of bangkok -- all of those are attractions. the tourism industry has been affected by this. host: thanks for talking with us today. guest: you are welcome. host: he reports on the continuing violent protests in bangkok. let me move back to domestic situations. let me introduce you to our next

guest this morning. he is a professor at the university of texas at austin. he caught our attention with recent pieces suggesting that federal debt and deficits should not be on the mind of american residents and in the long run, they do not matter. but said the sovereign debt crisis in europe. give us your point of view and talk about the concerns. guest: united states has important problems, unemployment is the most important. we have a catastrophe in the gulf of mexico and other challenges going forward. in that context, we spend so much time talking about the budget deficit and not just the current budget deficit, but the artifacts of the forecast for 15 years out. it is a bit strange.

when you look carefully at the forecasts, it leads you to believe that they should be taken very seriously. how is this different from the situation in europe? very different. that was precipitated by a very small country, greece, whose debts are issued in a currency that does not control the euro. in order to fund itself, it has to go to the capital market where it must pay interest rates that are dictated by speckling tip pressures. it was unable to fund itself successful on the basis. that face the european union to extraordinary measures. it had to salvage the situation to prevent ineffective runs on the currency and the banks. it is not clear that the european union has succeeded.

it is not spreading to the united states. funds flowed into the united states. treasury bond prices rose. we remain the destination for flight to safety. the idea that some of the greek situation is a forerunner of what is going to happen in the ninth is states does not have much standing. host: here is a headline in the papers today. general motors returns to profitability for the first time in three years in guest: to the extent it is true, it is a success story. that would be a good sign with

spending on automobiles. host: there is a cautionary note. note. it talks about the cash for clunkers program. guest: there is nothing artificial about the program. it was a very good idea that fat people to think about getting rid of their old cars in getting it -- that got people to think about getting rid of their old cars and getting new cars earlier than they would have. if the effect is to get people back to work to keep the car company alive, that benefited greatly exceeds the risk that you'll have a lull. host: our guest is here to take your calls about the role of government intervention in the marketplace and the coming and

the will of governments in our society. he is a professor at the university of texas at austin. people may be wondering if you are related to one fellow. our first call is in michigan. democrats won. caller: the said the deficit does not matter. do not worry about it. -- you said the deficit does not matter and do not worry about it. why are we borrowing so much money from china? guest: china has exported to us more than it imports from us. more than it imports from us. it has exported to the world more than it imports from the world. as a result, it has built up a horde of treasury, security treasury bonds and bills which it holds at an account at the

federal reserve. it does not have significant leverage over united states. the chinese know they cannot do much with this. if they would try to sell some of it to drive down the value of the dollar, it would only hurt them with a capital loss. they would take a huge risk on countries that stand the risk of not being able to fund their deficits by trying other measures. they would put themselves right in named middle of the european debt crisis. it is a relationship that gives us a symbolic linkage that reflects the imbalance in the trade accounts, but it does not give them a political leverage over the united states. host: he suggested that we as a country should not rely on the projections by the congressional budget office.

there is someone on the other side of how this thinking is. an economist at the heritage foundation has a piece this morning. the projection was unrealistic and molly opportunistic.

why with people on both sides of the political spectrum suggesting that we rely too much on these, why do we? guest: there is an extremely valid point in that piece. back in 2000, there were improbable projections of a federal surpluses continuing to a national debt. it could not happen. when the federal government runs a surplus, what it means in practical terms is the government is taking out more in taxes from the private sector then it is put evection spending. the private sector's pockets are being drained. that has happened seven times in the history of the united states since 1790. none of those have produced a recession.

that is what happened in 2000 and 2001. we right back in the normal condition, which the government spends more that -- then it takes in taxes. takes in taxes. there is a large public debt which people hold as bonds. the cbo is a non-partisan organization whose fundamental purpose is to provide lenders of congress with assistance in figuring out what's the pieces of legislation are going to be. to do that, it produces an economic projection into the future. the problem with the forecasts is that they are very mechanical. they are not thought through very well. they are inconsistent. the things that are claimed to be part of the forecast really

cannot happen together. the cbo argues that the unemployment rate will go down and the inflation rate will stay below 2%. the short-term interest rate will rise back up to 5%. the deficit will increase and the interest payments on the debt will rise to 20% gdp, which is about as much as new federal spending as we had in the second world war. you cannot have the government writing checks up to another 20% of gdp. that cannot happen at the same time inflation stays below 2%. those things are very unlikely to occur together. if we focused our attention on that, we would come to the realization that the deficit and

the foundation of many policy arguments, it supports unjustified cuts and would not have the foundation people believe they have. host: those become the fodder for political debate in the country. is this geopolitically motivated? guest: 9 i do not think so. it is part of a process -- i do not think so. it is part of a process that is convenient, but may not have been examined carefully enough. it serves one purpose in a functional way, which should not be used for a other than larger purposes that it is being used for. host: in the pan and line. caller: i think we need to look

at the situation we are in right now and look at how we got here. i think everyone is panicking. it is terrible, the way we spent things that are unfunded. the war's -- i could go on and on. ever since 9/11, we have been in this constant state of fear. i think that is what is happening now. we need to stimulate the economy. the more money that is spent, the more money the government takes in. with money not moving, the government is not taking in money. if i have $1,000 paycheck and i spend it, the government takes taxes and the second time the

many changes hand, the government makes money off of it. when everything is still, the government is not making money. obama inherited a terrible situation. we have to look at what he inherited. there is no way we can stop spending now. the economy is going to die. we are in debt, and we have to get out of it. we have to get our economy moving again. i look at the deregulation and everything that has happened and the way the government has been run. it will take a long time to clear all of this out. -- weeople in government are seeing the people that are causing these problems. until we work these accounts,

things will be like this. guest: that is a very good analysis on the whole. fear is a powerful motivating factor for politics. it is being used by those who would like to precipitate or oblige the acceptance of major cuts in social security benefits and medicare down the road. we should look at the arguments motivating those claims in a dispassionate way. they are not well founded. the question of how we got where we are is an an important question. in the last couple of years, we have seen a collapse in the private financial system. that was the fundamental problem that produce the great

recession that we are coming out of. that collapse was due to mismanagement of the housing finance sector, and the failure of supervision in ratings, underwriting, the entire process whereby the financial sector ticked the mortgage loans that have been made over the course of the latter part of 2000. process collapse and the banking system foldup. it has not been making substantial loans to the private sector. it could not do so, because so many people that were used to borrowing on their homes no longer had equity. they cannot justify it. we are going to have a large government deficits. the effect of not having that

activity generated does that give have less economic activity and tax revenue host: what do you think in the public sector, the role of the monetary policy and the administration's, which had a big pushes for people of modest means owning homes. guest: what did low interest rates cause the housing bubble? they created a climate mortgage originators realized the thing to do was to issue mortgages that would heed to those low interest rates for a couple of years that would reset after three years to a higher rate. this was a way to create an instrument that looked like it was worth a lot of money. those instruments were being

issued in large volumes to people that had no prospects of being able to meet payments when interest rates rose. i am not that much of a critic of the low interest rates that existed during that time, but of the climate, the realistic expectation of a few years later, interest rates would be higher and set up this market with a mortgage rates that were explosive. host: republican line. caller: our deficit matters a whole lot. if it does not matter, why are we paying it back? we need to look at agrees to see where it is s. they want to sue us because it is our fault for were they are at.

i think the ailing -- to allow the upcoming is not ok. " in america makes appliances -- " in america makes appliances -- who in america makes appliances and wiry bailing out people for them? [unintelligible] [unintelligible] if people are getting all of this, what am i getting? i am getting in debt to make the payments where they get all of this extra money back for. i do not understand your reasoning. guest: the most important thing we need right now that we do not

have our jobs for the people who have lost work, left the labour force. those jobs created in the united states would pay wages paid here, and it would create opportunities for the country at large. that should be the priority. i think you have a point. it is possible to do these programs in ways that are calculated to work quickly and then add be as effective as one like. in the stimulus package, there was a strong emphasis on shovel- ready products. it put a lot of people to work and road-building projects and things like that that were ready to go. one can make a reasonable argument that there should have been more emphasis on projects

that were more transformative and do a better job of leaving us with better capital stock or living environment going down the road for five or 10 years out. the banking sector fold of shop and is out of business. you are left with the public sector as the one instrument that can act. criticisms aside, the public sector did stabilize the economy over the course of the past couple of years. some of it was automatic processes. tax revenues fell. other benefits rose. some of that was congress passing the stimulus bill. the private collapse would have

extended to a collapse of the entire economy without of those things. that did not happen. host: we have been focusing on the national economy. state budgets are in a crisis. california is a prominent example. many have balanced budget requirements in their constitutions. talk about spending at a state level. guest: the supports public services that the public dow use. it supports public -- that the it supports public -- that the public' needs and uses. it supports public schools. it is under tremendous pressure. it would be lost without the stimulus bill. it did put funds into some states localities so teachers that were laid off were allowed

to get hired back over the course of the summer. it was cost-efficient givens -- given the death of the crisis. pth of the crisis. the appropriate thing for the federal government was to stabilize the these governments. it is counterproductive to fire teachers and policemen and close libraries. you want to have more economic activity and not to undermine neighborhoods that are extraordinarily fragile. you could federalize the medicaid program, which could put significant funds into the hands of state and local governments. the program was introduced which

lasted from nixon to the raid ended ministration. that could be very sensible. it would allow the federal government to plug those budget gaps. this problem would be dealt with. when it recovers, there would be less dependent on public funding. host: we are talking with this economist. he is the author of several books. he writes a column and is a regular contributor to the texas observer. -- what is the most effective way to get your message out? guest: i use them all, but i suppose this is. host: you were a staff member on capitol hill of the joint economic committee. you were in china it as well.

guest: that was a special program with a brief visit in 2001. i did some advising in china. host: our next telephone call is from baltimore on the democrat'' line. caller: one of the great arguments is that gm cannot be fixed. it essentially had to be let's go to make way for better cars such as toyota. such as toyota. both senators mentioned there were contrary to as -- contributions to their campaign. i agree with some of the views of the tea party and officials

and those that want to downsize the government. but i cannot see why a gm chapter 7 back then would have made sense if it were to cost the employment of millions of people in one single blow. .

guest: most serious problems which the new law is probably that the mandate provisions, enforcement provisions are quite weak, so there will be a tendency for young people to take up the insurance until such time as they actually feel the need for it. that may complicate the problem of having a viable, private health insurance industry. i think it is endemic to the structure of the bill. i if not saying -- the solution would be to raise the penalties necessarily, but that is likely to generate that reaction. host: why are you concerned

about the penalties if you are trying to get people to participate? guest: it seems to me at the end of the day, every other country has solve this problem by having some kind of common, universal system. we are trying to do this in a very different way which preserves the institutional structure that we had before. ok, and give them a lot of credit. they put together a bill, which takes an ingenious approach to the problem and does a lot of good, but there is the underlying issue, which is that so long as you are imposing a cost on people, a high-cost on people, to take insurance and share the burden of providing health care to the community, to

everyone else, then people who feel they do not need it for themselves will look for ways to slip out from under. host: next call is from baltimore. david n. the independent line. -- on the independent line. caller: i just have a comment. i sixth of america is the best and brightest country in the world. we have the greatest minds, the best opportunities are here. there has been way too much negativity about our country, but one thing that does concern me is the manufacturing sector. not that we have let a lot of the technologies good to china -- go to china, but i think we

need a big national push to push over to renewable energy. that could be the manufacturing sector. -- that could be the new manufacturing sector. we could supply this to other countries. that could be the national economy. we need everyone to be tired of paying $3 per gallon for gas. it is iraqi gas we're putting in our engines. guest: i am in full agreement. budget deficits are not a problem we will face down the road. we're talking about a financial issue on one side, verses real

conditions and living conditions on the other. issing previous caller with the reference to his restructuring of general motors was also touching on this point we did you have to set the direction for the private economy to grow into. that was done very effectively in the 1990's with the rise of information technology, the internet, and communications as there became a focal point for economic development for private investment efforts, and we had at the end of that decade a very extraordinary transforming boom in that sector. going forward, energy and environmental questions, the way we produce energy and consume it, the way we organize ourselves to make use of energy are going to be the dominant or should be, i think, the dominant themes for economic development. we need to have institutions

that foster that ideas -- those ideas. we need to have labs that do the research work at all kinds of levels. a level of local economic development planning. that will pick it possible to implement a new direction -- that will make it possible to implement a new direction for economic growth. if that cannot be done through the large banks, then we should think about setting up new funding mechanisms, essentially a policy-oriented mechanisms that will begin as -- that will permit us to grow the economy in that direction. host: we have seven minutes left in our discussion with james galbraith. prices at the wholesale level fell in april reflecting

declines in energy and food. the labor department said wholesale prices edged down in the past month. they further right absence of inflation pressures means the federal reserve can't continue to keep interest rates at record level lows. construction of new homes rose more than expected in april, but new permits fell shortly. -- fell sharply. the commerce department said construction of new homes and apartments rose 5.8% last month to a seasonally adjusted annual rate of 672,000. reaction to either. guest: first of all, the construction numbers tell you that construction remains extraordinarily weak. it is, in spite of recovery

elsewhere in the economy, this is the dead weight on economic expansion, and will remain so because the housing sector has fallen dramatically because they cannot take out the debt stock to finance new construction -- the purchase of new homes. this will become a major problem going forward. it will last a long time. on the inflation front, this is one month's news, but it is a clear indication that those who have an leaking -- linking the budget deficits to this are speaking prematurely. i think they are clearly not reflecting the fundamental reality, which is that apart from the risk of rising energy prices, which are in a substantially deflationary world. japan has experienced falling

prices for a decade or more, and so this is a world in which the least of our problems is some story in which the federal deficit runs out of control and drives up interest rates, drives up -- a term bond rates. the capital market clearly does not think that is likely because their lending to the government at a little more than 4% 420-year terms. they are happy to get that. they are happy to get that. -- they are lending to the government at a little more than 4% for 20-year terms. host: what is the impact on falling prices? guest: they encourage people to wait. they think maybe i will buy the car or new appliance, but it will be cheaper next month so

you save your cash. you do not go to the store and economic activity sectors. also people that find -- also people that have debt find that paying back is harder and harder. default rates rise. deflation is a very serious problem. i am not predicting a long-term of deflation, but when it does happen is a very difficult problem to escape for. host: jane on the republican line. caller: we're going down the same pasth that greece has just headed down. they have been told to privatize their health care. the cbo came out with new numbers that put it over one trillion dollars.

we know that the director was summoned to the white house. he is a democrat commen andt, ae note he is a democrat, and as far as the walt care problems -- health care problems, the finance bill will do nothing. last week when obama had the business leaders meeting, maxine waters. they are part of the problem. host: i am going to stop you there. long laundry list. guest: we have, as a result of

the financial crisis, a major problem. a major challenge for the rule of law. i said this a few days ago to the subcommittee on crime of the senate judiciary committee. these events will break down that the rule of law. it broke down at the mortgage originators that were generating fraudulent and abusive loans by the hundreds of thousands. it broke down in the ratings agencies. it broke down in the underwriters who were basically acting in defense. they were selling them to the investing public. it broke down, as the caller correctly said, in the management of the may and freddie mac. they loaded up. they want the originators of -- they were not the originators of

the subprime crisis, but they help the previous high administration delayed the crisis by essentially taking those toxic assets of the private market. this is a matter that will require the attention of the securities and exchange commission and the part -- and the department of justice, and that process will continue for a long time. we're seeing investigation. we're seeing cases being filed. we're seeing eefinbeefing up ate staffing of the fbi. but you are quite right. people will not have confidence in the system until the rule of law has been reestablished. host: democrats line. caller: this month on national

geographic i came across something very interesting about tax havens. it's as the united states treasury loses about $100 billion per year because individuals and corporations put their money in different tax havens. i know last year they found that u.b.s. had 15,000 people that had secret bank accounts, none of that interesting to our country. just the other day, in regards to the oil problem, halliburton, which has 30,000 people working in houston, but their offices are in dubai so they do not pay and the united states taxes. same thing with trans union. british petroleum, i think they are at an island.

none of those companies, even though they profess to be american companies, i guess with the exception of british petroleum, they have their offices, there is a small staff and other countries take advantage of the tax rate. host: i am going to jump in because we're out of time. guest: i understand. you are right. it is something that has to be dealt with in my view. host: i want to go back to entitlement spending. so many times we need columns with the headlights of the ticking time bomb as the population ages. you have written that the national debt owes little to medicare and less to nothing to social security. guest: in fact, the contribution

to that system as a whole has been to reduce the deficit. medicare was never intended to be funded through payroll taxes. it does have an element that comes out of general revenues, but it is less than -- it is about 10%. most of the deficits we have had already are due to the recession itself. and the fall in tax revenues as a result of that. looking for work, there is a projection for how your health care costs driving increased government spending. if you focus on cutting medicare, what you're basically saying is that in dealing with health care costs, the burden should be entirely on the elderly, people over 65, for no other reason other than their

health care is funded by a federal program. that makes no sense at all. if you are going to do with health care costs, deal with it rationally. it's the whole system came under medicare, it would cost less than it does, because we would be getting rid of the necessary cost of funding private insurance programs. however you do it, deal with health care as a whole, do not single of medicare, and there for the elderly, where reductions in health care, which people obviously need. it supports elderly who when not have children and do not have children, and it requires people who do not have parents that they would otherwise support, to pay into a common system. both of those things can be sustained indefinitely. there is no economic reason to cut this. the elderly will not go away. someone will have to take care

of them. social security has been doing that very effectively for many decades. host: james galbraith, thank you. we have one more guests ahead. his name is jeffrey miron. >> in the headlines, five americans are on projects are among the six nato troops killed by a car bomb in coppoka. the bomber struck during rush hour on a major road. the taliban is claiming responsibility. it was the deadliest attacks in september in the capital. britain's iraq war inquiry panel holds meetings this week. the panel is examining the case made for the war and errors in planning for post-conflict

reconstruction. although it ultimately will not assign blame or establish criminal or civil liability. britain's new parliament meets today for the first time since the country's general election. they will swear in lawmakers and elect a speaker of the house of commons. back here in washington, interior secretary ken salazar and other officials will come under senate questioning about the gulf oil spill. the questions will be about the government response. oil company executives are back for a second round of questions. c-span3 tv will have coverage at 2:30 p.m. good and bad news on the housing front today. as the commerce department reports that while construction and new home rose more than expected in april, new building permits fell sharply. construction of new homes and apartments rose 5.8% last month

to a seasonal rate of 672,000. that is the highest since october of 2008. building permits, a gauge of future activity, sank 11.5% to an annual rate of 606,000. that is the lowest since october of 2009. those are some of the latest headlines on c-span radio. >> a couple of light evens to tell you about today. the senate foreign relations committee hears from secretary clayton of all the new reduction arms committee. that is on c-span at 10:00 eastern. of c-span3 another look at the gulf oil spill. lee said jackson and ken salazar and representatives from the army corps of engineers will talk before the senate

judiciary committee. also today, a forum on the supreme court. panelists include justice stephen breyer's. host: meet jeffrey miron. i am going to start with the stereotypes. a libertarian that is running the economics department at harvard. some people would be surprised at that. guest: 30 more libertarians' at harvard and some i guess. -- there are more libertarian's at harvard than some might guess. larry summers was one of my thesis advisers. he is also a friend. he is an incredible economists.

he is thought provoking. the questions everything. being around him is stimulating because it makes you question that is a little bit of what i do. i take issue with what are perceived as bill and troops for -- known truths. host: along with kristanna -- christina romer, they are intellectuals. they are often surprised -- there are times when that larry and i have had brawls. we have shocked some light of accusing each other at making arguments as we would end an economic seminar, but it is a sign of respect and very argues with you. it is far better than being ignored. guest: absolutely.

he is famous for wanting to debate. if you make good garments -- arguments, it is worthy of response. host: i want to invite the audience to call in because we will talk about a libertarian's view of the world through the segment. and i will throw some big topic areas that are in the news right now and have jeffrey miron explain his view. we really want to have your calls and comments. let me start with health care. guest: health care is a tough issue because it is so emotional because there is a wide-spread view that health care is the right, not a commodity. libertarians do not accept that proposition. we would like it to be treated as all other goods, the people that have more income to purchase -- get to purchase more

of it. libertarian view is also pretty skeptical, but it is much less opposed to the notion that government should try to help suppor the poor, but that intervening generate so many unintended consequences that it is an incredibly ineffective way to redistribute and that makes a huge part of the economy worked very badly because of figuring out reimbursement rates for doctors and so on. host: you cite your influences. you also discussed the fact that the definition of libertarianism, there is a strict constructionist and a point of view which is called consequential libertarianism.

guest: it means that we are thinking through policies in the same way that really everyone should, which is to ask, is there really a problem that policy needs to try to fix? if we used a particular policy, will it fixed the problem? even if it does go some way towards addressing a problem, will have the unintended negative consequence? it says let's be more thoughtful, more careful, and more consistent and are realizing that all attempts by government to make things better, sometimes have benefits, but usually have a large range of costs. usually the costs are worse than any benefits so we're better off with smaller or little government in a broad range of areas.

host: mary in clearwater, florida. turn down the tv and ask your question. you have to hit mute quickly. we can hear you. keep your tv volume down please. go ahead. caller: hi. i had a question regarding libertarianism. host: still ahead and ask. caller: i notice in the tea party groups there are lots of libertarianism groups in government. can you elaborate on that a little bit? guest: i think the tea party is not clearly defined yet. the big interest -- the big issues that have confronted the country have mainly been economic. i think conservatives are little bit inconsistent, but there is a

lot of commonality on construes the constitutional issues. -- there is a lot of commonality on constitutional issues. libertarians are in favor of allowing legalized gay marriage, having a legal abortion and so on. when the tea party tries to have an influence, i think it will have to pick alain and find that the divisions might be just as problematic as they are for the republicans. host: dr. miron is a regular blogger. what do you post on twitter? guest: i basically tweet about

my book. host: you write about the kind of things that you list. guest: i was blogging for awhile and that was helping the development thoughts and ideas. i also taught a course at harvard on libertarianism. that is what led to the book. host: we have a twitter questioner wanted to know about the image. guest: the little image is a porcupine. it is meant to be like the republican elephant or the democratic donkey. it is small and friendly, they're ready to defend itself if attacked. that is the image that libertarians want to present. host: independent line from florida. caller: thank you for taking my call. mr. miron, i am curious of your

overall opinion about youthoughs from mr. galbraith before you. i was shocked by some of his opinions. i am serious as to -- i would have loved to be able to get on, but it cannot. i miss the first part of the program. i was not sure if he declared his political position, if he was a republican, democrat, libertarian, and i've would be interested because helps me be able to lineate off of the jump. i was curious if you could

respond to that. guest: i would be very surprised if professor galbraith was a libertarian. just to illustrate a difference, she was speaking against concerned about deficits and debt for the united states. libertarians, and a fairly broad group of economists, would be much more concerned about the deficit situation then him. he certainly is right the projections are notoriously inaccurate and one needs to take them with a grain of salt, but certain components can be predicted pretty well based on history, the demographics, experience of other countries and our own. for example, medicare, medicaid, and obama care will contribute to denounce going forward -- will contribute to urghuge amous

going forward. i'd thing we should take those concerns very seriously. -- i think we should take those concerns very seriously. host: what is your view towards the bailout? guest: a large part of what happens in 2008 was government intervention and government policy, rather than being this behavior of wall street and so on. government was in the business of encouraging people who could not easily afford homes on their own to get loans by fannie mae, freddie mac, and all the extensions and that that played a significant role in why we had so many homeowners are risk of default. likewise, the federal reserve lowered interest rates significantly in the early part of the decade, but went around giving assurances that macro economists have sold the

business cycle, the federal reserve was almost all powerful and when the crisis hit alan greenspan would take care of it. that type of assurance to libertarianism s is insane. host: for jeffrey miron, the next call is from albany. caller: i think you are one of the most incredible voice is an articulating the failures. do you think the obama administration is serious about having a debate? guest: i am not sure. i expect behind closed doors a large amount would be happy to have the conversation and be sympathetic. i am not sure any administration

sees it as a political winner to take a strong stand because there is still a lot of opposition to legalization, save for marijuana. -- say for marijuana. the key initiative would be the california initiative. if that passes, and it creates the question of what the federal government will do about this. will they let california offpt out of the spectral cut program. i agree with you, i'd think the administration is sympathetic. i am not sure they will take a strong stand publicly. host: 8 twitta twitter for you,a libertarian, do you think

churches should be exempt from paying u.s. taxes? guest: all taxes are paid by people. all taxes should either be on consumption or personal income, then we do not have to decide what is non-for-profit. we would not be imposing any taxes on churches or other religious institutions but we cannot impose taxes on any other corporations or businesses. we will make it clear that all taxes are on all people. host: how old were you when you first realize your view of the world? guest: i think it evolve gradually. my father is a libertarian, but he came about it later in life. i asked him what took him so long to realize he was libertarian, and he said two words -- richard nixon.

in college learning economics was a big factor. i think i had suspected i was more in the free market can, but economics gives you a sense of reason and teaches you the unattended consequences that when you try to couldo good youy or may not do good but may have unintended consequences. host: clinton township michigan. dolly on the republican line. caller: hello. quick question. i would like your opinion -- why do you think this congress and the white house, against all obvious polls and objections push this massive health care takeover when they could have done things in a more targeted -- targeting the insurance practices and increased subsidy

addition -- increase subsidies for the poor? guest: a lot of polls were negative on the existing system. a lot where supportive of wanting to do something. a second factor is that different congressmen run in different districts. in the district where the democrats run, for the most part, obama was much more popular. both sides, which iere doing whs acceptable. that is what made sense for their constituents and voters. i think the republicans concluded that once they got in place, people would gradually come to like it. they may turn out to be wrong about that. there are born to be tax increases and defects on how

easily people can get health insurance. i think eventually we will get cost controls and rationing, all sorts of things that people may not like, but when it comes to 2010 or 2012 elections, democrats can say there is no pre-existing clauses. it will not have actually cost the economy much yet. i think the calculation was that this would end up being the winner for democrats, and that is why they pushed it through despite the polls. host: chris on the democrats' line. caller: thanks for having me. i am not educated or sophisticated. i did go to vietnam in the 1960 cost for a year. my question is, in the 1980's i had my own business. i was run at a business by a

mexican company that came into town and outbid everyone until we could not compete. in the 1990's i went to get a job in the factory. each one was bought out by a larger company, shut it down, gutted it and send the whole operation over to china. in 2000, i worked in construction, but i have not worked and over a year. the last job i had was i worked at a power plant down here in florida. the company that built it was a mexican company. 95% of the employees were mexican. i am from all over the place.

all of the steel came from china and korea. all of the generators, turbines, everything like that came from japan. even the concrete -- host: i am going to jump in because the phone connection is bad. global competition. guest: i understand caller's concern. competition from immigration. it does not necessarily help everyone. some people are worse off if we open up competition to japan with domestic auto workers, but the economics claim, is that

free trade is overall a very good for the country because everyone gets to purchase goods from abroad at the cheapest possible prices. it is good for immigrants because they moved to better jobs. even though some people are adversely affected, the overall impact is gains for the u.s. and other countries. these led the most obvious and effective ways of promoting prosperity around the world, both here and abroad. host: how about illegal immigration? guest: there are no free lunches. we could get rid of illegal immigration tomorrow by making all immigration legal. it is important to remember that, because as long as we have high wages here compared to mexico or latin america, there will be strong pressure for people to want to migrate in response to the wage

differential, and if it is illegal, a lot of it will occur illegally. we can do things to try to diminish this. we can allow capital to flow easily to other countries so that more investment will take place there then the big multinationals will build factories in mexico and employee mexican workers in mexico. we could get rid of drug prohibition. one of the reasons mexicans are migrating is to escape all of the violence. host: madison, wisconsin is next. mary on the democrats' line pearman calle. caller: you are using a different term -- libertarianism. i do have a couple of questions for you.

do you and larry summers and all of the people you admire, how many anticipated collapse in the market? getting to the point of the earlier man is that with your system of economics, you blame the big dumb, but you always keep all of the control, all of the power to the high and mighty. there is no competition for consumer -- or consumer ability to choose. that was not true in health care. that is not true in the people who are needing jobs. we are all at your mercy. what you are proposing is an oligarchy that controls the world economy, and we will always be at the bottom with less health care, spending more for it.

with the junk to consume, not good, high-quality products. we will also have the nation that continues to decline and our infrastructure -- in our infrastructure and jobs, in everything that once made america great because in your system there is no place for public moneys to be spent on maintaining quality of life. guest: on your first question of -- did mainstream economics predict the financial crisis? with very few exceptions, the answer is snow. not larry summers. not ben bernanke. a few people did no. nouriel roubini did predicted. we failed. there is no dispute about that.

the suppresses the working class for everyday people but i think that is backwards. the libertarians claim is that the more government there is, the more the elite can control what goes on in the economy, and much of the wealth and concentration, much of the mobility is because government has intervened in a way that prevents competition, it prevents people from making choices. if we looked around the world that have capitalism, indonesia, russia, lots of other places -- and that is where government is intervening substantially. they are imposing lots of control that makes it more difficult for individuals to make their own decisions and to break out at the controls that are fostered by government. host: the gulf oil spill. guest: it is interesting.

i do not have a good answer for that. i think the thing to think about is why do companies engaged in behavior that takes a risk in huge cost? partially because they're not on the hook to pay for it, or at least not all of it. most corporations have limited liability. if things go badly, if they fail, the individual owners, the people who make the decisions to drill in the deep water, their homes, competition they have received in the past are not at risk. that is not necessarily a great system. a different system is when the company wants to engage in risky behavior, they have to put a bunch of money into a bank account verified by third parties and is there until such time as the activity stops. if pat -- if it has gone on for 10 years and there has been no accidents, then the company gets the money back. if there have been accidents,

then the company loses the money. it is very different than the attempt to regulate, have government being involved in saying you have to use this type of safety system or that type of safety system. it is very hard to monitor companies following the plans. no one really checks or nose. sometimes things are not safe at all. -- no one really checks or knows. no one is on the hook for the losses. if we went that direction, there might be much smaller companies and corporations. they predict may be that is not entirely desirable -- maybe that is not entirely desirable. it is not clear that we cannot do without corporations that are trillion dollars in size and have the much smaller.

host: sarasota, florida. greg on the republican line. caller: i am curious about housing act. guest: focusing on any one of the housing initiative is only part of the story. the right way to think about it is going back to the community reinvestment act in 1977, i believe. there were a number of measures that congress enacted, some of them week, but gradually leading to a situation starting in the early 1990's where the housing development was pushing fannie mae and freddie mac to have affordable housing be a much bigger part of the portfolio. that pressure continued to build until the fraction of loans that they were buying or guaranteeing that work for homeowners with relatively poor credit characteristics was gradually going up and up. the implicit guarantees that

fannie mae and freddie mac have a enjoyed meant there was not enough and due diligence. there was not enough concern about the fact that this credit was being expended in ways far beyond what had happened in the past, and far beyond what seemed prudent. ciro dollar down payment loans being be example. -- $0 downpayment loans being an example. a huge amount of the debt that will street had was built on the foundation of success of home ownership. it is not shocking and ended up failing. host: our next caller for jeffrey miron is from a gulfport, mississippi. rich on the independent line. caller: i agree with civil

libertarian views of the guests, but the problem i am having with a modern day libertarian viewpoints is looking back historically to benjamin artucker, what was considered an individualistic view, were not good for that level. what i do not understand, and what has not been answered is how you are to change the system that has been built up so much by an increasingly inflated government and increasingly

inflated corporate structure, which does not have a democratic accountability to its workers. guest: i am not quite sure i understand question. i do not think libertarian's think that corporations should have to have democratic accountability to its workers. what they should have is what their contracts, articles and corporations say they should have. they are responsible to shareholders and there can be different rules. i would add that in terms of when the libertarianism has worked or not worked, if you look at -- this goes back to the previous callers questioned on terms of when to seek the u.s. became a great power. it became a great power, to a huge expense, and the first years of existence when the economic programs, the social policies were much closer to the individualistic libertarian

perspective. in the early 1800's's in 1900's and it has been in the last 100 years when we have moved away from libertarian government. we still have a lot of development of our free market society. it has been whittled away, and a lot of the difficulties we are facing our the result of expanded government. host: we have about eight minutes left with dr. jeffrey miron. the house republicans will lose a member of their caucus when congressman mark souter retires at 10:00 eastern time -- resigning actually. the reason for that is it has been discovered that he had an affair with a staffer in his district office cann.

he was elected during the republican revolution of 1994. he is married and has three children. fox news is saying he will announce his resolution -- resignation after announcing an affair. elected as a family values conservative as part of the republican revolution, he survived a primary challenge two weeks ago. he was absent from washington most of last week. he only voted on thursday. it makes him the second lawmaker to step down in less than two months. i want to go back to our topic. we will take a telephone call from houston. this is billy. caller: i'd like to comment on

capitalism and free markets. [unintelligible] as far as capitalism goes, isn't it the whole point to allow physicists to fail so that someone else can step in and take over and that is the whole point of a free-market? i will give you two quick examples because i work in the industry. i worked on a dairy farm. the dairy was subsidized, and every morning we would milk the cows, but the milk was poured out onto the ground to keep the prices of milk up. the freeze in florida, the

orange grove owners were paid for what they would have produced that year. they took the money and turned around and sold all of the groves to coca-cola. they sold it and made money. i just want your comments on that pearman gues. guest: i think you said it exactly right. when businesses fail, that is bad, but economists, free-market tears think that when firms fail and businesses go away, that shows that capitalism is working, that consumers are punishing the firms that are not making good products.

in terms of the bailouts, libertarians are incredibly skeptical of the bailout. the claim that we would have had a financial meltdown, armageddon, whatever, if we had not filled out the wall street firms is, in my view, substantially exaggerated. i personally think this would have helped us learn the lesson that we cannot promise wall street or any other sector that losses will be bailed out. we have to hold everyone accountable. sometimes that might be painful, but unless we experienced the pain, we will keep doing it more and more and my guess is we will have other bailouts in the future. they may be bigger and worse than the ones we have had because now wall street has learned the lesson very clearly, congress and the country will never allow you to fail so you

might as well take risk whenever you have a good opportunity to make running -- money because congress and the taxpayers will cover the risk. host: next call is from mark on the republican line. caller: thank you for taking my call. i was curious on his views on immigration. i frame house ad houses from thd 1980's to the mid-1990's, and i saw a lot of downfall after that in the homes being bought and stuff. the economy started going down. host: i am going to jump in

because we had on this earlier. guest: this is a much harder view, a libertarian think it is very difficult to keep illegal immigrants out. we spend a lot of money doing it and we end up not really doing it so that seems wasteful because we're not accomplish cadging predict accomplishing the stated goal. -- we spend a lot of money doing it, and we end up not really doing it, so that seems wasteful because we are not accomplishing the stated goal. there is a concern that some immigrants might come because of a generous welfare state. i think that is highly exaggerated, but not completely irrelevant. to libertarians that suggest to reduce the welfare state but allowed for immigration. host: john on the independence

line. caller: i would like to say that our country had libertarianism in which we stole all of the land from the indians. we had slavery where you could treat humans any way you wanted to endorse them to death. -- and work them to death. then we had the 1920's where they gave you free credit beyond what they actually had to support the free credit, and then the 1929 stock market crash. host: are you suggesting these are examples of early libertarian thought? caller: exactly.