about the news of the day and the 2010 midterm elections. "washington journal" is next. . . host: thursday, president obama meets with the russian president at the white house leading into

this weekend's g-eight g-20 meeting. we begin this morning with a push from the administration. do you support the idea to push the superfund? for republicans, 202-737-0001. for democrats, 202-737-0002. for independents, 202-628-0205. "the washington post" is the only newspaper this morning that the president's plans to push for the registration of the superfund tax. the program established 30 years ago to clean up sites around the country is facing a budget crunch. "for 15 years the government opposed taxes on oil and chemical companies. the money went into a clean up a trust fund, which reached its peak of $3.8 billion in 1996.

the fund ran out of money as the taxes expired in 1995. the obama administration will push to reinstate the so-called superfund tax. at the environmental protection agency, which rarely urges passage of specific bills, will send a letter to congress as early as monday calling for legislation to reimpose the tax. they are looking to ease the burden on taxpayers where no one has accepted responsibility for the contamination of certain sites. opponents say that it amounts to an unfair legislation. since the fund ran out of money at the end of fiscal 2003 the federal government has appropriated public dollars each year to peak -- to pay for each side would accounts for 206 of each site.

and the program completed just 19 sites last year compared with 89 in 1999. superfund sites are found in the district of columbia and every state except north dakota who is one site was restored to health. the atlantic would industry, the washington navy yard, still struggling with contamination dating from the 1800's." in blummenhauer's bill it would raise excise taxes of 9.7 cents per barrel on oil products. 22 cents to $4.87 per ton on certain chemicals as well as an income-tax of 0.12% on certain

corporations modified alternative minimum taxable income. a separate bill in the senate is sponsored by frank lautenberg and faces a greater challenge over there, "facing a greater challenge because of the republican inclination to filibuster any measure that lacks the support of 60 senators." bill, democratic line, would you support a superfund tax? caller: yes, i would. host: why is that? caller: my aunt and uncle owned a filling station. the people that install the tanks in the ground to damage one of the tanks and did that know about it in years later -- and years later created a toxic site. they did not know about a until

it started to bubble. they had to call out heavy equipment. the only way that it to be afforded by anyone around there was the help of superfund sites. it was very important to them and the people around there. what people need to understand is that there are thousands of toxic sites around our country that will not be cleaned up if there is not a super fund account. host: do you know how much the area of received from the account? caller: around $80,000. host: what was the process like for your parents? caller: it was my aunt and uncle. it was a night and day thing for about one week. they would come out and block everything of with tape. they would dig up everything and haul away the old soil. they did their best to make sure nothing was left over.

host: has the area seem ramifications? caller: everything is fine. host: there was not any side effects from the original contamination? caller: not that we are aware of. host: steve, good morning. caller: we need something. it makes no difference if taxpayers pay for it or if other companies pay for it. " we should be charging a lot of -- and love for all the light bulbs that come from china to contain -- what we should be charging for all are all of those light bulbs that come from china that contain mercury. things like that. all of these things that people say are good for the air, they forget that they are terrible for the ground. they have forgotten about that

all of a sudden because pollution has become popular. this carbon that they think is in the air, they have a lot of other things to worry about besides climate. >> the opponent of reinstating the tax says that oil producers and refiners faced the prospect of reliability fund taxes and are serious on the idea of another tax burden. chemical manufacturers are just as opposed. "using everything from plastics the public water treatment. members of the association have invested literally billions of dollars in sites where they have taken responsibility for take -- cleaning up." the next phone call comes from atlanta, georgia. democratic line. good morning. caller: my main concern is that

it will eventually fall on the shoulders of the taxpayer and new ways. does host: you mean that the companies will pass on the cost? caller: yes. that has been the way the business has been done lately in this country. eventually you say you are taxed and you puu it back on the customer. host: what is the answer? caller: that is my concern. host: all right. caller: sorry. i think it is a no-brainer, we need to clean up the environment. but i think eventually the taxpayers will wind up paying for it anyway unless there is regulation on how much to the burden can be put back on us. host: ok. let's go to jane.

democratic line. go ahead. caller: i was concerned about the state emergency benefit fund for the unemployed. i think that it should be approved. they keep bailing out the banks and fannie mae. host: week are talking about the idea of reinstating the superfund tax. the president may be proposing to the house and the senate. we are not sure beyond a chemical and oil companies who would be supporting it. the piece this morning is in "the washington post." the presidential push for the restoration of the superfund tax. remember, for republicans, 202- 737-0001. for democrats, 202-737-0002. for independents, 202-628-0205.

you can also send us a tweak at twitter -- twitter.com/c-spanwj. you can also send us an e-mail, journal@c-span.org. we put up the addresses for both of those. this is the twitter address, twitter.com/c-spanwj. in the mail is journal@c- span.org -- andy e-mail is journal@c-span.org -- and the e- mail is journal@c-span.org. good morning. caller: not only does the need to be funded, but the companies need to be charged. it is more than facilities. i am a veteran that was stationed at a facility. it was affected by the fund, the superfund site. i had contracted the contamination.

many of us receive nothing. there was still in medical costs for our families, things that were not being as dressed. the water was contaminated. that has to be something. one way or another the consumer is affected. my family is affected by medical costs and i am sure that there are thousands out there just like me. host: the sponsor says in "the washington post" says "pushing to reinstate the superfund tax, the oil spill in the gulf of mexico might encourage lawmakers, even some republicans, to embrace taxes on oil and petrochemicals. -- petrochemical's." westchester, n.y., and gill, republican line."

-- republican line. caller: all of these democrats say they do not mind paying a little more tax on this and that. what i would like to see them do is add up all of these little taxes that they do not mind paying. when they get to the bottom line they will realize that half of their income is all taxes. that is all i wanted to say. host: ok. we will go to brooklyn, new york. cornelius, democratic line. caller: how come whenever anything happens they blame this president for it? host: how does that relate to the superfund tax.

caller:uhhhh. host: alright, we will move on to michigan. willow, independent line. caller: i am calling because i think that the tax should be reinstated. but i think that it should be in a locked box. a fund like that seems to be taken over by interests and i think that there should be regulation on how much of it can be passed on to the people. people need to realize that if they use these products, but they need to be responsible for the taxes that are left behind. the best way to get rid of some of these terrible things going into the environment is to

demand products that do not put those toxins into the environment. host: what about the concern that if you are taxing the oil companies that are already facing increased taxes for the trust fund for cleaning up oil spills and now possibly facing another tax for the superfund, their argument is that they will take those jobs, oil rigs, and go to other countries and not produce and not contribute to this economy. caller: by taking these jobs overseas they will be paying more for transportation. everyone needs the it together as a worldwide thing and figure out what they need to do.

why is it okay to kill the environment in another country if we do not want it in any country? put it eventually comes back to us anyways. host: delaware, jim, republican line. caller: i have three points. the superfund allows companies to not be as vigilant when it comes to creating pollution in the first place because they realized that they can generally walk away from the sites. secondly, a lot of the work that is done is underneath the back where you need to pay prevailing wages and it becomes a very inefficient operation because you are paying a lot of people to sit around on shovels and make $30 per hour. from what i have seen, the

application of the superfund is not subject to a lot of cost benefit analysis where they do not look at the severity of these sites, they do not look at the number of exposure is against a number of mortalities it will because. things along those lines where they are trying to clean up things and are not necessarily harmful in the way that the funds are allocated. is through the association with local lawmaker and if you can pressure him into giving the superfund activated. things along those lines. it is just another government boondoggle. we should simply require that people that are going to be working with hazardous chemicals put up a bond that ensures that the private sector is going to pay for it and actually be responsible for the

pollution that they create, not pushing it on to the taxpayer. host: what is your experience with this? caller: i have friends at work in remediation and they'd tell me stories about what goes on where people sit around and drink coffee and make $40 per hour of the taxpayer. you often read stories about areas being polluted or contaminated to a degree, but if it does not cause additional exposure they just do not balance the actual value of the damage against other areas that might be more contaminated. there seems to be a lack of prioritization about what gets cleaned up. it seems to be more about one hand washing the other.

there is an inherent corruption when the government is involved. caller: good morning. off of the internet i have printed public laws. i have a history of the mmf originated in 1953. most recently a result of the energy policy act of 2005. anyone can see who is responsible for the cleanup. since the one that was 2005 the amendments included examples of the establishment of oil fell liability funds.

that was set up by reagan and bush in 1982. this gal that was recently fired from the minerals management place, she was the associate solicitor from 2000 to 2001. this all started with reagan and bush. i hear these idiots say that any corporation will just pass their operations on to the taxpayer. they passed it on in big bonuses and compensation to the corporate officers. and they are all interlinked from one corporation to another. it has just gone crazy, the increase in what they are taking over what they did back in 2008.

i mean, 1998. host: we will leave it there. a few more stories on the gulf oil spill. from the front page of " wall street journal," "pp blunt the demand -- bp blunted u.s. demand. bp argued that it should not be liable for the broader economic distress caused by the president's six months moratorium on deep water drilling in the gulf of mexico." bp was able to win on two points in that meeting last week. from the front page of "the washington post," "top lawyers and public-relations professionals unlisted as a scrutineer rises." that is the front page of "the

washington post," this morning. the front page of "the financial times" says that the c l i b p, tell me a word, will be going to -- ceo of bp, tony hayward, plans to go to russia this week. there is also a story in "the financial times," saying that bp is looking to liquidate its assets so that it has more cash on hand. joe, independent line. good morning. caller: i could not agree any more with lowe was already set by the two previous callers. -- with what was already said by the two previous callers. there was a gulf oil spill in

1970. it was on c-span on a thursday or friday. a doctor from noa talked about it. host: he was from osha? caller: osha or noa. this did occur in the gulf of mexico in the late 1970's. host: cleveland, tenn., byron, a republican line. are you there? hold on. i am not sure which line your arm. we will come back to you in just a minute. in other news "the new york times" frontpage, "in concession, israel relaxes gaza blockade.

president obama and benjamin netanyahu will meet in washington on july 6, a rescheduling of the meeting after mr. netanyahu cut short one trip abroad. can a tough nationalist emerge as a statesman? waukesha, wisconsin. good morning. caller: i believe that the profits coming out of the goal should go to the american people. and 25% can go to the superfund, 25% to deficit relief, and 25 for a sense i should be reimbursed to the american people.

and and now you say they are going to leave? we can drill our own oil and get 100% of the profits. they keep acting like it is their oil, as if they made the oil. they did not make the oil. they are drilling a hole and sucking up the oil. that is our oil, the oil of the american people. we deserve 75% of the profits. host: this is from "roll call," this morning. "the problem for senator kerrey is all that work may be for naught if he can persuade a handful of republicans and as

many democrats. joe lieberman discussed putting a price that allowed different industries for different reduction targets. michigan, good morning. caller: on the proposal for the superfund, i am on the fence on this. the reason is when they start accumulating money for a certain cause, to put it bluntly i do not trust the government. they have a habit of taking the money for other purposes, like medicare and social security. that is my main concern. i have heard other people voice their concern. i think everyone has a very good idea about these superfunds. thank you.

host: cleveland, tennessee. byron, republican line. caller: ibm probably against this superfund and i will tell you why. we pay money to take care of these cleanups. people do not understand. i worked at a mint -- major manufacturer here in tennessee for years. we only passed the costs along to the consumer. they just do not understand, it will affect everything. host: how did you go about doing that? caller: what it takes to produce the product, you add that in and

derive a certain cost for the year. then you just pass it on to the consumer. host: did you ever take into account a certain price point? caller: everybody does that. you have to make cuts somewhere. they have folks that will figure out what the consumer will pay for the product. you work backwards to get the cost. host: so, you pass on as much as you can without going over the price point? caller: yes, like this energy

bill, it would go right in your products. people just do not realize that. close to what is the first place the companies look to cut? caller: people. host: why is that? a caller could you would have to get these other manufacturers to reduce their costs. you would have to purchase all of these other products. you get the lowest cost that you can. sometimes it is still not enough. if your cost exceeds what they can get in the marketplace, you start telling people.

host: you think that the full cost would be passed on to consumers? caller: yes. host: even after di -- even after the discussion we had about cost and price points? caller: yes. nobody realizes it. host: asking you about the poinns from earlier, critics say that those jobs will just go elsewhere because there is too much regulation. do you agree with that? caller: yes. host: when is that discussion come up? that we have to take it somewhere else? caller: in our place we build some plants in mexico. the one in mexico folded.

they will bring those products in two other places. -- into other places. if those products go to high, the people [unintelligible] host: phil, independent line. caller: what the country is suffering from is an economic stockholm syndrome. the superfund is a wonderful idea. republicans that do not want to pay for it, we call them dead beats down south. take that term. use it. the thing is, these people that want to take all the profits and put them in their pockets, get

used the term. and the superfund is a great idea. the thing is that the people that do not want to pay for it, what good are they? dunite let them use the american military to protect assets than. and host: -- do not let them use the american military to protect assets than. host: the lead editorial, "democrats target gop apology to bp." "we look at the point last week that it failed to assess the best way to do all of these things by establishing a broadly based economy wide cap and trade system that would put a price on cap and trade systems. he opened the door to wide to policies that were not truly alternative.

action in the senate has been delayed for months as they argue that without real proof the economy will be affected by driving up the cost of energy. -- cost of energy." that is the editorial from "the new york times." robert, milwaukee, good morning. caller: as the previous caller just stated, it seems that no one, particularly republicans, they do not wish to pay any taxes for anything. we must pay taxes in order for our government to be able to perform. another thing. tax returns this year for individuals, everyone received a much higher -- did they receive more tax rebates this year than ever? one more thing that i really

have to say, i feel that c-span is turning into more of a right wing type situation they used to be. i wish we would ring back some of the old guys to change c- span's philosophy. host: why is that? caller: you particularly have more of a dialogue with republican callers and seemed happy when you can read all of those negative things about the present government. host: ok. yesterday i happened to host a show and the caller call in and said that i was having too many democratic guests on. it is not a perfect system. sometimes we might lean a bit in either direction but we do

attempt to balance the show with guests, topics, and questions. every day is different and the network must be taken as a whole. this is the front page of "politico" this morning. "the house and senate are negotiating a final bill. we will have coverage of those conference negotiations picking up this week on c-span. analysts say that the bill will singe but not burne. anywhere from 10% to 20% less compared to reports to try to predict reform bill impact." a story this morning in "the telegraph" with the headline "rohm emmanuel expected to quit the white house.

"it washington insiders said that he will leave inside of six months to eight months because of a lack of willingness to bang heads together to push things through." lawrence, good morning. caller: can you hear me? host: weekend. caller: it was not clear. discussing superfund tax? host: yes. caller: i lived 40 miles from one of the worst toxic dump sites in michigan and the nation. they moved everyone out of the area and put police tape around the whole thing and claimed to have cleaned it up. it was a superfund site. you can reference that. i think it is important to clean up these sites. cancer deaths seem to be related

to proximity to the dump well above the national average. we have a family out here that lost the eldest daughter at 19 and the father and 38 within a few months of each other. an unusual cancer considering the family has no history of it. the tax is no -- not only necessary but should perhaps be implemented to a greater degree because there are a lot of these sites all over the country. i do not know about hawaii and alaska. something needs to be done. as i said, i am convinced that the pollutants that are still under the surface of the soil, in the offer, because it is being transferred to people's homes through their water supply. we have wells out here. so, it is a real concern. i have tried to get the state government, and the local

government, to get involved in this. it is disconcerting to think that people are taking in pollutants that will kill them every day and no one will do anything. host: the front page of "usa today" has this headline, "a number of doctors are refusing new medicare patients because of low government payment rates setting a new high before baby boomers begin to enroll. more doctors are limiting medicare patients partly because congress has failed to stop an automatic 21% cut in payments to doctors already regard as too low. the cut went into effect on friday even as the senate approved a six month reprieve. the house has approved a different bill. the two need to get together and reconcile." below the fold today, another story, "sponsoring a trip for

nonprofit groups that spent 73% more this year on domestic and foreign trips. privately funded travel is still far less common than it was before congress passed tougher rules in 2007 prohibiting companies that employ lobbyists from sponsoring extended trips. private groups spent $5 million in 2005 to 2006 compared to $3.5 million in 2007 to 2008. -- ." frank, good morning. do you support the superfund tax? caller: i do. it does not make any sense. pretty soon we will be walking

around with gas masks on. what would that cost? when you are strictly looking at dollars all the time, frankly i am looking at the situation from a bad point. it should not be about dollars. it should be about fresh air that we can read. clean water that we can drink. you can pay me now, you can pay me later. host: ariz., wally, independent line. caller: good morning. host: good morning. but the main thing i wanted to talk about was i think that you are pretty level with both sides. i watch the show. host: thank you, wally. "the wall street journal" this morning as "exchanging currency

policy at the g-20 changes focus remaining skeptical." the headline was in the papers yesterday, beijing moves to head off the g-20 dispute. "their announcement that they will let their currencies appreciate goes into a -- puts them in a strong position. under the plan u.s. and other big trade deficit companies have committed to import less while the big trade surplus countries, china, germany, japan, have pledged to do the opposite. they will grow more through domestic consumption and less through exports." and that is the headline of "the wall street journal," this morning. the next phone call comes from

madison, wisconsin. martin is joining us. what line are you calling on? caller: democrat. host: democrat. go ahead, martin. caller: basically, what i have to say is the reason the banks get away with those million- dollar parachutes, they decide how the money is spent. the people at the bottom to all of the work. government is the same way. all the money goes to the congress and the senators in the get away with it. host: all right. in "the wall street journal," this morning, "escrow funds announced, dudley will become the daily manager of the oil spill." that is in there in "the wall

street journal." charles, independent line. good morning. caller: yes, thank you for c- span. i just wanted to say that i think that you guys are very balanced. in an environmental consultants. -- i am environmental consultants. i have been working on a number of sites for years. there are thousands of superfund sites that have not been recognized. the epa avoids them because of the cost. it is no surprise that the chemical industry wants to avoid paying for these things because they cost millions of dollars that are passed on to the american taxpayer. the worst part about the current oil spill is that bp is

literally sitting on millions of acres of block 20 that they had never drilled in, which is of dollars. host: why is it costing the taxpayer? caller: they track the drilling permits out west. you can see that there are literally millions of acres of leases and often a company will purchase them and sell the profits. it is all speculation. the purchase oil leases the inset on them. what the government should do, they should require that if in one year, it does not belong to bp, it belongs to us. we are losing billions of dollars every year in royalties. if you are going to produce

toxic chemicals, you have got to pay for the cost to get it cleaned up. one reason the department of energy is completely exempt from superfund sites, we are spending billions of dollars to pay for uranium talks cities -- toss the city and plutonium -- toxicity. every man that shallows -- shovels yellowcake dies. the taxpayers had to pay for that. that was back in the 1950's. we have plutonium going down the creek into the ohio river. out in idaho that melted nuclear reactors to see what would happen. they have a arsenal outside of denver.

that is where they build the triggers for the atomic bomb. host: corning, new york. jim, democratic line. go ahead. caller: good morning. last week on the senate floor senator bernie sanders said that last year exxon mobil paid absolutely no income tax and actually got a rebate of $50 million. if there is a tax problem i think we should recommend something like that. thank you very much. host: next we will be turning our attention to a discussion about what is next beyond oil and petroleum with deborah gordon. she used to be an engineer for chemicals and regulatory engineers. she wrote a piece about moving beyond petroleum. we will talk to her about that.

first we wanted to show you a little bit of what our crew shot in louisiana recently, caught up with environmental science, talking about studies of oil contamination sites on the shoreline. take a look. >> my name is yvonne adeffy. >> you are with? >> in a technical specialist from california brought in by the national oceanographic and atmospheric association. one of the federal agencies responding to this bill. i work for the california

department of office in response. i have been doing marine oil spills for about 20 years now. host: your disclaim -- your display here, can you explain that? caller: these are basically teams made up of federal agencies, state agencies, and representatives of bp. their job is to go out and represent shoreline impact. here you can see that there is a map. on the map will show where we have gone out. what will happen is they will decide that today we will take a look at a certain segment. you might have eight or nine teams going out. here you can see the teams going out any way that they can get there. helicopter, airplane, that is how many of these areas are being done.

they will show you where they have done. here they are telling you exactlyhey have gone. then they try to characterize what they sought. the first line here, they had about 50% coverage of oil. about 10 meters by 1,900 meters. meaning added is an emulsified oil associated with vegetation. okay? in the second area they said they had about 6 meters by 700 meters with a 8%. so, the teams go out in different areas to identify what they see. that information comes back to the command post and it will all be downloaded. you can manipulate that data in a number of different ways. what we do with that data is we

say ok, how can we clean up those shorelines? we developed shoreline treatment recommendations. and what you might do for a sandy beach would be different from what you do for a marsh or a mud flat. developing recommendations based on the type of shoreline, they will go out and spend cleanup crews based on the stage of this bill. but one of the hard things about this particular spill is we are still in stage one. shoreline's continue to get oil. you might go into a marsh, into marshes, you might go up to the area around the marsh where there is a pool of oil and bring it out to shallow water skimming.

that is pretty much what they do. and the third stage that comes from the day that is what you do with long-term radiation of the marsh. typically it goes on for as long as there is oil. then you move into what they call the cleanup. what does that habitat need to have done so that it meets the end points and goes back to the way that it was prior or significantly similar to the way it was before this bill -- before the spill. >> "washington journal" continues. host: deborah gordon is a former regulatory and environmental engineer for chevron.

you wrote a piece in "the washington post," last week. the headline is "big oil can't get behind petroleum." why? caller: since the 1870's big oil has structured itself around one commodity. -- guest: since the 1870's big oil has structured itself around one commodity. there is a real doubt now that we are likely to talk about being a real transition with the oil. the old oil will not be bp and the new oil that we are now on. they would rather go to the dangers toils. host: why is that? why would they rather go for deepwater oil, which is what you said, dangerous?

caller: it is what -- guest: it is what they do. they have over $1 trillion invested in the oil industry. there are very large, capital- intensive mega-projects. it will be dispersed around the country, which is a good thing, economically. but they are not in the gulf. they are in different parts of the world where oil is. host: in your piece you noted that how much they spend on alternative marketing, british petroleum changed its name, doing a beyond petroleum marketing campaign. how much did they spend on that guest: to be fair, they are following market pricing. talking about the price of oil

for the last 25 years, it has been relatively low. they have determined that there are oil nations that we are beholden to determining the price of oil, which implodes and they have not used as much to invest in alternatives. we are at a crossroads because the price of this oil in the gulf is very expensive. it is not the cheap oil anymore. to do more for oil we need to think about alternative fuels. i do not think that people want to hear it but the price of oil will go up over time. the cost to produce oil that is two miles below the ocean floor, another way that bp is looking to develop the gulf, the ocean floor. we are talking 9 miles down. the conditions there are inhospitable. the oil company traditions down

there are much harder than the minimum. host: they make so much money on these deep water wells. if you could, talk about the infrastructure and how much the price of oil goes out. we are seeing reports that bp could make $20 million in its first quarter. guest: they think that the amount they put into developing it could go up and they will still make a lot of money. with oil at $100 per barrel, many alternatives become economic. much more than oil. then you have competition in the market. right now we have no competition when it comes to our cars. if there is a major refinery down at the wrong time, if there is a skirmish in saudi arabia, it is not a good security

position to be in. hopefully others will get into the market. host: go back to what you said about their pricing. what did you mean? caller: with oil as volatile as it is, you can ask anyone at a moment in time if they know the price of gasoline in that week. very few people really follow the price of oil. in the last 18 months, two years, gasoline has gone from $30 per barrel to $140 per barrel, back down to $70 per barrel, and when you have a volatile market like that it is very difficult for alternatives in the market. this market, going up and down

like a yo-yo, they are all invested. it is very difficult to be a biofuel company right now. very difficult to look at hydrogen development. where do your investors go? they leave. host: so, the investors are the oil and gas companies in the alternative? guest: know, the investors are the venture capital. pennies to the dollar, they are not completely missing in action, but they are not really invested. the alternative is oil in the market. if they want to end up getting alternatives along the way, i am sure they have the deep pockets to do it.

they should not be blocking alternatives. host: how are they blocking alternatives? guest: no other alternative can weather the storm of the market. it is not something america wants to deal with. when the price goes up we get innovative. we have a generation from the 1970's of inefficient cars and over consumption, which is not a great position for americans to be in. i think if we export the money to other countries, if we could actually put a price of oil and said it more favorably, there could be an alternative.

host: how could you do that? i thought you said that opec was in charge of this. we are talking about oil stands , the rocky mountains. these are the oils that have come on line in the next decade or two. the price is going to migrate. can we do it early so that all of the alternatives can compete? host: looking at your earlier title, what do you do now? caller: i started out my career with my -- guest: i started out my career after undergrad.

at the transportation and energy policy, i am much more interested in the signals to create what we have. so, i ended up wanting to work in the broader markets, getting out in front of the issue rather than tinkering in the back room. host: what did you do for chevron? guest: ironically i was developing hydrogen in a laboratory. we were in college in a chemical engineering laboratory. the price of oil plummeted. this is what had been happening over the last 25 years. everything dried up. everything having to do with alternative energy went away.

it was fascinating. i permitted offshore oil development, spending hundreds of millions of dollars trying to get the environment to do the right thing. it is very difficult operate out there. there are a lot of unknowns in terms of the active nature of storms and hurricanes. host: what is the permitting process like for deep water drilling? guest: this was back in the 1980's, it was a completely different industry back and. biologists, archaeologists.

and turkey vultures. santa barbara did not want offshore oil development. host: franklin, you are on the air with deborah gordon. .

caller: maybe a hybrid car with air pressure and the electrical battery to run it. you technically wouldn't have to plug it in. so you can take that technology and apply it where you have an electric battery to run your home and then the air charger charges up the battery itself. so i think it's more political. it's all about jobs. if you move all of this stuff off the grid, nobody would have people want to drive large distances and not be limited by

geography. a wrote a book recently, coauthor, "two billion cars" that just came out. the troubles here are that china and india are geographically very much like us, and they are growing leaps and bounds. so it's going to be difficult to traverse these nations,dxñi rus, brazil. these are huge nations. it's hard to be off the grid when 2 comes to -- when it comes to transportation. i think we can be cleaner. i'm not into conspiracy theories. think it's just a thorny, difficult -- it's difficult. we've been on this system for over 100 years. host: charlestown, west virginia. democratic line. caller: good morning, ladies. bare with me for a couple of minutes here. i'm from west virginia. obviously natural gas, coal is huge here. when the miners died, god bless them, i watched mr. bois obama d vice president biden and joe

consumption. but yet i see the administration wanting to cut out coal, which doesn't make any sense. that's an ironly.

.. . guest: then you have the case of china which doesn't tax their gasoline or oil at all. they're desperate to get oil. that's what they're trying to fuel their economy on. so you get a lot of extremes in the world. the greatest thing that we could do is bring up the price of gasoline, turn on -- and the price of oil, turn on these alternatives and become an exporter. an energy exporter not importer. host: you're saying explore the

natural gas that is in the west virginia area, in the shail part? -- shale part what what you're saying? >> this is precious stuff it comes at a great cost to develop. you're displacing people. there's environmental damages. these are risky ventures. very, very risky ventures. we should have alternatives for ourselves. then if we want to use this extensive energy, we should use it for profit for ourselves. host: next phone call, cambridge, new york. bill. independent line. caller: good morning. host: good morning. caller: how are you doing today? guest: good. caller: i agree with you on many issues. but the one issue that i'd like to bring to light is the commodities deal in the enron type of trading where the speculators are just dealing in paper. i think we should return to the day when speculators, when they

bid on these -- when they gamble on these commodities, if they lose, they should take delivery of the product and let them sell the product. i think there would be so much less volatility in the commodities markets, and oil would return to a more affordable value and he would start, also, building new refineries. but the enron type of trading would have to go. and that's my point. guest: you know, that's something that -- i do think if we're going to continue to dangerous oil, the eep, very unconventional oils in america, then we can start doing that. because then the energies can be more at home, and we can take ownership of that. for the last 25 years this oil that we have been so glad to burn -- and you burn it at

ridiculous rates when you think about cars, or light s.u.v.'s at 13 miles per gallon. it's not our oil. we've been taking it from countries at a great cost to ourselves. my great hope is that if there's a level playing field, then we can choose the best alternatives to ourselves as opposed to being forced into having to be hostage to other countries for this oil. host: deborah gordon is a consultant for nonprofit organizations, private and public sector clients. you specialize in transportation energy and environmental policy. she was a former chemical and regulatory engineer for chevron. she's joining us because she wrote this piece in the "the washington post" outlook section, "big oil can't get beyond petroleum." georgia, brenda, republican line. you're next. caller: yes, miss deborah.

i'd like to ask you, could you list some of the other things that we use around our household that is made from petroleum, please? guest: that's an excellent question. just like we have -- the hope is that when you produce something, you use every bit of it. you know, that's the goal of the production process. if an engineer does a good job, they have. there's no weight. so everything in our lives is right for petroleum. that isn't to say we can't devise new ways. plastic, all the greases and oils and things that lubricate, all of the systems that we use are based in oil. what's interesting is a lot of that goes the way of electricity because they aren't moving parts of electricity so if you would electrify more and more cars, then a lot of the oils that are used for motor only, a lot of those would end up not being needed. but it's just like ethanol, as a

good example. we have agricultural policies to produce corn. then we went to corn for fuel, which wasn't, i think, a very good idea if you think about it. but now we use corn in all parts of our diet, everything, both edible and nonedible things. so i think the economy is pretty smart so when you have a product and you don't want to waste something, people are innovative. we really haven't been innovative for a very long time. we use oil for a lot of things. guest: so where should -- host: so where should the government invest in alternative energy? guest: it's very difficult to pick winners. you really don't want to pick the winner. we picked the winner with corn-ethanol, and it was a terrible idea. we invested money, farms, and ended up with a fuel that was taking more energy to make than

we were getting out of it. what you want to do, i think, bring the price up to a point where there's innovation and stability. i don't mean a gauthing price. i mean a price where it's floating anywhere if we go offshore for the unconventional oil developed. then let competition -- let the venture capitalists, let the market work. the market has not worked in transportation for so long. host: so government shouldn't get involved? guest: i think government needs to do basic research, a huge factor. then i think the government should do some pricing policy. that's the most fundamental thing. but not tinker too much. the big goal in a macroway, and then doing the real hidden research that is very difficult for companies to do. host: hawaii, chris, on the democratic line. good morning. caller: good morning. good morning, greta. you're great. and, deborah, excellent talk. i work in solar. i develop distributed generation

projects in hawaii. and other places. and there's a lot of things to talk about, for sure. one of the things in hawaii -- of course, there's issues with the technical parts of the economics. but more in what we're talking with oil, this state is completely relyant on oil. it's like 99%. my point of its history, it was geting a lot of its electricity from burning sugar cane waste and all kinds of things that all got pushed away because of the cost of oil. but really what i think something we're looking at right now is a lot of people don't believe that solar capacity, as an example, can make much of a penetration in the overall energy portfolio of the united states. host: what do you think, deborah gordon? guest: i think the call ther -- caller is exactly right, it's all about the price of oil. when only is $35 a barrel, very

little economicically competitive against it. that's where we were for a very long time. i think if the price of oil were higher, we could use a whole range of alternatives, definitely using solar. host: what are your thoughts on solar? that's another area where critics say you're picking a winner, solar and wind, tax subiedies with very little result. guest: oil has wind and tax subsidies. we picked that for a century. and megainvested in oil so it would be great to think we could be so honest to strip away and make the level playing field. but there are investments that you have to somehow keep supporting. but i think, again, the price of oil. have everything to do with the alternatives. i think that people will get much more innovative in themselves as many did in 2008. we had a whole different range of options it wasn't an easy

time, but it was a creative time. think that brings a lot of new excitement, new jobs and invigoration to the marketplace. host: washington on the independent line. thank you. good morning. caller: good morning. how are you doing? host: doing well, sir. go ahead. caller: has there been any study of zr robert -- dr. robert bussard's study? i've been watching on a website where he talks about you can develop a 100 megawatt fusion reactor that can be built for less than certain companies' annual electricity bill. has there been any thoughts and studies into possibly switching over to that? guest: again, this comes up all the time. it's so interesting to remember that when we talk about oil, we're not talking about today, the utility sector. the more we do nuclear, solar, wind, gas, the more we do for

our utility sector, until we transition our transportation fleet -- especially our light duty fleet to our cars and s.u.v.'s -- to electricity, none of that matters. it's a huge priority to transition. we have many alternative on the horizon for utilities. and, remember, utilities are generated in a more -- they can be distributeded. they can be concentrated. and we had the power infrastructure to transfer that energy much more easily than we do to say if we're going to develop share oil in colorado, we need new lines to transfer from these new locations for very deep or, um, heavy oil. so the nuclear question doesn't really address transportation. and i think people get confused about that a lot. they think energy -- and this is startling. when it comes to transportation, 97% of our mobility is oil-based. we don't have anything else in our economy that pigeon holes

into one thing. that's really what holds us hostage. so let's have a conversation -- or these alternative and utility industries. but that will only happen if we start creating electric vehicles and hybrid plug-in vehicles which is extremely necessary. host: we're talking about why big oil can't get out of petroleum, the headline of deborah gordon's piece in "the washington post." but "the new york times" this morning if you're interested, dedicated about four pages of its newspaper to between blast and spill, one last flawed hope, taking a look at the blind sheer ram, which is part of the blowout preventer and what went wrong there. you can see a picture here of the blind sheer ram within that blowout preventer. "the new york times" this morning, if you're interested in reading it. great falls, virginia. fred, on the republican line. good morning. caller: good morning. thank you for c-span to make life a little better for everybody. when you come to the united states from europe, the

difference you see is gas stations, like 7-11 makes this country 24-hours running. other countries is -- [inaudible] so this is a different culture, different economy. to talk about alternative, we have to figure out all of those gas stations, all of those employees, technicians have to change their job. and, you know, the real estate, you know, value for the gas station is million dollar branch right now like 7/11 and mcdonald's. you have to change all of those. like one day we decided not to eat hamburgers. what's the alternative? so it's a big deal. and we need to work and think about those points, too. thank you again. guest: you know, this transition will take 25, 30 years. nothing, nothing is happening

overnight when it comes to, you know, oil and cars. we just have too many -- like the caller said, the infrastructure is based on oil. it sounds like -- you know, the donkey following the carrot. at a certain point you need to make a change. you can keep following something forever, quhass weaver' been -- which is what we've been doing with oil for over a century. and accept it that there will be a transition. the real thing is when there's an energy crisis, like in the 1970's when there were lines at the pump and there is no oil. those are the things that are disruptive. but a transition that could take 25 years? you know, given the right signals, given a lot of competition, i don't really see that as economically advantaging as the situation we're in right now where the oil that we're burning is not ours and other people are giving it to us. host: right. a little bit more about the b.p. oil spill. "the new york times" reports this morning that crews have reached the halfway point on one of those relief wells that are

meant to stop the gusher. maryland, mary, democratic line. good morning. caller: i'm skeptical. i don't believe that we're going to be able to make the transition. in 2000, honda sold a car that got 70 miles to the gallon. i think maybe four people bought it. if they stop selling them here in the united states in twice -- 2007. i look around at all of these ford excursions, hummers, giant vehicles with one person in them commuting to work. i just don't think it's going to happen. i think we're too shortsighted. host: deborah? guest: the best thing we have is choice. we can each do what we want to do. and given the right pricing, the right signals which is information for consumers, some people choose to spend more of their income doing something that maybe, you know, more

wasteful, and some people will save. but i do think the point about bringing new cars online, at cheap prices of oil, you're right, there's no way. we're not going to get new cars that are different from anything we had when oil is $35, $50, $60 a barrel. but we will see if it were sustained and -- a lot of these mechanics are brought to market. maybe you could argue for the right or the wrong reasons, but these vehicles are coming to market. the volts, the nissan leaf. they'll have a much better chance of surviving if the price of oil is not cheaper than what really it should be. host: massachusetts, independent line. caller: yeah, listen. why are we approaching this oil from -- [inaudible] host: why are we approaching in the wrong way? caller: yes. host: what do you mean by that? caller: we're letting people drill off our oceans.

without any justification, by the way. we're paying for their mistakes. why? guest: you know, i couldn't agree more. if the proper regulation was in place to do this, and if we had a better sense that the oil companies really understand the challenges, the material challenges -- i mean, technically has identified oil very deep, but we don't have great materials to handle that oil. we're talking maybe on the deeper route two miles down to the ocean floor, another seven miles down below the ocean floor with 20,000 pounds of pressure below and then thousands of pressure above. you've got temperatures diametrically opposed, very hot oil, very cold ocean. it's crazy conditions. i think it's exactly right. i think that this is a very dangerous experiment. witness b.p. it's a very dangerous experiment we're doing. and those prices aren't reflected in what we're paying

when we go to the pump today. so i think that we are letting something happen that if we were to transform the economics of it, then we might still be doing this. b.p., she will, chevron might still be going there because that's what they do. that's what the article is about. but then we would have other alternatives also happening. and then the american public would have to decide do they want this or do they want that? and otherwise we don't have, again, any choice. host: austin, texas. mike on the republican line. caller: good morning, ladies. two quick questions. first question is, here in austin now you can get gas as low as $2.43 a gallon at some service stations. but the same brand name service station on a different part of town is selling it for $2.69 a gallon. and, you know, it's all over the place like that. i can understand if one different brand service station or something was selling the

fuel at this same price at a -- at different prices. but the same brands selling it for such a difference in price? second question is, i really resent the fact that exxon doesn't pay any taxes where i make only $30,000 a year and i've been paying taxes for the last 20 years that i've been working. so could you explain to me why they don't have to pay taxes and i do? i'll hang up and listen. thank you. guest: i don't really know about the tax situation. i'm sorry. i'm sure there are these tremendous costs. we have the companies down in the gulf now, as an example, going farther offshore. and those exploratory costs are probably all write-offs for the company. exploration, you know, a questionable part. they all do it, but there are no guarantees.

i read -- the transition drilling rig that had exploded -- and there are about 26 of them in the world. everybody wants these drilling rigs now. countries want these drilling rigs to drill off shore, brazil, africa. going for half a million a day. we're talking tremendous amounts of money in the oil industry. and those are all write-offs. so i don't know -- you know, they're the cost of doing business. it's a really good point that there's so much in terms of cents, a quarter here, nickel there, 30 cents there. there's so much volatility in the market that i really don't understand why americans have seized on this cheap oil and the price varies so much from place to place, even in a town. there's no stability in the price of oil or the price of gasoline. and we're talking cents. but if there's, you know, a problem in the middle east, it could be, as we saw a couple of summers ago, dollars. host: so you don't understand why americans seize on it-to-it?

guest: it just matters so much. the caller observed that there are these variations. and they're somewhat annoyed at the market because it happens all the time from week to week, day to day, from parts of town, around the country. you know, if you fly somewhere else, the caller from hawaii, it's much more expensive to buy gasoline in hawaii. it's interesting that it matters so much. but when you look at the amount of money it costs for foam refuel their car, maybe between an efficient or inefficient car between $500 and $1,000 a year, it's really one of the smallest costs in your household budget but it matters so much. host: plano, texas. pat, democratic line. caller: hello. i'm a frustrated -- i've worked my entire life on energy. i realize the good intent of your guest, but if america wants to get out of this mess, they're going to have to dispell myths. solar will never get us out of there.

the sun's density, we can get no more than 20%. i build solar cells. they cost $1 to $2 a watt. electrical power to a car is $25 a kilowatt. you need a factor of 1,000. you will never get it. the gas price will never rise to the point where solar cell will ever drive a car. and if we want to get off of this mess, the government has to get involved ala manhattan project and get involved with fundamental, revolutionary new physics approaches of which i'm doing one. companies won't do it. they don't have central researches anymore. my company texas instruments eliminated. you will not get venture capital to invest in a revolutionary idea. they simply won't do it. if we're going to get out of energy, we have to put the facts on the table. get people who understand the truly alternative energies and get off this myth that wind, geo thermal and solar and grid wires are going to get us out of this myth. host: pat what are some truly alternative energy sources?

caller: well, that's the problem. there are seven renewables. and none of them could ever get you to the numbers you need like $1 a kilowatt. none. so the argument is and there were a number of reports by the basic engineering sciences. and there's a big argument a few years ago, can science get thruss with an unknown alternative ala manhattan, if we work on it? or can we get there by just improving upon the existing renewables? the ultimate conclusion was we'll get there with these existing renewables. and it's not going to happen. true fizzists who understand energy -- physicists who understand energy know that you never will. so to me -- bills in congress were shot down to do a manhattan type of project. and find this. and there are physicists out there. i'm one and i know others who are truly working on it but we can't even get a hearing with the department of energy because there's a general belief, ah, we'll get there with solar and

wind. good luck with that one. host: pat, do you have a suspicion of an area that may lead to an alternative energy? caller: heat. heat is not limited -- you want to turn heat directly into electricity. that's a revolutionary concept in physics. with nonyo technology. that's where we're going to get there. now nano technology, which is a field i've always worked in at texas instruments. that's down where there's new laws of physics. they're unresolved. so one of the dangers is -- good news, bad news. we don't have good laws of physics down at condensed level at the nano level, nuclear level. we don't even have a nuclear model. but if you figure that out, god's got a secret for you of how to solve this energy thing and it's through nano technology. ultimately that will win out. and the frustration of people like myself is you simply can't get hearings. you won't put out solicitations on some form that they don't know about.

host: one more question for you. how much did texas instruments dedicate towards nano technology? caller: well, quite a bit until recent litch but they completely eliminated central research. this has gone over except for maybe an i.b.m. or whatever. there's no silicon valley in america anymore. the large corporations one likes to allude to and talk about the miracle, they don't have central resources. they don't carry the overhead anymore so when someone says let the private sector do it there's no private sector left. so there's individuals like me starting up companies and ideas. and i'm, frankly, going overseas to get money because i can't get it in america. we can't even get a hearing. host: where are you going overseas to get the money? caller: european nations. china is where some of my connections have gone. i'm trying not to go there. europe has a much higher effort. that's where the new high -- in

switzerland. i'm going specifically to switzerland. i think the issue is if america wants to win the nano technology war, and if we give into this and let the asians take over semiconductors which they're presently doing, and it will spill into energy, we are going to regret the day. so what my frustration is, i believe the powers of our government -- i think they're being misguided as to what it is happening with technology in this world. host: ok, pat. we'll leave it there. deborah gordon, do you want to weigh in? guest: there's been so many good points. i agree. i think america's gotten very lazy. i think that we have been complacent for a very long time. we had breakthroughs in computerization. but those companies are not -- those are established companies now. and it's been -- we've had 20 years of mall yeas -- malaise. i think we have to shake it up. we have to invest a tremendous amount of money.

i think china will wrangle us a little bit. think we'll be pushed to go, which is what the caller is saying. that we're being pushed out of our complacency. host: new york, our last phone call for deborah gordon. caller: hi there. i'm a little frustrated, too, about where we go with our alternative fuels. the one thing nobody ever looks at is hemp. it can be used for a number of different reasons, especially as a biofuel. they made a mercedes i think in 1980's that could drive -- around 50 cities in north america, powered solely by 600 gallons of hemp biodiesel. why aren't we ever talking about hemp as a alternative fuel. it's not marijuana, so i don't understand why we never go there. guest: i think biofuels, there are so many options for biofuels. i don't think it's a silver bullet, but i think it's a great transition fume because it's

liquid. and that's the system that we're on now so we should look at all different options for biofuels. but we really also need to look at the consequences of biofuels. there were issues about corn ethanol with land. you don't want to remove food production to get fuel production. so i would say that there should be no biomass products, algae, other things off the table right now. host: deborah gordon, thanks for being here. appreciate the conversations. guest: you're welcome. host: next, we'll turn our attention to arthur brooks, president of the american his book "the battle: how the fight between enterprise will shape america's future." first this update. >> in the headlines, the suspect in the may 1 attempteded bombing in times square appears in manhattan federal court today. shahzad will be asked to enter a plea to attempted terrorism and weapons charges. the attempted bombing fizzled

out when a gasoline and propane bomb failed to ignite in an s.u.v. parked near a broadway theater. experts with the rand corporation said the u.s. should hold back on some of the money it's giving to pakistan nal country does more in the fight against terrorism. the report says that while pakistan has helped the u.s. in the hunt for extremists it's also undermining u.s. interests and exporting terrorism. voters in the eastern nebraska city of freemont will decide today whether to ban the hiring of or renting property to illegal immigrants. the vote is seen as the culmination of a two-year fight that saw proponents collect enough signatures to put the question to a public vote that town has seen a recent influx of hispanic workers attracted by jobs at local meat packing plants. and finally, china today has followed through on its pledge to allow greater flexibility in exchange rates. but officials also sayyan appreciation in the currency alone will not rebalance the

world growth and urged other world leaders to carry out more fundamental economic reforms. and those are some of the he latest headlines on c-span radio. >> commissioner robert mcdowell talks about reclassify something broadband services, media ownership, and the use of public airwaves for emergency services tonight on "the communicate indicators" on spoim c-span -- c-span2. supreme court justice clarence thomas on the prospect of a new justice. >> bringing in a family member. and it changes the whole family. it's different. it's different toddy than what it was when i first got here. and i have to admit you grow very fond of the court that you spent a long time on. >> with the confirmation hearings for alana kaghan, learn more about the nation's highest court in c-span's latest "the supreme court: pages of candid

conversation with all of the justices" providing unique insight about the court available now in hard cover and also as an e-book. >> "washington journal" continues. host: arthur brooks in the president -- is the president of the american enterprise institute. he has a new book "the battle." what are you writing about here? guest: this is about the main cultural battleground in america today. the battle today is not over the cultural issues from the 1990's, god, guns, gays and abortions, but rather over whether we want to be a culture-free enterprides and whether or not we want to choose the culture of our european allies, social democracy. host: what does free enterprise mean? guest: a focus on limited government, the belief that free market should decide the rewards and consequences of people's behavior and whether or not we believe that people should govern themselves, largely. that's what the free enterprise

system was founded upon. and we contrast it to what a lot of our european friends are interested in, which is a large government with largely managed economy and a huge focus on income equality. host: so the stimulus and the terp -- tarp money, you don't think that was a smart decision? guest: see, this is the thing. we're deciding as a country what parts are smart what parts should reflect our values what this book is about is the cultural conversation. what is the culture supposed to be about. reasonable people can say, sure, we should be more of a social democratic country. that's the way our culture should go. the trouble is most americans disagree with that. so my feelings about the tarp or the bailouts notwithstanding, this is trying to understand what the main contours of our national argument are about is what i'm trying to deal with in this book. in fact, one of the things that we find is a big, overwhelming majority of americans prefer to have this traditional culture free enterprise. they feel angered and very worried about the fact that we

seem to be wondering away from it. host: if that's the case, why do people think the government should step in during, let's say, the response to the oil spill or the government should step in and bail us out of certain situations? that the government should provide certain things? is there a role for government? guest: sure. one of the things that we now absolutely over the hundreds of years of this country is the free enterprise system requires rule of law and requires a smart government. basically there are two questions here. should the government step in for something like the b.p. oil disaster? and should the government step in to bail out companies when they're failing? those are two entire index types of questions. the b.p. case, that's something where clearly markets are failing. even add yax smith, 200 years -- adam smith, 200 years ago, believed that government is needed to rectify situations of clear market failure. bailouts, on the other hand, generally are not making markets succeed. they're actually making markets fail.

that's entirely the opposite side of the coin. one of the things that alarms americans a lot is we find out in the case of the b.p. disaster that the government is incapable or unwilling to deal before the case with something really terrible like that. we find that it can't it appears to a lot of americans that the reason is because they're spending all of our money and their time doing things that are making markets fail, like bailouts which lower levels of accountability, like the social engineering schemes like fannie mae and freddie mac which were tremendously expensive and simply pushing people to buy more houses. and finally basic pork-barrel spending like the cash for clunkers program. those are things that americans don't like. it seems like that's what the government is spending all of its time on as opposed to the things we really want. host: what should the government be doing? guest: thinking about market fail yours. cases in which there's bad information. cases in which there are things like pollutions. public goods like a standing army, and cases of monopoly, clear cases where markets are failing in which the government is best situated to be involved

in the process of helping markets to succeed. so the free enterprise system can succeed. and also providing a basic minimum standard of living. beyond that lowering the risk nerve's lives through bailouts and the idea of equalizing incomes, equalizing rewards so that we can have what many people think of the fairer society, or the government thinks of fairer society. these are the things that fail and most americans don't like them. host: are you referring to the tax system? guest: certainly the tax system is one way that we have to deal with risk in a way that we deal with equalizing people's incomes. the tax system best situated accordsing to most americans' views, including my views to pay for the government as opposed to simply equalizing incomes. i think the tax system is horribly suited simply to bring the top down to get a notion of greater fairness. i think it's the system that we have to use to pay for basic system of government that can help markets sukeyeed and help the free enterprise system. host: so should the middle class be paying more? guest: the middle class,

actually, -- well, well, in fact, pay more. whether or not we think they should pay more, notwithstanding what the president or anybody else says that the middle class won't pay more, for all the things we're doing now, the middle class is basically going to be the payer. the reason is because that's where all the money is in america so we can pretend that we're going to increase taxes a lot on the upper class simply because that seems farah cording to the definition of fairness which most americans reject, but when you get down to how programs are actually going get paid for, you're going to have to dig into the revenues in the middle class. we're going see that with new taxes. no way arn it host: why? guest: because there's not enough money to pay fort things wire doing. host: because you've already taxed as much as you can out of the wealthy? guest: you can tax -- you can tax them as much as you want but they tend to -- there are always ways that people when they're avoiding taxes, can avoid some taxes. i'm not talking about plots. i'm talking about things like not starting new businesses, not creating new jobs, not expanding existing businesses.

those are things that when people have a disincentive to grow, when they're entrepreneurs, they will. and that forces lower tax revenues. then you dig into those working for prenprerns, the middle class in america. host: what are your thoughts on the tea party movement? a lot of the criticism of them has been that this grassroots group and anti-government. where do you think that comes from? guest: that comes from a terrible unease that americans have with the perceived direction that our country is going that predates the november 2008 elections, incidentally. if you look at public opinion polling or just talk to folks, you'll find that people were really upset with the idea that american government was growing so much and taking over so many functions. people are deeply offended by the last administration, the bush administration, there were 55,000 federal spending earmarks without one veto because of the use of federal spending. then, of course that accelerated, the idea of spending for social purposes,

things outside the core functions of government, expanded a lot when the new administration took over. and americans are really worried about it. so you see a natural grassroots rebellion. this is not well organized. this is not highly intellectualized. this is an expression of real concern that americans have. it's an extraordinary expression, too, when you think about it. it's actually quite amazing when you compare what's going on in the american street versus the greek street. host: that's where you wrote "slurk towards athens." guest: yeah. host: compare the two guest: in athens, the greek protesters, these are people working for the government. these were people for labor unions throwing monthly after it cocktails, burning down their own buildings demanding i will why h -- early retirement, by greek standards lavish pensions, and salary paid by other citizens in the midst of the worst economic meltdown in decades in greece. in america, the tea party protesters are protesting exactly what the greeks are demanding. it's an extraordinary

juxtaposition. it's american exceptionalism at its best. or if you don't like the american tea party protesters, perhaps at its worst. host: first phone call for arthur brooks. louise on the republican line, new york. go ahead. caller: i just wanted to say that i'm a republican. but with a small r. and i believe that actually social democracy is acting evolutionary process from this unfetered capitalism. you look at europe it started out, you know, with this kind of -- you know, the market rules, adam smith kind of, you know, machiavellian mentality. and it evolved into an economy that protected its people and had more social policies. so i do believe that is evolution of capitalism. if you want to to know how the road, ask somebody coming back. that's where europe has been. i don't believe that if you stick with capitalism in this

form, and the free market enterprise in this form that we're going to grow and expand. unfortunately capitalism and the free market economy as we know it is archaic. i just have to say for the last panel, for the emphasis that there is a lot of nano technology going on at suny albany and albany state. guest: you got a democrat that snuck through on your republican line. host: you don't believe it? guest: of course it's a process but it's not the kind most americans like. if you look over the past decade or so, evolution has been that one little policy after another has grown the government and americans hate it. so one little bailout here and, ok, we acquiesce to it. one little takeover there, we acquiesce to that and pretty soon we end up with a system he would don't like. we end up with one system that we have as our ideal, which is the free enterprise system, and we found out that we've gone down the other road. and quite frankly, it's our fault because we have been acquiescing one policy after another toward the system.

so i agree with the caller that it is an evolutionary process, but i disagree that it's a good one. think it's very bad and we have to be cognizant of our values. host: democratic line. caller: yes. ok, i'll try to stay focused because every time i hear one of these republicans or conservatives come on tv and talk about the bailout and the current administration, it just drives me crazy. now, let me explain something to you people. we were in a mess. and we -- the president had to do something. i'm going to draw this analogy. when your house is on fire and the firemen dom put it out -- come to put it out, you don't, as an owner of the house, come to the firemen and say don't get water on my living room floor. the first thing you want to do is get the fire out. then you worry about the water afterwards. so, you know, you people keep

talking about bailouts, bailouts . these were strategic things that the administration had to do to keep the economy going. and i get so tired of hearing you people, like rush limbaugh and the rest of those idiots, talk about this administration wanting to make this country turn socialist. it is not like that. your george bush put this country in a mess. host: we'll leave it there. get a response. guest: well, it's not my george bush. i'm not a republican. and i'm very critical in all of my writing and n my book about what the last administration did, too. so i don't accept the idea that all of us republicans because i'm not with any political party. i'm independent. if i were calling today, i would be calling on the independent line. in point of fact, a lot of problems with republicans and the bailout started with the last administration. these were not democrat

policies. these were government policies. and some of them economists thought were wise and some were not. so the idea of putting them all together and say all people on the political right or conservatives or republicans want is to get rid of all the bailouts or all of the cleanup from the financial crisis, that's not right. a lot of it were started under republicans. and some of it is agreeable to a lot of economists and a lot of it is not. it's complicated stuff at the bottom line so most economists today think financial bailouts, going in and trying to stabilize the financial system, started because of the policies that were stupid. and if we can go back in time, we wouldn't do those things. but once the dye was cast, there were certain things we had to do there are other types of bailouts most economists think were unwise such as the bailouts to the car kches. unwise simply because they were not economically sound and created insen testifies that were not good for the economy and were rewards to particular industries that most people on both sides of the aisle it turns out when you look at public opinion polling, don't like so it's more complicated than all of that. host: so because this viewer

tweets "it sounds like you reject the government's efforts to stabilize the economy. what would you have done instead of tarp?" guest: no. i don't reject the idea. once again, the easiest thing that somebody, an economist, can do is say, well, by going back in time a couple of years and different policies. of course that's ridiculous. in fact, the housing policies of the united states government and a lot of other policies set a bunch of economic forces in motion that led to the situation that was so -- once it happened, there were certain things that had to get done. host: you write about that in the book, one of the five myths of president obama's narrative on what happened with the meltdown. and one of them is that the government had no role in it. and you point to fannie mae and freddie mac as a policy being set up on capitol hill by democrats and republicans that set this whole situation in motion. guest: correct. i really urge people to look at the work of my colleague at

a.e.i. his work has been most influential on the whole idea of federal housing policy through fannie mae and freddie mac. and as early as 1999, peter was saying that this is going to be the next great american financial market meltdown, going to come because of these policies where fannie mae and freddie mac were creeyathe an environment where they were pushing low and middle income loans, buy up loans originated by banks and other mortgage originators. and what they were doing effectively is issuing these and creating incentives to create all of these subprime mortgages, mortgages that didn't have you know, proper credit behind them. this inflated the housing bubble which ultimately burst. that was the spark that according to, you know, the work of peter and alex pollack and other economists at a.e.i. and all over the country, that was the spark that burnt down our financial system. of course, now we have politicians -- they're even blowing fannie mae and freddie mac back up. it's not just reprehensible.

it's actually putting us in danger to repeat the crisis. host: there was a story in the front page of the "new york times" yesterday about the status of fannie mae and freddie mac right now that both of those companies are selling these -- coming in with these foreclosed homes and reselling them and only getting about 60% of the value back. so the pricetag for taxpayers keeps going up for these two institutions. guest: it does. and there's no cap on the amount of the size of the bailout for fannie mae and freddie mac. the government has made that clear. they will pay whatever it takes to bailout these organizations and the pricetag will continue to go up. host: it's separate from tarp? guest: yeah. it's basically an open-ended garn fee. what's going to happen, of course, is that this ultimately, this housing policy -- particularly if we don't learn anything from it -- is what's going to put generations and forward united states in hock. host: peter wilson says the spark that set off the financial situation.

but how so? what did companies do related to what fanny -- fannie and freddie were doing? guest: they were at the vanguard of this market for terrible loans. basically to buy loans up, mortgages up, that were not backed by proper credit that were on these subprime and alt-a mortgages is what they're called. and private financial institutions got into the mix. they saw this behemoth doing this thing and it became part of the culture. this is not to say that any private sector organization was doing this and you'll get off the hook. in point of fact, a lot of wall street firms were leverrged at 30 and 35-1 to buy up these lousy mortgages, slice them up into these mortgage-backed securities that turned out were highly unstable and horrible for the economy and ultimately were what destroyed the financial system or part of what really destroyed the financial system so there was private sector complicit for sure in this thing. but when the public sector, which is geared to try to help

markets succeed, creating the impetus to make markets fail, that's something all americans should be really concerned with. host: buffalo, new york. ashley, independent line. go ahead. caller: hello. host: good morning. caller: good morning. so i basically wanted to just say that free enterprise won't work until there's oversight, you know. for the most part companies pay whatever they want to pay them and then they go out and splurge on themselves. so until the businesses, you know, are overseeing then the government has to be big, for the most part. host: what about regulation versus free enterprise? guest: well, regular laying and free enterprise are not incompatible. a free enterprise system requires strong rule of law, property rights, and smart regulation.

great companies actually like good regulation. and the reason for that is because they're able to prosper. they have the highest quality, the highest safety, they serve the consumers best. and the idea of an entirely unregulated environment is actually horrible for the free enterprise. people won't trust each other, won't trade with each other, and ultimately the best players in the free enterprise system won't prosper. so the idea that you need no government or no regulation, need no law, of course, that's nonsense. host: i want to get your reaction to paul crugman's piece today in the "new york times" "now and later" talking about this move toward austerity that we're seeing from the administration and congress that democrats some moderate democrats up there are resistant to jobless benefits, aid to state that costs too much. people are talking about the budget deficit. he says penny pinching at a time like this isn't just cruel, it endangers the nation's future and doesn't even do much to reduce our future debt burden because stinting on spending now threatens economic recover roy

and with it the hope of rising revenues. so now is the -- is not the time for fiscal austerity. how will we know when that time has come? the answer is that the budget deficit should become a priority when and only when the federal reserve gained some traction over the economy so that it can offset the negative effects of tax increases and spending cuts by reducing interest rates. guest: there's a lot of validity to the idea that we should when we're in a terrible crisis -- the central insight was when you spend more when things are horrible and you save more when things are great. the trouble is that the government always forgets that second part, and so they spend a lot when things are terrible and a lot but maybe a little bit less when things are great. and that actually leaves a biggier crisis ultimately because you can't keep up. you don't have anything in reserve. host: let me stop you. are you then tagging part of the blame for this fiscal system with republicans when they were in control?

they had tax cuts. which reduced the amount of revenue coming into the government. but they kept on spending and they increased spending over time. guest: oh, yeah. of course. that's a terrible problem. and the republicans know that perfectly. the problem was not the tax cuts. i know it's controversial. but the problem was not the tax cuts. the problem was the inability to stotch spending. it was all the earmarks, the pork-barrel spending. the department of education rose by 54% in real terms under the bush administration. if you're going to cut taxes, cut revenues, you have to be responsible about spending, especially during a fiscal expansion. that's something that everybody knows, even the -- paul crugman knows this he talked about this. you simply can't get the prophlegacy without worrying about it, we went through a period where we were unable to stop spending then, too. not -- spending is not all good. even spending for stimulus can be really bad if it's doing

counterproductive things. there's always kinds of evidence that the stimulus spending we have done in the united states has not gone in any way towards something that will stimulate the economy but varge bailing people out in ways that lowers their accountability and will actually hurt the incentive forces people to be responsible in the future. and pork. host: but supporters of the stimulus say it saved jobs. and every job saved adds $100,000 to the g.d.p. i think that was allen blinders' piece in the "wall street journal" last week. guest: sure, but my colleague, kevin, at a.e.i. has also shown if you take the government on their word on how many jobs they saved and how much it costs, it probably cost something like $400,000. nobody wants to lose their job and they're sympatheticic about that. but the government has a responsibility to make smart spending decisions such that we're not saddling future generations, our kids and grandkids with the responsibility that come from paying back an enormous amount

of debt that we're racking up, in many cases, without a whole lot of accountability and spobblet. -- responsibility. host: let's let ed weigh in here in new york. caller: yes. i'm looking here at an article in the paper, yesterday's paper. it says president medvedev about to loosen the strangle hold on the economy by introducing more competition and in stark reversal to the policies of vladimir putin. the decision to attract investment without which russian oil and gas dependent economy which shrank by nearly 8% last year is doomed to stagnate. host: ok, ed. caller: i'd like to hear your comment on that. host: ok. .

guest: real losing altitude competitiveness the we traditionally think of socialist economies, such as sweden. host: here is this headline that the bp ceo is headed to russia

to assure the russian government. he will meet with the president to let him know that the u.k. oil group is not dealing with collapsed after the gulf oil spill. caller: good morning. thank you for c-span. i don't know where i would get the truth if i were not for you. i have a few comments. i cannot believe that some of the things they are saying about housing. the government did not get the subprime housing thing going. this is for corporate lenders at selling off their risk. there was a giant land grab while this was going on. if every one fails, then they get all the land. i could not believe when it failed that, of course bush was not going to do it, but we could

have said that is fine. we will save it, but you have to turn over your properties. where are the property rights when no one has someone to call when their loan goes bad? guest: it is a true that private companies were involved in subprime housing. at the end of the day, 75% of the subprime mortgages were held by fannie mae and freddie mac. that is where the action is. it is basic arithmetic. host: a call from florida, on the independent line. caller: good morning. line is to talk about government spending. when the fed, hank paulson went to the government and started talking about how they needed to

bail out the big banks no one was talking from the right about that situation. we had eight years of george bush. he spent more money than any president in the united states. now it is capitalism for the poor and socialism for the rich. guest: there are a lot of people on the political right to were pretty upset with treasury secretary hank paulson about the bailouts. the policy did not seem well coordinated. paul idea was under george w. bush. should they have been louder? yes. if you look back what we were doing at a.e.i., we were just as critical of the bush administration as under the obama administration. socialism for the rich and capitalism for the port -- i do not know.

our problem in the country is we have tried to socialize losses and privatized gains. you cannot do that. history tells us that when you try to do that you wind up socializing but the gains and losses. host: what are your thoughts on spending, and how you get congress to not spend as much, whether democrat or republican? guest: a couple of different things. one is to see your belly and among taxpayers -- you see a rebellion among taxpayers, a wave of people from ideally both parties committed to more responsible behavior. they are committed to staying within their means. it requires political energy, then ideas and policies, finally leadership.

host: are you seeing that from republican leaders on capitol hill? guest: it is hard to say. republicans feel bullish because they see numbers that make them think it will be bad for democrats in november. if we go back to the situation to where the parties are indistinguishable with respect to spending, that will not be good for the united states. it is a bitter victory. host: good morning. caller: if congress would hold back spending, that would be constitutional. most of what they spend upon is illegal. first, i agree with almost everything you have said. here are couple of diagnostic questions. first, do you think the free

market is a good thing? guest: yes, in general. but occasionally the free market fails. caller: i would probably disagree. secondly, do you think interest rates should float freely on the free market? guest: virtually everything should float freely on the free market except for when we have egregious market failure or monopolies. caller: first off, i want go into a discussion on monopolies. i will stay on the interest rates. the federal reserve which fixes interest rates through manipulations caused interest rate taxes in the first, causing a boom and a bubble. i would assume you would

disagree with the idea that there should be the federal reserve to fix the interest rates? guest: that is a lot. that is skipping around a lot of things, going from whether or not interest rates are fully floating to deciding whether we should have the federal reserve is a big jump. the fed does not fix the interest rates. if it fixes a couple of key interest rates that banks can lend to each other and borrow from the fed. the interest rates they charge consumers are freely floating according to market conditions. the caller makes an important point, and many people and economists would agree -- the federal reserve had a super low interest rate for housing policy. they pushed down rates they could manipulate. that did affect the market and kept the prices too low. many economists would agree. host: good morning, bill.

caller: thank you for allowing average americans to voice their opinions on c-span. first, he said we will have to raise taxes on middle-class because that is where the money is. it seems like every statistic i have read says the upper 10% of americans owned 90% of the wealth of the country. so how can the middle-class the where the money is? secondly, every time i hear a republican, not necessarily mr. arthur brooks, but they're always talking about cutting programs for average americans. programs like medicare and medicaid. we must raise taxes on the wealthy and cut things like military spending, and get out of the wars we're fighting with

the billions we're spending. guest: a couple of different things. you can talk about the concentration of wealth. but when you talk about income taxes -- income and wealth are different things. the best book of income is going to folks in the middle class because of the sheer numbers. we should be thankful it is so vast. there is a significant amount of income in the top 1%. but you cannot get bad enough of the income to pay for what is going on. i do not advocate tax increases for the middle-class. to pay for the policies we're entering into we would have to tap into the middle-class -- my own view is not to go down the road of those policies. so that we can preserve the economic freedom for those in all income class's to earn

success. when we cut off pathways, people lower [unintelligible] dramatically. host: here is this heaven -- the rich got richer, but paid more taxes under president bush. guest: that is true. disproportionately the amount of taxes they paid went up even more. you find the very wealthy pay something like four times as much in taxes as they bring home in income. that is typical, not a terrible thing. if we have a progressive tax system which most people think we must, you will see them pay off higher chunk of income. the question is, at what point do we exempt so many from different parts of the distribution that they do not

have a stake in citizenship p? and how we get enough money out for services and entitlements? that is the real question, not in defense. defense is not a big part of our gdp or tax rate with regard to entitlements. host: this is a caller from ohio on the independent line. caller: sir, back when ronald reagan was president and mr. bush won, they pushed these mergers and acquisitions causing large companies to become monopolies. it caused great losses of jobs. they caused the corporate enttties to outsource jobs for cheaper wages.

we have lost our middleclass. we have a small middle-class when you look at the stagnating wages. under mr. ronald reagan, mr. bush, and bush ii, middle-class wages are the point where it takes two incomes now, sometimes three to keep a household going. guest: nobody will say that over this recession the middle class is not gotten pinched. but if you go back to 1980 in particular will find the rich have gotten richer, the faster than the poor and middle-class have. you can look at certain years and said the middle class has stagnated. if you look over the broad sweep of the past few decades to

find americans have generally done better, but the rich have done better fastest. so, income inequality has gone up. the bush and reagan and clinton and clintonii administration is working on helping the middle- class thrive, to help all americans to flourish -- bush, reagan, and clinton, and bush ii. it is about the execution of policies. host: here is a story about the tea party. one not recall them now? putting their efforts and to getting a bunch of senators recalled the in a half a dozen states. do you agree?

guest: i don't think it is very productive. it is trying to accelerate what would happen in the electorial process. there is no evidence that it leads to terrific outcomes. we have a well-organized system in which people vote regularly. people who want change should focus on that. host: the last phone call for arthur brooks from san bernardino, california. caller: there is a problem with cause and effect, the result of why these things happen. i'm glad the argument has been changed from free-market and no regulation to now we need recognition that we need some regulation. host: your final thoughts?

guest: thankfully, there have not been any economists who say to just get rid of all government, regulations. the conversation always moves back and forth. the idea that a free enterprise system with no regulation or government is not realistic. it is terrible that we would move away from the key thing to keep in mind, also. when we do not make a decision. when we take little crisis by little crisis, those things always break towards more redistribution. then we moved away from a system that 70% of americans say they want. host: thanks for coming on the "washington journal." we will talk with the editor of large of the "atlantic wire" next. >> in the headlines, bp said

today it has spent $2 billion respond to the oil spill in the gulf, and with no end in sight the number is expected to keep rising. meanwhile, ken feinberg, chosen to run the damaged fund said many people are "in desperate financial straits and need immediate help." he ran the victims claim fund set up after 9/11, also said he is determined to speed up payment of claims and that bp has paid out over $100 million so far. a military helicopter crashed during an early morning operation in afghanistan this morning. three australians and an american are dead. iran has banned two inspectors from entering the country because they disclosed to the

media what iran calls a false report on their disputed nuclear program. on the website a report quoted the head reportiran'iran's agene decision to inform inspectors who were not identified. finally, in england a celebration today of the summer solstice. following an all-night arty some 20,000 people crowded stonehenge in southern england to see the sunrise. those are some of the latest headlines on c-span radio. >> the fcc to mr. talks about read-classifying some broadband services. tonight on c-span2.

>> clarence thomas on the prospect of a new justice. >> you're bringing in a family member and it changes the whole family. it is different today than what it was when i first got here. i have to it met, you gogrow very fond of the court. >> with the confirmation hearing on june 28, here more about the land's highest court. and the book, pages of candid conversations, providing unique in said. available in hardcover and as an e-book. >> see what your member of congress said. searched the congressional chronicle at the video library. and for a snapshot of all members, the congressional

directory available on the website. host: michael is the editor at large of the "atlantic wire" here to talk about the politics of the day. i want to start with president obama's management of the tools bill and get your thoughts. guest: i see you have a column here this morning. one of his clients was [inaudible] -- one of his points. he has gotten health care, financial reform, four more times than bill clinton got. he deserves more credit. and the rector made another good point about why -- because we

over invest taupes and executive branch and particular, and government in general -- a conservative point, obviously. but about our expectations, this oil spill is a good point. the president cannot do much about an oil spill. i think that obama has had a very impressive first year. host: you do? guest: especially health care. clinton tried just as hard and could not manage to get it. host: let me read a little from ross' piece. liberals had hoped obama's election marked the end of a long, progressive era. instead, the welfare state is in crisis everywhere they look.

do you sense that wave of conservatism? guest: no, it is getting carried away. he is taking very short-term developments and extrapolating them to long-term historical trends. a couple of months ago, they were saying is all historical trends. now they're saying obama is down and it is all over. the key role of journalism is the story has to change, so there's a natural oscillation in people's standing in the washington. host: what will be the story for the 2010 elections? guest: well, i don't know.

but if i had to predict, i would say the headline would be democrats do not do nearly as bad as expected. host: why? guest: partly because the current trend is exaggerated, and because of the few hints we have had and special and primary elections which do not really support the idea of a huge conservative sweep. as the election gets closer, i think people will sober up a bit. host: what do you mean? guest: i mean for the democrats. why should they? because of health care, once again. anna the tea party which everyone is so excited about now, has never really articulated an agenda, certainly not a realistic agenda, meaning one that will balance the

budget -- or not even balance it, but bring the deficit under control. they claim that to be what they really want. host: this is the editor at large of the "atlantic wire." you can start by alidialing in. i want to get your reaction to this piece this morning from "the washington post." "how conservative islam has changed under obama." it says the tea party has replaced the religious right. these issues have been overshadowed by the broader, anti-government things pushed by the new all right.

guest: let me say a few things. number one, the feeling way of the religious right has been happening for a long time. pat robertson has not been -- i remember writing a piece saying he was the biggest force in the republican party. it has been a dictator more sense that was true. again, this is a phenomena began of the story must change. as a columnist, you push that, be the first one to say to everyone -- wait, times of change direction, and charge the other way. that was a good attempt to do that by the writer. once again, the tea party says

that they are anti-government, but the government gives them medicare, for example. they do not want the government messing with their medicare. host: it is a government-run program. guest: so they're not realistic in their anti-government positions. host: i want to show a piece posted on "the telegraph" last night that rahm emanuel is expected to quit the white house over frustration with the unwillingness of those around the president to get policy pushed through. guest: there have been rumors that he is leaving since the day he got therr. suddenly, this would not be an

abnormally brief stay. there's generally a big turnover after the midterm. there would be nothing extraordinary if he did decide to leave. third, newspapers have lower standards of when they consider a rumor to be accurate. host: what are the british newspapers'standards? guest: two independent sources for the american newspaper is -- then there's would be one and a half. they will go with a story more quickly. for me, i defend that. i think there's a lot of stuff that people in washington know, a special reporters, that they do not report because they feel they do not have it 100% sure. but they're pretty sure and use it in their analysis. i think maybe the readers have right to know that stuff.

host: as editor of largeditor al you be doing? >> i'm writing a column three times per week. the website -- theatlanticwire.com. you have to type out the entire thing. host: ok, what is the atlantic where? guest: it is a remarkably good website, and aggregation said. it goes out and gets, some people say, steals material from other news sites. this is an abrogation of

opinions. puts together all the different opinion on an issue. today they will have an "is rahm leading?" item, and then put together exurbs from other sources. i have nothing to do with this. i just think it is remarkably good. it is put out by 25 year olds who got jobs at the atlantic by sending in their resumes, basically. i believe this particular site at the atlantic had a laboratory last summer where they looked into different kinds of news sites to start and came up with this one. host: it was an idea put forth by some of these new people? guest: yes, as far as i

understand -- also, the owner, david, i believe originated it. host: michael is our guest. first phone call comes from sarasota, fla. caller: sir, i have followed you for i don't know how many years. guest: just don't say. [laughter] caller: forgive me, i'm calling to ask about a quasi-perronal matter. my sister was reasonabrecently diagnosed with parkinson's disease. were you also diagnosed? guest: yes. caller: could you tell me what you think are the two best web sites for information regarding parkinson's disease?

we're doing all we can to help her. for a number of years you talked about the disease. i thought maybe would have a couple of websites to be helpful. guest: sure, i have no secret website. of these days there is so much cross-linking that you can nearly start anywhere. there is the michael j. fox foundation, of course. he has become the leading advocate for parkinson's. his foundation spends its money on experimental research, not on lobbying, which is fairly unusual. the other one -- i think it is the northwest parkinsons association. i do not remember the exact name, but i think if you put in the keywords you'll get it.

they do very good work. i would say those two would be a good place to start. host: the next phone call, from brooklyn. caller: i must say that i missed you on cnn. i watched you for years. i cannot agree with you more with what you were saying about the advent of the tea party movement and sarah palin as a leader. i like to ask, where do see the movement of some of the going? guest: i will predict something. that i see t fading away. the story after the midterm elections will be that the tea party does not do as well as expected. it is because, for several reasons -- the cardinal rule is

that this story must change. secondly, the tea party benefits from enormous publicity now just because it is sort of a good story. it is almost surely true that the story is being overplayed. even if it only does as well as you would have expected, the fact that it has gotten so much hype will make it seem otherwise. host: here is that this new book that points to polls that say that 70% of americans do not like the government getting involved and want more of a free enterprise-type government, which is what the tea party members argue as well. according to arthur brooks they do not want the government providing all these different social progress. can you just deal with the numbers that he's sites? guest: i can deal with those

numbers easily. a hard thing is to deal with the fiscal numbers, those about what we really spend. those 7% of americans i do not think are being realistic. i think they have no idea about how the government is really spending their money -- those 70% of americans, and what could be cut. there will be consequences that they do not realize. something else, i think --well, it is a little strong to say unpatriotic, but if you're going to be carrying on about the government is too big and should be shrunk, you have a civic responsibility to really understand what the government is spending money on, how the government works, and to have a realistic plan about how to do it.

and i do not think that they do. host: the next phone call, from new hampshire, on the independent line. caller: i am one of the tea party members and i would like to respond to something you said a few minutes ago. about how the tea party is inconsistent and that it does not want big government, yet it says do not touch my medicare and social secured. i am too young to have those benefits right now, and i do not perceive myself ever getting them because they're both broke, bankrupt. i'm not one of those who says to leave alone my benefits. this is my answer to that seeming inconsistency. we recognize that the dependence on government is like a dependence onndrugs. it it makes you so that you cannot take care of yourself. it does damage.

eventually, the government cannot keep its promises. we see that in other countries. alan greenspan spoke about it a few days ago. they say those already addicted, we have to give them another domethadone. that explains what you see as a contradiction. ron pulse is the best. those who are already now addicted to government subsidies and money must be taken care of. they must be. it is only right, moral, but we do not need to go on forever making more addicts that we cannot take care of guest: i think you have a sophisticated view, and i do not think it is of view that is widespread,

frankly, among the tea party people. you are essentially saying we ought to cut the government with a grandfather clause. so anyone getting the deal now gets to keep it, but you don't give it to anyone else. that is one way to get change because you essentially keep the people benefiting now happy. i think it is not a fair way to do it. i think there ought to be some mutuality of the sacrifices. if you never get a penny from social security or medicare, even though you have been paying in large amounts of your entire working life, then the people who now getting these benefits who put in much less with the lower rates during their working years, ought to make some sort of sacrifice as well.

host: jeff, republican line. caller: i have seen your guest for quite some time. he has a point of view -- it does not matter, he will advocate from the liberal side, just like rush limbaugh would advocate is from the right side. the fact of the matter is, he has been around for a long time. part of the problem, this guy lives in the bubble we call " inside the beltway." i'm no to party, but it is no different than any other movement that takes place. the individuals do not want to eliminate government, but they said government spending is out of control -- i am no the tea party.

the voters under george bush, they need to get away from democrat and republican and understand the specific role of a pro-government and state governments. once you understand those things, you will realize that politicians will tell you anything and play on your emotions instead of doing their jobs. when you're dealing with the catastrophe in the gulf, bp has admitted it is their fault -- they have not denied anything government has asked concerning money, but you expect government to deal with the crisis. obama and the government have not done that. it is not blame, but government is needed for certain things. host: we need to move on. guest: there were an awful lot of issues there.

first of all, i don't like all this talk about how long have been run. i deny that wholeheartedly. particularly, i deny i have been in the beltway bubble. i have been living in seattle for the past 15 years. i do think all this talk about the washington bubble is a little phony. there are actually more and the rest of the country than in washington city because we get a constant flow of people who have been from other places. what you said about how people have unrealistic expectations, i completely agree. host: the next phone call from philadelphia, on the democratic line. caller: of a like to start out by saying our president is doing a wonderful job with everything

that was left for him to have to take charge of it -- i would like to start out by saying. he took charge of november 5, 2008. once he won the election george bush just disappeared. please do not cut me off. this country, not just the government, has always operated on mis-truthis -- lies. the polls the state that 70% up to 85% that say the country is against the administration, you are only polling the 70% or so of the people who did not vote for barack obama. you must clear up that. john mccain and sarah palin received 70% of the white vote,

then you have the other parties such as the libertarians with baba bar who received 4%, ron paul 9%, ralph nader 2%. guest: first of all, you are right. i should have mentioned this stimulus as something that obama accomplished. it was major. he is having trouble though getting through the next round. i do not quite understand your point about white people, even though they did not vote as a majority for barack obama. i don't think that means you should cut them out of opinion polls. the opinion polls it did not show that 70% or 80% people of any color oppose the president. host: i think she was referring to the polls are referenced, those for free enterprise to

run. guest: i do not really believe that either. caller: hi, i wanted to see if your guest could comment -- i hear so much rhetoric about free enterprise. as a republican for 30 years, just recently switched to independent cannot have been self-employed, my wife has run her own business for the last 25 years, so i know a little about the free enterprise system. it seems to me that we have the distribution of wealth in the country that has not been this out of whack since right before the great depression. the rich are getting richer, in the middle class is getting wiped of. president obama's is someone who

guest: i think both those points are true. the distribution of income in the country is getting more like a dumbbell every year, lots on the bottom and top, not much in the middle. president obama is aware of that and cares. it is a very hard problem to correct. i have a friend who recently ran for the senate against barbara boxer, and lost in the primary, who has written a whole book fear rising that basically the forces of the economics are changing to the extent that we cannot correct this economically, but there are other ways to change society to make it more equal. but having great public schools, for example, and great public parks. this can make us all more equal as cited enough i have mixed feelings about that. is an interesting idea. you're right, that it is a major problem. host: the next phone call from

tennessee, on the republican line. caller: i am a first-time caller. mr. kinsley keeps talking about the distribution of wealth. i would like to know more why we look at the distribution. we are capitalist nation. we have been since its inception. it has been streets of gold. america was the place to come and go so that you can make what you want to make. we don't seem to put responsibility on people who do not want to do anything. to give them money does not help them or me as a taxpayer. [unintelligible] the government plays this game continuously. what is your opinion?

guest: you threw up a lot of issues. just as you say capitalism is about people trying to work hard and make money, democracy is about politicians going after that. you can't really complain about a politician trying to get people's votes. i think that you are wrong when you say that the people who feel themselves slipping from the middle class are not working or trying. i think most are trying very hard. it is just becoming more difficult. host: next, buffalo, new york. caller: hello. i have a statement in regards to adults of not receiving enough in their earnings from the economic stimulus. america's national debt cannot be brought down by adults earning high salary incomes

monthly. the most earned $85 per hour. before this can happen, employers need to be allowed to borrow enough from the banks or stimulus for payroll. employers and employees can pay portions of taxes back on the stimulus from their own dollars. guest: i'm not sure that i understand your plan, but it sounds like you have thought a lot about it. i don't you send it to me, care of c-span, and i will see what i think about it? it sounds too detailed for me to give rational response right away. host: here is i have time. -- here is a headline. rahm talk on one of the sunday shows about it.

>> you were given what democrats see as a political gift by joe barton, the ranking republican. >> i am ashamed of what happened in the white house just today. i think it is a tragedy of the first proportion that a private corporation can be subjected to what i would characterize as a shakedown. in this case a $20 billion shakedown. >> joe barton later apologized after pressure from house republican leaders. but he has been called to step down from the committee. do you agree? >> that is for republicans to decide. it is a political gift for us, but dangerous for the american people. host: your thoughts? guest: this makes me very tired of washington.

this game of gotcha and the way someone says something, and maybe he should not have said, but then people have to pretend to be terribly offended when they are actually delighted. a gaffe -- people" meal lot as saying it is when a politician tells the truth. it is not that he said anything wrong as a surly, it is that he said something you can pretend to be terribly offended about -- not that he said anything wrong necessarily. we have important issues to settle. many viewers have called her with them. i hope that most americans care more about those then who said what, and i wish that people would develop a thicker skin and just shrugged this off host: from the independent line in kansas city, kansas.

caller: whattupsets me the most is the way the congress has passed the healthcare bill with the one cause they use. [unintelligible] it is for a small amount of people, yet we all have to pay for it. guest: i'm not sure -- you mean there are only 40 million people who do not get health care, yet we are all paying to solve the problem? if that is what he means, i would say that i feel as an american that i want to live in a society which does not let people die or suffer because they cannot afford medical care. no other country, no other major industrial country, no country that can afford it allows that to happen. i do not think in my country i

want that to happen. so, i am very happy to contribute will turn out to be not very much for me or for you, sir, to make that kind of country. also, as a practical matter, just to bring costs under control we have to bring people into the system. if it all goes well, which it might not -- republicans insist it will not, i think it will end up costing us all less, not more. host: this is the republican line, pontiac, own lawyer. caller: my condolences on your parkinson's. i have a question concerning our energies future and any likelihood of a major middle east war in the future. prior to the tanker war when the uss stark was hit, i told friends that the u.s. would die

for plastic. i have never found a reason to change that position. i heard in it industry analysts say if we push very hard, we could move our use of renewable from under 1% up to 15% of it usage in 20320, 30, 50 years. could you describe your view of the energy usage and the future and please relate that to a major war in the least. guest: goodness, it sounds as if you know a great deal more about this than i do. i would say that yes, our dependence on oil could be what will trigger a war in the middle east which would be a terrible thing, especially if iran or any

other country with an untrustworthy government gets nuclear capacity. but as to how long it will take us to become independent of foreign oil, even if we are committed to doing it, i have no idea. the first thing is to make that commitment. host: germantown, tenn., on the republican line. caller: first of all, regarding the tea party, i would like to ask what you think has made policy change so much? somehow very hateful and discriminating, but they are still in the limelight. i remember hearing about some party called the coffee party. it seems to have fallen by the wayside. guest: the question is why [unintelligible]

host: she says of the tea party came out full of hate, and why has it gotten so much media attention? compare to other parties? guest: well, the coffee party was a response to the tea party. whatever attention they get it is some kind of echo effect. the tea party it is to a large extent a media creation. it is a good story and answers the question that may not be the right answer -- how are american politics going to change now that the 2008 election is over? then there was sarah palin who turned out to be such a great story. in my view it is mainly a media creation, the tea party,

frankly. the real meat is that the story has got to change, otherwise there's nothing to write about. i think that the team party has tea party will suffer just as it has benefited from that. host: what is your view of what goes on in south carolina? guest: it is mainly one of fascination. the story about the gubernatorial candidate and whether she is a question or a sik? please. and in the accusation that she has affairs with a couple of political consultants. you may want to question her judgment if she has affairs with political consultants, but as opposed to doctors or real- estate agents, but i don't think

that that is really what we ought to be talking about. host: what do you mean? there is too much attention paid to those sort of things? guest: yes. and this question about christian vs. seik. she is a christian. first of all. and second of all, what difference does it make? there are many fine citizens who are seiks. host: that is the story on the front page of "the washington post." this is tom on the independent line. caller: do know the status on the unemployment extension bill? i have been off of work for like a year-and-a-half, have '85 applications out. host: tom, the senate was not able to pass that part of a larger package on friday. they return this week to address jobless benefits and aid

to states. that is still up there. michael might want to weigh in on he politics of that? guest: i'm not an expert on what is going on there. but i would just be astounded if one way or the other they did not pass that extension. or the aid to states, but mainly the unemployment extension. that would make -- first of all, it would be wrong and unfair because people are really hurting. second of all, it would make some of people so mad at them. third host: republican line, from san antonio. caller: i am a republican but like to think that i am a red list person. i say that because everyone walks around and talks about the deficit.

under george bush we got caught up in two wars that i do not think were necessary. he fought this war's off the books. -- he fought of the war's off the books. then when you have people calling in about big government, big government -- ask them what they would like to cut first? when you have the corporations getting most of the tax breaks, like those that bush passed, $1.30 to win for rich people? our deficit could be gone if we would just get realistic. guest: i don't think getting rid of the deficit will be that easy, but i agree with almost all else you say. bill clinton left this country with a surplus. i'm sure you have people here on c-span talking about how we would do with this terrible problem of a surplus -- we

should only have such problems again. george bush did run two very expensive wars which i would have been happy to do without, as your caller was. so, i think he is right. host: the last phone call, the republican line. caller: of like to comment also on the tea party and the election of ron paul. people have said democrats are not coming out this year. if you look to the actual numbers, -- the one that lost had more votes than wrong paul. there were many democrats involved with that election. i believe as we get closer to november that you will see