within the afghan taliban, you have a group that is a big complication because they remained so close to al qaeda. also close to some of the pakistan taliban. it has traditionally been close to the pakistan authorities. the pakistan government has a big fear that there could be a movement which results in a v pashtoons -- if they break off because there is no proper settlement in afghanistan, that would be bad for pakistan to see a large chunk of territory move away into a semi-hostile state. .

>> all i am trying to say is that i think they pursue their own interests and they are good at identifying their own interest, and that will cause quite a vigorous approach. but do you agree? >> i do, and also, man hunting is very hard. throughout history, alexander

chased king darius for two years and never caught him. eventually he was killed and alexander found the body. the fbi pursued the 10 most wanted within our borders for years and years. fundamentally, man hunting is hard, a particularly if you are talking about on the afghan- pakistan border. but moreover, and it goes to an issue of counterinsurgency, it is multifaceted. without a robust counterinsurgency effort -- a plan and effort -- the chances of getting bin laden are diminished. and that is about local support. that is really the key, it is about the people. even more daunting than the to rein in that part of the world is the human terrain in that -- more daunting than the terrain in that part of the world is the human terrain in that part of the world. >> last year there was this

pakistan moment with the video of the young girl being flogged by the taliban leaders in some village. i think the pakistan people were relieved over a vote -- revolted by that and that turned a lot of them against -- were really revolted by that and that turned a lot of them against the taliban. 17% or so of pakistan support the american effort. >> that is a pure research center -- that is a pew research center number? >> yes. i think the really critical turnaround in pakistan is anti- americanism does not translate any more into support for the devaughn or al qaeda. that is a significant change for pakistan -- support for the taliban or al qaeda. that is a significant change for

pakistan and for the pakistani army. they are fighting their own people in some cases and they want the public support behind him. >> time -- the time table discussion in this country with president obama suggesting that come july 2011 we should start drawing down the number of troops in afghanistan. and admiral mullen saying the other day that the latest offensive has been postponed a bit. we will not notice ackley how it has gone until the end of this year. -- we will not know exactly how it has gone until the end of this year. when you talk to people in the larger southwest asian region, or pakistan for that matter,

first, what is their time table? do they think that we have heard it long enough epo there -- that they're there for the long haul? or do they assume that the u.s. is going to pull out? >> i believe many in the taliban leave that the u.s. will pull out. that is what they tell the afghan villagers. they often comment that the americans have their watches, but we have the time. that means, they do not have a time line. that is their home. they have nowhere else to go. immediately after 9/11 in afghanistan working with our afghan allies, i was often asked, are you going to stick with us this time? referring to our promises made during the soviet occupation when we told the afghans that after we win this together we will be here with you. we will be your to help you redevelop your country. the afghans remember that and they're wondering if we're going

to stick with them. and not just the u.s., but the global community of nations. are we with the afghans in developing this pro-democracy? and i do not have the answer. at the time i told them, yes, we are with you. today, based on the political atmosphere, i do not know the answer. >> have we gained any credibility on that score? >> notte when the president announces a time line for withdrawal -- not when the president announces a time line for withdrawal and you do not see the support of infrastructure. nine years ago, only 6% of the afghan people were on the electric grid. today, only 6% of the afghan people are on the electric grid. there has been some change in public education, particularly for young boys and young girls. it is not without some progress,

but overall, we have a long way to go. >> i think there are quite of lot of things to say about these time lines. one is to say that they're paying close attention to what is going on in washington and london and the other capitals of the troop contributors. and they're looking at what is being quoted in newspapers or even some study that has been+ done by some think-tank. they are aware of the domestic public opinion pressures on government to deal with this and get it done. there are time factors that affect them nonetheless. if you look at karzai and his government, he has -- he is desperate to get something moving because he is worried that coalition forces will withdraw before he is strong enough to survive the

withdrawal. he is under pressure of time. therefore, that pushes his efforts to reconcile, or to talk -- start talks. and the pakistanis pressure of time because at the moment they are seeing the influence of the .l

everyone, although they may be slightly different. >> the two most recent attempted attacks of the christmas day attempted airline bombing, and the times square attempted car bombing, what those incidences said to you about what is happening overseas -- we had ambassador saying that -- how to those events play out beyond our shores? >> i think there is a diverse

perspectives and perverse interpretation of those events. you have some of those that it here -- and a diverse interpretation of those events. you have some of those that year to conspiracy theories that we put up those things. -- soft -- that we cooked up those things. on the other end of the spectrum, you have responsible leaders that understand that if there is a successful attack in the u.s., there will be consequences for pakistan. they are concerned on it and they are working more and more with the u.s. to address it. then there is a broad range within this spectrum. >> if we can take those two instances, faisal shahzad and abdulmutallab, if we can do the

times square one first even though it is chronologically second, the consequences in southeast asia -- you've got this young, hot had member of the mehsud crimtribe on nationav all over the world. >> and he is the mentor to shahzad when he was in pakistan. >> indeed, he is the guy that came out on video immediately afterward saying we are responsible. he had a map of the united states with various explosions happening. very dramatic stuff, and indeed, they were involved in that. for him, he has suddenly made it to the big time. he suddenly no longer a small- time crook in the highlands and wild lands of pakistan. he is now a national figure and an international figure. and that for him is great because it will bring more

resources and more recruits. that will be helpful. on the other hand, if you look at the abdulmutallab case, you can say that it originated in yemen, but his radicalization the somoccurred more in london n yemen. but if you say it occurred in yemen, first, they will be very fearful that there will be a direct american intervention and i think a lot of countries fear a direct intervention by the united states because it will tend to combine the population opposed to the government, opposed to u.s. intervention. they're worried about that, but also, they see this as an opportunity because there are huge problems in yemen. i think over 60% of the population is under 25. there is about 40% youth unemployment. there are about 1 million refugees there.

sennar will be the first major capital to run out of water, probably in the nnxt 10 years. secession is moving in the south and they've got rebellion in the north. al qaeda becomes low down on that list. but if the united states were to see al qaeda on the arabian peninsula being said -- a threat to their security, you could see how they will be managing that threat, playing it down. i'm not trying to be too cynical, but it is just a fact. >> you mentioned the case of the abdulmutallab probably having been radicalized more in london where he was a university student then in yemen where he eventually made contact. this brings us to britain and i will be very american and say,

by extension, the rest of europe. well is counter-terrorism operating in europe today? but i think is pretty good. there is a lot of cooperation between -- >> i think it is pretty good. there's a lot of cooperation between american agencies and european agencies that predates 9/11. clearly, everyone is trying to promote their own interests. any relationship house to recognize and trust the other side and to help with that. whether you are talking about europe or canada, for example, other countries whose security is so closely aligned to the united states, you are bound to see working together. i think it gets more complicated than that and in this world beyond with karger terrorism, you can pretty much see things

the same way. the partners are upset arabia, algeria, a saudi arabia, morocco. it becomes a much more complicated relationship to manage. it is all very well that the u.s., u.k., france may share the same perspective, but that is not enough anymore. >> you have a sense of the european counter-terrorism? >> it varies. there are some pretty big gaps in countries outside of england and the dutch and so forth. there is a sense of entitlement, a culture of entitlement in many european countries. it is not only reflected in their social programs and they are having to circle through some dramatic budget cuts because of it, but there is also a sense that they're entitled to a u.s. defense umbrella.

we won the cold war in concert with our allies and somehow they expect that to continue. but if you look at the nato allies, they have never lived up to their financial obligations. and they will need more budget cuts in their defense expenditures. europeans should not assume that the u.s. will always be there. as the behavior it continues with this divert sense of entitlement. i think there's a possibility of some divergence of some european countries. although, intelligence sharing, i think will continue and the macro policies for now, but that is not a given forever. >> let me ask you a speculative question, but one that draws on your experiences as an ambassador at large would counter terrorism and that the united nations. we just had a panel that described what he might -- with the next attack might be like.

-- what the next attack might be like. let's say there is another big, a terrible attack that cost a great loss of life here and its return address is not the tribal areas of pakistan, but perhaps near the horn of africa or the arabian peninsula, is the interest there, our allies to launch another multinational response to such an attack as there was after 9/11? or is the world somehow and they regard it as essentially our problem and we have been at it long enough that clearly is our war. >> i think there is an important distinction. you used the word "attack" often. pundits and others will refer to the invasion of afghanistan

post-9/11. it was not an invasion. if you look at the last urban stronghold of al qaeda, that was december 7, 2001. at that time it was only 90 days after 9/11 and there were only 410 americans on the ground in afghanistan. you have intelligence and logistics support, but it was an afggan picture. you ask afghans about that campaign and it was their victory. you compare that to the invasion of iraq. the answer your question is, how do we i'd done -- to find the enemy? in afghanistan at that time, it was al qaeda and those who chose to side with al qaeda. there were many taliban leaders who are now part of the government because they risked chaka this and they said, we think we will go with our afghan brothers -- the risk calculus

and they said, we think will go with our afghan brothers and not al qaeda. it is important that we define the enemy and are very nuanced in our response, which is hard for tte u.s. to do because of our power in the conventional military. we love blunt force trauma because we are so good at it. in this conflict, the more precise, the more nuanced, the more you develop local networks, trusted networks, and have them be the victors, that is how you succeed in this kind of war. >> what do you think? what the international response would be to 9/11, take two. >> i think it is unlikely to the military response. it is all about perception and domestic support. and i think that clearly so soon after iraq and afghan campaigns, which continue, i think the

international community would be very wary of even believing it could be successful, let alone that it could be possible. so, what happens? if you look at the intervention in africa, for example, let's look at that for a moment. we move into somalia at the end of 2007 and stayed for a time frame before pulling out. we tried to help ensure the transition of the federal government. there was an immediate and flow of opposition against it and support for the groups in existence at that time. i think that is likely to happen wherever. you cannot step into anywhere without the unintended and unexpected consequences. we have seen this in iraq and, of course, in afghanistan, and we would see it in the middle

east, the war of africa or anywhere else. -- the horn of africa or anywhere else. if you have a public that is sophisticated enough in his understanding of what lies behind an attack and what can be done about it to prevent another attack, rather than retaliate against a -- that attack, then you are in a case where the public demands action, as they probably did after 9/11. that was the obvious enemy, if you like. and that was a very quick and consent -- and successful campaign to dislodge the taliban. i do not think those conditions are going to exist again. >> in a way, we have already started the response for the next attack. >> we are poised. >> i would not use the word tempore in response. i would useethe word proportion. that is what a just war is

about as a proportion response. there is not just an element of just -- of attack, but also an element of justice, not retribution. >> would it be who moved to whoever might be on the delivering and to know what response is a -- is against them, or is it better to leave them in doubt? " a big believer in stealth and speed -- >> i have a big believer in stealth and speed. if you look at the reports, the intelligence reports after 9/11, they expected one of two responses from the united states. they knew there would be a response, but expected that we would lob a few cruise missiles in like we did before, or nothing like we did with the u.s. as colt attack. -- uss cole attack.

the last thing that they expected is that we would draw teams of cia and susteren -- special operations commandos behind their lines, a partner with afghan rebel leaders and it engage in extensive subversive as avatars and form a back -- and afghan victory. -- and forengage in extensive subversive of sabotage and form an afghan victory. deterrence does not work. it is not like where you are doing with a nation state. there you can make a calculation of reducing arms or flexing muscle this way or that. it is different. >> the audience would like to ask questions of either of you. there are some microphones in the back. the gentleman with the blue dye is heading right for one.

we will take that one first. >> i am the director of home and security studies at tulane university in new orleans. i am also retired navy and i spent a year in afghanistan on the staff of cst c. alpha as a strategic planner. i'm curious about the national development strategy. in 2006 and the bronx developmental out -- bowls for f caafghanistan -- broad development goals for our afghanistan -- i know the germans, i worked in please reform, for example, and they have not done -- police reform, for example, and they have not done their job. the afghan national development strategy was signed off by the international community in london of 2006, called the

london conference and it was followed by two other agreements, which were the agreements of the european community, isaf, and united states come on how we were going to fix afghanistan. >> i think nts -- of course, on the 20th of july there will be a kabul conference. the what has surprised me is the difficulty of delivery. if you look at what the coalition forces have in afghanistan, all the means at their disposal, the military means, they do not have so much civilian means. they do not have a very good significant partner. there are lots of ngo's, but the work is coordinated and is often duplicative, and ineffective and

is not getting into the areas where we need to divide that development to the people away from support of the insurgency. /op stops, and nobody believing in the future.

it is not dead. it is just very difficult. >> there is another question in the back. >> i am from the center for advanced studies. earlier we were talking about leadership decapitation and you mentioned the hunt for the bin ladens en to the rest of central command. -- and the rest of central command. can you talk to this strategy of network destruction? -- and disruption? >> on an operational level, in network disruption is important because if you have things coming to attack our communities, you want to stop them. i am not dismissing that. but from the most strategic perspective, the emphasis is on energy leadership. it is not either/or.

you have to pursue both. on an operational level, the degree of cooperation among the intelligence services worldwide in law enforcement is really unprecedented. we're doing remarkable things with a variety of traditional allies and a very new allies. operationally, we are doing very well overseas. i'd think we're doing better overseas and we aren't on the homeland. and -- and then we are on the homeland. >> kim doniger with the associated press. sabina, with, and true method that you describe for bringing -- the by, with, and through a message that you describe for bringing afghan forces up to speed, it takes a lot of time. does the car -- the timetable that is currently put forward by the obama administration, does

that help this message that you recommend as a policy of success? and should we be pushing for boots on the ground in afghanistan? he said that was essential in afghanistan. does that mean we should be pushing for that in pakistan? >> on the second point, boots on the ground, if yyu want to know about local networks, it helps to have your own people there. but if they cannot speak pashtun or communicate with the locals in any other way, then it will be difficult for them to know what networks are operating. in the taliban, a local leader is just as likely to be digging in a field as he is to be shooting at you from the account -- a compound.

it is difficult to distinguish a taliban from a non-taliban. if you look at the fatah, i think the american troops inside fought the -- and i'm not saying that they are not, but i'm saying if there were publicly troops inside fought top, it would really help -- inside fatah, it would really help pakistan a lot. because i think that the one thing there with the calusgluess part of the world together so well is a common enemy. they want all foreign soldiers out of here and that argument resonates pretty well. if you want more boots on the ground, i do not think you necessarily achieve your purpose. >> the timeline, as you understand it, who works with

the kind of successful event that you can imagine experts the time line is driven more by our own domestic policy then the need to generate the urgency. i may not know much about american politics, but that is my sense on it. i think is really artificial. cordoba, what could change that time line? -- for example, what could change the time line? another attack on the homeland. and did -- if it emanates from the tribal areas, what does that mean? and the afghan voices, -- the afghan forces, they have a vote. what if there is growing tension in afghanistan? how does that impact the time line? i do not see a need to telegraph

that to the enemy because they use that to their vantage. >> it seems like you would want -- you are not a party running for office or for congress next november -- you would want to reserve the flexibility to say that you may need a troop increase. >> well, of course. >> that does not seem likely. >> haakif you're in a knife figt and you say we have one minute to fight, you are going to fight until somebody wins. >> the afghan army will take a long time to train up to any sort of competent level. there is no good professional officer corps and the literacy -- illiteracy rates are very high. retention levels are still low. people do training and then go home and stay home.

there is a lot of work to be done. but it does not necessarily mean that you fill in the gap. because if they send more forces overseas, you are going to get friction. >> the only thing that works to make the check out is time to say, therefore, we need to stay there long were. >> should you fight during that time or not fight? should you just train? i do not think that fighting has really reduced taliban to smaller areas of afghanistan. in fact, they are pretty widespread right now when that is the statistics by the afghan government, not by me. it may be very well to carry on fighting while you are training. you may need to have a political presence while you are training. but as a model, i think it is not a good idea to train an army

to fight citizens. you should defend your borders. >> you may recall the afghan who was known as the lion because he rebelled repeated russian invasion. prior to 9/11 al qaeda assassinated him. we had a bunch of long-range operations in partnership with him. at the end of this discussion, he was a very charismatic and polite man, and he asked, could he recall -- could he inquire of me one thing. i was in his safe house with his men and i said, of course. he said, the united states is a great nation. i have such an admiration for your country, but my country is, does your country care more about al qaeda and killing bin

laden, or more about the people of afghanistan? and i told him the truth. i said, well, the only people that you are talking to in the u.s. government is the cia and our mission is simple -- a singular. it is focused on al qaeda. he gave me the saddest smile and nodded. he knew the answer. i think he was testing need to see if i had enough gumption to tell the truth. but he was also teaching a lesson, which is important, when you are thinking about conflict. it is not just about finding in killing the enemy. but it is also about the people. you have got to do both. until we address the non- military part of this conflict in afghanistan, and in other counterinsurgencies, we will be fighting in the same valley year after year. this is about the people. if you look at the classic counterinsurgency, 80% of that power projection is non-

military. it is about economic development, education, health care. it is about hope. and that applies to the tribal areas tough pakistan as much as it does to afghanistan. and we have done a lousy job of addressing this. >> let's get another question from near the front. >> hello, pamela brown from fox news. i just want to ask either one of you if you have information you can share when al-shabab is -- whether or not al-shabab is becoming more involved in the gulf of aden and inserting themselves into the piracy problem. >> do we know of any crossover? is there any of al-shabab in piracy? >> i have not seen any of that.

al-shabab have been quite critical of the piracy. they do not think it is good for somalia and they do not think is good for them either. clearly, piracy is a huge and very well-organized business and goes way beyond the capabilities of al-shabab, or rather unsophisticated. there are very strong element all over somalia that are involved in piracy. al-shabab takes a very puritanical point of view in house somalia should be run and, indeed, has a certain amount of support because of that, because of some of the areas that it controls that are relatively stable. but if it goes anywhere, it will go somewhere because it manages to present itself as a group that can least maintain control

of that area of somalia in a relatively and troubling way. -- untroubling way. somalia is a small war. it is not a big war. and before all of the money from piracy came into it, they might have been fighting a big war because they would have been fighting over bigger spoils. >> i agree, but what concerns me about al-shabab is that they do have links -- not strong links, but they do have links to yemen and minneapolissand ma -- minneapolis, minnesota and to australia. you could pick a relatively small, insignificant in surgery -- insurgency, but given our communications among our people, it can unravel pretty quickly, as the ozzieaussies found out lt

year in their intense investigation. >> we have time for one more question. this fellow in the back. >> i am from washington science. as you all know, there were very senior officials in the last administration who would say that britain and israel were our only true allies were smote derisively if you mentioned france, germany and canada. what is your own view -- ambassador crompton in particular -- what is your own view of who the best allies are, the real allies are of the united states in this current conflict? and i would like to ask you in particular about countries in the middle east, some of whom are really perceived to be

trying to play the sides in this conflict. >> first, i have enormous respect for those allies who are fighting with us. there has been loss of life in some of those countries. canadians have been with us. they fought bravely, as have other allies. the first and foremost, we need to acknowledge that. if you look at the most effective allies in this type of conflict, though, is not necessarily nato members, our nato itself. it really is about local allies. the way to go neil talked about all politics being local -- the way a tip o'neill talked about all politics being local, this kind of fight is the same. most of our allies in these parts of the world are non-state actors that we have to find and assess and build alliances with. it is often hard for us to do that because we see the world

in a near-mirror image. we want to do with the ministry of defense or a ministry of volunteers. at the nation state level, there have been some very effective allies -- the jordanians, the you a youthe u.a.e. the u.a.e. are very good allies. >> if you look at the non-state actors, some of the world families, businesses in saudi arabia, they are still finding al qaeda. i believe that is true. however, -- they are still funding al qaeda. i believe that is true.

however, since may of 2008, and the attacks were launched across the saudi arabia, they really figured out it was a problem. it was a sea change. frank towns and and i went to the saudis and this must of been in 2007, i think, and we talked to them. our message was, you have to do more. we showed up and the deputy minister of interior was late. he finally showed up. he had been up for 48 hours and he had just lost a a three men in a firefight. and our message to him was to do more. it was a pretty poignant moment for me to have this discussion with him. >> we have talked about time lines here and i have reached the point in our time line when i have to thank both of you. thank you for all of your insights and answers. [applause] [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2010] >> up next, a discussion on the economy from this morning's "washington journal" and that will be followed by a discussion of u.s. trade with china. then the 60 the anniversary of the korean war. and then coming up at 8:00 p.m. eastern, preparing for the possible next terrorist attack. >> c-span is now available in over 100 homes, burnie you -- bringing you politics, and all as a public service. >> read c-span's latest bokova "the supreme court: candid conversations with all of the justices active and rrtired." >> and now, author stephen rose on his book of a white america

will emerge stronger from the financial -- on his book "why america will emerge stronger from the financial crisis." also, the reason we have him on is a piece that he has in the new republic, morning is coming. four reasons why the economy will roar back toolife. you say that first amongst those reasons is that you see an upturn in investment. >> there's no doubt about that. i think it is starting. the economy works by feedback loops. that is one company relies on someone, the demand from other workers. they get the other companies hire people because they think they can sell their product. and investment has historically been what responds first in the downturn, so the downturn showed that we were down $600 billion, over 30%. and starting two quarters ago,

investment starting to rise. in today's newspaper there's a report saying that for tune 500 companies have $1.8 trillion in cash. we're just making the initial moves, investment is up 15% from its bottom and i do believe that we will see it. it's going to take time. people are nervous. but once it starts going, it kind of feeds on itself. there's a positive interaction of somebody invests, those workers create demand. someone else expands. >> so when you say investment, you're talking about equipment, jobs. what kind of range are we talking? >> everything. investment has three major components. one is structures and equipment. the other is actually computer hardware is considered a form of investment. and then residential investment is also a form of investment. the government has very little investment that it actually is considered expenses. so that's what's really down the most. inventories are also down. so we are right now very lean.

and as soon as we get a little positive momentum, it should be able to take off. >> when everybody looks at an economy they'll look strictly at what we're doing. giezz your way, you're suggesting that there's more to look at when jobs being create. >> the data over the last month or even the last years, there's really about ten bits of information that are released each week. so earlier in the week that had a lot of bad news, it showed that consumer spending was up. so i start the piece in the new republic with do a thought experiment 12 months ago and think where we would have been today. most people were pretty negative. and everything week, somehow or another negative news sticks with you more. but every week i found about 7 to 8 positive and four to five negative. so i think the balance has been positive.

it's dicey. it's weak because of the financial crisis undermined things but i do think that it's in place to take off. whether it will in the next few months or thereafter i think by the end of 2001 there will be 5 %%llion new jobs. jobs are the lagging indicator. in fact, in recession what is we find is that companies use that opportunity to restructure and they often lay off people such that in this recession product tivity is up tremendously because companies are making due with less. but they have low inventories now, they have cash in hand, they haven't invested. we are clearly poised to take off. >> you talked about perception and negative perception, there's an op ed in i think it's the "new york times" today and the bessism bubble. he says a similar mentality can take hold during downturn.

>> i used the same comment when i read it this morning i had a little chuckle. i do think there's one study shown in bad economic times on the front page of the newspapers negative news outnumbers positive news 8-1. and in positive times, negative news outnumbers positive news about the economy 6-1. it's basically gooze news is boring and -- good news is boring. there are people being hurt. the people who have been laid off and the unemployed for those who have been six months, a year, year and a half, that's obviously something you can relate to. and but if you can care about it it leads. and all of these news, the

positive events kind of you don't hear them as much. but if we look at history and we predict the future basically by looking at the past, the mark economic performance of the united states and all of western europe is preety remarkable in the sense of pretty significant steady growth, interrupted by short and shallow recessions. i mean, once you just remember that after world war ii japan and germany were devasted. their infrastructure didn't exist and now they're number two and number three in the world. the economies in the modern era have really shown themselves to be able to grow such that in the late 1980s there was another debate. remember when everyone was saying that japan was going to be number one and the value of tokyo real estate was more than all of california. and then lester surro, a depeen at mit was going europe was

going to be number two and we were going to be number three. and i said no the united states would likely be ahead of the convergence clubs. all of these countries seem to have high levels of living. that is the norm. we're going to return to the norm. the united states has certain advantages. it's the largest integrated market, the dollar is the international currency, english is the language. our media sets the tone of culture. we have the, in terms of higher ed and especially graduate ed. our schools are by far the best. we have capital infrastructure. we also have what i like to say is the ability to change such that when microsoft came along, ibm hired these two nobes to put their essential -- nobodies to put their essential programming ahead in their pc. that never would have happened in europe. and europe had a conference saying could microsovet,

sissco, intel have happened in europe? and they agreed that it wouldn't primarily because people like to keep their relationships. where as in the united states venture cam tallism, try something new. >> we like to take risks. >> we like to take risks. and that's why we're going to get out of it. we're risk takers afplt and when you want to get out of a recession that's a good thing. >> the numbers will be on your screen. first call for our guest, kansas, robert on our independent line. go ahead. caller: i've got a lot of friends that are out of work right now. i want to know where your economic rebound is at. i mean, we just had this big old disaster in the gulf. there's goes our gdp.

where is the big economic rebound. tell me? guest: first of all, in the united states more than other countries, there's always a large number of people unemployed. now, there's no question in this recession that really caused us a decline dramatically in employment. we didn't go down much in gdp. now, personal consumption is actually at the level before the recession. but employment is a lagging indicator. there's a lot of pain out there. of the unemployed, a lot of them do rely on months and months of unemployment insurance. but over half the unemployed are in a household with someone else working. this is not to undermine the real human tragedy of long-term unemploimtted.

but i think we will see job growth. it's going to be slow. in 1982 when we had a recession with 10% unemployment, the economy rebounded faster. and about 400,000 jobs a month. i'm forecasting 250,000 jobs a months, because finance really is at the key of the economy and they made a series of crazy choices that really undermined the strength of the financial institutions. no one wanted to bail them out. they just felt that the alternative was worse. and i think it's been two years since the start of the recession and i do think that we will see growth in the future, slow at first, but it will gain momentum. and i'm predicting that the unemployment rate will dip below 7% in the summer of 2012. host: is there research to suggest for those unemployed, when they go back to work do they return back to salaries hey were used to?

guest: people have different reaction. as people age, they tend to have a positive trajectory. what unemployment does is knocks them down. a few of them respond but most will then jump to here and then they will catch up. but there can be 5 to 10 years of below their normal earnings. so it's tough to get back to what economists call job specific skills and seniority. so it's a disruptive event. host: south carolina, wess, go ahead. caller: good morning. so you say it's going to go down to 7% unemployment within the next year? guest: summer of 2012. host: summer of 2012. so you're shooting for that. here's the thing that maybe you %+n comment on this. i think they had a great thing yesterday on c-span talking about american exceptionalism. and the entrepreneurship in

this country is one of the strongest things we have going for us and the risk-taking too. but i think what's failing us right now is the political class. it seems like all these investors have made so much money. you look at the stock market. none of these guys have suffered a bit from this recession. the government is out there to bail them out. but now the political class comes back and you've been talking about jobs. and it seems like there seems to be one political class that is just going to block anything to help working people out. just in order to try to win another election. and maybe you can comment on how the politics affects the economy. i think the reason why there's so much pessism is not because ggp numbers are up or down or anything like that but the sheer fact that so many of the people i know who even want jobs are on wic, food assistance. the jobs they have aren't paying. maybe you can comment on it.

guest: everyone likes to blame the politicians and they are certainly a squabbling group. but this crisis, and i really think the depth of this crisis could only occur in finance, really had little to do with government. that is those in finance across the board made a series of risky bets because they were making a lot of money that were successful for a number of years and then they tushed around and then e-- turned around. it looked like the economy was in free fall and could reach 20% unemployment. one should remember that the response to the crisis began with the bush administration. it was hank paulson who asked for the $700 billion of tarp. it was them who set in motion a thing that was continued by the obama administration. the fed did a remarkable injection of currency. and i really do believe that stopped this from getting worse. so i really support it.

i think the major mistake that obama made is when he first came in he said pass my stimulus bill and the unemployment rate will only go to 8.5%. i think that set the wrong perception and underestimated the negative force of the economy. economies are like big ocean liners. they have a lot of momentum. in general this is a good thing. that's why we have had very moderate recessions. but once it gets disrupted and goes backwards, it's a bad thing because it takes a lot of time to get going. that's why my forecast are for 18 months out and 24 months out i can't predict the next few months because it is still taking time. all the forces now are in place. unemployment is a lagging indicator, and the pain in jobs and the pain of low earnings especially blue collar, less educated male workers is going to be around for a while. host: did the stimulus help?

guest: yes. personally, i would like a little more stimulus, but i do think it's the $1.8 trillion that businesses are sitting on right now in investment that's down $600 billion and inventories that are down over $1 billion that can set off this rebound. that is, we are dependent on the private sector economy. we are a mixed economy as we find out with bp. we need all these government rules to keep it working. we made the mistake with financial deregulation. that is, we thought that no one would risk the whole health of their own companies. we thought no one could be that stupid that they could bring down a.i.g. and lehman brothers and would have brought down more if we didn't intervene. host: there's a piece in the post today. but it talks about worries of regulation, especially in light of an expansion by some c.e.o.s as far as the administration's

expansion of authority, it said. is there some relevance there? guest: i think there's a little bit and i would prefer a different balance. but people like to complain, first and foremost. again, it is the sailions issue of they know what they don't like more than they know what they like. i don't think this administration is anti-business. the whole issue about health care, this is something that we've been trying to do since truman on and even nixon made efforts in this thing. this is like unfinished business and they felt that the politics, which right now, this is -- you know, again, it was an odd thing. they were so commited to it and they so underestimate it had depth of this recession. if they had toyota do it over and the politics were different, they probably would have postponed it. host: steven rose teaches at jornlt and wrote this book, rebound, why america will emerge stronger from the financial crisis. . .

caller: i was wondering what your credentials as an economist are and how do you expect people to invest when their wages are being driven down further and further? thank you. guest: there are a lot of data points. first, i am a card-carrying economist. i have a ph.d. in economists -- in economics. i have chapters in my book about what is happening to the wages. all of the data is there. let's just look at the last few months. apple introduced the ipad and

sold 1 million units at $500 apiece. avatar came out last year ended set box office records of $14 per ticket. -- and it said box office records of $14 per ticket. if you go into suburbs, they're waiting lines at restaurants. the gdp per capita basis is 3% lower than it was before the recession. it is not down 15% or 20% as some might think. . . , gallup, the daily trackly poll of what they call the affluent people and how much they spend, and in the last -- defined as households, and they control something like 45% of total income, and in their last survey, they found that the amount that they were spending was up 20% from a year earlier, and that's going to be the one that creates the demand for businesses that have $1.8

trillion in cash, not lower income people that are going to drive the recession. it's going to be the upper income people to start with, the businesses that are going to invest, and then they're going to hire for the medium and lower income. host: if those businesses are holding back cash, what do they need to see to put it out there and make it happen? guest: that's an interesting question. i want you to remember, you've been down this road 10 other times in the post-war period, and they knew how to respond. this one was more disrupt timbings it's taking longer to grow back confidence, to start the positive momentum going. there are signs, as i said, seven positives to four negatives. i think it's going to switch. it's not going to be in the next few moss, it's not going to be by the november election. i think this will be much stronger at the end of this year. and then 2011 is when you'll really see the positive

momentum going forward 11 and 12 and on. host: florida is next. caller: hi. good morning. host: yes. you're on. kathleen? caller: yes, hi. good morning, pedro. i'd like to ask your guest a couple of questions. when did he first decide to write this book? and, you know, i want to invite him to do it, could he answer me that? guest: sure. it's a financey story. i was actually writing a book -- as i mentioned to the last caller,y been doing data on the state of the middle class for the past 30 years, and i was going to write about it not being as bad as some said, and the crisis came along. well, you couldn't write middle class is doing wonderfully in the middle of this crisis, so the book kind of marked about talking about first the crisis, and i picked the title for the book in march 2009 when the economy was going down at an

annualized rate of 6% a year. i had that much confidence, and i wrote the book a year ago, and i finished it -- i finished it in the final gale in october 2009, but i came up with the argument in march 2009 because i was so confident that the future really does replay history. from 1945 to 007, it's one in which down turns are followed by rebounds. and i lay out in the book a lot of data on this. i lay out a history of the financial crisis nd how it+ specifically happened and why it took us down, and i talk about the history from 1980 to 2010, which aalot of people think was a period of stagnation, and i argue that, two things. one is medium did not did not go negative, but it was up 30%

from 198 to 2007, and i also argue that this notion of a shrinking middle class is true, that people in the middle of the income distribution are lower, but it's completely because people moved up. the share of adults in households was over $100,000 in income, and in inflation-adjusted terms, increased from 12% in 1980 to 24% in 2007. >> our producer has made the point that the healthy economy is also related to banks lending. how does that factor into your thoughts on the strength of the economy, a bank's ability to lend money? guest: obviously it's a tough plod. it's tough on two levels. the financial crisis set in motion affecting the real economy, and then we had these negative feedback where somebody lays off, other people lay off. now, banks use other people's

money. i mean, banks start with leverage, but they mainly use other people's money. obviously their capital cushion went away, with all the losses and all the bad investments and these instruments and all. it's a complicated story. they are rebuilding their balance sheet, it's still in process, number one. and number two, they're nervous about not doing -- i mean, lending money and not getting money back. so again, we're waiting for the positive interaction. it's not like it disappeared, it's just down. it's down significantly. but as the interaction of the $1.8 trillion that companies are sitting on now, when they start to invest that, that will cause other companies to want to expand, to want to see banks, the business community better, and then they'll end with them.

guest: but the consumer, you're going to probably see tougher credit, tougher loans to be had. how does that factor into the strength of the economy if, down at the consumer level, it's going to be harder to get that credit, get the loan, get the money in order to make those investments? guest: right. it actually isn't the consumer that's been the one that's dragged this economy down. if you remember, for those of you, one you might have heard, g.d.p. was consumption in investment. that's how we consume things at the end, so consumption, basically what's happened in the economy is investment tanks, government went up, and consumer spending actually changed remarkably little in the middle of this recession, and right now it's at a level that is just slightly higher than it was before the recession, so the american consumer -- you know, our savings is probably more along the discussion about what that means, but the american

consumers, when given a chance, are ready to spend. guest: brooklyn park, minnesota, janice on our democrats line. thanks for waiting. caller: thank you. my question is this -- how do you feel that the outcome of the midterm elections will affect either the improvement in the economy or maintain the stagnation? >> i don't think it's going to affect a whole lot one way or another. i mean, i think they've come to a kind of balance, equilibrium. as i said, i would prefer more stimulus, but there are some republicans and moderate democrats that are not in favor of it. i don't think that's going to change. obama will still be president. i don't think -- personally, i think that the democrats will lose seats, but i think they will stay in control. but it's a close thifpblg it's pretty hard to believe the

democrats will lose the senate. so in terms of economics, i really don't see the election -- in terms of economics, i don't see the elections having a big effect on the economy. guest: ted in biloxi, stay on the line. you're coming up soon. oklahoma city, next, tony on our republican line, go ahead. caller: yes, my name's tony cook. i actually run top dog roofing out of oklahoma city. i'm from mobile, alabama. we was put out of business by the illegal workers in mobile, alabama. folks were firing. i get here to oklahoma, and folks won't hire us because we're out of towners. and then i call around to the local roofing companies, and they actually tell me they don't hire american citizens. what are we going to do about that? i called our government and got nothing but the runaround. guest: obviously immigration is a hot-button issue, being the son of two immigrants, i have

certain feelings that immigration has served america very well, that we are a nation of immigrants, and the best studies show that immigrants have a slightly positive effect on the economy, but that positive effect is not across the board, that clearly there are people that there are certain jobs available, and if companies can hire cheaper people, they'll do it. so the overall effect doesn't negate the fact that a lot of people are losing their jobs in this tight economy, and that creates the hot-button issue with the arizona law, etc. it's actual a relatively small point in the economy as a whole, but if you're the one that's hurt by that, you're going to notice it. and if you have a president or a brother, you're going to notice it. again, it has to do with the negative news, you're going to

remember those cases where people have been displaced, and you're not going see the skills and the other things that they do, and as far as i know, overall, the best studies show that immigrants have a positive effect, not tremendously economy, but a positive effect on the economy. specific until silicon valley is where they have a big positive effect, and about 20% to 25% of startups over the last 20 to 30 years had a person who went there, oftentimes graduate school, who stayed here and formed an intel, formed a google, and led to thousands of jobs being created. guest: biloxi is next. ted, go ahead. you're on the line with stephen rose. caller: good morning, mr. rose. i have two questions. when i was young, our economy used to be based on primarily manufacturing.

manufacturing was based on making a small profit on many, many, many items. our economy seems to be based on making a large profit on just a few items. driving the prices up, which eventually means that our wages no longer will cover, so we raise the minimum wage. that raised the minimum wage, it's been passed down on to the cost of the item until our minimum wage no longer covers on and on and on. when is our economy going to get back to the old-fashioned way, which seemed to work just fine, used to minimize the pepth of the depregs we went through other than the 1929 depression. and my second question is, would it not help our economy

if, during a national crises and such, if we turned to companies within the areas of the crisis to help solve the crisis, such as during the gulf coast crisis california companies, during earthquakes, companies within the flood yareds during floods? guest: ok, made your point, thanks. guest: start the second question first. wr a globally integrated world, and while buying local makes a lot of sense, just remember, if everyone bought local, then you couldn't sell far. and then our exporting firms would be hurt. so buying local, in the middle of the depression we passed a thing called the smoot holee law, in which it was buy local, and a lot of people think that's what made the worldwide crisis worse. so yes, it makes a lot of sense

right in front of you, but you forget how many people sell abroad. caterpillars. world that are selling construction equipment to china. so just remember, if you buy local, other foreign countries can say the same thing, and then it will hurt other companies. so that's usually a short-term strategy that ends up not working. in terms of manufacturing, manufacturing is really greatly affected by productivity increases. and productivity increases by and large are a good thing. even in 1900, 40% of people were farmers. today, only 2% are farmers. so what does that do to productivity advances? in manufacturing, it makes most sense to think that economy is about producing things. well, today it requires one-quarter of workers to produce the same amount of steel that we did in 1965.

one-quarter of the workers in coal mining produces twice of amount of coal that we did before. it's just the nature of the beast that we have high productivity in manufacturing, and it's just not going to go away. that is, we aren't going to grow ourselves by a manufacturing economy. and in a study i'm doing now on what label it takes to produce various things, the thing about giving to the american people, what to buy in the supermarket or what to eat out, of that money that we spend, $1.4 trillion or so that we spend on food, three cents on the dollar goes to the farmer. five cents on the dollar goes to the food manufacturers. just eight cents on the dollar go to the direct producers. another few cents, other manufacturers. and the rest are advertising, consumption, retailers at the grocery stores, the people who work at fast food stands. that is, we're still producing

goods, it's just that the value chain is relying less and less on manufacturing workers. in apple, it says on the ipad, assembled in china. there was a study that came out of the u.c. irvine that said, well, let's look at the value chain of the ipod. it said made in china. three cents on the dollar goes to china. $75 goes to apple, and then there are the sales again. so the whole value chain of producing goods require fewer people to make it. we aren't going to return to a manufacturing economy. host: how does trade factor into the economy? guest: it's something you see. so it looks like it's displacing things. if you look at the data, you try and look at any relationship, does trade go up, let's remember, ross perot ran in 1992 on the great suck sound . they had 22 million new jobs in

the years there afterwards. we had the highest what's called employment to population ratio among adults ever. that is, the economy grew. it appears that trade is contractionary, because once again, you see those that lost their jobs, and you don't see those that gain their jobs. no advanced country has throde increasing unemployment. there are individuals, much like the productivity growth, individual companies with areas that are responsible, they get hurt, you remember those people, you forget. so when i was on a show about two years ago, call-in radio from wisconsin, they said, oh, this is down. and i looked up the numbers in wisconsin from the time of nasa passed in 1993 to 2006, in wisconsin, employment was up 15% overall. the wisconsin state product

adjusting for inflation and population was up 17%. people remember those that are close. our trade deficit is something else. they'd can also be neutral. we also run a trade deficit. it's remarkably complicated issue, and it would take time to really unravel this, but we run a trade deficit because other people benefit, and in return, they buy our bonds. that is, every time we trade goods, one way in which money flows across country, but another way is the capital investment, and the capital investments have to offset it because your balance of payment is leaving the country and the dollar is returning to the countries always each year have to be in balance. we have this money flowing in, and that provides the portion of the economy, and that's why it doesn't affect the overall g.d.p. host: delaware on our republican line. ronnie? caller: the skevb active line.

-- the conservative line. credit is the greek to the capitalists, and in the early 199 's, i remember buying a home and getting a mortgagg, and it took me three months to get the mortgage, and the credit they did, they did a credit check behind me and everything, then there was a million mortgage more like jesse jackson who loosened the credit standards. i think that started the loosening of the credit standards where people could get mortgages with no income verification. then i thought people were remortgaging at will, using their home as an a.t.m. machine. so that there, i'm thinking our economy grew so much due to the such ease of credit. then all the sudden the a.t.m.

machine or the housing -- the houses reached their limit, people were mortgaged out two times, credit card debt to the max, and all that -- we were filling the demand. they need credit. guest: a couple of things. one is certainly the history of the subprime disaster has many architects, and some of the architects were those that encouraged the expansion of homeownership in the clinton administration and the bush administration had the homeownership initiative. and that was one of the things that helped. it helped cause the crisis. but the crisis really took off in two steps. the first step was that there was low interest rates to get us out of the recession on 9/11, and all the sudden this new subprime mortgage, which has only been 8% of mortgage

originations in 2001 jumped up, and then they were make ago lot of money, and they changed the rules in 2004 and 2005. there's a very nice book called "confessions of the subprime lender" based in dallas, texas, showing how all of a sudden the ninja loans, the crazy loans are from the 2005-2006 period, and they really were instituted by the banks that really wanted to make money. they were instituted by the banks and the credit agencies that kept a.a.a. and instituted by the people that bought these mortgage securities. and by the way, these weren't little old ladies. they weren't even rich people. the only people that could buy a mortgage security were institutions. so this was an institution, the institution growth. people just got a collective blindness to this, a, looked like it could go on, and b, they underestimated the downside risk. they had been through the stock market crash of 1987, the s&l

crisis, the leveraged buyout companies going bankrupt, the long-term capital management, the currency crisis, the bubble, the enrons, they had seen all of these mini crisis, and they had very little macro economic effect, and they really said to themselves, ok, you look like you're doing ppstupid things, but ok, we'll take a little hit and then move on again. they really just -- in the book , i was trying push the limit, just trying to see what in the world could they get away with? they dent think the downside risk was going to be there, they actually did have a lot of pain. financial industry lost 10%. somehow they lost $1 billion on them when companies went bankrupt so. they didn't want to do this. they just made crazy mistakes. it was an odd period that finance sometimes does. host: clinton, kentucky. todd, go ahead.

caller: i lost my job 18 months ago, and i started going to college to better myself, and my question to him is, what area of jobs would be around maybe in the next six months or so? guest: obviously i have to look at your specific economy, but healthcare is an industry that's growing. if we look around where the jobs are in downtown and suburbs, it's offices. office work has historically been a strong growth area. people misunderstand the service economy being, you know, hamburger flipper jobs, when, in fact, it's mainly office jobs, information jobs, computers are only going to be more, getting a technical, specific skill. i work for center on the education in workforce, and we have projections in 2018, you can go to our website and look

at that, so we project the jobs of the future. host: new jersey, stuart, go ahead. caller: hi. you touched on this earlier about the role of perception of good news and bad news and this is really encouraging, this book. i'm surprised people have been negative in terms behalf they've been asking. but my question is, what do you see as, if you could quantify it, how much attitude will overcome this dilemma? if you'd comment on that, i'd appreciate it. thank you. guest: in many ways, the psychology, the animal spirit do play a role. what crisises are are turning it around. when people are negative, they're worried, doe make make decisions. when they're optimistic, they make decisions that lead to economic growth. so psychology does play a role. a lot of people -- i mean, there's a long history in the

polling of i'm ok, you're not. a lot of people express negative opinion on the economy as a whole. there's a new pugh poll that was released last week that showed 8% of americans think the crisis was severe and will be permanent. 12% thought it was mild and was going to be permanent. so only 20% of americans think that they're going to have permanent problems from this crisis. so i think americans individually about themselves tend to be more optimistic, and that should bodely are for the future. host: ohio, randy on our independence line. caller: hello. i was actually going to -- well, i was going to ask if there is a way -- like, you look at the short-term economics, the impact of jobs and just production of things, and you said it's kind of insignificant, i don't know if you want to call it insignificant, but you said it

was kind of not as relevant. is there a way for the government to look at the current economic situation and get involved in a way that will stop big companies from just repeating this process of a recession and a bounce back or is that just kind of the way it is going to work regardless? guest: in terms of what you're talking about is a business cycle. the business cycle we've had over the last 30 years has been one of the heinous in the history of capitalism. you know, there just tends to be mistakes made that then compound. this crisis was unique because it was financed. some would say it's the lifeblood of the economy, as someone referred to earlier, so it affected everybody. it's going to take time. we just gave the argument for a

stimulus program. as i said earlier, i don't see it's going to happen that much more in the future. i'm optimistic. i don't think that manufacturing is insignificant. i just think it's probably a small share of the unemployment, somewhere around 15%. and there are weak spots now, and that's why it's taking so long to get started. and checked stall again, but in my mind, there's no question in the intermediate run that we will be rebounding. host: you can read his piece at the new republic, "morning is coming." you can connect through our >> more from "washington

journal" with a discussion on how china's currency policy affects the united states. >> "washington journal" continues. host: joining us for the next 45 minutes, sam gilston of the washington trade and tariff. is there anything you want to read about the nature of trade agreements and how it shapes an economy such as ours? guest: one of the points that he made was correct, trade gets a lot of publicity and attention because it is out there, but in terms of the overall economy, it is smaller than people think. it has the appearance of being larger because of the publicity it gets. but in terms of the dollar amount, it is a smaller share.

trade news is my life and i would love it to be a bigger part of the economy. it is actually about 10% of the economy, 12% is based on trade. host: correct me if i'm wrong, but the balance std at about $40.3 billion. how does that square? guest: in 2009, there was a severe cutback in world trade. every country faced that. u.s. trade exports dropped about 18% to 20% over the year. what we're seeing now is a bounce back in trade. the numbers that are coming in right now reflect that bounced back. a lot of it is inventory

rebuilding. our trade deficit actually went down in 2009 and probably this year it will go back up significantly. host: why did it go down? guest: recession, we just were not buying anything. as a result, the things that count in our trade deficit, the largest element in our trade deficit, which are cars, petroleum, the consumer goods -- hen we stopped buying cars and we stopped buying the gasoline to put in the cars, or slowed down, if reflected accordingly. host: does this affect our relationip with china? guest: a gets the most attention on trade because it has -- china gets the most attention on trade

because it has grown so fast. if you look at the framework of our trade deficit, we have trade deficits with europe, japan, canada. and we're running trade deficits with poor, developing countries, but also with large industrialized countries as well. china is a growing part of it. a lot of the imports that we get from china have come at the expense of other asian countes which have not grown as fast. host: are their deficit is there because the with the trade agreements are set up? est: i do not think so. we do not have a bilateral trade agreement with china. that has not grown because of a free trade agreement. it has grown because china is a low-cost, major producer. host: our guest will be with us until 9:50 a.m. he is the publisher of the

washington, tariff and trade letter. if you want to ask him any questions, the numbers are on the screen. you can e-mail us at journal@c- span.org. as far as trade agreements, what is pending as far as what this administration is doing trade- wise? guest: there are tee or four things right now in the mix. there are three bilateral free trade agreements that the u.s. netiated during the bush administration and those have not been acted on. congress approved them for colombia, panama and korea. and in addition to that, there is the doha round and that has

been going on for nine years and not getting close to completion. and then there is the trans- pacific partnership with some asian countries which will aim for a u.s.-asia free trade agreement. that has got a couple of years to go before it gets to completion. president obama just a week ago announced that he is prepared now to start working on the caribbean free-trade agreement and get that -- coriakorean free trade agreement and get that going. host: you wrote in your letter about this that is bad news for some and good for others. can you expand on that? guest: in the past, the majority

of republicans have voted for them and the majority of -- the republics -- the majority of democrats have voted for them and the majority of republicans have voted against. there are some who say that the democrats will lose seats in november and republicans are going to gain them. to that extent, many of the republicans,, if they win, will be voting for free trade agreements. host: our last guest talked about perceptions when it comes to the economy and perceptions when it comes to trade, especially in the political realm. guest: sometimes trade is all perception.

i do not know how much people delve into the numbers and the actual out -- reality of trade. a lot of it is perceived in a personal way. people who lose their jobs in manufacturing because a plant has closed down and move overseas. or someone knows somebody who lost their jobs because of trade. that strikes closer to them -- closer to home and people react to it. host: you said trade is 10% of our economy? guest: imports ar about 10%. there's about a trillion and a half in and a trillion out. depending on what today's gdp is, $12 trillion, $13 trillion.

it is about 10% of the economy is imports. about 10% exports, so about 20%. host: our first call is from massachusetts. you are on with sam gilston, go ahead. caller: you just have a graphic up about a $40 billion trade deficit each month, correct? host: april 4, 2010. caller: how much oil do we iiport each month? hostguest: i can tell you in 20, we imported $254 billion in petroleum products.

divide that by 12 and that's what you come out to. host: you have a follow-up? caller: the amount of oil import is similar to the trade deficit. if we were not importing the oil, most of that deficit would be raised, correct? guest: not entirely -- would be erasers, correct? guest: not entirely. if you look at the deficit over all, there are probably about five categories of products that makeup the bulk of our trade deficit. you have in petroleum, automobiles and auto parts, textiles and apparel, toys, consumer electronics cell phones and tv's and such as that, and that makes of the bulk of the trade deficit.

host: o of twitter someone has asked -- guest: i cannot say trade decits are good. we have had them for a long time and we continue to be a strong superpower. i am not sure it has undermined our ability to be a superpower. a strong economy is obviously, as steve earlier mentioned, an important part of our national security and growth. trade is a two-way street. we are getting a foreign investment coming into the u.s. they are buying our bonds and our stocks and that strengthens the country in one way. a lot of our trade is in products that the united states will never be competitive in again. the future is finding areas of growth that are different from

what we had in the past. host: another person off of twitter -- could you explain what that first part means for those who may not know? guest: chinese policy with u.s. and china bilateral relations for the past 10 years or so, china has had for many years a fixed exchange rate and it was on the dollar about eight something, the yuan, or wt they call currency. and then it came down to about 20% against the dollar. and during the economicrisis they stopped that policy and

froze it again, so they fixed the exchange rate. probably at about six mething. a couple of weeks ago, the people at the chinese banks said they were born to allow the exchange rate to moderate -- were going to allow the exchange rate to moderate, not devalue, but be more flexible. depending on how it appreciates, the trade balance shod a just a little bit due to that. depending on who you talk to, some people say their currency is about 20% undervalued and some say 40%. if it was 40% and it wanted to reevaluate its 40% higher, you would see a significant trading -- change in the trade deficit. host: what changed the chinese

policy? guest: a lot of it was pressure from the obam administration and european officials who are seeing these trade deficits growing with china. it is not just the u.s., but europe and a lot of other countries asell. there was a feeling and there were on -- under constant pressure that if they did not do something, europe might do something. there is pending legislation in congress hat would try to attack the church -- the chinese currency problem. host: huntington, west virginia, you are next. caller: a specific question and a general question. first, why is it that the united states has a trade deficit to begin with? that is trade of 101. what do think obama is

pondering all that he did not know during the election and he did not know ahoy he did not -- and he did not know haake that he did not know? guest: why do we have a trade deficit? trade deficits go back to economics 101, as you say, and adam smith and 18th-century economist. counies produced what they are good at and they import what they are not good at. sometimes it is not a matter of good at, but just economic efficiency. if you can import something cheaper and better than you can make it here, people will buy the products. the classic example is one from france, bananas from latin america.

nowadays, people like japanese cars and german cars and they a import them. that is where the tra deficit comes from. host: indiana, john on the independent line. caller: about a year-and-a-half ago, a multimillion-dollar contract at my company was signed and much work was shipped to china because they could get it done so much cheaper. is there anything that can be done -- there were 18 people in the country -- in the company that immediately lost their jobs. i do not understa how a compancountry this large could

not stop jobs being shipped overseas. it is not productive to -- for our country to send our jobs and our work overseas. i realize the company is getting it done at a cheaper rate, but with the shooting and the tariffs, doesn't that equal out -- with the shipping and the terrace, does not equal ou-- doesn't that equal out? i do not understand how they are getting it done much cheaper. guest: that is certainly a widespread problem for companies and jobs that have been shipped overseas. manufacturs, owners of companies are free to find the best price for the components that go to their products and the labor that goes for their

products. the wages -- the wages in china are way below those in the united states, working conditions are less protective of workers in china. plus, the chinese government provides extensive subsidies to businesses to invest in china and produced in china. it is not just the cost of labor, whichs low. but there is a whole additional structure of aid that goes to manufacturers to move their production into china. that has been a serious problem that has not been addressed. host: on to twitter -- is wal-mart a factor in the way we consumed things as well? guest: absolutely and proponents of free trade will tell you that

while we import a lot, that is a benefit to consumers. the fact that a bottle -- a moderate income families in the united states can clothe and feed its family and buy goods, you know, televisions and furniture and apparel i wal- mart and live a comfortable life because of that lower cost of the availability of goods is one of the benefits of free trade. in fact, we are spending less to buy a shirt and more to buy a computer probably then every other society. right now, you do not have a choice because so many products are made in china. host: if you follow such issues, sam gilston is the publisher of the washington care of and trade

letter. who is this design for? guest: mostly international executives of companies, attorneys that work on international trade issues, policy makers in the trade field. host: and on your web site is there formation for the general consumer? guest: yes, it is right there host: there is a link to it on our side. ohio, vanessa on the republican line. caller: i will make a comment and then ask a question. i can recall years ago when the chinese products were considered inferior to american products. i do not know if you remember that, but i remember that clearly.

as a consumer of american-made cars i was very disappointed in the product. it seems to me the american workers, agreed to kick in. . the greed kicks in. and then they probably price of the vehicle, but the quality was not equal to the sally. -- the salary. many years later i was told that you will never buy -- and many years later i went to get a foreign car end i was told you will nev buy another american made car and it was true. it not a myth. it is truth that the foreign-

made cars are better made than an american-made car. the car that i own is a foreign imports and i'm very pleased with it, but my personal preference would not be for a foreign car because of the way it is made. however, i have decided that american-made cars that are making a strong comeback. now they are finding these faults with the foreign imports. host: ok, thankou. guest: you make an excellen

point. i think that people perceived value with the imports. they're not only producing better products, but more sophisticated products. the foreign makers by an inroad into the u.s. because there was the perception that they were producing a better card at a better price than the u.s. manufacturers were. that started many years ago and led to a long decline in the american automobile industry. now the cars that you are buying, they have been made in the united states, actually, because nissan and the interview and hund have moved production to -- nissan and bmw and honda have moved production to the u.s. the airlin

e consumer is looking for quality as well as price. to the extent that a foreign- made car is willing to meet the coumer with the quality that they want, that the pigs the marketplace. -- that dictates the marketplace. i tnk obama has been toward of restraint in the last two years because of the need to hold together the democratic party and its constituents, a large party union backers. he has been very restrained in the opening and promoting trade talks and agreements. i think his instinct is more toward open trade, but we will see if he follows through with that. host: california on the democrats line, martha.

caller: good morning. thank you so much for c-span. my husband and i are both 86 and i have been watching c-span since its inception. retired for -- from long beach appear in twain harte and we are in the western hills. my question is, if mr. colston would please compare the minim wage in china -- mr. gilston would please compare the minimum wage in china to the minimum wage in the united states. ourovernor recently said he was going to start paying minimum wage to state workers to help with the budget deficit and all of that. also, i read a book on c-span called the wal-mart affect that

was reviewed or by a guess on your program some time ago. my husband ordered it because it was not available in the bookstore. host: we will leave it there and of our best to answer your questions. guest: as far as i know, there is no minimum wage in china. depending on the industry's beck -- the industry sector, they can be quite low. there has been a lot of agitation in factories were more advanced products are made to raise wages. but even in good factories there, they are a dollar, the $50 per hour versus $7 here. -- $1.50 per hour versus $7 a year. host: what about trade deficits with canada?

guest: one of the trade agreements we have is that nafta, the north american free trade agreement. and again, depending on who you talk to, that has been very successful or terrible. part of the trade deficit we run with them is petroleum. we run a deficit with canada, mostly on petroleum. we have trade deficits with mexico as well. but it is a symbiotic relationship between the three countries now. host: pat, go ahead on the republican line. caller: you were talking about our trade goes both ways and it seemed like you were saying we import consumer products and export stocks and debt. how does that help american workers w need an income source to maintain this economy? guest: i did not mean that we only export stocks and debt to

foreign countries. the united states does export over $1 trillion in manufactured goods per year. there is a lot of major american competitive industries that are exporting. you have boeing, caterpillar, many of the car companies do exporting, even though not as much as we import. our chemical companies are big exporters a a, a pharmaceutical companies are big exporters. high-tech instrument measurement companies are big exporters. we are not just in -- exporting debt. host: your trade letter marks the effort by charles schumer of new york. what is he up to as far as currency issue? guest: this has been a big

issue for senator schumer and several others, senator gramm and senator sbenow. they have been pushing this r about five or six years. it fluctuates a penny on how -- depending on how the administration in power pushes them or not about trade. . . it would identify chinese currency as a misaligned fund. it would help getting a redress. it would change u.s. trade laws to allow these departments to treat the undervalued currency from china as a subsidy. under the anti-dumping laws, the

schumer bill would allow congress to increase the duties that it pays on foreign imports on undervalued currencies. host: our guest is sam gilston. they give for waiting on the independent online. caller: it is too late because, once the hands are out of the henhouse, you cannot get them back again. ss a duty on a product that came into our count for the wage difference and social security benefits, so that when a company went over there and paid $40,000 each year including social security and they were only paying in thailand, for example $8,000 per

year, we will assess a duty of $38,000 per year because of the difference in wages. that would stop a lot of american companies from going abroad and it would lift all boats. i would like you to comment on that. >> that has been proposed by some people. there are numerous problems with going down that path. first of all, under world trade organization agreements, raising tariffs like that would probably be illegal. we a promise not to do that except in cases where there is an unfair trade. you would have to define wages and benefits as unfair trade practices. secondly, not all trade deficits are with countries that are low wage or do not pay social security.

imports from europe, where wages and benefits are higher than in the united states, canada, and japan, would have their debts oduced because they had better pay and better benefits than the united states. as i mentioned earlier, much of the trade deficit is not nearly due to low wages. when you come to a country like china where there are subsidies for operate in the country, those benefits can be greater than a wage difference. you would have to look at a tremendous array of economic policies in order to impose a tariff that would counter all of those different economic situations. >> do most counies have trade deficits? guest of know, if china or korea

runs a trade -- guest: no. china, korea, saudi arabia all run at trade surpluses. the world is not all deficits. some countries that are small ppbenefit from trade. host: mainly because they benefit with us? >> -- guest: primarily with the united states. but also with europe and japan. host: texas, go ahead. caller: there is something much more sinister going on here. we have to revisit all of our active trade agreements. now we are pushing for panama, colombia, and korea. in korea -- columbia they have a very small gdp. drugs are all that they have to export. all it is is another chance to

avoid foreign workers for this worldwide industrial complex. if we do not stop and revisit these trade agreements, we will reach a tipping point where this country can no longer compete. we are modulating down the work force. ery day we have millions of illegal, poorly educated workers coming into the country. these trade agreements have to be revisited, one by one. we have the right to opt out of them and we should. we are on a dangerous path and i do not know that america can recover. thank you. guest: that is a very common view of the americans. one reason that the obama administration has been slow to pick up pro-trade policies. the national manufacturers

showed that we had a trade surplus in our free trade agreement partners. it is not strictly a trade deficit with those countries. there is no agreement with china, which is the big deficit. most of them are not free trade agreement countries. it is not strictly free trade that is causing the deficit. >> youngstown, ohio. caller: good morning. thank you for c-span. thank you for taking my call. did you think that trade adequately account for the cost of social disruption as an industry moves offshore? second, i wanted to said companies have patents to

protect them from other companies to not have the development costs so tha they can produce. tariffs actually protect countries fro the same thing. from generational processes that take generations to develop. othecountries are taking those processes away. i wanted to see if i could get an answer. thank you. guest: the 19th century economist that first proposed free tra and the foundation of that policy, as i mentioned earlier it goes bk to the idea that countries produce what they are good that an import what they are may be good at. there is an adjustment process that goes alg with that. in the 19th century it was likely a slow process because

economic movement was very slow. today economic changes can occur rapidly. as a result there are jobs in industrres that overnight can become competitive that you might not have expecte the downside of that policy is sharper and quicker than it was 200 years ago. i do not knowwthat anyone has developed a way to resolve that problem. worldwide tariffs are only a small part of what projects countries. over the last 60 years through trade agreements, global tariffs have come down considerably. so, they are not as much of a factor. although some of them are still very high. much of this trade is not between countries, it is between

companies. you have companies like the freedom american auto industry that are producing parts in mexico, assembling them in different parts of the world. it can be the same company doing the importing and exporting. st: buffalo, new york. independent line. guest: give me a minute with pedro. pedro, every couple of months i call you about these twitters. you look awfully display -- displeased with your eyes glazing over. may i remind you that this is a call-in show. remind these twitterers, why do they get in every single day and we get in every 30 days?

take off the 30 day rule. let me ask you a question. how do you perceive the economy shaking out over the next year or 18 months? like the previo guest was exemely optimistic, c-span brings these guys on every day. 24 months out. bp says they will demand oil in 30 days. the country is not stupid. how do you thinkhat things will shake out in the next year? your down there in washington. far as i'm concerned, there is no difference between these politicians and the surprises that are coming in november. >> i do not suggest waing 18 months. as i mentioned earlier, there was a sharp drop in world trade

in 2009. as the economy picks up, trade will take up with it. so much of our industrial components are imported. my guess is that over the next few months, the next year, you will see the trade deficit grow. our exports are growi. nouestion about that. president obama has created what he is calling a national export initiative, aiming to double u.s. exports over the next five years. the administration is putting a big push on improving u.s. exports. first of all, they start with 2009 as the base year and you alrrady have a good start. you will be getting back equilibrium from 2007. we are up 20% already. we are one quarter of a way

towards doubling the base from 2009. between 2002 and 2008 exports grew 70%. you are only talking about 30% extra in exports. if the global economy does as well as expected, it will continue to grow. host: one more call from indiana. john, go ahead. guest: mr. gilston, figures do not lle. but liars figure. omeone is benefiting from these figures that they're putting out. when will they realize that we cannot sustain this $40 billion per month trade deficit?%% if americans do not have jobs, they do not purchase products.

not from a manage-- american manufacturers or anyone else. we cannot go on like this. we have got to have jobs before we can purchase products for our economy to move away that it should. >> i know that the national association of manufacturers, it is not just small manufacturers. they would hve been amongst the strongest advocates for taking up against the chinese currency. support -- supply chain has changed over time. u.s. manufacturing has not been the driving force in the economy for years. it is -- it is nostalgia to go back to the days when everyone worked in a factory.

those days were probably over in the 1950's. the service industry has been a growthndustry of the united states for the past 50 years and probably will continue to be. >> tomorrow, they look at some and nutrition programs for children with the president of the food research and action center. the present for the center for education reform as well. there's a look at the obama administration plan to end homelessness in the u.s. all of that is tomorrow on "washington journal" starting live at 7:00 a.m. eastern. this week, using technology to promote open government here and around the world with conference

founder tim o'reilly. that is tonight on c-span 2. >> congressional leaders gathered at the u.s. capitol to mark the 60th anniversary of the start of the korean war. among them were three u.s. representatives, charles rangel of new york, north carolina's rep and john conyers. [applause] >> good morning. we're here to honor those who served and to remember those who perished in the conflict. please stand for the presentation of the colors.

♪ 06 n uc ♪ by the dawn's early light? ♪ what so proudly we hail

♪ let the toilettes less greening ♪ whose bright stripes and bright stars ♪ through the perilous fight ♪ over the ramparts we watched ♪ were so gallantly streaming ♪ and the rockets' red glare ♪ the bombs bursting in air ♪ gave proof through the night ♪ that our flag was still there ♪ 0, said, does that star spangled banner ♪ yet wave ♪ over the land of the free ♪ and if the home of the brave

>> please remain standing as dr. gary black gives the indication. >> lettuce pray. the eternal lord god will loan spreads up the heavens, we gather in prayer on of this 60th anniversary of america's

forgotten war to seek your blessings. bless the family is of the fallen as well as the shrinking core of aging and korean war veterans -- of aging korean war veterans. let them know that you have kept their record of their sacrifices. bless the korean people whose peninsula was cut in half along the 38th parallel. ease the current tensions and bring reconciliation and coexistence. hasten the day when the barriers that divide north and south

korea will be overwhelmed by the forces that unite. lord, you have not given us a spirit of fear, but of power, of love, and the perseverance. l.l. the light of your truth -- allow the light of your trip to shine and spread, to restore and he'll, to eliminate and rebuild -- allow the light of your truth to shine and spread, to restore and to heal, to eliminate and to rebuild. >> please be seated. ladies and gentlemen, united states representative from new

york, the hon. charles rangel. [applause] >> madam speaker, i cannot thank you enough for making certain that this great nation of ours has an opportunity to thank some of us for the contribution that we have made in korea. and we have little knowledge that it is not us that you yonor -- and we humblin acknowledge that it is not test that you honor. we can talk about america and what happens when that flag goes up and everything that we

believe in is a part of that flag. those of us that went to korea did not go there just as members of the marines are part of the navy. we went there as americans. the only color that we knew was the flag. it was read. it was white. it was blue. it represented everything that we were and everything that we hoped to be. and so for the families that really made the sacrifice as they lost their loved ones, some came home not to be forgotten, but sometimes not even to be remembered. we thank you for taking this time to pay tribute to all of the young men and women to went to a far distant place. i was 20 years old in the barracks of four los, washington

in 19 -- of fort lewis, washington in 1950. someone said that the u.s. was going to korea to stop a police action that would stop the communist takeover of korea. i had no idea where korea was, but i was so anxious to get out of fort lewis. [laughter] a police action actually sounded pretty attractive. but when we got there, we understood that here was a democracy that was being invaded by the communists. here was a place that communist china thought was so important to them. it was not only until we left and saw the land that had been flattened out that the hopes and aspirations of the korean people made a democracy that the old world and the region respected. in terms of being america's friends, they have not

forgotten. i would ask my korean-american friend from york who never stopped saying thank you to please stand and if they do for coming down here, not to celebrate, but to remind us that your great nation is our greatest partner, a great trading partner, and we thank you for your friendship. in conclusion, i would say that, if you know anybody -- because we have reached that ge where there are not that many of us left -- that you could just walk up to and say thank you, we'll understand. we understand that is not just for our sacrifice, but our bodies and their friends that we left in south korea, many who were taken as prisoners, many who died in that prison. it was an honor to serve with howard coble. john conyers was a young officer

in korea and of course, sam johnson never stopped defending his country, whether it was korea or vietnam. of course, senator specter was prepared to go korea on this day, but our leadership in the house and the senate created this opportunity for us to think our korean friends, in a very special thank you to our korean angels who i hope you'll be able to see perform and provide the spirit and we will be able to say "god is good." [speaking korean] [applause] >> united states representative from north carolina, the hon. howard coble. [applause]

>> thank you. it is tough to follow you charlii. i've made no significant contribution to the war effort. the good news is that south korea continues to be a friend and ally. the bad news is that north korea continues to be a threat, upon which we must maintain a consistent and sharp lookout. i appreciate the presence of the democratic and republican leadership. i appreciate as well the presence of all of you who took time to be here to commemorate the 60th anniversary of the korean war. [applause] >> ladies and gentlemen, united states representative from michigan, of the hon. john -pconyers, jr.

[applause] >> to my leaders in the congress, that my colleagues, friends from literally all over the world, arm service members, present and former, and all those gathered here for the 60th anniversary, this is an experience in everyone's life in the service that goes into an active area of military engagement that transforms their lives. their philosophy and their attitudes toward change. -- are changed. i, too, was that washington. we would wake up in the morning

and the battalion had been moved out and everything was gone where the barracks were. they had been shipped off overseas to korea. the thing that i will never forget is that some of my classmates at fort lewis, at the biltmore engineering school, i never saw them again after that graduation. many of them were shipped to korea never to return. i was among the lucky ones. i dedicated myself because of that military experience to the question of force and diplomacy

in our foreign policy activities. it is my deepest believe, as martin luther king, jr. said, jobs, justice, and peace, if you had to sum up the career and life and legacy of the one person that influenced me, with all due respect to other influences, more than any other person i have ever met, known, and worked with. on the question is how do you get the peace? it seems more clear to me a that you cannot get to peace without a full employment plan, without justice, which includes economic and political justice, and then

you can inch toward peace. funny, in these several thousand years, we are still struggling toward that objective. and so, it can be said that a military presence and force is sometimes still required. now, as a legislator, privileged among the 535 men and women in a nation of 350 people to be a part of making laws and guiding the destiny of what i think is unquestionably the greatest government and nation in recorded history, in terms of

accomplishments and power, we are in a peculiar and challenging situation. how do we make sure that there were not only no more koreas, , and anyre vietnams of the other wars? some are military actions within countries that make it more difficult for us to determine what to do. how do we make in this grand idea of an organization that

contains all of the 232 nations on the planet earth, 6.4 billion men and women, scores of nationalities and religions and races and creeds? to make, to be able to serve with my colleagues here being honored, it is a reminder today that it should and could be the goal all of us if we are to make the that we'll understand opportunity and the challenge at this moment and on this day. i am so honored to be here with all of you.

thank you very much. [applause] >> ladies and gentlemen, the united states senator from pennsylvania, the hon. coral inspector. [applause] -- the hon. arlen specter. [applause] >> ladies and gentlemen, i remember june 25, 1950 the vividly. i was one of 2000 rotc cadets that checked into the air force base to fulfill a six-week training obligation between our third and fourth years in college. and there we were, 2000 of us, in khaki, and the war had just started.

the conclusion throughout the barracks was backed we would e -- was that we would be on our way to korea. we were already in uniform. but that was not to be. we were sent back to college because they wanted to win the war. [laughter] i spent two years stateside as a special agent with the office of special investigations. i have a deep reverence for veterans which arises from the first veteran i knew, my father, harry spector, a russian immigrant who served in world war one and was wounded in action. in the tough days of the depression, he was looking for to the $500 bonus promised by the united states government to world war i veterans.

the government broke the promise, not in an unusual way. i believe it is hard to figure out motivations and the have become interested in coming to washington to get my father's bonus. that is a figure of speech. as we focus on the events of the day, what is happening in afghanistan, what is happening in iran, i believe we ought to renew our efforts in a very intense way at negotiations with a little different tone as we approach our adversaries around the world. it has been acknowledged that you do not make haste -- you

don't make peace with your friends. you make peace with your enemies. the north koreans among others with more dignity and more respect. koreansited the north ambassador at the united nations in 2007. there is no investor here. i said, "how can we have better relations?" he said, "you can start by being a little more courteous and understand our position." but how do expect us to respond when you have warships off the coast? you call a zero nation. you have overhead satellites watching your every move. -- watching our every move. those things are necessary, regrettably. but it has caused me to rethink how we conduct our foreign relations. i think that negotiations are

not a lost cause with anybody. if you can bring khaddafi, the worst terrorist in the history of the world, into the family of nations, we ought to keep trying with countries even like north korea. that would put us in a position, hopefully, one day, not to have 7500 of our troops in south korea, given the obligations and commitments that our nation has and the grave difficulties we face with the deficit. as yet, we have not been able to conference a supplemental appropriations bill. so today is a good day for a little reflection, a good day to pay tribute to the men and women who served in the korean war and all of the wars which have provided the freedom for this country. thank you. [applause]

>> ladies and gentlemen, the republican leader of the united states house of representatives, the hon. john boehner. [applause] >> madam speaker, my fellow leadership colleagues, my colleagues, honored guests, welcome to all of you. first, i would like to thank the previous speakers for their service. it of always good to hear my good friend charlie rangel tell his stories about the korean war. i also want to thank my colleague sam johnson who is a real hero, having flown some 60 two missions of of the skies of korea. 60 years ago today, koreans

world -- korean soldiers crossed the parallel that started a war that technically has not ended. the cease-fire of july 1953 ended a bloody struggle that made korea the main battlefield of freedom against communist tyranny. reports of that invasion 60 years ago or still burned in the memories of many americans, just like the news of pearl harbor. even president truman and his military leaders were surprised as they had little reason to expect an invasion on this front during the cold war. but they responded quickly. they put in place the leaders, the troops, the ships and fighters and bombers and tanks and everything needed to face the communists and say, "this far and no further." america was joined by 21 allies

to preserve south korean as the from line of democracy and freedom. in the end, 628,000 allied soldiers gave their lives in the struggle, including 36,000 americans. we remember them today. there is an image that captures exactly why the sacrifices made in that war were justified. if you go to the google birth, you can pull up a satellite image that shows the world as it appears that night from a satellite. the pictures of the korean peninsula are very striking. south korea is lit up like the east coast of america. when you look north, it is pitch dark. there are no lights. that is because there is no

freedom. communist dictators have ruled the north koreans with an iron fist, content to watch their people starve and weather. north korea's actions in recent months only underscore that the regime remains a threat to the region. we must a vigilant for north korea as we have every day in the last 60 years. korean war memorial opened here on the mall in 1985. it is one of the more distinctive memories in washington. on a plaque, these words are inscribed. "our nation honors our sons and daughters who answered a call to defend a country they never knew and people they never met." of today, we remember those events of 60 years ago. we recall the tenacity of the south korean people and we honor those americans who have lost

their lives defending their country. made their sacrifices -- may their sacrifices be a never- ending reminder that freedom is not free. [applause] >> ladies and gentlemen, the majority leader of the united states house of representatives, the hon. steny hoyer. [applause] >> madam speaker, my distinguished colleagues, leader reid, leader mcconnell, leader boehner, heroes who served for all of us when i was a child, i thank you for your service. charlie rangel is a hero hours and all those who fought and

died and who were wounded and came back our heroes of hours. i want to make knowledge those of you to wear the uniform today, who wore it the successors to those we honor 60 years later. thank you for your service and thank all of the hundreds of thousands that you represent and everyone of the branches of our armed services. to this day, like those in korea 60 years ago, you keep us safe. give them our love and respect and let them know that not only do we remember the korean conflict, as it is euphemistically referred to, but we remember them this day, this hour as they served in harm's way. [applause]

we have heard the korean war called the forgotten war. i would ask, "forgotten by home?" not by the americans to start and shivered through the korean winter, not by a the people who love to the 37,000 who never came home, and not by history. that puts the korean war at the start of a half a century struggle to shift, to spread -- to check the spread of communist tyranny. it is a war that sits uneasily in our memory. it is because it was a war of shifting games and uncertain and. -- shifting aims and uncertain anends.

it was a war that went on and on and on. that is all the more reason for us to remember today. the war cannot out with a justice of its purpose for the heroism of those who fought it. we find reasons not to forget. whenever we look at the satellite photographs that john boehner show correctly pointed out, as those satellites crossover that korean peninsula, they see the darkness of dictatorship and the holy light of freedom dramatically displayed on that peninsula. it was american lives that kept thinklights politalive and we our south korean friends for remembering this day and every day. whenever we look to the faces of

our veterans and hear their insurers, we cannot and must not forget. -- and hear their stories, we cannot and must not forget. their memory will last forever. with that resolve, they will be remembered much longer than that. god bless our country that is blessed so well by those who had the courage to serve in danger's hour. [applause] >> ladies and gentlemen, republican leader of the united states senate, the hon. mitch mcconnell. >> i mentioned a couple of years

ago to my friend charlie rangel , the book "the coldest winter," if he had read it. i am paraphrasing his response, which was essentially, "once was enough." it was an extraordinarily difficult conflict. today, we honor the men that fought that war on some of the worst train and the most challenging conditions that american workers have ever seen. we remember the assault on and on. most of all, we remember the men who fought, for their courage and their sacrifices in defending freedom against their enemies. many of these men work already heroes who had fought the nazis,

fascists, and the japanese just a few years earlier in world war ii. they came from places like oklahoma, kentucky. lieutenant commander john and was one of them. he was a football star and he served in both wars and he gave his life for his country on march 9, 1951. for his valor, he posthumously earned the navy cross. three years ago, he earned a permanent place in the aviation hall of fame. sometimes we fight wars with the outcome causes people to wonder whether it was worth it. yet nowhere is the contrast between freedom and oppression more apparent than on the korean peninsula today. the korean war is on display 60 years after the men we honor today endured that brutal fight.

the people of north korea have endured a dismal level of fear and want for entirely too long. courageous american men and women are still fighting battles against fear and oppression in places like iraq and afghanistan. in honoring the veterans of the korean war, we also honor them. the struggle to defeat al qaeda and the taliban are difficult. they have made great sacrifices. many of the lessons in korea remain relevant today. in his classic book on the subject, a writer said that communists understood that the united states had the will to react quickly. and the american people learned that the post-world war was not the place they had hoped it would be. we disregard the communist threat only at extreme peril.

the same could be said about al qaeda today. this is why u.s. forces are hard at work whether it is the example of the soldiers who fought in korea or those that fight today, america's soldiers, sailors, airmen, and marines give us of the reason to believe that the day that all people can enjoy freedom. in a dangerous world, they give us hope and they deserve our profound thank you. [applause] >> ladies and gentlemen, majority leader of the united states senate, the hon. harry reid. [applause] >> as it has already been

noted, america's sacrifice in korea deserves a more prominent place in our consciousness. we come together today to prove the cliches and the conventional wisdom wrong, to prove that this war is not forgotten, to share the stories that keep the memory alive. the stories i know about korea are many, but center around my friend michael callahan. other than my wife, i have never had a close friend. he was my high school teacher. he was my mentor. he taught me how to box in the ring. he helped me to get to and through law school. we serve their stick together. and is nevada's governor am indiana's lieutenant

governor. before any of that, mike served this country as a marine, a member of the nine states airforce, and a member of the and and states army so that he could see combat in korea. he became a platoon leader. he became a sgt. like every hero of that war, his cause was not fame. it was freedom. in the bitter cold winter of 1952, what has been called the world's coldest war, but he ran headfirst into enemy fire and brought back his men from the trenches. with mortar round and other rounds hitting his group, his left leg was hurt very badly. his hip was badly broken. but he kept going.

he turned a telephone wire into a tourniquet. he took command of his unit and refused to leave before the emmy laughed. he took, silver stars for his courage and swell as a bronze star and a purple heart. he left behind his left leg. but that does not stop michael callahan. by the time the winter turned into summer, michael is back home, getting an education so he could teach kids like me. mike is not here today. he died six years ago. but the courage of that six decades ago and my fellow warriors is very much present today. their heroism lives on in each of our honored guests here today. they will continue to live as long as we share them. [applause]

>> ladies and gentlemen, the speaker of the united states house of representatives, the hon. nancy pelosi. [applause] >> today, way markets solemn anniversary for our nation, for the people of the republic of korea and for the world. we honor those who fought with bravery and valor in the korean war. in the words of a resolution passed in the house last week, we recognized the noble service and sacrifice of the united states armed forces and the armed forces of allied countries that served in korea. we are privileged to work alongside five korean war veterans who came home from the war and continued their public service in congress. we have heard from today from

john conyers, chairman wrangler, sam johnson, who has been reference and is a great american hero, and senator arlen specter. we are honored to be joined by the former speaker of the house. he is the chair of the korean 60th anniversary memorial committee, speaker dennis caster. dennis, thank you. [applause] byythe chief of staff of the u.s. army, general george casey, general, will come and thank you for being with us and for your service to our country. and the ambassador of the republic of korea, welcome to you and your distinguished delegation. the korean war, as has been said, has often been called the forgotten war. but today and every day, we

must remember them and their full measure of devotion. all of our veterans deserve our respect and admiration as we honor our korean veterans. the story of the korean war is a story of heroism and selfless acts of patriotism. at the memorial day concert, this year, we heard the moving story of private first class charlie johnson who gave his life saving nine others. as one fellow soldier carried by johnson to safety later recounted, there were not many men who made it out off of that hill. if charlie had not been there, i do not think any of us would have made it. mary white hester, a flight nurse, she volunteered for the air force and became a flight nurse, tending to the wounded and caring for the injured. her story is the story of many women who served honorably in

the korean conflict. lieutenant colonel frank mercy, two years ago, he met a man born in a small town in south korea he is now -- in south korea. he is now a researcher at mit and he thanked the colonel saying that his life is only possible because of the american soldiers who fought in korea. the offensive continues. these are stories of commitment, passion, and courage, of men and women who serve because that is what the country asked them to do. hearing my colleagues, leader boehner and leader hoyer, talking about the picture of the satellite of the brilliance of south korea by night and ho dark and never been free and light is in north korea, that picture is reflected on the ground in north korea as well.

i had the occasion to visit some years ago on an intelligence visit. while i had seen the overhead and we continue to see it, the contrast only grows greater over time. we saw on the ground the same thing in the faces of the people. in seoul and south korea and other places there, the vitality and the entrepreneurial spirit, the sparkle, the industry, the children are so alive. in pyongyang, where we visited, the capital of north korea, there was a poverty of spirit, a dullness, the propaganda machine network. what we saw in our hotel room or films, newsreels -- were films,

newsreels of american soldiers in north korea. that is what they showed the north korean people over and over again, americans in north korea appeared that was their excuse for not having enough food for the people because the americans could be coming anytime so they had to keep the food for the military and their people are starving. leader mcconnell referenced the difference between freedom and communism and it is very clear there, as clear as that overhead picture. others have mentioned, it's on the korean war memorial, our nation honors her sons and daughters who answered the call to defend the country they never knew and people they'd never met. this same spirit of duty and

devotion to the cause of freedom of lives in the service of service members and veterans to this day. it is the greatest legacy of the people who stood on the korean war front lines. their colleagues have the metal and the shrapnel to prove it. today, we have a chance to sacrifice once more. we pledged to never forget them. we recall everything that they did for the american people and what they have achieved for peace and liberty around the world. general casey, every day, americans are blessed by the men and women in uniform who defend the home of the brave and of the land of the free. thank you very much. [applause] >> ladies and gentlemen, rev. daniel will deliver the benediction. >> shall we stand, please?

dear god, we have not forgotten and we will not forget. bless all those we honor and remember today, especially those who have served in the military and their families in the korean war. less personally and reward greatly charlie rangel, john conyers, howard coble, sam johnson, arlen specter, colleagues who we honor here today. they and their colleagues in this war have moments frozen in time and moments that melted, body and soul together, in sweat and blood. lord, we remember in this living

moment the deeper hidden stories yet to be revealed as we recall pow's and m.i.a.'s, with so many fraid relationships and open wounds left behind. made their memory be a blessing to us today in a world for the universal concern of all those who are called prisoners of war, even in our day. made the longstanding stair and patient attention of military forces across the 30th parallel -- 38th parallel, the demilitarized zone of this day, be a blessing to us presently. invite us again, lord, to recognize all of the invisible lines that create parallel lives

separating families and a common culture and history. as we recognize and struggle with the differences of north and south and in so many parts of the world, bring unto us the healing of the past and hope for the future so that, with one voice, we can call you creator of all of us. and as free children of god, usher in a new era of reconciliation and peace. amen. >> ladies and gentlemen, thank you for joining us today. please remain in your seats for the departure of the official parties. all guests are invited to continue this commemoration. continue this commemoration.