the bank rate is an interest -- and is an instrument to which everybody uses. >> are you happy with the policy of the banks that has been imposed? is it too high >> that is just a matter for you and the chancellor to debate. i will say that the principle for the medium to long term instrument seems to be sensible because what it is trying to do is to provide an incentive for banks to use less risky types of finance that got us into trouble and to rely more on the long- term sources of funding which provides stability on the balance sheet. that is one of many instruments.

there is a whole program of reform to shift and this is one of them. >> do you think that the country is addicted to inflation? should we be moving away from a situation or so much reliance is placed on inflation? >> i think there is a problem in trying to change the targets of the banking industry to include a wide range in general. it makes sense for some element that we should enter a measure of consumer prices. it is a bit of an anomaly. that is not quite the right word. it is not really reflect the cost to owner-occupiers.

[inaudible] >> i think it would be an improvement for the measure of the cost of owning or occupying for the measured level of prices. >> i am quite cautious about the way that unoccupied price houses are brought into the inflation range. the way you do that is quite important. as well as the consumption activity. you have to get the cards right. i have been surprised about how much house prices have bounced back from last year.

they bounced back so strongly. >> talk about real-estate interest rates. something you said in response earlier. you talked about how it affects money supply. clearly with $200 billion, 150 billion is what the u.k. gets. that could have an effect on business and the government's ability to raise money. i'll have your activities affected interest rates?

>> initial and immediate impact on asset purchases is to increase the amount of money in the economy. how that the fix the economy goes to a variety of channels. you can raise asset prices and diversify into other assets so they might be buying corporate bonds said the yield on those bonds generates return and stimulate investment. for long-term interest rates, my perspective through our activities where we would be raising the prices and lowering the long-term interest rate, this could be seen as a national -- natural counterpart to the interest rates changing. that probably affected the yield curve for the long term and

conventional actions would have changed that but it is hard to judge how far or how much. we are attempting to estimate the importance of this but it is bound to be very uncertain. asset purchases will affect a whole variety of things which depend upon the long term interest rates and the markets. [inaudible]

>> interest rates are incredibly important for many households out there. how confirmed are you about interest rates and their connection to households? >> one thing we did -- -- one thing we should feel more confident about compared to 1990 is households by and large been able to service their mortgages. it was more difficult in the 1990's when interest rates went to a very high level. it is a big contrast with the united states and the downturn which is far and away the largest downturn we have experienced since the great depression. the level of market repossessions and mortgage defaults, it will not be much lower than the levels of the early 1990's. that is because this downturn

has been accompanied rather than was generated by a massive rise in interest rates which resulted in a failure to control inflation. >> one of the interesting dynamics is the tendency for households [inaudible] people are not saving. [inaudible] d.c. that is a problem in the future? -- do you see that as a problem in the future? >> there are other aspects of personal savings and finance and.

i think the issue as a whole, which is our households able to build up a level of savings appropriate to the length of time we should reasonably expect them? that is a big question. it goes to what you do on their mortgage for what pension you expect to receive about period and relation to your mortgage. one of the problems in this area is it does not like buying something and if you do not like it you buy something different the next week. you are stuck there for a very long time. i do not think that question can be answered.

>> my next question is about business investment. that will be crucial for the economy's recovery. [inaudible] small businesses are finding it incredibly difficult. do you see any impact at the banking system at the lower levels and how that will affect the recovery and the economy? >> i accept your description of the state of access to credit. i think it is a particular problem. there is a 20% fall in investment.

there is no doubt that the difficulties, and trying to reduce their balance sheets quickly to improve capital positions, they are reducing and reducing -- restricting lending. much of that has happened in the financial sector but has extended to private sector. you can deal with this by issuing bonds or equity to the market as a whole to go around the banking system. many companies are in worse financial shape than the banks. it is difficult for small and medium-sized enterprises to go to the banking system. how much this will slow the

recovery, what we look that suggests that sluggish growth is not an impediment to recovery in part because such a large proportion to the investments carried out by big companies so it is not something that we should have a major concern about as a whole but aid is something we should worry about in terms of what it means for small and medium-sized enterprises that are making it difficult. their positions were undermined. that will have the fix we will notice for years to come. >> there was an article last week or the president of the european central bank called for fiscal tightening. the chairman

of the federal reserve said support was necessary. [inaudible] is it something much deeper? >> i think you touched on exactly the two views. north america operates differently than north america -- then europe. we do not have the luxury of the u.s. which has the ability to borrow from the rest of the world. there is a real difference. there is of several different in terms of uncertainty. i think that what is very clear and what is agreed upon is that all countries need to have a

credible medium-term plan where they can demonstrate that they will get back to a position in which structural deficits are eliminated and, they are on a sustainable path for long-term planning. you can debate about what the theory you used to spell out that path but not spelling it out is a bigger problem. >> i would like to press on something the chairman asked earlier. [inaudible] i was very strong on the monetary policy. you did go as far as to say that [inaudible] i assume there is a trend of opinion that this may be an

action necessary to take. >> i feel that it was mentioned that it is the time to ease gently. the rest of the committee had decided neither to extend the stimulus nor withdraw it. whether it will be true at the next meeting or subsequent meetings, time will tell. we have not made up our minds yet. monetary policy has never played the game of trying to signal in coded language what is already decided. >> do said you did not think it was the proper it -- inappropriate [inaudible]

>> there are big risks on either side and the most likely outcome with words being crystalized. it depends on how much weaker inflation pressures will be. it would be appropriate to loosen monetary policy, i think. >> i was struck by something and this article in the press. the reason why fiscal consolidation is necessary and important. [inaudible] the rapid deterioration among constituencies of households of

savers and investors my understanding is an overwhelming majority of industrial countries entered uncharted waters with confidence potentially at stake. do you recognize that? would you go as far to say that confidence is at stake? >> consumer confidence is uncertain. i would not use the same words but to individuals never would. i share the view that we are in uncharted waters and there is uncertainty about where things will go. the key point behind this that has been brought up is if greece had taken action earlier, it

almost certainly would not have been necessary to do as much as we did. that is sad and unfortunate but it is true. we have to get behind the perception that we are on top of the fiscal issues. in the u.k., people look to the u.k. and said in the real world, we do not expect to see many convincing statements on fiscal policy before the election. afterward, we do. we were given that grace and that opportunity. after the election it was clear that markets were looking for action to spin out. they are supposed to do this. gradually, over a period of time, to get back to a point where it is possible to say that the ratio of debt to gdp would fall back again.

that is a sensible position to have and the general strategy applies to all countries. >> back to businesses. you particularly a highlighted the small and medium enterprise businesses. the two big employers in my city are all in the public sector, hospital, university, the majority of the small and medium-enterprise businesses. in your report, you mentioned the weakness of bank lending in the past year. you are saying that there is uncertainty about future supply and future credit. i might be unfair to say do you

share my disappointment but this seems to be only a report in a situation. are we waiting for the market to solve it or is there anything you should be doing or the government could do to actually get this right? whenever we rebalance the economy, this is a key part of it. when we lose public-sector jobs, that moves throughout the economy. it is important to get investment and the banks are clearly not playing their part. >> i share your concern. you put it very clearly. i share that concern. i did not think the monetary response that we can make helps the particular challenges for small and medium-sized enterprises. we can provide a degree of monetary stimulus and that is

exactly what we have been doing. while the banks are restructuring, there is a real adjustment going on. the banks will have to adjust their balance sheets. there are two things to be said about that. there are new capital requirements. the weakening is sensible to bring those and within the transition period. i do not think it makes sense to push banks to adjust to quickly. that will make it more likely that they will reduce finance lending. the point that i have made to the government is to think about that. this is true of all publications, at the time, balance sheet growth needs to be

slowed and capital needs to be built. paying out large amounts in dividends or compensations to employees is not getting them to the point where their balance sheets are stronger. it would seem to me that it would be better if there was less emphasis on distribution weather in compensation and building up balance sheets so banks can get back to a point where they can land. -- can lend. >> when we were in the middle of helping the banks survive, i was under the impression that we signed an agreement with banks that they would lend at given levels. i think the committee was skeptical about it. the bank said they would do with. -- would do it. it was clear there was an agreement signed.

is there any scrutiny -- did these agreements exist? was there scrutiny? does your organization have knowledge of this scrutiny? if we rested of these banks with a regular taxpayer money and we ask them to do one particular thing and it is clear it is not happening to the extent you and i would like to buy it is effecting people out there in the street, is there a way we can actually put some pressure on the banks not out of good will but out of an agreement they signed? >> you are certainly right. the agreements were not effective in achieving the objective set out.

the agreements are now specified in terms of gross lending and those will not be effective because what matters is net lending. what can we do? i think we have to understand the pressure the banks are under. i do not think the banks are deliberately trying to be difficult. i think they have a weak balance sheets which means it is expensive for them to borrow money to lend. we have to understand that banks need to improve their balance sheets. that is one thing. we should also encourage a new entry into the space. i think we should try to have new ways of transferring the investment into savings by going around the banking system and increase competition to the banking system which is desperately necessary. there are plenty of ways to make long-term refused -- reforms.

in the short run, if we want to achieve anything, the instrument at the disposal of the government is to ask itself what is the role of state-owned banks? understandably -- there be heading understandably because those are the instructions they have been given. i think we do not want that to happen. this would be a way of doing that. it would affect the way people see these banks in the long run. i think we have a panoply of instruments to put together a range of things to encourage competition to the banking sector as well as within its and ways that the government can offer support to the sector.

i have great sympathy with the point you make. we do need to be rebalancing and that will require a shift of jobs from the public sector to the private sector service small and medium-sized companies can succeed. >> we are beginning an investigation into increasing competition within the banking sector. you said the only instrument available apart from state-owned banks to the government was to act. you therefore barred ruling out the prospect of profit tax. >> it is not for me to decide. that is a fiscal matter for you

to take up with the government? >> so there are other instruments. what's the question is what is the instrument. i do not persuade or discourage the banks to change the judgment about the amount of money they're willing to lend. i am happy to leave it to you. >> [inaudible] >> coming under the scrutiny and we are agreeing around the

table. >> we encourage them to get out of london and go to the country and see what is happening. the thing that makes them angry is there are businesses that are often owned over many generations and they are trying to maintain long-term relationships with their work force and other companies and they have had the same banking relationship for 80 years and out of the blue comes a letter turned out by a computer saying the terms of the relationship have changed. they cannot think that is a sensible and fair way to operate the relationship. i see many of these. for the banks to say there is no demand for credit, that is not an adequate response to what is happening. i understand the problems that banks face. their balance sheets are a mess.

they are having to adjust. we should not stop them adjusting. they have to adjust but they have to understand what is going on with client relationships. and the only way we can respond is to not prevent them from adjusting but make sure that we are encouraging new banks and new sources of finance because it is a threat to those banks. if people jeopardize relationships with clients, they will lose business. we have to make sure there are other sources. it is just heartbreaking sometimes. it is a lot harder to run a business than it is to sit in london and trade and make millions one day and lose millions the next. it is a very tough job to build these businesses. i believe we need finance of

that respects the needs for those longer-term relationships. >> [inaudible] is there any evidence that would help support the instruments in place for regulation? did you have transparent evidence of what is going on to help the public and banks understand the situation? >> you can put them all together and talk about it. what can we actually do? increasing competition within the banking sector, promoting new entry, alternative sources of finance, these are things

that can help through it. i think these are questions for you in terms of economic growth. [inaudible] in terms of emerging economies growing more quickly and more developed economies being sluggish, what is the shape of the world? >> you expect emerging market economies to move more quickly. that would be the natural progression. it is when the crisis hits where every country of the world suffers a lack of confidence at the same time.

there is something of a difference between what is happening in western europe and what is happening in emerging market economies. they have not had quite the same problems they have had with the banking sector's this time around. at the moment, the asian economies are its strong driving force in the world economy. china and india are very large countries that are growing very quickly. that is expected to continue. >> [inaudible]

each of these countries has its own individual scenario. china has a much more direct command. >> the confirmation of that growth plus the difficulties and other areas [inaudible] could use the problems? >> the problem with the u.k. is the area of growing quickly as exports. a strong export market. half of those exports go to europe.

we have not had a strong of presence in places like china and other emerging countries. that is an opportunity we should take up. >> this was going to be predicated on starling being down against major currencies. on the ability of the u.k. to export? >> it takes some time to be quite honest. four years would not be unreasonable. it took many years to have any effect on u.k. exports. it is difficult to ensure that properly.

we should be starting to see it now. we think particularly in the initial downturn, probably that was not the time when you take companies would be trying to match benefits. it would be time to take advantage. >> a question of the exchange rate and fluctuations. you seem to be taking some of that margin to encourage businesses to reduce the price of exports based on the fight with some of the market. >> it should be up to them. [inaudible] >> i am told we are running late

so we have to move quickly. i must make the observation that your comments on thinking reinforce my judgment that stripping retell from investment-banking is the only option. on page 45 of the inflation report which was published uiin it said it may be needed to avoid unnecessary increases of pursuing public debt. in june, and the house of commons, the business secretary said the leader of my party talked and received uncompromising and unequivocal that the incoming government who

we did not know who they would be put have to act immediately and decisively on the budget deficit because there was a serious threat to this country. did you think your advice is achieving the desired effect? >> the advice i gave was for the inflation press conference. three days after that, i had one conversation. judge who decided when about their attitudes for the fiscal policy. you will have to ask people about that. i have a comment that the press conference in response to public requests for the new government to say what advice would i give

and that is what i said. >> my question remains the same. to you feel the advice you gave in public -- >> fiscal policy is set out clearly does show the ending of the horizon to which it demonstrates the ratio of debt to gdp beginning to turn down. >> you have your foot on the accelerator. that could result in us going around in circles. what do you think the impact would be of the fiscal consolidation of the private sector and how fast will it be able to recover? >> i think we have to wait

until august for the overall judgment. they have taken the position and that it can be positive and not that far away from our trend but it will take a long time to get back to the capacity. and i think the reason for that is that there is a real adjustment going on by which i mean not something monetary policy can prevent, the rebalancing of the economy includes many parts. the switch from consumption to exports and investment. a reduction of borrowing and the reduction of debt. experience suggests that after a national crisis, it takes many years of relatively slow growth before we get back to normal.

i did not see any reason to deviate from that historical experience. in many ways, what is striking is how close the recent past has been to the response to the previous financial crises. i do not think we should expect excitement. >> could i ask you one question. why is it so uncertain? >> we knew what happened to demand. it has fallen a long way. it is below where it would have been if it continued. it is good to know what happened to the supply side of the company.

it is very difficult to see the whole factory state) -- closing. >> use it wrong this morning -- >> it is not the most likely outcome but the worry is high inflation could have the potential for a long time been built into expectations of what the future might look like which is then reflected. i believe it is a risk but not

the most likely outcome. i think actual wage settlements remained pretty level at 2% or less. that will be one reason inflation is moving toward the target level. i do not think the most likely outcome is that but there is a risk where inflation will go. >> once inflation becomes ingrained it is very hard to remove. >> absolutely. a bad and difficult situation for the country would be one

where people came to believe that inflation was consistently set above the target level and is billed and to being reenforcing. that is a risk we need to go on. >> say if immigration [inaudible] presumably there would be upper pressure. >> i think the question would be why immigration would be falling and if that is because there is a degree of slack in the labor market denigration being lower than you might think a few years ago, i think it is actually responding to the slack. >> at the moment, you did not

see any sort of legislative intervention as being necessary? >> it is not a question of money policy to be honest. the labor market and the u.k. has worked pretty well because we have seen a rise in unemployment in the u.k. which is probably a lot less than most economists would have expected given what was put out. there has been a degree of flexibility. one thing that has struck me is how many countries and say it was severe in late 2009 and how companies and their work force were managing their way through without the scale of things you would expect given the downturn. temporary wage freezes and the like.

>> i would like to return to emerging markets and china. [inaudible] is there a danger we are overlooking the chinese economy? >> i would not single out china. there are a number of economists. the biggest for in the world are germany, japan, china. that requires people to run a trade deficit. countries like spain. that cannot go on. we are adjusting.

it cannot continue based on the export model. one way to reconcile this to have a weak level of world demand although there with the conflict began. i do think that one of the biggest challenges at the g-20 is to face up to the fact that unless there is a genuine acceptance around the table that refinancing applies to all countries, we will end up in the end with a very weak [inaudible] this is a major challenge and i do not see any solution to it. i hope that we will one day get to there. >> there were dramatic increases from 0.1% to 2.0% up to 4.3%.

the reduction in the structural deficit is predicated partly on the tax revenues that the increase will bring in. how realistic is that that inflation will be kept at 2% with that projection of 5.3%? >> you will have to put the details to those who made the forecast. when the regime was started in 1997, we were talking about the inflation target being completely compatible with earnings increases of about 4.5%. what is interesting is how low it has been recently with no immediate sign of picking up. there are certainly, as you can imagine, weighs where financial

positions could be used to bid up wages. the generalized rise, i did not think there is enormous evidence for at this stage that we will have to be very careful for looking for it. i would be skeptical that this is a period in which we could expect to see which is to pick up. but you cannot be certain. [inaudible] with the production of such a high increase, monitoring trends in immigration, exactly

who is taking the new jobs. >> indeed. one difference we have found in recent years is the inadequate data we have on migration both in terms of when numbers are coming in. one explanation for unemployment raising less than we expected increase of the scale of the downturn may well be that many of the migrant employees were coming to the u.k. have returned home and are no longer working here. it is very hard to judge the data. we have been generally surprised by how muted has been the response of and planned through the downturn -- of employment through the downturn. the opposite occurred in the u.s.

i do not think it is easy to find explanations were dark compelling at this stage -- that are compelling at this stage. it would depend on how far we expect to see a recovery due to increases in employment. >> [inaudible] inflation has been above target for 41 of the 50 months. you sit we can come up with clever reasons to explain that you but some people say that inflation seems to be different than it used to be and it is a substantial risk. are we at that point or passed it? >> that begins to feed through some of the underlying processes

like wage increases. [inaudible] we are at the point where we have to think one or two years ahead. the economy could be weaker. i certainly feel that people experience inflation and it is an important factor in their judgments. the credibility and inflation, i think we need to take that seriously. >> are we at that point? >> point at which people will say inflation seems higher than it used to be? >> looking back, i think they could make that observation. the question is how does that

affect their behavior is going forward? inflation is petitions were pushed down after the initial shock of last year and they have come back to more normal levels. the trajectory has been upwards. that is one of the reasons why we need to begin gradually talking policy so we are not in a position that is difficult. >> inflation has been consistently underestimated for so long, how can we be confident that you are not underestimating inflation with quantitative easing? >> we cannot be confident about anything. inflation is on the upside. it has been consistently in the recent past.

oil prices are substantially higher from where there were two years ago. after our initial assessments turned out to be incorrect, it looked that the factor of depreciation of two and a half years ago were down 25%. they have been rather larger and faster than we expected. we formed a judgment on that. people expect to set [inaudible] we certainly think that is one of the reasons why inflation turned out stronger than expected. we are in a world where there are several factors that drive

inflation. the exchange rate, [inaudible] this was only a discussion touched on. it could be very large. getting the estimates of the responsiveness of inflation to the output and exchange rate led of movement.mount we certainly cannot be confident looking forward about exactly where inflation is going to go. >> how can we be sure you are not under estimating inflationary pressure due to quantitative easing?

>> we cannot be sure. there is no way you can be sure. the only thing you can do is make the judgment with the information we have available about policy actions. the impact that we talked about earlier and providing our assessments. in terms of the impact on the economy which is what we are trying to assess, some years down the road -- it will be some years down the road before we can assess the impact.

>> thank you. [inaudible] we will take a short break now for eight minutes and start again soon. >> we will try to keep this session brief. i hope we can finish but the clock 30 -- by 5:30. in order to understand how this new system will work, but the bank tells the treasury today that we need to rescue a bank before the markets open up

tomorrow, the chancellor is in charge of all decisions related to the use of public funds. >> i would very much hope that an extraordinary calamity like the one that hit that we would never get into a position where i would be saying to the chancellor i am sorry, i've got -- i forgot to tell you before but you have to do something before markets opened tomorrow. part of the framework is a very clear statutory obligation on the governor to keep the chancellor informed of any developments that might have implications to using public funding. they should avoid the position, which i am sure distant memory can recall, a situation where a chancellor fell he had no opportunity to change the course of events that led to that.

>> what will be the practical mechanics for the chancellor been in charge? will he share at meetings? >> no. that is exactly what he seeks to avoid. i had a long discussion with the chancellor about this. i said what is the real substance of concern? what became clear is to ensure the chancellor did not want to be sucked into individual decisions but did want to make sure that he would never be put into a position where the bank says to the chancellor you need to take this action by 5:00 this afternoon or 8:00 tomorrow morning and we devised a process in which there are six- month meetings between the chancellor and the governor and others where i would be saying

all of the range of activities which come under the bank from the pra to teh ftc including the mpc, if there are any requests for action that require indemnity for executive decisions for the bank. what implications could there be for public funds down the road? this record will be made public. above that, the overarching strategy so that exposed, this committee could say to me what did you say to the chancellor? there will be a private written record which will make it absolutely clear what the communications were so no chancellor would be put into a position where he would be asked to make a decision unless circumstances made it

inevitable. >> that is a very helpful initial clarification. you will be very powerful now as a consequence of the addition of these responsibilities. what assurance can you give us and the public that accountability will flourish in the democracy? >> this is a monumental point to the arrangement. i do not think that i will personally be powerful and that all of the decisions will be taken by committees or groups of people. fpc, pra, it will not beat me but those bodies. the institution will indeed be powerful. it is crucial but there is proper accountability. accountability to parliament, the government, and the public.

i would differentiate that from the industry itself which is often an excuse given to lobbying as to how the system should be. fundamental accountability is to the government and the public. that we would speak with all members about their responsibilities. i think we have a track record. [inaudible] has been highly accountable in public. i can personally say it has not been a body that has been a centralization of power. i have been a minority only 15 times now.

that has not affected the effectiveness. it has danced heat in credibility -- enhanced the credibility. i would like to argue we could deliver that with respect to other bodies as well. >> do you want to charity new policy committee? can you explain what happens [inaudible] the monetary policy committee decides to take credit? listen or tolerate the same instruments. what we saw was the failure of having only one instrument because [inaudible] to ensure there was a balance between supply and demand.

what we saw was an unsustainable leverage and credit expansion. two-thirds of the credit creating was not to companies or households. they will be focusing on that and there is not an instrument available. i think the actions taken -- the assumption they have been tightening would make it easier to take these decisions. i see them as complementary. >> you don't see it circumstances they could be working against each other? >> i don't think so.

[inaudible] that may well make it possible for the monetary policy committee to take a different decision. [unintelligible] will be high and have a is not one i am concerned about. >> should you chair both? i will not be making the decisions. we have a track record of that -- it is only chaired.

>> we will return to this issues shortly. >> in addition to these new bodies, [inaudible] [inaudible] we touched on that earlier. these structures are very different. how do we negotiate [inaudible] how will that function? >> [inaudible] i would expect to be on that. that will bait discussing the risks, similar to the

discussions we were having nationally. -- when it comes to regulation and the new authority, prudential regulation of banks -- the new standard will be embraced and they will be binding as a minimum. i have no concerns about an that as a commitment standard. this is not tough enough. at that point there will be no discretion for them to adopt this judgmental approach to

regulation which is the purpose of these reforms. the benefit of splitting the consumer protection from the provincial regulation is they are naturally different. the other should bay very close look at the balance sheet risks and the judgments mid which can result in decisions [inaudible] it has to be possible in our view. i will be -- if we got to appoint [inaudible] the national regulator had discretion removed. >> [inaudible] are you have paid the banks --

[inaudible] to the extent they need to [inaudible] >> have a has never been a word used. in the number of meetings and frequency of them is a massive program -- not just at the european level, but the international level. people are trying to get to the end point to quickly. many decisions will be better made in a more relaxed time frame. we do not want to lose the

momentum for change, but i would be happy if we could take the time to implement it. >> [inaudible] the bank did not blow the whistle. why do you think you can do better than that now? we did [inaudible] both within the banking system and the shadow banking system. [inaudible] there was a lack of a systemwide perspectives. a lack think there was

of analysis, there was a lack of action. this problem was replicated to a greater degree around the world. that is thek decisive change complemented by the government. we will not just work [inaudible] we will look forward over time and ask is this becoming stretched? should something be done to lean against [inaudible] [inaudible] leaning against improvement credit bends.

this tools are lacking in the past. had they talks been there we would have done a better job of analysis, but the basic problem was one of lack of instruments. >> there was one indication [inaudible] [inaudible] [inaudible] this is a question for [inaudible] [inaudible] how will you be taking [inaudible] >> that is a misunderstanding.

one of the things i did when i was appointed governor was to ask [inaudible] the day you start to build a market intelligence function. i would look carefully at the way the new york fed operated. it was a very successful market intelligence function. we have people who had a great deal of knowledge about all aspects of banking. they were not believe -- written people whose expertise was in economics. [inaudible]

we need to move away from the idea that having people [inaudible] we need public service in the area of regulation, people who understand banks [inaudible] believe you understand the risks you are taking. [inaudible] >> the central banks have [inaudible] this of quips them with extraordinary [inaudible] [inaudible]

every other significant government agency. the the new york fed [inaudible] about reconnecting that second endowment to stability process. there are lots of things we have to improve, but i don't think anyone should be concerned we start off in some ivory tower. >> do you think your ability to attract [inaudible] >> in the long run it enhances

our ability to -- opportunities to move around. >> [inaudible] [inaudible] >> there is [inaudible] to put much more of this activity throughout central party is. one of the things we will do -- possibly through exchanges for trading platforms, but also through a process that nets theses to a smaller number so it is possible to see clearly where the exposures are.

this has gone far beyond anything sensible. it could have been avoided if the authorities stepped in half a decade ago. >> i don't know what it will be. in need to be much more alert and determined -- [inaudible] >> i had the privilege of working with your predecessor to stop a run on the banking system. derivatives trading [inaudible] it was agreed directors of banks [inaudible]

my question is accountability. [inaudible] it was apparent to me that he felt personally it was him alone [inaudible] do you consider it would be [inaudible] could you expand on that slightly? my experience was he felt it was only done to him. think that is an accurate description of what i said. if there was any suggestion of public money -- on saturday the

chancellor decided no money would be made available. i would be with a team of people around me. we would have better infrastructure involved and it would be easier now for the committee to say tell us what happened, when did they meet, and they would be here at this table to ask them. that is a better infrastructure. not to take it upon myself. >> that is very comforting. do you think the dodd-frank legislation is an opportunity.

is it an opportunity for us? >> i don't think we should [inaudible] as an opportunity for us to lower standards. that was one of the views that led to the critic amend. ,illary's should ask ourselves what is the right framework to have? their outcome is a different provision that is massively long and it reflects a large amount of lobbying. i hope that this committee will be able to resist some of the excessive lobbying that will rain on your heads.

we need a fair regulatory framework. >> do you agree that regulation has trumped competition? >> they too big to fail problem is a complex problem. banks have become large and governments feel they have to support those banks. it cannot be the subject of one or two simple measures. we need to see a change in the whole liability structure of banking, so it will be possible to put in place resolution recovery plans. we should not believe we can do that quickly, but we must

believe we can do better we were able to do. >> we will do the best we can. you need to get me [inaudible] >> we will indeed. >> [unintelligible] can i ask you a couple of general things. you did not want to expand your entire so you could take part and [unintelligible] he was surprised by the lack of interesting issues related to the financial markets.

would you like to take the opportunity now to set the record straight? want to get involved in arguments about who said what, but after -- i supported the changes then. it would be good to avoid the repetition that can come from merging banking supervision. i changed my mind after the crisis and when i saw that it seemed to make no difference to the degree of contamination. when big banks got into trouble the central bank was drawn in to dealing with the capital of those banks.

when i came to form a different view -- it actually it would have been sensible for us to [unintelligible] the lessons of the crisis were that monetary policy was not sufficient to ensure a stable sector. the people running fsa were under constant pressure to deal with consumer oppression. at the time when there appeared to be no problem in the banking sector. the twin peaks approach was the right way to go. i have come to the view -- i

have done everything i can do to do the opposite. i come to the view that is sensible to do have regulation in the central bank. all aspects are well away. >> [unintelligible] since he took up your post in 2003 that the impact of the financial crisis on our banks could be averted? >> i think it was global in nature. the underlying causes, the massive capital into the banking system, that was still [unintelligible]

i think the massive expansion of the financial sector would probably have taken place to a lesser extent, but the financial policy committee would have enabled us to focus on that. >> what is the point? i suppose your answer is the reputation. >> having the financial policy commission is having the instruments, not a group of people who can say capital requirements must be higher. the instruments are to make judgments and it suddenly to say

all requirements should go up or down. it is appropriate to have a separate committtee make that judgment. >> [inaudible] >> you will have to form that judgment. against my wishes, it is sensible to have the authority, but not consumer protection. it is sensible to have a financial policy committee. it is sensible for us to attain [inaudible]

we will be crating a powerful institution. the accountability is to parliament and the government. >> [inaudible] the balance of responsibility -- [inaudible] are you comfortable with that? >> [inaudible] 1 of the great lessons of the reform was having clarity of responsibility was the key to successful policy.

these responsibilities in the bank and they do not put consumer protection -- the responsibilities are limited to provincial. clarity of responsibility, accountability, asking the central bank to do what it can do. >> [inaudible] are there any areas are you -- [inaudible] >> this is something we could discuss in the future. you will hold us accountable, there will be great transparency.

the mechanism is adequate, but nothing can work unless it is clear who is responsible for what. the virtue of this document is it does make clear who is responsible for what. you may prefer a different style, but if it is clear who is responsible for what. >> [inaudible] they are discussed not just in the wake of the process, but when things are calmer. after months of banks have failed. how else could this have been avoided? it could have been avoided if there was a public discussion year in and year out.

>> you said clarity of responsibility. it sets of the authority in peace time task in crisis. do you think the division of responsibility have sufficient clarity? >> [inaudible] 4 it is important we know in advance his attitude toward the use of public money.

the responsibility is fair and square. >> [inaudible] it is pretty straightforward. there might be different components in the bank. [inaudible] >> the composition of the boards and committees will prevent any underlying because bank executives will be present. there is enough there that it is important -- those appointments will be made in due course.

neither will exist in statutory form until two years. it is sensible we have time to get it right. we are talking about 2012 at some point. we must get it right. >> one quick question, i am interested in the events surrounding [inaudible] which had the misfortune to come in the middle of the development process. >> when you have a bank like that. who is monitoring it?

how will we have that kind of failure dealt with in a more appropriate way? >> it did not bubble up over 48 hours. that will become paid to the extent -- that will be conveyed. one of the things he referred to was any individual institution -- [inaudible] that is true, but one would expect small institutions would not [inaudible] in that crisis they can, but

they would spot and it initially. they know they have a responsibility to refer it to fpc. there would be a report as an institution or its representatives. >> thank you. >> [unintelligible] [unintelligible] he left as an emperor. [laughter] >> i must return that to you. >> i want to touch on the [unintelligible] we have never been persuaded

[unintelligible] i am uncomfortable. it gives a sense [unintelligible] it is not big enough. it might be unfair on the market's part of the business. [unintelligible] would you care to comment? >> you can reasonably argue for severed body is doing market conduct. i don't think market conduct should be on the bank of england. this is a natural enforcement --

[unintelligible] understanding what is going on in the drawing into the market. there are ways of handling that. the regulation should not be in the bank of england. it should be a standalone [unintelligible] or part of an overall body with two branches. it will be sensible to consider having separate sessions. they are very different regulations. they should be considered separately. that is a matter for them who will be running it. >> [unintelligible]

1 of the things that was noticed, was the way [unintelligible] what is the prospect for the cost to the industry? but the running costs in the future. are you intending to see this as [unintelligible] or more? if you could tell the committee. when you set the levy on the industry [unintelligible] [unintelligible]

is id unilaterally agreeing with yourselves? >> i don't know the answer to that. >> i asked you a question and you said you don't know the answer. >> i would be happy with the agreement. from our point of view i would hope we could produce cost savings because i think focusing on judgments needed does not require vast numbers of people. you need the right people with the right focus and commitment. it would be wrong for me to pretend we can guarantee any particular figure on the budget. i don't know how this will be

run, but i hope we will be able to make a reduction in the overall cost. >> [inaudible] [inaudible] [inaudible] [inaudible] they will be responsible for [inaudible] [inaudible] who is regulating one side.

is this a sensible way of approaching this [inaudible] which is about the global derivatives markets. [inaudible] without seeing [inaudible] >> is sensible. >> they are mechanisms for disturbing financial risk. the systems involve huge amounts of credit and the transactions bring all the risk together. they dispersed it again. if either of these get into difficulty it will

[unintelligible] the fact that those parts worked well throughout almost everywhere in the world is something we should be thankful for. this crisis could have been worse if the infrastructure failed. we will have an interest in how securities are traded. not just before enjoying the integrity of the system, but the integrity of the system in an honesty cents. they will have to be cooperation in this.

they are not going to approach this parallel universe. it will be very odd to leave clearinghouses outside. i would go further personally. there is a greater [unintelligible] it would be very hard to take excahnged away. we would have an impoverished regulator. >> [inaudible] [inaudible] [inaudible] >> questions about [inaudible]

the process of moving away from the fsa. [inaudible] which is [inaudible] [inaudible] do you think there is a risk we could lose that intelligence? >> i think [inaudible] is of enormous importance. and i was trying to persuade him he might change his mind and see this enormous new challenge. we have to work very carefully in the next two years to insure

the best come together. we have transition teams in place and resources devoted to this. >> [inaudible] [unintelligible] there is some concern about transitional issues and change with quantity. is that a concern? >> we had a very strong team of people. we are putting up together [unintelligible] if it is our task to insure we retain motivated teams of

people. we have to work hard on that. what i have seen so far does not make me worry we cannot do that. >> there are issues raised about the [unintelligible] one of them will be in relation to remuneration. [unintelligible] how do you seek to deal with that as a way -- [unintelligible] could salaries are one of the attractive features -- good salaries. >> it will be an integral part of the bank of england, but no individual transfer will be

required to accept a d eterioration. in the long run we will have to work towards a harmonization. this goes along with my view that what we want to do is to train people who see the professional motivation in life is the key thing. it has worked perfectly successfully in other countries. >> [unintelligible] you mentioned about state central banks and are talking about culture. it will be a different culture. do you see that as a difficult transitional issued? >> [unintelligible]

that will involve a change of culture. this does involve infusing it with people who have greater experience with the industry. it will be a challenge and is particularly important when you look at banks that have failed, [unintelligible] to challenge senior management appropriately. [unintelligible] it was a global origen to this crisis. and it was a function of the way the banks were being run. >> do you agree with the

governor that [unintelligible] [unintelligible] [unintelligible] >> this is a sufficient level of turnover. this is a transition period. there is a degree of overlap in the sense of how we have had to respond. the response to that has been over. the reason is when a bank gets into trouble and turns up at our door and the says we need assistance, we have to understand that.

25 million pounds tomorrow. [unintelligible] we have to have a deep level of understanding. we have learned lessons from the past three years. we cannot be ignorant of the circumstances. [unintelligible] you have to understand the [unintelligible] >> as it crossed your mind -- has it crossed your mind -- >> [inaudible] there is -- i am more concerned with what i am learning. i don't think this is a relevant consideration.

i have often said that if we need to get an expert and pay more, we should pay that person. there is no reason where the bank should earn more than the employees. >> [inaudible] >> considering the statement of new york civil servants [unintelligible] when it comes to their own pay, how are you going to stop poaching of such people in future years at a time when their value becomes incrementally greater by the year? when some institutions might

want to use inside knowledge to push boundaries further? >> you will always lose some people, but we have learned what you have to offer is a combination of low level of remuneration. if that was the answer of the story we would be [unintelligible] going with that is a desire to want to deal with challenges that come with public service. this is difficult work that we do, but it is enjoyable. we have that enjoyment combined wic a level of remuneration that says that is a good combination

for may. -- for me. we are now going to expand. >> with this new strength and [inaudible] you have used accountability three times in the last hour. talk about transparency. one of the limits to transparency -- particularly historic late? -- historically? [unintelligible] it would be interesting to see the internal discussions in the few weeks after the crisis hit you. what the discussions were banks

what the different people in the bank thought? [unintelligible] when a comes to the mpc, we can see that. there are minutes and the chance to explore the nuances. what is the role for increased transparency so we can learn some of the lessons to assess in the debate that was absent in the past? >> there will be a published record update discussion that will set out the balance of arguments discussed. you will know what were the arguments we were debating. you will be able to ask us to

explain this. on the pra, what we cannot do is put into the public domain information about a bank that almost failed and it did not. whether our [unintelligible] you will be able to quiz us on what the arguments for and against our. there will be transparency -- when dealing with individual cases there is a difference. the mpc is never dealing with information in the private domain. if all the information is available to you. what is your judgment about

where this goes? in forming policy debates and assisting parliament, there are huge commercial sensitivity is. there comes a time when the production of historic information -- not necessarily 25 years, perhaps five or 10 years, does not have that sensitivity and would inform current debates, including whether the bank was up to the job and whether that is a structural issue. it seems that is vital.

should consideration be given what stage such confidential and permission should be made to allow that prospective to be considered? >> it is for you and the parliament to discuss the balance for the arguments of protecting confidential advice. having the ability to look at the past. that is pretty close to the debate which was had on the 30 year rule. that has to be a decision for parliament. one of the things i did in a bank was due put in our report his statement made very clear that on any lender of last

resort, when it became possible to reveal details without jeopardize in the operation, it would be made. -- without jeopardizeing. that has been formalized with a private briefing to the chairman of this committee. it is backed up by a clear undertaking from the bank. we would publish the details of the operation. we have made clear what we actually do. >> we should consider some thought to it in the near future. >> thank you very much for coming today. we have managed to get back on schedule. we will be publishing our

inquiry into this huge subject. we will want to see you again before we come to our conclusions. i know you want time to think this through, i agree with that, but note the tight deadline. i think we need to send a message to the government, i hope they are listening to you and i am sending these same message. we may take longer to finalize our views. you have arrived as governor, but you do have profits we will be quote -- keeping a close eye on. >> the u.s. senate is debating the nomination of elena kagan to the nation's highest court.

we are getting a live look of the senate floor as sheldon white house is speaking. >> what were the telltales be that you have an activist court? >> debate is expected to last until 8:15 eastern. a vote is planned for later this week. you can see why your senator has dead -- said and which senators announced their support or opposition. that is at c-span.org. today is primary day in three states, kansas, missouri and michigan. >> c-span programming, politics, books, history is

available anytime on c-span radio, and nationwide on xm satellite radio channel 132. online at c-span.org, and into c-span radio on your phone through a partnership with audio now. just call the number on the screen. is it is free, but check with your phone service provider. c-span radio, even more available on your phone. >> every weekend in august, "book tv" returns to book festivals we have been through. seat talk-show host tammy bruce in la.a -- in la. the annual meeting of historians

and libraries and freedom fast, amonte filled with authors and books. -- a month filled with books. >> topics at today's white house briefing included a political fight over the bush tax cuts which are supposed to expire this year. penalties bp will have to pay and the economy. robert kids speaks with reporters for almost an hour. . .

>> but seriously? is that -- are you trying to bring us down a little bit here? >> what's the big deal about all this? >> brother, you're asking the wrong guy. take us back to seriousness. >> in the gulf, obviously the static kill procedure, trying to move forward with that. and i know you've said before that the president gets updated daily, i think. i assume that's still true, right? >> yes, it is. >> is there anything special about now that they may be coming to the end of the leak -- anything special about how he's getting updated, by whom? >> well, i know secretary chu and others are down in houston today. i think he will likely touch base with them at some point -- i don't have the schedule in front of me -- but likely at some point today speak with secretary chu and others that are in houston and are monitoring the activities. i think it is important to know the static kill, injecting the mud into the top of the well, is certainly one part of the long-term effort to finally kill the well.

that will be followed by activities at the bottom part of the well. and then ultimately, as we've talked about, the permanent solution is still the relief well that is ongoing. >> so you guys wouldn't be sort of declaring victory on this until you get the relief well done? >> no, no. again, i still think that -- and the science -- the scientists believe that the long-term permanent solution is still ultimately the relief well. look, i would touch on a few things over the past couple of days. obviously it's always good news that since the sealing cap went on some weeks ago now, oil has not been flowing into the gulf. i would point out the release put out by epa yesterday on toxicology tests, which are important, surrounding

dispersants, and that -- and their findings, and their continued testing by epa, noaa and others to ensure that we're monitoring that environment, all of which is tremendously important as we move forward. >> let me just switch topics quickly. we had the iraq speech yesterday, the first of several, i take it, planned on that topic. we have a second round tomorrow on the developments in the auto industry. what are some of the other topics that we should expect to see the president focusing on as success stories, good news, achievement kind of -- >> well, let's say that -- now

that you mention those, let's just touch a little bit on them. i mean, obviously the president -- and i think many of you that covered the campaign, regardless of which campaign you covered -- without a doubt, i think it is safe to say that the president's plan to remove our combat forces was among the most hotly debated in both the primary and in the general election. and i'll be honest with you, i think if you look back at what was said over the course of many months both during the latter part of the general election, during the transition in the first part of the administration, i think many people believed that having -- changing the mission away from combat by august 31st, 2010, was likely not doable. that we know now is on pace to

happen. some 90,000 troops will be pulled out, along with 2 million pieces of equipment -- pulled out of iraq by the end of this month. you mentioned the president visiting on thursday the ford facility outside of chicago -- >> thursday, not tomorrow -- getting ahead of myself, aren't i? >> right. and, look, we've spent a lot of time on autos here both in the briefing room and certainly in the west wing. and i think we are still encouraged by what we see in a newly revitalized auto industry. we're getting auto sales figures today. gm's were out earlier and showed an increase in sales, not just from last month, but a more than 24 percent increase year to year, which i think also gives you a sense of making overall economic progress, because the discussions that we were having about the auto industry was in many ways predicated on an economic environment where you were selling -- going from a height of selling 17 to 17.

5 million cars a year down to selling, during the height of our economic downturn, sales that approached 9 to 9. 5 million. now we're closer to -- on track for closer to 11 to 11. 5 million, which means that the investments that the president and the team made in the auto industry and the hard work of the workers in those facilities has led to a strongly revitalized auto industry. look, i think that the president will continue to talk about the steps that we took to revitalize the economy, the steps that have been taken to make us safer and more secure, all of which he'll spend some time over the course of the next several months reminding people. >> are there are other sorts of achievement areas or specific achievements that he intends to kind of pluck out and talk about in a way that he has these as we get closer to november? >> yes. i mean, look, i don't have the

schedule in front of me, but i anticipate that we will spend, as i said, a bunch of our time over the course of the next several months or at least some of that time reminding people of where we've come from. that will definitely be a big part of our fall. yes, sir. >> a couple questions. on the international front, israeli and lebanese forces clashed on the border there, five dead. what, if any, message does the president have for both sides? >> well, look, obviously it's a -- it is an enormously tense region. i think we have seen, over the course of the last several months, real progress in proximity talks and in building towards what we hope can soon be direct talks on a comprehensive peace. and we hope that the conditions -- conditions certainly throughout the region don't change that. >> is there any call for restraint on the part of the u.s.? >> well, obviously i think that

is something that i'm sure you'll hear out of the state department today as well. >> and on the domestic front, treasury secretary geithner was speaking today about elizabeth warren as a potential candidate for the consumer financial protection agency chief. how much closer is the president to making a decision on that? will he do so before he goes off to martha's vineyard for vacation? >> i don't know whether he'll make a decision on that before the 19th of august. i do not expect anything this week on that topic. i don't think anything is imminent. yes, ma'am. >> robert, two questions. first of all, president zardari told le monde today that "the international community to which pakistan belongs is losing the war against the taliban. above all, it is because we've lost the battle for hearts and minds. " when a partner like that -- a supposed partner says something like that, what does that say about where we are in afghanistan? >> well, i don't think the president would agree that -- with president zardari's conclusion that the war is lost.

i don't -- again, i haven't seen the interview. i don't know what he -- why he's come to that conclusion. but i think it is safe to say that the actions and the efforts that the coalition, international forces and american forces, have taken over the last several months have very much the hearts and minds of the afghan people at the forefront. and i would say this. the afghan people know of the brutality of the taliban, just as the pakistani people, on the actions that their extremist counterparts were taking in pakistan last year to move on the capital of pakistan is why the country of pakistan started to take more direct action against safe havens. so i think that the hearts and

minds of those in afghanistan and pakistan are obviously a key part of our strategy, as well as the hearts -- what is in the hearts and the minds of the extremists that seek to do afghans or pakistanis harm. >> just to follow up? >> let me go around. >> i just wanted to ask something a little off topic, a little more fun. the president's birthday is tomorrow. >> it is. >> any special plans? >> obviously we travel to chicago later tomorrow afternoon. we'll probably have more information on this later, but i assume that -- i think his plans for tomorrow are dinner with some friends in chicago. and i think he is looking forward to spending the night in his house for a change. >> he's been referencing his age a lot lately. he did it at the sub shop, talking about his slowing metabolism. he did it yesterday, talking about his graying hair. does he feel like the weight of the presidency is perhaps accelerating his aging?

>> i can't imagine that the weight of the job doesn't take a toll physically and mentally on anybody that does it. but at the same time, i think he's still -- i would say he's still in pretty good shape and is having -- is enjoying the job even with its many challenges. he knew what he was getting himself into in deciding several years ago to undertake this. there's no doubt that it takes an enormous physical and mental strain on making the decisions that you make, on sending young men and women off to war or tackling the greatest economic calamity our country has faced

since the great depression. but i know he greatly enjoys it, and it will just require him to get more frequent haircuts. yes, ma'am. >> there's a debate that's taking -- >> likely i'm going to hear about that. >> there's a debate that's taking place in new york city whether or not it's appropriate to build a mosque, an islamic cultural center, near the site of ground zero. what is the administration's position on this? >> suzanne, i've been asked about this a couple times. i think this is rightly a matter for new york city and the local community to decide. >> the president takes a position on religious freedom, on tolerance. why wouldn't the administration weigh in on this? >> well, i think we have -- i think you've heard this administration and the last administration talk about the fact that we are not at war with a religion but with an idea that has corrupted a religion. but, that having been said, i'm

not from here going to get involved in local decision- making like that. >> do you think the anti- defamation league has a correct point of view in saying, out of the sensitivity to some of the victims of 9/11, it's not appropriate? >> suzanne, again, i think it is a decision that is appropriately debated at the local level. >> on another topic -- mccain, coburn report that cites economic stimulus money they say has been mismanaged or wasted. they cite 97 projects out of 70,000. do you believe that this is good news, bad news? is there some acknowledgment that some of those projects actually might not be well managed? >> well, i think there was an acknowledgment on their part, in pulling a couple of their projects out of their report that weren't ultimately recovery projects. i think this has, suzanne, much

more to do with politics. i think maybe the best person for senator mccain to debate on this would be the chief economic adviser of his own presidential campaign, who not only weighed in on the president's recovery plan, but has in the last week written an analysis of what our economy would look like without the steps that we took. it's a report that instead of 8 million jobs having been lost, that figure would be 16 million jobs. so i think this is a -- look, every day, the vice president and the vice president's staff work diligently to ensure that projects that receive funding abide by certain standards. all of that is on the internet -- a level of transparency not seen in government programs, particularly those of the magnitude of this. and i would suggest that john mccain and his chief economic adviser during that campaign, i

think the debate is probably better between the two of them. >> do you it's a credible report? >> from what i've read, no. yes, sir. >> following up on that, for those of us who covered the mccain campaign, i don't think anybody thought zandi was actually the chief economic adviser. he was somebody who was consulted. and zandi has told me that he's a registered democrat. so, i mean, isn't it a little disingenuous to hold him out there as an example of republican thinking? >> because he's a registered democrat? >> well, they were reaching out to people who think differently. he is not the person who formulated the mccain economic plan. he's not their chief economic adviser. >> was he not a mccain -- okay, was it -- >> he was an outside adviser to the campaign -- >> he was a key economic adviser? >> no, he was somebody they consulted on economic issues. but, i mean, to treat him as the guy who formulated the mccain economic plan i think is just not accurate. >> well, i -- apparently, according to you, chip, he took part in a couple conference calls. i don't think either john mccain or mark zandi have portrayed their role quite as minimally as you have.

i would say -- >> but i'm just saying he was not the person who formulated the core of the mccain economic plan. >> well, needless to say he was an active participant regardless of his party registration on the campaign of john mccain. i don't think we're going to doubt that his support was for john mccain. and john mccain has apparently come into a disagreement with a guy that played a prominent role in his presidential campaign. >> hasn't he also advised your administration? >> pardon me? >> zandi -- hasn't zandi also advised this administration with the stimulus? >> they certainly have -- we talked to a whole host of economists. >> exactly, that's how they described his role with the mccain campaign, that they talked to a whole host of economists. >> one of them being mark zandi. >> just as the white house -- he is one of the people you consult. >> we're happy to list mark as somebody who we've taken advice from.

we thought his advice was so right on the stimulus that we pursued an economic recovery plan that i think mark's own paper describes along with alan blinder, the former vice chair of the fed, as having had a significant impact on ensuring that the depth of our recession didn't reach a great depression. >> do you agree then with mark zandi, who said the tax cuts shouldn't be allowed to expire in the middle of a recession? >> the president believes that we should not raise taxes on the middle class. >> he says across the board. >> right. the president believes that adding $700 billion to our deficit for tax cuts for those making in excess of $250,000 a year doesn't make sense. >> so is zandi wrong about that? >> that includes businesses. >> we disagree with him on that. >> and that includes businesses though, robert, it's not just individuals, right? >> well, understand that, again, this is the debate we had during the campaign in which we now know which way the participants line up.

the number -- you'll hear this a lot during this debate -- "you're going to raise taxes o"" -- >> small business. >> right. just as we said during the campaign that about 2 percent of small businesses fall into that category. so when you hear -- i mean, let's be clear, this isn't about small business, because if you were for cutting taxes on small business, would you be holding up a small business tax cut in the united states senate right now?

would you be holding up a bill that allows them to deduct more of their investment in equipment if you were supportive of small business? would you be holding up a bill that eliminates capital gains for small business? well, no, right, because you're for small business, except when you're not for small business. i would say i think they use the moniker of small business when it fits their political lens. but in reality, this isn't something that is going to impact on 98 percent of small businesses. it's not going to hit a majority of families in this country. the president believes we ought to protect those in the middle class. >> changing topics. the president is hitting the campaign trail. has the white house heard -- there have been these reports recently that the white house has heard from various democrats that they prefer the president not come to their districts and campaign for them. has the white house heard from people who have suggested that? and if so, why do you think that is and will the president honor their request? >> chip, we'll help people where they think we can help them the most. i think that's largely been -- that's been how it was when the president campaigned for democrats as a senator, when he was running for the senate in

2004, and i think how most white houses deal with political requests that come in. >> but in 2006 and 2008, just about everybody wanted him to come to their districts and now there seem to be a lot of people who don't. why do you think that is? >> i don't necessarily believe that in 2006 -- i think if you look in 2006 and 2008, we stayed in a certain number of states. i don't -- we never said we were going to all 50 states. look, chip, again, i think it's a fairly well worn adage that we will go to places where candidates think that that's helpful. we will raise money for places -- in places where candidates and committees think that that's helpful. we'll be in mail, we'll be in -- >> will you stay away from places if it's not helpful? >> well, of course. absolutely. no, we're not going to go to places where people think it's unhelpful that we go. that would be crazy. i mean, i -- breaking news alert, but, you know -- >> are there are a lot of those places, you think? >> i don't think so. i don't -- >> can you name them? >> which districts?

>> could you name those places? >> could you get back to us with a list? >> yes, i think i've broken new ground here. we will not go places where candidates think it is unhelpful for us to go. story and film at 11,00. >> on the gulf, in the oval office address, the president talked about a gulf restoration plan eventually that bp would pay for. where are we on that? is there going to be an announcement of that at some point? >> well, i would say this -- >> and what kind of money are we talking about? >> well, i would say -- i don't think we've reached that point yet. there are a series of -- there will be a series of fines. there will be a fine that the government requires bp to pay that will be based off of the amount of pollution put into the gulf, which i think by any accord will be a substantial fine. in addition to that -- and i can check on where the exact process is -- natural resources damage assessments will be made -- bp is liable for the damage that

it's caused to the environment above -- that's different than a penalty for the pollution that's been emitted. secretary mabus is working through the process of gulf coast restoration. and we expect i think his report to the president sometime the latter part of september. >> and are we talking about a fund of billions of dollars that bp will be -- >> well, i think maybe -- >> -- paying into this? >> i think that the penalty on the oil emitted, if i'm not mistaken, that is a penalty that goes to the treasury. the natural -- the damage assessment, i think will, be without having a lot of backing on this directly in front of me, i think will be a substantial penalty based on the

damage that the pollution has caused. >> and the last question. is the president upset at all that his family is not going to be with him on his birthday? >> well, you get a long answer about -- i think it's safe to say that of course he will miss them. he has a daughter at camp that i know he's already talked to a couple of us that obviously he dearly misses. but they'll be all back together soon. >> has he called camp? >> i'm not going to get into that. wendell, welcome to the front row. >> thank you. >> can we get a readout of that? >> if i can follow on jennifer -- if i can follow on jennifer's question, in secretary geithner's op-ed, "welcome to the recovery," he cites a number of statistics, including the auto industry recovery and increased savings rates. and i wonder if the president

believes there is enough good economic news to get people past the 9. 5 percent unemployment rate? >> well, look, i think before and after secretary geithner's op-ed, i don't think secretary geithner in his own op-ed believes that 9. 5 percent unemployment doesn't present serious challenges. and i don't think anybody -- the president and the secretary included -- believe that despite the progress that we made in where we were and where we've come to, i don't think anybody is satisfied that we're -- that we've made enough or that we're out of the woods. we'll get jobs numbers at the end of the week. i will stipulate, as i have many months in a row, that i don't see those numbers before

they're announced. i don't know what this week's -- or this month's numbers will show. but our hope is that we will build off of positive private sector job growth heading into the seventh month in a row as a positive sign. is the economy adding jobs fast enough or as fast as we would like to see it? no, of course not. i think one of the things that would be a good antidote to where we are is the senate passing a small business bill that would spur investment by small businesses and provide them the credit they need to expand and hire.

>> given the economic difficulties, pollsters pat caddell and doug schoen say the tone of the president's comments, especially in political circumstances recently, seems to have abandoned the politics of hope to be appealing more to the democrats' base. are they -- >> how so? >> more negative. for example, yesterday at the dnc fundraiser, talking about, as he has in the past, whether or not we should give the keys to the republicans and put the car in reverse or drive. one, has he abandoned the politics of hope, at least for the midterm elections? and two, does r and d stand for reverse and drive, or republican and democrat? >> both. an analogy he used during the campaign in which i think we were criticized as being too much about hope. i don't -- i can't divine what pat caddell and doug schoen -- what their agenda is. i will say this, wendell. the president believes that there is a choice that will be made, and it is exemplified in

the analogy that he uses -- are we going to go backwards to the type of policies that led us to the greatest economic calamity that most of us have ever known, or are we going to continue to make progress and go forward? understand the agenda of those on capitol hill. let's take, for instance, the last piece of -- the last piece of reform that the president put into place was financial reform, new rules for the way wall street and banks operate. the republican plan for that, repeal it. that seems like a fine thing to debate come this fall. >> is he concerned that he might turn off independent voters? >> no, i think independent voters want rules in the road for -- new rules in the road for -- >> looking at the poll, not just talking about this specific legislation. >> look, i think if you look at the tone of the president's

remarks in the auto factories in detroit and hamtramck on friday, i think the president -- the president said don't bet against the american worker. i think that's the tone that he'll have a lot during the fall. any interesting emails, ms. guthrie? >> oh, sorry. gosh, that was embarrassing. on taxes -- >> i didn't ask you to read them, i just -- >> you might want to. >> bill, stop emailing savannah. >> it's from my boss. on letting the bush tax cuts expire, given the continuing economic difficulties, would the administration be open to a compromise position of having the bush tax cuts for the wealthiest americans be phased out over time? >> well, look, our viewpoint is that for the wealthiest americans -- i don't think the wealthiest among us have --

well, they certainly haven't felt the type of economic downturn that the middle class not only experienced during that economic downturn, but in the years that led up to it. and, again, as we've said, adding those tax cuts on, continuing those tax cuts, likely adds another $700 billion to our debt. >> so no room on compromise, on letting them expire at the end of this year? >> i think the president -- the president's viewpoint is protect our middle class -- protect the middle-class tax cuts and let those for the wealthy expire. >> on the judge's decision yesterday in the virginia lawsuit -- i know it's procedural in nature, but he did say that one of the strongest claims the government made in defense of that health care individual mandate was that it derived from the government's power to tax. by pressing a legal argument in court that that individual mandate is a tax, is the

administration acknowledging it's basically passed a tax on everybody and would violate your pledge not to tax the middle class? >> no. again, i'd go back to something like the car insurance example. i think we all pay a tax when all of us don't have health care, right? we pay a tax in your health care premiums, because instead of having health care that pays for the bills if you're in an auto accident, if you don't have insurance you go to the emergency room and the rest of us pay it. the president believed -- and this was not a position he originally took in the campaign, but believed that if we're going to bring down health care costs, you have to have everybody in the system. >> but you're acknowledging it's a tax? >> again, i think that the president believed that if we're going to have the type of savings that we need, if we're going to have the type of benefits we all know can come

from health care, everybody has to be in the system. >> is it a violation of the pledge not to raise taxes on the middle class? >> no. >> how come? >> again, i think the president has spoken pretty clearly to the reasons for making sure that each of us has coverage. >> okay, one last thing real quick. just to get it on the record, the first lady's trip to spain with sasha, what portion of that is paid by taxpayers and what portion by -- >> i would point you over to the first lady's office. it's a private trip and is being paid for that way. >> the president tomorrow meets with the afl-cio. is he going to reassure them that trade pacts -- excuse me, free trade agreements with korea and other countries have strict labor rules in place to protect american workers? >> well, look, the president believes that we ought to have rules in place that make sure that trade works for everybody here in america. that's why the president has pledged before going to korea in the fall that we'd present an agreement that made sense for the auto industry, made

sense for the beef industry, and not just simply passing along a free trade agreement that existed before. the president believes that -- and i think if you look at either the gdp numbers or any reasonable economic growth plan for the future, it involves having to increase our exports. here's a good example, and it's sort of in the realm of some of the concerns that were had about the free trade agreement under the bush administration were about autos. and, look, because of help that ford is getting from the department of energy, the factory the president will visit outside of chicago got money to help retool. that retooling allows the new

ford explorer not to be built on a truck frame but to be built on a car frame, which means the car itself is more fuel efficient, and that is a gateway for -- and ford's business plan calls for specifically marketing this car not just in this country but overseas. that helps -- they just added 1,200 jobs, by the way, at that facility, so that helps put people to work, that helps grow our economy, that helps with our trade deficit and our increase in exports. >> will he make any new assurances of things that he wants to see? >> i have not seen the draft of the speech in total yet. i think the president will talk about the economic decisions that we have made and where we go -- where we're going forward. peter. >> robert, following up on a couple questions you took

earlier about the gulf situation, what kind of reassurance can the administration offer to people who live there who are worried that once you do have the ultimate solution with the relief well that the government and bp are not going to be there for the long haul on the environmental cleanup? >> it's a very good question, and, look, i think if you go back to the answers that i gave around bp's decision to change ceos, i think certainly thad allen, carol browner and others have at every opportunity taken the chance to both tell bp they can't leave, and reassuring people that we're in the gulf for the long haul. capping the well, though for the past 100 or so days has been our most immediate project, that does not, as you say, that does not allow us to, and this government will not, walk away

from the obligations to continue protecting the coastline, continue cleaning up the damage that has been done, billing bp for that damage, as we talked about in both the cleanup activities themselves as well as the damage assessments that will be made about that damage, and continuing to work to implement the escrow fund that will pay for not just the environmental but then the economic damages caused by the spill in that region. i think that we would all agree, we do all agree, that what has happened requires our continued focus long past capping that well and our commitment is to continue to do so. >> is there any initial dollar estimate or time estimate on the cleanup? how much it's going to cost and

how long it's going to take? >> let me see if they have -- without me sort of guessing on this, let me see what type of updated figures. i assume partly, too, what i said earlier in the question where i answered about secretary mabus, i think some of that will likely also come in his report again to the president later in september. * yes, ma'am. >> senator mcconnell said in an interview today that the president's immigration lawsuit against arizona was a "blatant political move to help his reelection. " he said it was more about helping the president get reelected in 2012 than helping the democrats in 2010. do you have any reaction to that? >> well, i think later in the interview -- didn't later in the interview then he surmise that we ought to take a look at the 14th amendment? so i guess -- i don't know if that was based on 2010 or 2012,

but my hunch is it's based purely on politics. the president and the justice department were concerned about the law creating a patchwork of environmental -- i'm sorry -- of immigration policies. the case that we made to the court in arizona was just that, and the court ruled indeed that arizona and other states can't and shouldn't create a patchwork of immigration laws throughout the country. so it wasn't an argument that was based on anything other than a legal argument, and honestly a legal argument that the justice department prove to a judge. >> so the idea that this will have a long-term benefit for democrats -- >> i will say -- i've said this

before, i'll say this again -- it builds off of chip's political question. the president has made a lot of decisions in this white house. i think if you were to -- i think if you look at the polling on the particular decision, the numbers aren't exactly with us, right? if we were making decisions based on politics, or on polling, we'd get a new pollster. i don't think -- no, the dnc has a pollster. we wouldn't -- those decisions are made on what's best for the country, not on politics. >> he also said that elizabeth warren would be a very controversial nominee to the consumer protection agency. do you have any comment on that? >> based on what? >> that's what he said during the interview. >> i don't know what he bases -- it would be interesting to know what he based his comments on. >> a lot of people have said that she could be a controversial pick. >> based on? >> i mean, senator dodd has said that she might not get enough votes to be -- >> based on? >> okay, the afl-cio event, can i just ask one thing -- is it at the white house tomorrow? >> i believe it's at the convention center, yes. >> and why is the president meeting with them?

do you have any background on the meeting tomorrow? >> we can get it. it hasn't been put out yet. but we'll send it out. i mean, look, i think working men and women are an important part of this country. and the president looks forward to speaking tomorrow with the executive council as he's done on a number of occasions. ari. >> human rights lawyers are challenging the administration's assertion that an american citizen can be targeted for killing overseas. should americans worry that if they go overseas, their own government could target them to be killed? anwar al-awlaki is the person in question, but the legal principle -- >> okay, let's -- let me just for the point of -- i don't know what i would make -- i think you just largely said a tourist going overseas and anwar al- awlaki are somehow analogous in nature. i'm not a -- >> but if the u.s. decides that an american citizen is affiliated with a terrorist group -- >> no, no, let's be clear, let's be -- no, no, let's be clear. >> is there any legal process? >> let's be clear about anwar al-awlaki, okay?

the united states hasn't decided that anwar al-awlaki is aligned with a terrorist group. anwar al-awlaki has in videos cast his lot with al qaeda and its extremist allies. anwar al-awlaki is acting as a regional commander for al qaeda in the arabian peninsula. so let's not take a tourist that might visit italy overseas and equate him to somebody who has on countless times in video pledged to uphold and support the violent and murderous theories of al qaeda. there -- >> the u.s. has mistakenly identified people as terrorists in many instances in the last eight years, and if americans can be targeted for killing --

>> ari, it's hard to imagine an issue in which two things have been conflated more than your question in the past 18 months of me taking questions here. i think the notion that somehow anybody in this country confuses traveling overseas and the role that anwar al-awlaki has in inciting violence -- they're not even in the same ballpark. >> are you acknowledging that awlaki is on the assassination list, then? >> i just answered his question about comparing joe the tourist to anwar al-awlaki. >> just a quick follow to that. u.s. citizens are entitled to a certain judicial process when it comes to questions like this, when it comes to sentencing to death. and is there a process in place that we don't know about? >> there's a process in place that i'm not at liberty to discuss. >> thank you. returning to the tension in the middle east, if it begins an all-out war involving hamas, hezbollah and iran, the countries around -- would the

u.s. come to israel's defense militarily? >> it's hypothetical day here at the white house. i'm, connie, not going to obviously get into discussing what if there was an all-out war in the middle east. obviously the president has since the moment he walked into the oval office taken steps to pull us back from those type of tensions. i have on countless times stated our long-held, countrywide position of protecting the security of israel and its people, and the white house and this country will continue to do so. >> and anything new from iran -- on the three hostages in iran? >> nothing new. obviously it's been -- friday and saturday represented a year of them being wrongly held by the iranian government. and the president on friday called for and continues to call for the release of three people that are wrongly held.

>> thanks, robert, two questions. one, the president has been trying his best to bring those who do not support the u.s. on terrorism and also who does harbor and finance terrorists in the afghanistan region. does the president now believe pakistani intelligence, pakistani military, and pakistani civilian governments, that they will not -- they will support the u.s. from now on? >> well, i will give you largely what i gave last week on this, and that is i think if you look at the progress that we have made with pakistan on safe havens, on confronting terrorists, i think that is a record that they and we can be proud of.

is it -- does more have to be done? unquestionable. we have tough work ahead in pakistan and in afghanistan. and together with our partners, we'll make progress. >> and second, on immigration -- and, first of all, my happy birthday to the president in advance. >> oh, boy. >> my second question is on immigration. >> i have a follow-up. [laughter] >> i'm going to put george and peter down as no happy birthday for the president. all right, go ahead. i'm done. >> thank you. second on immigration, most of the police chiefs around the countries are against the arizona immigration law. what they are saying is that if this spreads around the country, it will bring more violence and it might be out of the hands of the police around the country. so where do we go from here?

>> well, look, obviously the court ruled and stayed many of the provisions that were set to go into effect last thursday around this law. i think police chiefs in phoenix and tucson -- the two largest cities in arizona -- have, as you said, goyal, expressed many reservations about what they believed this law would intend for them to do, and along with others, spoke out and filed briefs with the court. where it leaves us is the same place that it leaves us -- left us last week. and if -- senator mcconnell brought up immigration earlier. if senator mcconnell would like to solve a problem rather than to continue to talk about one

that we haven't solved at a federal level for many years -- it's time to bring together democrats and republicans to do just that. that's the only way we're going to make progress on comprehensive immigration reform, is to do it together and to do it in a way that's bipartisan. >> thanks, robert. with the kagan vote coming up this week, i wanted to ask, on july 19th, written answers to the judiciary committee, she said that she had ceased doing her full duties as solicitor general after the may 10th nomination. has she been receiving her full salary as solicitor general since then, or should she? >> i'd point you over to the department of justice on that. i don't know what the pay records are. >> do you think she should receive -- >> i'd point you to the department of justice. glenn. >> robert, over the last couple of weeks you folks have put the president out there and brought folks to the briefing to emphasize sort of the things

that you have accomplished in the past 18 months. we had the -- an update on the auto bailout, we had his iraq speech yesterday. a lot of this doesn't seem to be getting through to voters in general. we saw a gallup poll today that has the president at 41 percent, which is low, i think, on their scale for the administration. is it frustrating -- >> leaving aside that the other gallup poll showed it at 45. but i'll leave gallup to explain the margin of error. >> gallup versus gallup. or is it gallup versus zandi? >> i guess. i think gallup is with -- kidding. go ahead. >> is it frustrating to the president that these messages on these accomplishments don't seem to be getting through to people, and why do you think they're not? >> look, i would say, glenn, i don't think the president spends a lot of time -- the president spends a lot of time worried about how we make progress, not worried about whether people are giving him enough credit for the progress

that's been made. i'll be honest with you -- and i said this last week, glenn -- i don't think people -- i don't -- i wouldn't hold the auto investment against the american people because i don't think the story has been told. i don't think that the american people knew that for the first time in 10 years we were adding jobs to the auto industry, and had added 55,000 jobs since gm emerged from bankruptcy, or that for the first quarter since 2004, all three companies at the same time posted an operating profit, or that the money invested by this administration was very likely to be repaid in full. i don't -- i think in many ways the auto story where we started -- or where it began in late march of 2009, and where we are now in late july and early august of 2010 is in a much different place. i think the president believes

that, and hopes that people will, whether it's adding jobs in the auto industry, whether it's taking 94,000 soldiers out of iraq, i think that the president only hopes that people look at what he's done and base their conclusions off that. i get the -- >> how much of it is the unemployment rate? >> a lot of it. q i mean, you can send him out on a sales pitch every day, but as long as the product includes 9.5 percent, can you get around that? >> i think as the president has said before, if a pollster called you and you thought your economic situation was not as good as it could be, it was too expensive to send your daughter to college, your neighbor had just lost their house, and your -- somebody else in your family just lost a job, and the pollster asked you how they thought the president was doing, i don't think he would be surprised that the american people would answer to a pollster that they're concerned.

>> how does he get around that, though? >> well, two things, continuing to tell people what we're doing, and to continue to tell people the choices that we have to make. and i think, as i said earlier -- again, i don't think a lot of people had the totality of what the auto story was. i don't know how many people know that we're at the lowest point in i don't know how many years in our troop level in iraq, or that if you look at civilian deaths -- what are likely to be the number of civilian deaths in iraq in 2010 and what they were at the height of the iraq war, we're talking about a reduction of 92 percent. but that's what the president's job is to continue to tell people what's been done. ms. ryan. >> robert, on the crack cocaine sentencing law, it's down from

100 to one to 18 to one, but some on capitol hill feel that the fight still needs to continue to bring the disparity down to one to one. what is this administration's efforts on that push? are you leaving it here and just accepting this, or moving forward, still trying to bring the disparity down? >> well, let me see if there's any guidance on it. i will say this, april, i think the signing of today's bill into law represents the hard work of democrats and republicans coming -- this is a good example -- of coming together and making progress on something that people had identified as a glaring blight on the law. look, i think if you look at the people that were there at that signing, they're not of the political persuasions that either always or even part of

the time agree. i think that demonstrates the, as i said, the glaring nature of what these penalties had -- the glaring nature of what these penalties had done to people and how unfair they were. and i think the president was proud to sign that into law. >> and also, senate republicans are being blamed again for holding up or delaying the stand-alone vote for the black farmers. and john boyd, the head of the national black farmers association, wants a meeting with the president and wants assurances that the black farmers will be paid their settlement monies. and he's likening it to the assurances that were given to blanche lincoln -- senator blanche lincoln for $1. 5 billion farm relief subsidy payments. >> well, again, this administration has worked a lot over the past several months to

try to get this to a point where we can make good on the judgment that was handed down, and the administration will continue to try to do that, april. >> will he meet with -- will the president meet with john boyd at all? >> i think he met very recently with valerie jarrett. >> he wants to meet with the president to express his concern. >> i don't have any knowledge that that's on the schedule. >> thank you, robert. >> margaret. >> robert, thanks. do you have any information, any detail about what's on deck for friday? i checked the schedule and it said something about news. >> off the top of my head, i don't. i'm trying to conjure that up, but let me see if there's any guidance for friday. >> and then quickly, this is probably preface to ari's question earlier, but there is a lawsuit that the center for constitutional rights and the aclu is bringing today regarding the policies or lack -- perceived lack of policies as they relate to mr. al-awlaki. and what i wanted to ask is -- i mean, you just told us there

is a process in place that you're not at liberty to discuss. is that going to be the government's position, or are you going to disclose what the policy is? do you think there's any merit to this lawsuit? >> well, look, again, there is -- i'm just not at liberty to discuss intelligence matters, margaret. i would say -- i will repeat that anwar al-awlaki is someone who has sworn allegiance to al qaeda in the arabian peninsula, is a regional commander for that group in yemen, has and continues to direct attacks there and, as we know, against innocent men, women and children in this country. and this president will take the steps necessary to keep our

country safe from thugs like him. >> i understand that. but the president is also a lawyer with constitutional law training. he made clear during the campaign that sort of dotting the i's and crossing the t's mattered, even if you're going after bad guys. >> and i think it's safe to assume that if -- without getting deep into this -- the president understands the process and the president will do all that is necessary to keep this country safe from people like him. richard. >> just quick on the tax cuts. does the president want the middle-class tax cuts to be extended permanently or -- >> yes, permanent. >> he wants permanent? >> yes. yes, sir. >> the british prime minister last week said that he would not tolerate export of terrorism from pakistan. does the president agree with the views -- >> i'll let mr. cameron deal

with that. yes, sir. >> president ahmadinejad of iran said that he was ready for face- to-face talks with president obama. i was wondering if the white house has an initial reaction to that? >> i would say this, that obviously iran has on any number of occasions changed their position based on i think largely the pain that they're feeling on sanctions, based on the decisions that their government has made that don't jibe with where the people are. we have always said that we would be willing to sit down and discuss iran's illicit nuclear program if iran is serious about doing that. to date, that seriousness has not been there. iran has obligations that it needs to meet, and failure to meet those obligations will continue to result in unilateral sanctions by this government, u.n. sanctions that have been passed, european union sanctions that have been passed,

and other countries beyond this taking unilateral action. i think those sanctions are beginning to have an impact, or else the iranian government would not be changing its position so often about discussing its program. thanks, guys. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> today is primary day in three states.

voters are at the polls in kansas, missouri, and michigan. we will have coverage later tonight on c-span and c- span.org pra. wednesday, a senate environment subcommittee will hold a hearing on the use of chemical dispersants in the gulf oil spill cleanup. that is by setting it in a glut a.m. eastern here on c-span. on our companion network, a c- span3, senate hearing to prepare for a terrorist attack using weapons of mass destruction. that is like sitting at 10:00 a.m. eastern from -- live beginning at 10:00 a.m. eastern. what's the debate and vote live on c-span and2. we can also see how your sinters are planning to enter your senators are planning to vote on c-span.org/kagann.

>> but tv returns to but festivals with panels and -- book to the returns to panels prad. it is a month filled with authors and books on c-span2. for the full listing, go to booktv.org. >> c-span programming is available anytime on c-span radio and the washington and baltimore area. it is also available on your iphone and ipad on yo ur apps. now listen to c-span radio on your