if we will not see a dramatic improvement in housing dahlias until we get the economy moving again. we still have high unemployment. that has created a tremendous amount of stress for consumers. the fundamental issue is to bring this economy back to grow more quickly. host: one more phone call, charles on the republican line. caller: the mortgage electronic registration system set up by the bankers in 2000 that hid the and knowledge of who the real investor is in the mortgage, that covered 60 million homes. f f how can we get that darkness created -- how can we get that pervez created to shield all the intermediaries between me, that our work, and the investor -- between me, the borrower her, and the investor?

guest: i think that is a good point. i think many people relied on the rating agencies to do that underlying evaluation, to say, is this a good or bad loan, what is the risk in this pool to help the investor? will we find out is that the rating agencies did a poor job on that. people did not understand their risks. you are right. we need to have that information so that investors can make reasonable decisions. host: one more headline. those took effect this week. jim chessen with the american bankers association, thanks for being here. the series continues tomorrow

looking at financial regulation law. we will look at the impact on the consumer and on thursday we will tourneur effect off to the changes for investors. on friday, we will look at what we will do in the future to prevent another financial crisis. what does a 440 journal this morning. we will be back tomorrow -- that does it for "washington journal" this morning. we will be back tomorrow. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] . .

>> i.b think it is important tht i will be a person that has stood up for the principles of the people at the state of florida. i am going to fight only for the people of florida. >> in this campaign 2010 and the c-span video library makes it easy to follow the debates, rallies, a victory in concessions speeches of three on your computer any time. "book tv" continues tonight with a focus on campaigna ans and elections.

kenneth ackerman on the campaign and subsequent assassinations of america's 20th president, james garfield. it is in prime time all this week on c-span2. >> in about a half hour we will bring you live coverage of the defense department briefing from afghanistan. the commanding general will brief reporters. until then, a look at this morning's headlines on washington journal. peace in "the wall street journal." they say peace in "the wall street journal." they s that the tea party movement has blossomed into a powerful social phenomenon because it is not directed by any one political agenda. stay true to priiple. the assertive and respectful. add value and don't take credit for other people's work.

our community is built on the trader principle, we associate by mutual consent, to further shared goals of fiscal responsibility and constitutionally limited government. it goes on to say this --

the website for this contract is the contract.org, and they break down the 10 principles that would like to see from candidates to sign this contract. we put them up on the screen. protect the constitution, reject capt. trade, demand a balanced budget. there are five more. first phone call from georgia. joe on the republican line. what do you think about this hostile takeover of the gop? car you with us? -- joe, are you with us? we will move on to add water, maryland, on the independence

line. what do you think this morning about the tea party manifesto and dick armey saying there will be a hostile takeover of the gop? caller: i think it is a good thing. i do believe that washington is inherently corrupt and has sold the country out and long time ago. my issue has to do with, if we did not believe in the constitution anymore. and this is part of the problem. we have people in washington th are basically in a lot of cases, good people, however, you cannot get against the money machine. anthis is what the biggest problem is. and this is where the corruption comes from. we have a banking system that has tak over washington, d.c., and they dictate everything that has happened. we have a country or a government that is by the banks, for the banks, and ultimately it

comes back down to the federal reserve, which, in my opinion, if people would just read about how it came into being and how the federal reserve act was created, i think people would really start asking some serious, serious questions about how the system works because in this last eleion, you know, and this bailout for the banks, it should be crystal clear for every person that list in this country that this country run only by big banks and also they run the economy as well. host: let me let you and our other viewers know that we are continuing our sers this week, looking at the new financial regulation bill. today at 9:15 a.m. east coast time, we will look at the impact of the slot on banks. joining us is james chessen, chief economist at the american

bankers association. let us go back to joe in georgia on the republican line. guest: thank you very much. i was the chairman of tom gray's campaign and we put together, the tea party people and a small business people, and i am all for the tea party. i have spoken to many groups. in fact, i of part of a radio show that actually goes all over the world. host: do you agree with the strategy of a hostile takeover of the gop? what does it mean? guest: it is not going to be hostile. another congressman i was with, one of the top leaders, we will have a very friendly -- it is a merger. a merger of the gop and a small business people and the tea party people. and i think it is going to be the most powerful political force in american history. allegheny in his radio show, we are working on making it happen all across the country. i am really fired up. i am so fired up i cannot sleep that night about the merger of

the tea party and the gop, less government -- host: why are dick armey and -- writing this morning it will be a hostile takeover? guest: greta, i don't like to use the word hostile. i was right in this campaign when we elected tom gray, who i think will be president -- he put together a group. it is not hostile. in a coalition that won for him, we had a lot of gop and tea party people and we worked together great. it was a love and. it was not hostile. i love dick armey but i did not call him hostile. down here in georgia, we are doing it peacefully and just having a lot of fun. no animosity whaoever. very friendly. host: and it's on the democratic line from san vernon b. now, california -- emmitt on the democratic line. guest: the problem with this country is not the tea party. the problem with this country is

that we don't all nothing. host: we don't own anything, that is what you say? caller: we don't own the food, the oil, we don't own nothing. host: all right. we will go to josh from uniontown, pennsylvania. republican line. caller: i just wanted to call and and tied together your first caller's point just about the federal reserve. mentioning that is the only power tt is in washington. ron paul wrote the bills to audit the fed. they are still in committee. i am sure there is no movement. he was the part of the tea party -- if you look at the grass- roots campaign. the political points, but we should and the federal reserve. host: missouri. bob, democratic line.

good morning. what do you think? caller i don't know about the this hostile takeover artist of the gop. it would seem to me they would be able to find out exactly who the leaders of the tea party are. if they keep saying that there are not any leaders. that this is spontaneous. imagine this scenario. mom and pop are sitting around a coffee table one morning and they say, i am mad, let us make a couple of signs and go up to the national mall. it sounds like a good idea, but it is too far to drive. i've got an idea. let us go to the bus station because i am quite sure because somebody has already arranged for bus transportation to take us up there. ,don't know who paid for that and we don't care and nobody else managed to find out who it

arranged for and the logistics of getting people there and arranging for permits. there should be a name. somebody had to pay for it. these people did not go there, here is my $20 for a ride, and where we are going to eat, and these restaurants know there are several busloads coming in. to say that there was no leadership, that this all happened spontaneously is disingenuous at best. and somebody should have been able to find this out from the get go. host: who do you think is the head of this, bob? caller i don't know. but they are making every effort they can to make sure they are not found out. host: mississippi. ron on the independent line. what do you think this morning of this tea party manifesto?

caller: big army is behind it and republican money is behind it. part of a neocon right. have they ever put their but on the li for this country? everybody here, i lost my job in 1982 because ronald reagan started shipping jobs offshore. this is all started by the republicans. i came home from vietnam and got a job at general motors and 50 years later i lose my job and it was all because -- 15 years later i lose my job and it was all because of ronald reagan. host: where do you see similarities between ronald reagan and the tea party? caller: it is a neo con right taking off. host: republican, al, you are the next phone call. caller: i had to take issue with what the gentleman from the military said earlier. we almost pulled off a coup here

in georgia last week. but she became 2500 votes short of a 17-year washington, d.c., fixture of nathan deal, one of the most corrupt members of congress. the tea party ca ashore and i did not think you can reconcile differences between a thin deal and the tea party. host: what do you mean by that? reconcile differences? caller: i do not think d.c professional politicians, being consistent wh the tea party movement which is back to a limited government and limited spenng when nathan deal never saw a spending bill he did not like. host: have you been to the website? caller: not yet. i will vis there. host: you have not heard about it? caller: sure.

it could do you consider yourself a member of the tea party? caller: i do. host: why? caller: i think the republican party has failed the conservative side of america address that way and got very far away from the constitution, balanced budgets, and the sorts of things that i as a fiscal conservative like to see happening in government. host: is the tea party movement were to overtake the republican party, what would be the republican party's new brand? caller: new brands, i think it would be true constitutionalism and not corrosion that has happened under bush and balanced budgets instead of insane deficits that we have -- the awful budget warfare we t under bush. and return to financial sanity. host: what do you do? caller: an accountant. host: order you?

caller: . host: have you always lived in georgia? caller: yes. host: clearwater, florida. arlene, democratic line. caller: i have a question for you to baggers, a year ago you had done not then but -- at the town hall meeting screaming to get your hands off of medicare and social security and now you are lining up like good little sheep behind the gop. everybody knows they just want to end medicare and social security. could you be any dumber? thank you. host: in washington state today, vote totals for clues abouthe general election. democrats fighting to all two seats in washington. open third district, patty murray's senate seat. the dramatics of the senate race

is all in the vote total. the very unique primary -- the democratic senatorial campaign committee released a memo monday saying it expects rossi to take at least 46% of the vote, despite facing upstart challenge is from former professional football player dier and inventor paul akers joined forces with rossi late in the campaign. hardly cause trouble for the primary prospect, democrats believe the two conservatives forced rossi to move to the right, potentially dgerous place to be in the state prison -- president obama 1. lowering murray's expectations, expecting her to finish in the low 40's. the thinking goes -- either way,

the vote totalelow 45% could set off some alarms within the party. the last poll in the race taken late july by a democratic firm polled her at 47 percent and the three republicans totaling 47% with rossi taking 33%. on thirdongressional district race -- open the but moderate seat ripe for republican backing. since being elected to congress and 1998 was never elected with less than 55% however george w. bush carried the district by two points in 2000 and 2004 and obama won it by seven points in 2008. it says that attempting to hold a seat for democrats is a businessman and former state house majority leader running against democratic controlled washington, d.c. his campaign theme, give them had to. fayetteville, north carolina. a line for tea party members. what do you make of this tea party manifesto?

the piece written by dick armey calling for a hostile takeover. caller: excuse me. good morning. i think republican party certainly has severe problems about appealing to the broad conservative base that they were supposed to represent. we remember it was the gang of 14, the republicans in the bush administration, who were able to stop almost everything he did, and those were republicans. we, as conservatives, don't feel that the republican party truly represents a constitutional government. i have been reluctant since becoming involved with the tea party to contribute money or

support the republicans without question anymore. host: let me bounce this off of you. an e-mail from one of the beer wars. week -- from one of the viewers. caller: i don't think that the insurgency accusation is correct. i think what you are seeing is a true grass-roots movement of americans, concerned americans, all across the country that truly believe that our country is being subverted through republicans not being responsible, electio being stolen, through illegal voters being encouraged and placed on

us. it is interesting when i was on the bus going to washington, d.c., on 9/12 we were asking ourselves a group of six buses from north carolina, th we were asking ourselves, here we are, do you think they will hear us this time. when we were coming back, we were asking the same thing. the general consensus of opinion was, no, it they would not hear us and, no, they would not report us and that is exactly what happened. i will be in d.c. for glenn beck's thing, and i will be back there again for the next 9/12. we have a strong organizion here in fayetteville, in north carolina and those people are the ones who put together the trip to washington, d.c., it was not anybody secretly funding or anyone secretly organizing it. it takes concerned citizens all

across to make these things happen. host: can you tell us what you do? caller: retired military. host: how old are you? caller: i am 69. host: would you say that a lot of the tea party members that you know in your area are of your age group? caller: i think mos of them are young prepared a lot of them are in their 40's. i think i am the exception. i know on 9/12, there were a lot of people there who were my age but mostly in their 30's and 40's. host: another e-mail from a viewer. you can email us, journal@c- span.org. some other news on the primaries and wyoming. they will be picking their governor in that state. cnn.com reports republicans are

hoping to reclaim the governor's nsion. seven republicans are competing for the gop nomination, while five democrats are running for the parties not. a mason-dixon poll conducted three weeks before the election shows in the race for the gop nomination, state auditor, former u.s. attorney -- 27-24 but believe it was inside the margin of error. since then, son of former u.s. senator alan simpson, received 17% in the same gop survey. norfolk, connecticut, bill on the republican line. it caller: thank you for c-span. the only place where at least a few people call in and you can hear the truth. i am a former politician from connecticut. some people may recognize my name -- my voice, even. but i am not worried about it. people who understand that the

tea party, i believe, was created by freedom works and dick armey, who are the establishment. what you have to realize is politics is all perception. it may only be 50 to 100 people, and the targeting all this publicity, mainly to throw people off track. it is to forget about wall street. the biggest farce that ever happened to us. with all the money we had stolen and bailed out from wall street. but people were starting to go to the presidents of the homes of wall street, aig, are around connecticut and the lower end and that is why something had to be done by the establishment part because -- politicians. both parties are in bed. something had to be done to take the people away from that and now this group, what they want to do, they want to use the tea party. there are really some good people in the tea party but they don't understand what is going. any third party is going to be

taken over by the major parties. they will send people in of from either party to go it up. it did not happen with ross perot because it was all his money involved. so, with anyone else trying, it was put up or shut up. but i really think they will use the tea party to try t take social security away. th the media being the fourth branch of government, you've got to ask these questions, why did cia tenent get the medal of freedom, highest award, when he was considered ruining the iraq war with intelligence. the media never pick that up, because it is establishment. host: new tell our viewers what kind of republican were you were you in office, more a moderate republican, and what you think happens to moderate republicans if there is a tea party takeover or more

influence from the tea party? caller: moderate republicans. some of them like the so-called liberal democrats, i guess, in either party are disgusted. i think they have to rally people to vote. to get fear and everything. what they did -- ok, of both parties do, is the democrats tried to play the race card to get everybody excited and the republicans tried to overdue -- they always go back to 9/11 and try to use that for everything. last election was you voted, people did not realize they voted for it, you voted for either you hated a grumpy old man, voted against a woman or you voted against a man of color. it is all to get people in

emotional and not get to the facts. they've got to get out of wall street. the wall street people should be arrested. the military industrial complex is feeding from t trough. none of these issues are being addressed, and i don't care anymore what party. i just want a good future for everybody. host: bill, we will leave it there. other news. rmer senator ted stevens will lie in repose and alaska. the funeral is set wednesday. former congressman dan rostenkowski's funeral is today. for more information about both of those issues, programs, go to our web site, c-span.org. you can find more details there. in other headlines, front page of "the times-picayune" -- front-page of "the financial

times" this morning, a story about mortgages. that is today in washington. go to c-span.org for our coverage. they will lookt fannie and freddie also during this holding conference today. some other news this morning

about the economy, the front page of "the wall street journal," below the fold. if you read a little bit more in the story, polls show people disagree on which steps to take but do agree that tough steps need to be taken. back to your phone calls about the tea party manifesto. a book out this morning about the tea party. illinois. ted on independent line. calling for a hostile takeover. caller: i wod like to say bill, the republican there, he stole a little of my thunder and he is becoming closer to an independent like me. there is no takeover. this is a republican board. every time a party is out of office it findome way to reinvent itself. if it happens when the democrats were out of office and now happening when the republicans are out of office.

the bottom line is they keep coming down here and messing with us independents. they think we are stupid. all we are simply doing is getting people back they lose during presidency. these people who are saying, i am tea party. you should start asking them, what was your party affiliation before he became tea party. and i think you will find it very interesting pattern. host: all right. in more news this morning, about the mosque in new york, ground zero. "the new york times" this morning, the editorial. the constitution and e mosque. that is a "the new york times" editorial. "the washington post" also weighs in. now he is in it, president obama

needs to lead it. senator harry reid, giving his statement on the building of the mosque. the associated press reports this morning that he opposes the mosque plan, has gone against president obama. a statement from the spokesman -- the first amendment protects freedom of religion and senator reid respect that and thinks the mosque should be built someplace else. that is an "the new york post" this morning. fronpage of "the daily news," puts it like this. orlando, florida. linda, republican line. caller: i wanted to ask a fav first. i have been wanting to call about this for a while. i wish the host there would -- i am not sur correct, or at least educate your callers that the word tea bagger is an

offense of sexual term. i know you don't allow people to use words like the n-word -- i know the word tea bagger does not have a history, but it is not the correct term. host: whave asked for this conversation, and a matter what the topic is, to be settled and to believe that the name calling somewhere else. we don't want it on this show. call in with your opinionand comments but keep the conversation civil. orlando, florida. tea party member. caller: i can only speak for myself. i cannot speak for all of them. i know a lot of them who have a lot of similar ideas as i do. i want trespond to some of the callers. basically the way i look at it

is, we only have a two-party system. third parties have never worked. so, i have to look at the two parties. i can't work within the democratic party because of their platform is for progress of government programs to solve our problems and i just don't agree with that because government is an expenditure paid for by the taxpayers. it does not produce anything. we have to pay for it all. i believe more in the limited government, where people are given the right atmosphere where they can succeed or fail. it therefore i turned to the republican party. it has problems. a lot of problems. d we are trying to change it from within. i know one of the callers suggested that ronald reagan exported jobs. have a real issue with that. if you go back and read his winds of freedom speech --

where the middle class would rise up around the world and create world peace if we got rid of the tariffs, that is a real progressive democratic idea and not a republican conservative idea. and the results of those actions, is our middle class was destroyed and the jobs are gone. that is where we are. i suppose things like george h. w. bush's national standardization for education which is a local issue. it does not fall into the powers of the federal government. and his son, who turned a military action into a war without congressional approval for war, military action, turned it into an all out war that is still not over, never funded it, just put it on the credit card, put in medicare prescription -- these are progressive things. i think the final thing that made people snap was tarp was

everybody called up their congressmen and senators and said no to tarp and they voted for it anyway. all of these republicans are voting for it. you have a republican president saying it was the right thing to do. sang mitt romney it is the right thing to do. that was the final straw. of the last thing i want to say, there are a lot of republican politicians who claim they belong to the tea party who do not. all of you have to do is pay attention to what they are sick -- saying. you look at people like sarah palin, marco rubio -- he is using the argument about the balanced budget amendment. they say that argument all the time. it could you put sarah palin in that category. you do not think she is part -- host: you do not think sarah palin is part of the movement? caller: no. sarah palin is an opportunist. a true politician and an

opportunist. she is not part of the movement at all. the people who are part of the movement are ron paul, that is your guy. host: "usa today," washington wiseman going home. lee hamilton. frequent guest of this show and member of the 9/11 commission is going back to indiana, saying he has watched politics change over the years. that is today's "usa today," if you want to read more. also in the papers, some of the headlines. this is "the washington post" frontpage. u.s. loses window into russian arms. because the start treaty expired, the for the first time in 15 years u.s. officials lost the ability to inspect rushes long-range nuclear. next to that store, on the front page, afghan rebels security contractors. it says the afghan president

karzai once companies out and calls foa four month deadline. the u.s. caused the deadline very challenging. that is the front page of "the washington post." also this morning, we want t show you below the fold of "the financial times." bp raised $5 billion in loans to boost liquidity. that is "the financial times cause of this morning. in a widow, ky. bill on the democratic line. good morning. ta. er: good morning, greg te i have been liberal than for 15 minutes -- on hold for 50 minutes. hard to keep your train of thought. last few callers, are pretty much agree. let me put it this way, out of a population of over 300 million

people, i think that the media has a lot to do with this simply because if you look at the totality of the tea party movement, probably been from what you see in aotal, of all the time you have seen and heard of them, maybe 10 million to 15 million at absolute positive most. it is the media that perpetuates this idea that they are taking over anything. you can't have that few people to be able to have as much clout -- the same way with sarah palin. she has become a rich person for quitting and simply because the media grabs ho of a thing, they latch oo it, they run it, and they tried to sensationalize it and we as the american people fall prey and we go along with it, too. speaking the same talking points

you hear on mbc, fox, cnn, all day long, you hear the same thing. it is a bit of almost brainwashing. host: an update on the oil spill in the gulf and the drilling moratorium. front page of "the new york times." >> to that is also a story about pakistan. -- next to that is a story about pakistan. bloomington, illinois. georgia, republican minded caller: in response to the mmts from the german -- gentleman from connecticut, former republican, and the gentleman from rockford responded. the bankers did engage in much excess, and hopefully it will be corrected by this new bill, the only major lislation the

current administration is gone through aside from obamacare. but back to the tea party and a german from rockford, if my memory serveme correctly, -- gentlemen from rockford, if my memory serves me correctly, 1980 former congressman john anderson ran for president, highly respected, made me think of him. prosecutor, longtime state's attorney. he did not win. he ran a good race. but i believe it was the same year, my memory serves correctly, that ronald reagan was elected president. i do think that what happened, confirms what the gentleman from rockford said a while ago, these movements result in many voters going back to their or regional inclination's or party membership such as republicans,

because i think many independents who supported john anderson were really just republican moderate republicans. thinking republican, not a liberal republican. dick armey, i have respect for him. i followed him for many years. i do think that dick armey and some of the folks in the tea party, like some people in the cato institute in washington take for granted the support of the social conservatives and do so at their peril and mitch daniels, well intentioned, but the same inkling inhat he wants to have a truce on the social issues. we are not going to let a social issues trees. if the tea party members will remember that, they will be even more successful than they will otherwise. host: the caller referred to dick armey. he writes and "the wall street journal" that the movement is not seeking a junior partnership

with the republican party, it is aiming for a hostile takeover. the two are out with a new book today. there are calling on tea party candidates and republican candidates to sign their contract from america. it is on their website, thecontract.org. if the goods have their website, 10 different book points -- south carolina, democratic line. good morning. caller: i was just looking at the things. passing and all of the above

energy policy. i don't know what to say. there are some of the problems faced in this country. -- the caller who said sarah palin was a comte -- oprtunist, red and the money. just as dick armey. they tried to delegitimize clinton during his turn. i am sure there are any answers. in two wars. host: calling from the democratic line. are you motivated to vote for democrats? caller: i think there will be a surprise and south carolina. nikki haley is running for governor. down herome district -- not speaking to the press. i think there will be a

surprise. they are basically trying to run -- i do not know she represents south carolina now is, whenever it means. i think there wl be surprises around the country. i do not thinkt is republican and democrat. i agree with the caller, i did not think it is fair to call them tea baggers, becauset carries a negative connotation. i just thi the wrongheaded. host:the new yo times" this morning says michael bloomberg, picking joe suspect -- sestak. the gop reveals its midterm blueprint in politico this morning. readying a 2million tv ad, aimed at a handful of powerful,

long serng. some of the incumbents' they are looking at is budget committee chairman john spratt, representative chet edwards of the appropriations committee. alan grayson -- while democrats reserve ad time in 60 races to date, the vast majority -- designed to protect vulnerable incumbents and republicans on the other hand investing almost entirely offensive effort. got to turn your television down. "washington post," appeals court puts gay marriage is on hold.

bill, have returned a television down? caller: i have been an independent for quite a few years. i am retired military. vietnam vet, all that good stuff. on this mosque building on ground zero, i think it is outrageous. people are slapping the new york state, new york city people in the face. i don't agree with that at all. host: all right. cleveland, ohio. a democrat line. last phone call on the tea party manifesto. what do you think? caller: i would like to say that i think the tea party really does have not just manifesto that it put on-line, they really have other things they are not saying. if they were really for what they are saying on a manifesto, they would have been doing something when george bush was an office because george bush was the one who took our surplus

and turned it into a deficit. he was the one who went to war for reasons that were lies, and our deficit went completely out of control it and still is, the corruption in washington is >> we are leaving "the washington journal." we were expecting to go live to a defense department briefing from afghanistan. the commanding general for the troops in northern afghanistan was supposed to brief reporters, but it looks like they're having technical problems with the feed

from afghanistan. we will try to bring that to later today. barack obama is leaving california around noon and heading to washington state. he will help patty murray and her reelection bid on primary day. the president is in the middle of the three-day campaign trip. he will hold a local business meeting in seattle and will be heading to fund-raisers for her. >> "book tv" continues tonight. donald ritchie on the 1932 race between fdr and herbert hoover. kenneth ackerman on the campaign and subsequent assassination of america's 20th president, james garfield. "book tv" is in prime time all this week on c-span2.

>> nasa hold the first-ever information technology conference. they heard from the chief innovation officer from dell. this portion is just under an hour. you are watching c-span. >> i already have a problem. i cannot help walking around. i have to start of making the comments, because laura asked me

if there was anything she could do while i was here, and i want you to find out what misty has for breakfast. i need that are regular basis. and i am going to talk to you a little bit about innovation, and the reason i am calling to talk to about innovation is i personally and we as a company happen to believe the number one issue that will face i.t. for the next five years is an ovation. we will have more than enough technology to play with. we will more than enough demand for technology in the service, and lord knows we love more than enough problems with both of them. -- will have more than enough problems with both of them. now, to start this discussion of innovation i wanted to find innovation problem for you. i do this through a video.

some of you may have seen this video in the past. please do not help your neighbors are. i have never done it was an audience this large. it will be interesting to see the results. i will find a problem in terms of the 800 pound gorilla in the terms that innovation is. we did not do a lot about it. the problem with innovation is

ah[laughter] >> ok, how many of you are totally embarrassed because you didn't see the guerrilla? i can see the hands. it is interesting, particularly in smaller groups when i use this video, nine above 10 people will not see the parallel. -- nine out of 10 people will not see the guerrilla.

most will get 15 correct, but they will never see the guerrilla. that is the problem in a nut shell. we're so focused on budgets, the technology refresh, the list of service levels we have not met that we do not stand back far enough to look and see what is happening overall in the big picture. how are all of these pieces pcoming together? hopefully what you will walk away with today is an understanding of what is necessary to be innovative, what innovation really is, how you can go about being innovative, and i will give you one approach for how you might begin to be innovative inside your organizations. defined innovation as being an invisible gorilla. i would like to talk about why innovation is not. innovation is not a weird guy

sitting in the corner that are created and nobody wants to talk to and we cannot deal with them. the fact of the matter is an ovation truly can be a process. it can be systemic. it can be repeatable, but it takes some work to get there. ok? innovation does not have to be disrupted. we tend to think of innovation as being destructive activity. it can be a sustaining activity. it can be new ways of what you're doing today but can be better. it does not have to be a new way of doing things. i'd been one of the key things about innovation, especially today and the rate of change that is taking place inside of the industry is it you either innovate or you die. that is fast becoming a mantra within the technology space. one thing we are seeing taking place is your starting to see yet another consolidation of what is going on.

we're entering into a new world. at one point in time we had mainframes. they moved to minicomputers. now comes of fertilization. we all know someday to nirvana will be achieved. -- now comes virtualization. the way we will deal with it is to be innovative. i am not talking about the invention. i am not talking about research and development. i recently saw a quote the research and development is the consumption of cash to create knowledge. [laughter] innovation is the consumption of knowledge to create cash. that probably is the best description of innovation. it is taking the knowledge you have and applying it in new and creative ways in order to achieve more than a bit --

benefit. there is technology innovation. it isd] not necessarily inventig a new technology but finding new ways to apply the technology. the example i have is the $100 pc. it has built in the internet and the holding is meant to be priced at $100. there is business model of innovation. who better than southwest airlines to demonstrate the ability to totally innovate and industry? product and service innovation. to this day i am still amazed, i remember watching star trek and thinking i want one of those communicators. [laughter] guess what? i got one. my problem is i have three of them at the moment. that is another story we will talk about later. process innovation. sit and think about -- how many

of you have seen the old world war ii movies? one of my favorites was "a victory at sea." it is interesting because there was one episode that said the war was really won by the merchant marine. it talks about downloading liberty ships and the cranes lifting of an dropping the tanks and everything into it. do you realize that the technology of container ships that we had today was totally available back then?

airlines was. as i indicated, there are multiple ways to innovate. most people think innovation is the guy up there in the upper right-hand corner and you throw him into our room and he comes up with this great and wonderful ideas, but the fact that the matter is innovation can be done in a very systemic, repeatable, sustainable process. let's talk about innovation within the context of i.t. i'd think the number one problem that will face i.t. going forward is how do we innovate? had we take all of the new technologies that are coming to the forefront for us, all of the new ways of delivering technology and creating new value propositions for the i.t. department? the first thing that i always talk about is something that we in the computer science world tend not to take seriously, and

that is the fact that the matter is we do not really cause a change to take place. weaving we do. huizenga the invention of the pc was all wonderful thing that totally changed the world. -- we think we do. place it there is an underlying social reason for the change or there is an underlying government regulatory reason for the change. all technology can do is enable the change, facilitate the change, or accelerate the change. we do not cause the change. if you want to be innovative, you want to understand that, because your ability to innovate is your ability to understand the social trends, the economic trends, the business trends, government and regulatory trends. see where they will end up and they carry out how to take technology and apply it to the problems it will create.

we live in interesting times, which most of you will remember

there is not bcc in the world who wants to have a capital and asthma in information technology anymore. he wants all his capital investment to be applied to assets at either create some type of differentiating advantage for them or some kind of separation for them, some type of higher value than just doing what other people do. the other thing, and this was from the recent recession, and it has been a true driver for this. company executives now want

information technology attached to the rheostat. the want to be able to turn it down when the economy goes down. when the economy goes up, they want to be about to put the rheostat up. in other words, the wattmeter information technology. charge for and what the network. what they want is something that correlates to their business in some way, shape, or form. i was meeting with a financial institution, and they said within five years, i want to come to you for 8 billion units, and i do not want it to be cpu cycles. i wanted to be accounts, transactions, customers. what is service level attached. and the price for the billing unit has to have a service level attached to it. by the way, i do not care about 59 or 69. i want 100% availability from

3:00 in the afternoon to 3:00 in the morning friday night and saturday night. that is when people get their payroll check any access to the money. the rest of the time, i do not care. we're moving toward a world of natural killing units, energy efficiency. i want to locate my data centers in the most cost-effective way at that i can. if you do this study, it turns out to be iceland. probably not good for us. the other thing going on is the rise of the browser. now that i can get information delivered how i want, where i wanted on just about anyplace in the world, the nature of how provide that information is changing. now what is driving these? and i apologize for the slides. they will be available so you can see them directly. their three major macroeconomic trends which are driving this change. the first is the concept of work mobility. we have a new demographic coming

into the work force. that demographic actually chooses where they want to work before they choose who they want to work for. and because of that, they are mobile. they have different work schedules. we have entered into a world where it -- how many people, particularly in my generation, we were the first ones that had to come up with the concept of the two career couple. someone was talking about the world of ozzie and harriet. we started having things like who is taking food to soccer practice or hockey practice. and we have violin lessons. we had to come up with flexible work schedules. now that is the been compounded because my generation has introduced not just the child care issue but the elder care issue. we're trying to figure out how to take care of our parents. we need more flexible schedules. we're also ritualizing in the

sense that one of the goals we have as a company is to get more and more people working at home. one of the reasons is it turns out that it is not all that efficient to bring people in, to have them commute and come to a location when most work can be done interactively. add to that this last recession in particular, introducing the concept of what i refer to as the process cloud. but this whole hollywood business model. those companies that have outsourced those things which are critical to their business also had to rheostat attached to their business processes. they were able to cut down their fixed expenses. they were able to cut down their variable expenses as their revenues were decreased. if you combine the first one in the second one, you have an interesting problem for the information technology department. we have had this happen. people coming into work and saying -- yes, i work for dell.

the mac is what the new employee brings in. they have built their life around it. we have the wonderful thing called the ipad which is compounded the issue. [laughter] the fact is, you're walking into an environment where we're basically going to have the people coming to work, bringing their. the presence device with them. their work devices gone to be their phone, ipad, there tablet, their netbook. it will be theirs and not yours. think about the security and information compliance problems that will cause for you. it is even, how did more that we're outsourcing more and more of the work. any to be an activity on the part of your business which could be going on in four or

five different countries simultaneously and the work can be passing among them. how will we as the information department deal with that? the technologies are there. but we have not figured out the management and policies. the last of the major economic trends we see is this rise of utility computing. or the clout. there are myths about the cloud. i could talk for hours about that. we will run into the pit of the status of the cloud changes moment by moment. the fact of the matter is the economics are utterly compelling for cloud computing, and we will all be moving in that particular direction. i am just going to talk about the eight -- 3. some of microeconomic consideration, if you will. and these slides will be available to you. first and foremost, how many

people remember paul strauss men? famous for a harvard business review article he wrote in 1992. your ceo immediately handed it to you if you're working for the information technology department. it was the of this -- infamous article that said i have surveyed the world of information technology and have yet to find any business value created by it. yes, now everybody remembers that article, right? yes. > he is still at it and enhancer'' little or no return on investment associated with information technology. how would you like to be going to your ceo and saying i need to spend $10 million on this project, and the sec says, where am i going to be? well, mike roi is going to be zero. not a very pleasant situation. then we have this guy called nicholas car. how many people have heard of

him? there's a wonderful article, i think summer of 2005, called the end of corporate computing. cherry title, right? end of corporate computing, he basically lays out the 90% + of everything i.t. departments do is ubiquitous. it means every i.t. dept. in every company in organization is doing the exact same thing. which means i.t. has no compelling strategic value. so you're sitting in front of your ceo and have given him the bad news. the $10 million he will spend will have no return on investment. and he says, i can live with that. yes, it will get me some kind of strategic value. sorry, not going to happen. [laughter] ok. now, our friends in the ecology world have come up with this thing called the red queen

hypothesis. what the red queen hypothesis -- how many people remember the red queen? you cannot be a space scientist and not read "alice in wonderland." it basically said that alice had to run faster and faster and faster just to stay in place. it is a holding in game theory and ecological science about the red queen hypothesis. well there are holes in -- it holds in our industry, too. it is called what? it is called the technology refresh cycle. playback in the good old days when we had mainframes, we refreshed about every 17 years roughly. you talk to your accounts, and they will say we will appreciate that over seven years. it is down to 18 months for refresh cycle is now. so you're sitting with the ceo, and you have told him he will not get any return on his investment for his $10 million. you have told him he will not

get any strategic our competitive advantage for the $10 million spent. and you have to tell him he gets to spend it all over again in 18 months. how popular are you? that is the world we are moving too. that is the driver to utility and clouds. that is the thing that says we, as the i.t. dept., will have to get our heads out of our budgets and -- if you did not think we were going to say that. [laughter] we're going to have to pay more attention to the business model and the use of information and solving business problems, and that is what will cause us to be innovative. so let's talk a little bit about the things that are coming toward us. the first thought is clouds but other more myths associated with the clouds than there are about the last sighting of elvis presley. there are only three fundamental types of clout.

infrastructure as a service, platform as a service, software as a service. everything else is built upon the three of those. if you're talking of a storage as a service, that is a variation of infrastructure as the service. if you're talking about erp, that is just a variation of software as a service. so there is only three basic forms of the cloud. there is no technology use by amazon, google, and what we use at delaware, the technology used by any of the cloud providers, any of the software of service providers, any platform as service providers. it is all different. they are architecturally different. and they're pretty much incompatible with each other at the moment. that is being worked on. for the time being, the clout is an in-state for you.

you need to be thinking about it, but it does not necessarily what you want to be doing right this moment, with exceptions infrastructure is a great way to provide services. long term, because what innovation is about is understanding what the in-states are going to be and then applying the resources you have in order to achieve that in- state. this is what we believe the trajectory of the utility computing models are going to be. again, i apologize for the size of some of these slides. the black line is traditional i.t. in this case, we look at it as i.t. outsourcing because that is the primary business of dell services today. we have a lot of interest and in the bidding at the moment. the purple line is software as a service. that is probably the big endgame.

and i currently am in the process of writing a particle called "the end of open source." james and i have worked together. he knows i am big advocate of open source, so why would i be writing that article? the value of open source is always provided as being usurped by software as a service. as you have smaller and smaller companies, even individuals able to have this tremendous breach of providing capabilities do software service, and actually get paid for it, suddenly all the traditional track since of the open source, the economy, is all still there, but i can actually maybe pay my bills doing it. software is a service and platform as a service are probably the biggest threats to open source as there has ever been. the blue line is infrastructure as a service. white is infrastructure as a service making that little nose dive? well, it is making it because where is the value in information technology?

it is in the applications. it is in the data. it has nothing to do with spindles and cpu cycles and and with and all those things that most of us do on a daily basis. we're fast becoming irrelevant, if you will. our innovations important for you? in the last line, the green line, as a platform as a service. you're starting to see interesting evolutions in platform and service. how many people are familiar with people asher? microsoft calls it a cloud. i refer it to a dot net in the sky. it is interesting. we are now going to be creating appliances, so you can actually meet the needs of that touchy feely, i need to hug my server, we cannot do this thing called the cloud. we will put those appliances you

can drop in your data service. and it will plug into the cloud we're building, and in this case it is in plano, texas, and you can do that in the facility. over time, guess what is going to happen. you're not going to hear about the appliance anymore. you are just going to use the one that sits out in the clouds. let's talk about the systems and operations business. we have -- it is currently evolving, and this one is easy. i will tell you what the endgame is. it is a virtual data center for every single user. that is what we're lobbying to. so when i am working or whatever i am working on, and i get up from my desk and head out the door, whatever i am working on appears on my phone. or when i get in my car, it appears on my navigation system. we're probably a little ways away from that, but watching people put on their make a, eat,

do everything -- maybe not. so we're moving to a world where all the things that most of us are probably doing in our day jobs, they will go away. what we will be providing is a virtual data center for every single user. by the way, the reason i say that, and i cannot tell you how to get their right now. that is the difference between innovation and invention. engines shows you how to get there. innovations as you have to get there and think preemptively about how you're going to do that. i will also tell you that the applications marketplace is changing radically. the endgame for the application market is very interesting. first off, we will get to something called applications components as a service. where i will not buying dips an erp system. i will buy bits and pieces of de an erp system and use them when i need them. how many people have heard of a fico score?

i know somebody has had a mortgage. it is really an application proponent. the company makes an interface available and if somebody wants to evaluate you, it is in the application or goes out independently. and then they do not issue you your credit. [laughter] but that is not the ultimate and day. the ultimate endgame of applications is applications will go away. what will happen in its places you'll have executable images. those executable images will have a ton of data attached to them. the met that data will describe what that component can do, what type of data it can work with, under what policies it can work with, of -- underwent governance rules are associated with it. they did not object sitting out there which will also have the tons of meta data associated with it

describing you can use in and under what conditions and applications. and when you want to do something, you'll conduct a search. the search will match the executable images with the information objects, and that will be the application of the future. now, how do we get there? one of the things that i always find amazing is companies and government agencies, and everybody talks a lot about innovation. but going back to my invisible guerrilla, it is really hard to think about innovation when you're worried about your budget, worried about the next technology refresh cycle, when you're losing all of your staff to the new company down the street who is offering the start of dollars. the other thing is if you're going to innovate, you have to try a lot of things. ok. innovation is a driven by fell

year -- failure. that is really hard to say, especially by this audience, because the bennett buggy cannot tolerate fell year, it is nasa. but at the end of the day, you have to find ways to do a lot of experiments, try lots of different things, and basically gain information you need to innovate. so how do we begin to get a system innovation process in place? well, the way that you accomplish that is by establishing an in-state and work backwards. that is the easiest way to do that. so how is i.t. going to evolve over the next five, 10, 15, 20 years? i will guarantee you and certified today that i will be accurate in everything i say as long as you do not only to a timeframe. fair enough? ok. this is the evolution that we see. real-time infrastructure, as

you heard me refer to the concept of every single user having their own virtual data center, these are the steps that we think are necessary to get there. the first thing we have to do is we have to begin abstracting what is we do today. you cannot begin applying for ritualization beyond the server or be on the client at the cannot abstract and define what you're doing today without getting into individual specifics. once you look at abstracting what it is -- once you abstract what you're doing today, you can start looking at different ways of doing it. it is really funny. the innovation group that i am now heading is a brand new group. we have never had an innovation group before. we were talking about, ok, what will be the deliverables of the innovation group? interestingly, one of the deliverables will be the new leaders of the organization. it comes about this way. what is the first thing you do

when you get a new employee? you teach them how we do things here. what is the death knell of innovation? doing the things the way we do things here. one of the goals i have is, how do you get people to start thinking out of the box? again, i will pick on at james. he hit -- pinos i have a generation -- that i think out of the box. i generally do not think there is a thing called a box. which is how i am doing what i am doing these days. anyway, the key is you need to abstract what you're doing today. do not think about spindles are cpu cycles are this or that software. abstract out what it is we're doing and what we're trying to accomplish. once you have done that, then you can think in terms of ritualizing the infrastructure. and this is not just ritualizing servers. we have to a virtualize our network activity and our stores

in the way we do storage. then you can start talking about, ok, if i have abstracted what i am doing and have a everything, ized consider moving things around. once i have started that, we run into the -- how to describe, this of this thought that week, with then i.t., have maintained for years. that is, we're probably the classic case of the cobbler's children run barefoot. we rarely invests in ourselves. we really pay attention to system management. we rarely think about storage management. in fact, what we generally do is rather than automate, we throw people at problems. the real key to moving forward, and you really cannot do it until you have done this abstraction process, is how do i begin applying automation?

when you start talking about a virtual data center for every single user, you're talking about all the issues of managing and maintaining a data center for each individual user. a virtualization is great unless you're not get a configuration management and systems management. virtualization compounds your problem in managing a data center. so did the center of a mission becomes the next big thing. followed by trials. i would argue we're not ready yet. everything i say is for a fact. there are clouds, and you can use them. we have dealt things out with the nebula. but because as projected by a lot of the industry is not here yet. before you can be effective in using clouds, you have to accomplish all the things i have listed here. the other thing in terms of

thinking about it is understanding with the vendors are going. at the end of the day, what we're likely to see is a very few large, hyper scale cloud providers. there is a book out that this directly from this idea. but what you'll also see is lots and lots of smaller clouds build on top of these hyper clouds that are very rich. they follow an interesting long tell theory of markets. this is what will cause the end of open sores. but i am saying there will always be some open source, but you'll probably not see the apache projects a rise up again. in the middle is the great unknown. it is still evolving.

the service providers are still in the formation. we do know that today's hard where vendors are rapidly moving into becoming hyper clouds suppliers. that is where we all want to end up. it is our amazon is going, where google is going, were all those companies are going. then we have the softer offenders moving into the platform as a service space. -- the software fenders. virtual is taking a piece of hardware and making it appear to be a lot of different pieces of hardware. clearly, a cloud technology which is taking all those a virtual pieces of it. the web 2.0 and 3.0 technologies, how can i created as a functionality and bring them together as a single one.

27,000. the world we are moving to is only going to work if we get better as security. and it is not security as we know it today. security as we know it today is basically a boundary condition. it is also a primary. you have access are you do not have access. at the end of the day, we're going to have to figure out how to do digital rights management are digital restrictions management. here is a case where we can go outside of our industry can look at things like what the entertainment industry has developed. how many people are familiar with something called mpeg 21? it is worth reading about. it is a brilliant digital -- digital rights management environment. the reason we have to do that is not just the security issue, which is almost the fool's game. you'll never be able to be 100% secure with a counterattack

condition. it is impossible. . it is because of regulatory issues. more and more laws are being passed requiring personal protection of information. how many people are familiar with the terms of fiduciary responsibility? if you have a bank or somebody. that is being applied by a lot to your personal information. whoever holds the personal information. europeans are really getting strict about it, but we're moving into it. massachusetts passed one of the most interesting restrictive, probably impossible to implement privacy laws, that i have ever seen. i sometimes jokingly say that

there's probably not a company in the world that is not in violation of massachusetts privacy laws right now. the germans, particularly when it comes to health care, become very stringent. how many people have seen the apple iphone ad or the doctor's looking at the mri on the iphone? that is great. the technology exists. if you are a german doctor and on one of the trains, as soon as he crossed the french border, you're iphone better shut down. that is the way the german laws read. how many people know what is the one application almost no company in the world runs anymore? in a totally outsourced it. it is outsourced almost every company in the world. payroll. why is that? it is to stem application. we can all run an application, right.

it is to keep the payroll system up-to-date. that is why payroll is outsourced. one of the problems facing us as i.t. is any information we hold as individuals and individuals' transactions probably will have the same problem as payroll has today. there's not a lot in the business world that does not assisted with individuals and individual transactions. we're the cobbler's stepchildren. the fact is we have to be much, much better at process. we have to go all the way. we have to get better at process and better at automation of our processes. bpo 2.0 is more for business people and less like the side to the community. basically talking about the businesses and outsourcing more. it is not critical to my company, either does not court or does not provide competitive separation or differentiation

for my customers, i will not do it anymore. and the one thing nobody talks about the probably the single most critical thing is unified communications. the fact that our phones, lap tops, our tv, and we started using the term. of presence device which we borrow from the telephone company to reflect the fact that i am going to have a context that i do my business in, that i operate in, and that has to be able to move with me wherever i go. and because we're so distributive and working with so many partners and so much is outsourced, you'll be totally dependent upon the communications system for maintaining the context of our work. therefore, unified communications will probably be the critical underlying infrastructure we all use. the obligatory note from your sponsor, the way we're looking at this at dell is it something we refer to as our meta cloud

model. yet to be concerned about compute, storing, preservation, about the securing the information. and we also have to recognize that this is not going to be an overnight switch. you cannot read about everything you have got to put in all of this new stuff. we have to find ways of blaring the technologies and capabilities and processes, and security, and everything on top of existing systems. so someday you may have an as- 400 as a service offering. we still operate months. how many people remember months? i keep expecting to walk onto our race for one day and see a multi system running. it is like an archeological expedition. but that is the model we're going to move to.

how do we do this with access? who can use it for what purposes? and do you have specific permissions? one of the things the european health-care laws say. today if you have an x-ray, it is probably not a radiologist inside the building that is looking at it. there's some under the european laws. their boundaries. you'll probably have to pull out your phone to give permission for that person to do something. but we do not have infrastructure in place to do that today. so what you are going to see over time is this a blaring of

infrastructures on top of infrastructures to enable the in-state, and then we will pull things out from underneath. that is what you will need to focus on from an innovation viewpoint. it is not just the data center issue. every device will probably be a virtualized. every device has the ability to participate in part of this infrastructure as a service platform, as a service software, as a service model. so clearly, what your in-state has to look lighke is one of you do it for everybody and do everything for them or they do it for themselves and you have to give them the ability to do that over time. and you can move from doing things totally yourself to a continuum where everything can be done for you. and theolas carr's book

article, he spends a great deal of time drawing analogies to the electric industry, the power grid. if you think about it today, i have these lights staring me in hawaii eyes. i will not be able to read anything for the rest of the day. however, the electricity driving that could be coming from canada. a could be coming from the pacific northwest. we do not know, and guess what, we really do not care. the fact of the matter is, we in the information industry are moving in the same direction. as long as we understand that, then we can quit counting the basketball passes and seed th te gorilla walking through the room and see how we will have to deal with that. thank you very much. i hope you all have a wonderful day. [applause]

>> dang, i thought i was going to get away without questions. any questions? yes? >> you mentioned a couple service platforms -- [inaudible] >> it is interesting. we get into a lot of conversations around data as a service. and it goes back to -- man, data as a service is one of those terms that the semantics are not well agreed to. because you could be talking data storage as a service. we could be talking backup and recovery. we could be talking disaster recovery as a service. when we talk about it as a service, what we're talking about is this concept i shared

with you on the information object and all the mteta data associated with it. what we're probably going to evolve to, and i am from a vendor so i can say this, one of the problems we have with all the semantics associated with cloud it computing is the fact that marketing departments have turned everything into as a service. i jokingly say that i will go to a store and see a ball point pen as a service offered somewhere along the line. data as a service really is a precursor to information as a service, which is where i will have, for example -- the best way to think about it is what is happening in the healthcare space. the concept of the health-care information exchanges were have all of your medical information, every x-ray ever made, every mri ever done, videos of all your surgical procedures. how many people are going to get

plastic surgery now? [laughter] all embedded in this object, and then you subscribe to the health information exchange for the personal medical records, or there are all kinds of business models. the other thing as sort of alluded to that you have to watch as the evolving business models coming out of all this stuff. that is the beginning of the data as a service type offering. those are the precursors, what we think it will turn into. right now, something like your dopplerfico score or -- something like your fico score the credit reporting agencies are starting to have data like that. we think the end game is a formation as a service. the key to those really resides with the legislatures of the world. that is the one area we have to be the most careful of. it is a mine field out there, the whole compliance space is a minefield.

another question. >> [inaudible] you mentioned the markers of the plants that will be released. can you explain the difference between the user application and the appliance between it will do? >> it is still a process in definition that is going on. i will officially refer you back to the joint microsoft and dell press releases for the real terms. anything as to say here i am expressing as my personal opinion and not necessarily that of the company. [laughter] everybody heard that, right? >> [inaudible] >> there is a microsoft press release associated with it, too. the idea is this, ok, there is something most people will not share. if you are a cio in the business, and i was not kidding, some guys actually have to go out to the floor and see their server and that is for that date

it is. it turns out it is not just the i.t. guys. the internal auditors are fond of being able to say there is the machine or that data resides. and there's still the jurisdictional issue i was talking about. this time last year, actually in the state of taxes, the fbi walked into the location and took out a whole string of storage, only with shared storage among multiple companies, and people are still kind of worried about that. so there's still people who actually want the fiscal -- the physical hardware on their side. for all kinds of degrees. what the idea behind the appliance is is that you'll be able to order a machine, and it will come fully configured with everything on it that you need to be about to run assure. if you have the clout on

microsoft or h-p is trying to do this, the need to take that application and it will run perfectly. in addition to running perfectly, it has the added advantage that if you run out of space, they do not have to know that six months in advance. you can basically burst out to either microsoft or dell or hd, whoever. there will be multiple appliances. we currently have a platform as a service compliance based as a service that you can order. you can have that. we're in discussions with other people who have cloud offerings would be able to deliver an appliance on to a customer site. so really what the appliance is is basically what we used to refer to as turnkey systems. at the end of the day, that is what they are. and by the way, off the official word of my personal viewpoint, it is a transition until we get to the extra clout in the sky that we will all eventually end up using. the electric utility, the power

grid. another question. >> of the beginning of your talk, you mentioned that a lot of vendors of clouds services and that they are all non interoperable and work in different ways. do you have a pretty consistent vision for how most i.t. will be delivered in the future by different specialists companies like payroll processing companies? what kind of work you think is needed in the future with regard to open standards? if open source is going to die, how do you get your data back from the company? >> a great, great question. this is one of the things that when we work on what we think the in-states will become of them to do not read history are doomed to repeat it. this is a natural evolution of what has been going on from the beginning. and the way to think of it, how many people remember dce? there are a few old farts in the

room. dce of was our first attend a cloud computing, believe it or not. unfortunately, you did have to be a rocket scientist to use dce. then we involved in to something that was much better, much more flexible, much more capable called corba. how many people remember that? you needed to be rocket scientist with a ph.d. in computer science and 300 years' experience to be able to use corba. it could do everything i have talked about. what has happened is what i referred to as the rise of xml. xml has introduced an independent way of describing things, something that can be both program radically and human-readable to describe what the data is what the system can do, with the application component is capable of. xml becomes searchable and becomes a pattern unmatchable. xml becomes the basis of

intractability between application componentry, the images that i talked about, the objects that i talked about. so it really becomes the evolution of xml. i often cautioned people about one of the things this new world requires, which is an organic mindset of verse is an engineering mindset. we are going to have to move to organic models of security. look at with the immune system does. it does not keep you from getting infections. it just enables you to be a tough fight it. it also allows certain -- we have things filled with good bacteria. they do nice things for us. we have to move from engineering models to organic models. the sanding will be true in the xml space and the meta data associated in that we will have languages and dialects and translation capabilities. and we will have all the

misunderstandings' we currently have a siemens. but that is what we will evolve to. it will not be necessarily standards much as it will be consensus building around dialect and xml description approaches. that is in proper ability and how we think it will evolve towards the in-state. any other questions? she is coming onstage. thank you very much again. [applause] >> thank you. [laughter] >> "book tv" in primetime continues tonight with a focus on campaigns and elections we talk about the presidential race in 1960 and how it shaped the next three presidencies. a senate his torn on the 1932 race between new dealer fdr and and commit herbert hoover. and then we would like about the

campaign and subsequent assassination of americans 20 its president, james garfield. "book tv" is in prime time of this week on c-span2. >> and about 10 minutes, the heritage foundation will be hosting a discussion on solutions for america. while we wait for that to get under way, i look at some of the issues that led to the current economic situation through the financial industry. we will leave it when the heritage foundation event gets underway. >> "washington journal" continues. host: the washington journal summer series continues this week with a look of the legislation that was signed last month into law. the whole week will be looking at different aspects of it. on monday it was the financial gulation and government power. today, we will turn our attention to banks. wednesday will look at consumers and thursday will take a look at investors and friday we will

wrap up with looking at how to prevent a future financial crisis. james chessen is here to talk about the impact on banks. mr. chessen, if i could just begin with a part of the law that deals with banks and mortgages and how about will be impacted. it requires lenders to retain at least 5% of loans that are securitized. can you explain that? what is the impact for banks? guest: part of the idea is that if banks have some skin in the game they will be able to manage that better. the practical consequence, though, is when you think about a lot of small community banks that are making mortgage loans, their model is really to sell it to fanny or freddie to try to get it off their books. it has an added complication to have a process that. and all those things that go into the business model that

they have, how they do their mortgages, what they retain, the capital they have to will against that. the concept is very simple. make sure that you have the equity involved, some reasons to wonder right to 12. the practice of implementation is a little bit more -- to underwrite well. the practice of implementation is a little bit more complicated. host: you look at these loans that they have repackaged. they make them into some kind of security. but that day -- but then they ensure they know what is in these packages. they can say to a were the investor, yes, we know what is in these packages. guest: it is not just banks that are making loans and i is not just mortgage loans. and it is not just the largest banks that are compiling the loans or the wall street firms that are taking these to package and resell to consumers. a t of these are your main street banks in local communities.

they have underwritten these things the same way for decades and decades and the problem, really, has been in this current crisis a lot of these mortgage loans were made from non-bank for loners -- lenders. it is a bit shocking to think that 30% of the industryhas existed in the banking industry for more than 100 years. and you do not have that kind of stayin power without treating your customer's right, having a long-term approach, whether it is mortgages or other types of lending. the first thing to understand is where the problems were. if the vast majority of banks in small communities have nothing to do with these problems. but they are caught -- they're caught in this next and will have additional requirements and it definitely affects their ability to make loans in this community. -- in their community. host: stricterenalties on a

borrowersaying off alone early and lenders must feel to ensure of the borrower's ability to repay their loans. can you talk about this? guest: initially with a lot of non-bank providers, they would make it for two years and then it would reprice after those two years. there were often node -- there were often offered very low interest rates. what we have all discovered, of course, is that works great, but house prices were appreciating like crazy and people were flipping arms and making a great deal of money. and of course, those products are our favor. no one is interested in offering those products. and in fact, community banks were not offering those. host: if you want to get a mortgage, what do you have to have today they did not have to have three years ago when it comes to this provision and

making sure that borrowers have the ability to replay those loans -- repay those loans? guest: the big thing now, frankly, is that you have got to come in with a lot more of your own money at stake. if there are a lot of loans being made aware of of our work is only putting 1% or 2% and sometimes no money down. now it really is, how much money are you putting in to protect that deal? host: consumers are required to show proof, pay stubs, bank account statements, tax forms, to prove that they can afford the loan. the final point i want to talk about when it comes to mortgages and is the improve transparency of compensation for loan offers and mortgage brokers. how does that work and how does the law change this? guest: there have always been concerned about -- concerns

about what the broker was taking, the fees related to them, getting borrowers into higher-priced loans when they could have qualified for a lower loan. there are more restrictions on that now. and that is a good thing. consumers need to understand what t transaction is that they are undertaking. what is the feed that they're paying? whether it is a bank or eight -- what is the fee of off that they are paying? whether it is a bank or a non- paying off broker. host: there is a story today in the "wa street journal."

guest: and i think that is exactly what we are talking about, trying to get incentive payments to put somebody into a higher across home when they could have afforded -- into a higher-cost home when they could have afforded something else. i think that needs to change. the customer needs to know what the -- needs to know the product they are getting. these are roles that were being undertaken outside of the deal that was just passed. these are things that the regulators have been the k about for some time. host: yes, these are new rules that have come out from the federal reserve separate from the legislation pitiful also said on monday, --

why wasn't this information given before? why would it take a role to lett their loan is about to change? guest: there were a lot of disclosures and the question is, what was really understood by the borrower? go back a couple of years and think about the mind-set of some one who was interested in the two-year adjustable rate and then they'd read prices. many people off one to that because they thought their monthly payment was going to be lower. -- many people wanted that because they thought their monthly payment was going to be a lawyer. or someone was going to flip again did not plan to keep it for more than two years. people were trying to take advantage and had no intention of keeping in the mortgage. but as you know, things change very quickly and when the market prices fell, it was difficult to get out of those

loans and that became the problem for the stepped-up trade off, which w initially very attractive to many borrowers, was unaffordable. now disclosures are required to make sure that the borrower understands when the rate will adjust, what the conditions are under which it will and can they afford that? host: by the way, in washington this morning at our around 9:00 a.m. eastern time it started, a housing conference. sean donovan is speaking out. this is live coverage on c- span2. you can go there to listen in on that. treasury secretary geithner is there with a lot of industry executives as well. if those go to ohio, gary, democratic line, your first purified -- you are first. caller: i think our government has made it too difficult to get

loans. the biggest factor in this failure is fear. when this happens, it causes layoffs and production closures. this causes even more layoffs and less spending and more layoffs. this causes 20% of -- the media causes 20% of [unintelligible] host: we were breaking up there. guest: i think there is a tremendous amount of uncertainty out there today. some of it has been greeted by the laws that have been passed. we are facing probably 00 pages of new regulation. it is very hard to deal with that. and businesses as well, they're

dealing with health care costs that are unknown and uncertain about what that will mean. they are facing deregulation, tax increases. all of these are affecting the ability and willingness of businesses to expand and hire workers. there is a level of uncertainty that exists out there. until we get over that, we will have real problems. i agree, the cycle is very difficult to break. host: in addition, here is the headline in the "washington journal post -- off the washington journal." guest: businesses are not borrowing at this point. they're being very careful. they are hoarding cash. their word about what is going to happen over the next three to six months. they are not interested in borrowing and in some cases they may now be a good idea to borrow. if you do not want businesses taking on- you do not want

this this is taking on the circumstances they cannot afford to pay for. host: just a few years ago, someone who may have been credit worthy would not be a good risk today. charles, independent line, you are the next phone call, go ahead. caller: i'm so happy that they did away with the office of the thrift. they were a disgrace. i am a korean war veteran, service connected to my and wanted to buy this piece of property and a five star banc dance around. my credit rating was over 850. i could have bought this property and paid cash for it.

i never did get my mortgage 3 the flag star banc. -- through the flagstar bank. my son was coming back from afghanistan and he had to move his arm -- his family from the army post. i filed my complaint with the office of thrift. host: let's talk about that. it has now been eliminated. what does that mean for banks? guest: what it means is that it will be a change for the regulation. obviously, there has -- have been a lot of banks regulated by the office of thrift supervision and they function quite well. many of them were thrift charters. if they had a long history of beg dedicated -- they had a long history of being dedicated to finance.

and they got pulled into this whole mess even though they were good banks making good loans. the good thing is, what the bill did was preserve the thrift charter. it said four institutions that have long history of making loans, they will be able to continue to do that. host: what was the vocal role -- volcker rule? guest: tries to separate out proprietary trading with banks. it also sets of complications for the hedge fund. this is going to be a major rule making change. it is hard to separate out the function of what banks do, particularly those that are making markets.

it gets very complicated as to what reallys the interest of that institution and what is the interest of the customer. another thing related to the volcker rule, what will foreign countries do? if other countries do not adopt the same types of rules, this business and the taxes paid on that income flow to other countries. we are not alone in what we do in the u.s., whether it is capital, the vocal role -- volcker wolf. it really depends on the good -- the competitive aspect. host: year is an article from the "washington post." in the meantime, what does that

mean for banks? guest: the is uncertainty. you do not know what the rules are going to, or what they are one to be. the of the thing is comfort if you are an employee working in those banks working in those kinds of transactions, you might say, i'm going to go oveeas and work there because there are few rules. if i'm going to leave the bank because i want to protect my job. there's a tremendous amount of uncertainty about what ll happen and what that means for jobs and what that means for international competitiveness. host: as we go to the nexphone call, i want to show our viewers more banking authority over derivative spirit david on the democratic line in

washington, go ahead. caller: you financial people so discussed me in so many ways. i am an engineer. we are leaving this segment to go live now to the heritage foundation. they are hosting a discussion on a new policy created called solutions for america. this is live coverage on c-span. >> for those of you here to me in for our regularly scheduled bloggers briefing. we will take questions from the web and those of you here today, and i want to remind all of you that you can e-mail us, and we will get questions and comments that way as well. for those of you interested in a recording of today's events, we will have it available on heritage stock for later today. -- heritage.org later today.

>> thank you. on behalf of our board of trustees and the entire staff of heritage, it is also my great pleasure to welcome you here today for a special event, the unveiling of our publication, "solutions for america." after a lot -- 19 months of liberal change, america is in really the new policies and real solutions. liberal politicians have desperately been campaigning on the notion that the other side -- that is, we conservatives, are not offering anything new. that we have no policy ideas, no alternatives. i think solutions for america proved that that is false. "solutions for america" is a comprehensive guide to reforming government, instead of 128 conservative policy alternatives in 23 broad categories that define what a more conservative government

would look like. "solutions for america" presents a powerful policy agenda that will resonate with mainstream america and that is a real alternative to the excesses of the overreach we currently see in washington. unprecedented power and control has been centralized in washington. the government has blown exponentially in size, scope, can reach. yes, we have opposed these bald power grabs, and yes, we believe we should have opposed them. however, that is not to say that we do not have alternatives. we do have alternatives. one of the main concern is that we have, and we go into it in great detail, is what is happening in terms entitlement. i have three grandchildren, and it is unfair for my generation to be saddling each of those grandchildren with a $200,000

mortgage with no house attached to it because that is a share, individually, of the unfunded liabilities that our generation is passing on to impress from the big three in entitlement. what have the liberals given us? the economy is down. unemployment is up, and americans are more pessimistic about the future than at any time since the 1970's. that is why we answer these challenges in "solution for america." the policies "solution for america within" have -- the policies within "solution for america" return power to the people and doubled in transformational ideas. they are not necessarily new ideas. some of them have been around for a fair length of time, but they are born, and they are transformational. one thing we have learned is massive government and its villages in areas as diverse of energy, health care, and

education, have forced the government to do less well those things that it should actually be doing, such as providing for the common defense. fundamental elements of the american spirit, such as individual freedom, and since the dealership, federalism have been ravaged by the less radical agenda. we think america is at a tipping point. we want to make sure it gets back to its basic routes, to the fundamentals as outlined by our founders in the constitution. we have to reignite that flame of liberty that made america the greatest nation on earth. "solution for america," we believe, provides the policy fuel for that agenda. some of the specifics that we talk about "solution for america in" include placing a cap on federal spending at 20% of gdp and limiting the future growth

to inflation plus population, require the three entitlement programs i already mentioned to live within firm congressionally approved specific budgets. limit the unsustainable growth of welfare spending and its 71 categorical programs, and require recipients to give something back for what they are getting. pay for workers' wages and benefits comparable to what their counterparts receive in the private sector. recommit to peace through strength, repeal obamacare, and on and on. revive federalism as one of the fundamental beliefs that we as conservatives believe in, where states are traditionally and typically the laboratories of experimentation, where the federal government can learn so much as it did back in the 1990's on subjects like welfare reform from wisconsin, michigan, virginia, from other

states that were experimenting. "solution for america" office something very new -- real reform based on ideas and principles. the counterpoint to thought was an expensive government programs is not different thought was an expensive government programs. members of congress and candidates for office nationwide now have a series of policy alternatives to the failed philosophy of bigger government, higher taxes, greater control, and more spending. millions of americans have already stood up to demand a return to limited constitutional government, the timeless vision of our founding fathers. we believe that "solution for america" presents a way to make that vision a reality, to build an america where freedom, opportunity, prosperity, and civil society flourished. thank you for being here.

>> thank you, and good afternoon. welcome to heritage. ed described the reasons quite well of why we took the initiative and compiled these recommendations into this report. in a nutshell, it is really no ordinary time in this country. we are at a tipping point. a lot of other serious people have looked at our trendline and said that we are on an unsustainable course. this report addresses that and would seek to make america a sustainable nation once again. two of the big ideas i want to emphasize relate to our entitlement state, and in a nutshell, i think if there's any take away i would ask from you today, it would be to realize that the era -- we are recommending that the era of unchecked and unlimited entitlement must come to an end. there are two big wins we propose doing that in this report. the first one relates to the big

three -- medicare, medicaid, and social security -- the middle class entitlements everyone knows about. what we propose to do means and the entitlement status of those programs and require them to compete for funds the way all the other programs do and require congress to actually look at those programs every year, every few years of necessary, to figure out if they are on course for not in ways to make necessary changes instead of letting them go on automatic pilot. the other idea relates to the programs that comprise our modern welfare state. our welfare expert has looked at that, and he has calculated that the programs got up and scattered everywhere to read the budget. they are not in one place, no one knows how much we spend. it is $1 trillion per year and about $33,000 per family with kids who qualify for these benefits. if it really work to alleviate

poverty, and many experts say the party is as intractable today as it was when we first started this endeavor back in the 1960's, so we propose a couple of big ideas. -- poverty is as intractable today as it was when we first started this endeavor. you have a category of spending called welfare spending. cap the amount of money spent and let it grow only to be -- only according to the amount of inflation every year. again, and require congress to look of these programs, determine which ones work to alleviate poverty, which ones do not, and do something about those programs that are failing, and believe me, there are quite a few of those. the other thing he proposes in our report of this quite exciting, is to turn a portion of the welfare received into a loan that we repaid over time as the person surmounts poverty and becomes more self-sufficient. he also proposes putting in more work requirements for programs like food stamps and housing.

there are other big ideas in this report. another one relates to federalism. what we get at here is a sense that over the years, the relationship, the balance of power if you would, but when the federal government and the 50 states' sovereign governments has been altered in such a way that the federal government now dominates. most of the state level organizations have come to washington to represent the state's actually spend most of their time here petitioning for more money. they are basically rent-seeking entities, and they are not worried about the notion of a sovereign state governments that have their own ability to manage the affairs and health care for their citizens in local ways that reflect local initiatives and not the one-size-fits-all approach that has taken over areas like education, transportation, health care, law enforcement, homeland security, and some other areas. this report has a number of chapters in it, each of which

goes through specific recommendations on how to dissolve those response abilities from the fed to the states and give the state's once again the chance to be the lead in accessing these aspects of people's daily problems and lives. there is an ongoing debate in washington about how old we need to be. there are some who argue that the american people are not ready for bold solutions. they argue incrementalism -- gradual, slow change to try to wean the american people away from where they are, presumably supplicants of the welfare mentality, into a more independent-favored mind so they can adopt good ideas. there are others who are ready for this. they believe the american people can actually sustain the sinking, bold ideas, turning the government upside down in ways that are going to get us sustainable once again. with those kinds of people on capitol hill -- is with those

kinds of people we have cast our vote right now. it is not a time for a tepid thinking. it is not a time to be overly cautious because the base line out there of doing nothing is the worst possible outcome right now. that is what we see across the board. not just domestic policy experts, but also our national security experts. the recent review panel, including our distinguished fellow senator, came to the conclusion that the trend line military personnel for a timid and force structure are leading to a train wreck, so we are not just dealing with domestic meltdown. we're dealing with problems on the international security front as well, so we think this is a time for big sink and a bold proposals. i guess at the end -- i just want to say that there is a premise that doing things is somehow going to great

sacrifice, and it will be the political equivalent of a root canal. our argument is that the root canal comes by doing nothing. the root canal comes when you let these tramlines accelerate and go on their merry way. we have to change these programs. we have to get federal pay calibrated to be equal to that of a private sector counterparts. you have to get the entitlement program set and structured so the people who are under the age of 50 once again can have a reasonable belief that they may get something out medicare and medicaid and social security when they turn 65. average person of the 50 has discounted that. we think all these ideas are actually beneficial. it is a plus-plus. it will help this country get turned around, and we are aggressively marketing these ideas on capitol hill in the weeks and months ahead. thank you very much. we look forward to your questions. [applause] >> thanks.

again, if you are watching online and would like to submit a question, please e-mail speaker@heritage.org. >> [inaudible] michael just said that the real root canal would be a way to do some of this stuff. in here, i do not see calculations for what economic effects might come in the next six months or year. a lot of what i see from republicans, things like privatizing fannie and freddie, or revealing tarp, and it seems like the trap the democrats fell into. promising a lot and not living up to the expectations that this would turn the economy around. >> a couple of things -- one is that the baseline includes a big round of tax increases. one of our top recommendations is to do no harm. it is never a bad idea to raise taxes. it is an especially dumb idea to do that during a recession. one of our top recommendations

is to keep the rates and the level of taxation where it is today, but you can go beyond that. because we are in a recession, we have included a couple of policy ideas that would be especially beneficial for economic activity and job creation. one of them is to take the top corporate tax rate down. what we recommend is put it down to the level that is about the average of our three largest trading partners, which believe it or not, would take it down about 10 with 12 points. the other thing that we argue for is letting businesses write off the cost of investing in plants and equipment as soon as possible, hopefully immediately. that will in turn hopefully get some confidence of businesses to do those kinds of investments. right now, there's an uncertainty preventing them from doing it. there are some ideas we have put in here, so we have a very short term effect. in a lot of the rest of it has a long-term effect because the trend lines are so negative, that once you start seeing

changes come from the retirements of the baby boomer generation, for example, so it is a short and long term benefit. also, giving a lot of responsibility back to the states along with the revenue that would go with that in those areas believe will help -- really will help to improve the quality of those kinds of services when the states are the ones in charge of designing and delivering them. [no audio] investment decisions and what

kind of risks they take, makes it easier for them to make basic growth, grow their firm, so that is a short-term benefit that starts showing up in the model is very, very quickly. >> other question? yes, sir? >> i see we do have a couple of pages on holding terrorists accountable. hastert taken a stand as yet on the proposed cordova initiative? islamic center and/or mosque named after the city in spain that was convert in the name of islam? i see you do not address that directly in this booklet. >> no, we do not address it directly in this booklet.

a couple of fundamental principles -- one, at the heritage foundation, we strongly believe in federalism. there should be local control, local autonomy in questions such as zoning, etc. we also very strongly obviously believe in freedom of religion. nobody questions that. but what i think in our but we feel, we believe there is strongly is that that respect for other faith traditions have to be neutral. we do respect of the faith traditions, but we expect other states additions to expect allah's and others as well. it seems to me that of the organizers of a cordoba scheme in new york really want to bring people together, there are plenty of alternative sites in the women have that this is something that is splitting it

community apart. it is not a very sensible way to act in terms of showing concern were bringing us together. they should consider whether there are less controversial ways to bring about that religious harmony they say they want. this is not just a random site in lower manhattan. i have been to ground zero a number of times with france, with officials in new york. i know how it is considered sacred ground, and i think it is a very, very bad call on their part. >> we will take a question from one of our emailers. "how do you possibly get america back on track when the president and those who control congress are so off track?" [laughter] >> we are very optimistic at heritage, and we also believe that the american people, if you

look at the polls the last 18 months or so, have had a chance to look at and i just a lot of the ideas and policies that have been forced adonis by this administration and the leadership in the house and senate. if you look at the polls, this is a rightward tilt to the american people. on a whole range of issues. america has always been somewhat right of center, and it was even right of center on election day 2008, believe it or not. what has happened since then is 7-degree more rightward tilt as people have seen reports about spending and debt. they have seen the way the stimulus plan has worked or not work. the intervention in private firms putting unions ahead of creditors into bankruptcy situations like they did with chrysler. a whole range of these exposures to these kinds of policies has made america a more receptive to

the kinds of ideas that are in our report. our optimism is unfounded. my expectation is that come january, the people that will be in congress with the congressional voting card will look a lot different and vote in lot differently than the ones there today, and my guess is we will see a lot of in pulling this up, asking for some briefings and explanations of how to take these ideas and develop an even more. >> two additional comments -- mike is absolutely right when he stresses what the basic american political fan -- tradition is, and dallas has been asking the same question for david. there are twice as many self identified conservatives as there are liberals in united states. that has been identified most recently within the last two months. two, is simple for is that all of you know well -- tea parties.

-- a simple phrase for all of you know well. >> social security, the bush administration tried to go towards the idea of privatizing it, and the campaign essentially fell flat. what is the way to improve the whole issue of saving social security without having to divide seniors between people who are young? >> one challenge their is to draw a direct link between the kinds of ideas you talk about with respect to social severity and the intergenerational effects that not doing anything will have on our kids and grandkids. what we have found over the years is that even the and the folks see how the numbers play out, and they understand what the implications on in terms of taxation on their children and grandchildren, the kind of taxes that would have to be levied in owed to pay for all the promises being made to the current generation of retirees

and near retirees. they start to realize that they do not want to do that to their kids and grandkids, and i think there is a political bond that one can create for that kind of education. in a report, we have an idea that is very new and will be fleshed out more in the future, but it is a very exciting one, which is if they were criticized after the age of 65 they want to stay in the workforce, to liberate them from having to pay payroll taxes, and do the same on the employee taxes , af so theica -- so the fica tax would go away. it would also free up some money back to be used to keep them in private health plans and out of medicare. you could keep people basically living and working in the private sphere for a long time, and there is ways in which we calculate the benefits that would be given to somebody, so you could end up helping the trust fund as well without

hurting the workers. it is a very exciting way to put more money on the table, and that will hopefully be some of the so-called pain. >> generally, i am in agreement with what you are saying, but my concern is with the domestic economy being such a trigger for political activity in the united states, congressmen and senators is vying for the attention of voters with the economic news so prominent, my concern is -- what about foreign, domestic, and security policy and trying to go forward with specifics about how that can affect our economy in voters? my concern has to with the articulation of what we can do, help conservatives can offer

alternatives, what we're going to do in specific ways that indicated have forward and a real alternative. >> a quick response to that -- obviously, in the 48 pages of this report, we cannot go into great detail on every specific issue. if you were on the first floor, you did not have the occasion to see the elevated talented today, but starting three minutes from now in another room at the heritage foundation, we have the commander of nato forces in europe speaking at a roundtable of stairs about what specifically he envisions a future nato being, so there are a huge range of ramifications what you're talking about in terms of foreign, defense, national security, and homeland

security responsibilities that the government has to again put scented. when the government is fooling around with who should be eligible for what level of a subsidized mortgage, they tend to lose sight of what the primary responsibility of the federal government is, which is protecting the homeland. we said that is wrong. we say it is time to get back to having your priorities straight and doing what should be done. and there are very specific items in here about how to do that.

>> we want to let you know we are working on some technical difficulties fear with the hearing. we want to bring this to you as soon as possible. you are watching c-span. >> finally, what we're hoping happens is a lot of people start asking for more detail, more specifics about how you take where we are right now in this book and take it to the next level of detail, may be convincing people on the hill that this is the way to go.

>> question for you from facebook on entitlements -- he says, "how do we stop the entitlement and talent -- mentality, be and still the glory of the american ideal, and encourage people to pull themselves?" >> i think -- i read a lot of polls, and i take heart from this news, one that all state, the insurance company did about a year ago at the height of the financial meltdown, looking at how people view self-reliance in terms of financial issues. the bottom line is americans are a very self-reliant people, and they do not like feeling as if they are part of some kind of handout arrangement with the government. they want to do things on their own. they trust themselves in the decisions that they make much more and at a much higher level than they trust agencies and government regulation to do things for them.

i think the most important aspect to remember is that the american spirit is with us on this. the american people are calibrated to be receptive to these ideas, and i think they are going to embrace them when they are put out there in a way that is not to be distorted by special interest groups and that sort of thing. when is a fair shot, and fair debate, we win, and i fully expect that the resources will be there to have the debate in the years ahead. one section that seemed to be missing that i think is pretty important is campaign finance law. how can campaign finance laws be reform better ensure american prosperity and freedom. >> full an instant disclosure i think is the best way to reform campaign finance, and getting down in the month the m-- muck

is doing exactly the wrong way. every regulation gets another regulation and the violations of the hillary clinton as a campaign from two and a half years ago or john mccain was a primary is now being fined for something that allegedly happened before. let's just have full, is to disclose on the internet, let people know who is supporting whom and for how much. >> [inaudible] >> i would personally favor it. i'm not sure that we have taken a public position. >> i think because we got to go in with is the disclosure and full disclosure is that there is no limit. part of the idea is if someone gives an awful lot of money to one campaign, and that becomes public right away, then there is an accountability that is created by the way, and you have a public discussion for the candidate to have received and accepted such a large amount of

money may have an ax to grind, and that creates something in of itself, i think, a discipline as we afford, so we are libertarian on that. >> any other questions? >> i see you do have a section on making federal policy marriage-friendly. have you define marriage? >> yes, we have. >> and it is the traditional definition of marriage. >> one man and one woman. >> for either one of you -- michael, you said the american spirit is with us on these issues.

and a lot of these proposals have been floated in various forms before. how confident are you that the spirit on capitol hill is with you? how many of these do you have allies with and sponsors for on capitol hill? is it substantial, or are you still working on that? >> we have a number of them. we believe that welfare reform proposal is going to be introduced by eight congressmen named jim jordan from ohio in the months ahead, and some of the other ideas have been developed over time. for example, one senator actually offered a number of these tax ideas into hamilton did stimulus plan that got 36 or 37 votes, and some of the federalists, we're working with a group of interested members on the house side, and my guess is we will have four or five pieces of legislation they will

introduce in the months ahead to reflect that kind of thinking. and there is more work that has to be done. the other thing that is important is the reform plus maybe in the mid-1990's in a lot of these areas, as much as we can foresee this and sustainability coming, it was still in the minds of most lawmakers, very theoretical and far off in the future. today, is that much closer. social security now is actually in the red, six or seven years i had a projections, and it could make it in about one two more years, but it will be in the red pretty much for the rest of our lifetimes. 15 years earlier, people would talk in an abstract way that things would happen in two or three decades. that time is now, and that will force the people of on the hill to look at things in a different way than it might have in the past.

it allows members to shake things up a little bit and redefine what the baseline should be. am i want to remind everyone of you can remind everyone at -- you can find this @ heritage.org/solutions. there are copies in the hallway if you do not have one already. i want to thank everyone for coming today. i thank all of you for joining us. take care. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> president obama is rallying this afternoon for senator patty murray in washington state. she is facing reelection for her fourth term, and today's primary day in washington as well as a couple of other states. the president will also give some personal time to business owners in the region. you and his day with fund- raising events in ohio, and tomorrow, he will stop in miami before returning to the white house. funeral services for former alaska senator ted stevens will be held tomorrow in anchorage. he passed away last week in a plane crash on the way to a

fishing trip. we will have live coverage of the fuel service. coverage will include joe biden. it begins at 6:00 p.m. eastern here on c-span. "4 tb" in primetime continues tonight with a focus on campaigns and elections -- "booktv" in prime-time. senate historian richey on the 1932 race between fdr and income and herbert hoover, and activists on the assassination of america's 20th president, james garfield. nasa recently held its first ever information technology conference. participants were representatives of a number of technology and computer companies. in this hour and a half portion, and look at cyber security. and of our next speaker this morning is the executive vice president and chief technology

officer of symantec. he is irresponsible for their research labs. this security response and shared technologies, emerging technologies -- he is responsible for their research labs. he guides their investments and advanced research and is irresponsible for the company's development centers in india and china -- and is responsible for the company's development centers in india and china. [applause] >> well, good morning. that is not my title. welcome to the first nasa i.t.

summit. cpo for symantec corp. we heard from the earlier speaker about the importance of security, and that is what i would love to talk about. i would like to thank the leadership of nasa for providing the opportunity to appear at this conference, and i would like to commend nasa leadership for setting aside time to address the very important subjects outside the security. cyber security is a very broad subject, -- addressing the very important subject of cyber security. it is important to keep in mind that it is not a civilian or military problem or even a government problem. it is a universal problem. it affects all of us, whether in business or our personal lives. all of the networks use the same computers, the same networking hardware, same internet protocols, and the same software packages, and we are all targets of the same attack tools and tactics.

having said that, it goes without saying that u.s. federal government agencies are attacked on a more frequent basis and other entities in our country, either private or public. there are many efforts to address the situation. the obama administration has made cyber security a top priority, and there are a raft of bills standing before congress to address ciba security. -- federal cio's are designing new ways to fend off cyber attacks, but one thing that i think gets lost is the necessity of international cooperation. it is critical to realize that cyberspace is the central nervous system of today's economy at least critical infrastructure across public and private institutions and on

flow, and the global communications infrastructures are highly interconnected and crossed the rugged borders and national jurisdictions and the and all legitimate activities conducted in cyberspace are similarly global and transnational in nature. the earlier speaker talked about the example of having information in germany and wanted to move to another country and not being allowed to access it anymore. the world of cyberspace does not really have the same kind of boundaries that we have in the physical world. do the interconnected nature of cyberspace, u.s. national interests can be threatened from any point on the globe, and foreign domestic factors cannot be ignored. challenging the world's developing nations to de- institutionalize the underground cyber crime economy and if you the paradigm of robin hood hacking is an imperative.

cyberspace is a global commons area for economic development, growth, and innovation. as such, the u.s. cannot go along -- doe it alone. it is unfair and unrealistic to think that the u.s. government and its agencies can fully address the issues inside the security for the networks all by themselves. instead, the united states must embrace the site security strategy that fully engages active cooperation and participation from an entire range of potential stakeholders. the u.s. government must engage all of its diplomatic, economic, military, and informational capabilities in pursuing global partnerships and actions to secure a cyberspace on behalf of its agencies and its businesses. the globalized nature of the internet is currently creating systemic risks to the u.s. economy and national security.

for example, u.s. interests in the public and private sector are directly intertwined with the rest of the world, but it fairly with developing nations, and much of the cyber activities that religion it through these nations is enabled by very weak enforcement museums in these nations. if we follow the right approach, many of these attacks will be eliminated. however, bilateral agreements regarding cyber security and enforcement can be insufficient. many nations have no real incentive to collaborate with the u.s. is paramount to the success of our international efforts to provide the proper incentives to the developing world so they can create a more secure cyberspace and assist in managing the systemic risks associated with widespread compromise of their own countries networks. for example, the development of

a more secure telecommunications infrastructure and financial systems worldwide as well as capacity building for cyber crime enforcement is critical and can be achieved through existing world bank programs. in fact, the world bank can serve as a stabilizing force in providing grants pardon the telecommunications infrastructure overseas and encouraging countries to cooperate and help manage system exciter risks as posed by the current widespread global infrastructure. it is important to keep in mind that the infants judge of the world against cyber attacks and beyond incentivizing this country to cooperate with u.s. government, we also must increase the availability of qualified people in the developing world that can help discourage technologically savvy criminals from embracing the dark side and push more people

into the white hat community. another example of international cooperation to address some of the security is the international multilateral partnership. symantec sits on the board. affiliated with those of the united nations and the international telecommunications union, impact is a neutral body that disseminates and promotes best practices and information security to a large portion of the world. it also tries solutions to the global cyber community in developing capacity to protect the internet and other critical infrastructures. it is based in malaysia, and this nonprofit group offers a variety of services, including a global threat response center to provide situational awareness around the globe, cyber security

training and capacity building, petite release supporting those nations that do not have their own indigenous capabilities, and it also acts as a center for international collaboration and cooperation in cyber security. from a u.s. perspective, it provides a template to help developing countries build capabilities to police their own portion of the internet, and it can also drive training and capacity building in the developing nations in a politically neutral fashion, which will inevitably increase trust between nations. leveraging the neutrality and reach of bodies such as impact can be a very cost-effective way for the u.s. to provide assistance to these countries in a multilateral way that promotes international cooperation and needs the obama administration's goals for improving a multilateral partnerships -- meets the obama administration's

goals. it is only through a truly international approach, which includes incentives for developing countries be a grant, protection for their critical infrastructures, through the creation of sustainable development programs that create ciba security work force, that we can begin to civilized ciba security space and eradicate the hacker havens, the service launching pad for today's modern space pacts. many of you have read about the attacks. the threats to not realize how sophisticated they are in leveraging multiple locations and will to the actors to go after a single target. diplomacy on worldwide site security cooperation is in fact not working well at the tactical level and is practically nonexistent today at the strategic level. technologies -- technology is developing at such a rapid pace that policy-makers are playing

an captain game. governments and technical experts on not talking to each other sufficiently, and in an environment where 80% of the public's critical infrastructure is owned by the private sector, this is a major problem. there is an urgent need for diplomacy to help kickstart international cooperation on cyber security, and a central element will be trust building, which can only be achieved through a bottoms up approach, starting with cooperation on small technical issues, and then moving to more controversial strategic problems. as governments and policymakers examine international cyber security challenges, i recommend taking into consideration three goals, and these will be very similar to something you have heard earlier today. first of all, let's are to delete metrics for worldwide cyber security and what is needed to achieve them because we have metrics, and we --

without metrics, we will not know if we are making progress. stimulate progressive improvement in the way global cyber security is regulated. this goes to the heart of governance. and bring together leading policymakers, specialists, business executives, community leaders, and journalists from around the world to collaborate on defining an understanding international side of security approaches, concerns, and solutions. just in the last few days, we have read in the press about concerns in a number of nations around the world over the encryption of e-mailed and instant message traffic in certain mobile devices that are being used very extensively. it clearly highlights the need to have an open dialogue across the board -- borders of nations about many of these issues. it is really only after identifying the problems as well as the bottlenecks in international cyber cooperation

that we can really start to succeed in improving the situation. another problem that needs to be overcome is the fact that there is a clear lack of commonly agreed definition of what cyber security even means. internet security, cyber security, and network security should not be lumped together because each of these has their own for to fill a meeting. states sheet ciba security as a domestic issue, and its definitions and legal frameworks vary across nations, which further inhibits cooperation. in addition, many users do not understand how vulnerable they are to be technologies that may be vulnerable -- how exposed they are to the technologies that may be vulnerable to attack. we heard earlier about the move to cloud computing, specifically at the federal level. it is very important to bear in mind that most americans that were recently surveyed believed

they had never use club computing services, while -- cloud computing services, while at the same time, they admitted that they regularly use web- based e-mail, so there is clearly a disconnect between their understanding of the cloud and what they read in the newspaper about the cloud. most users do not understand the susceptibility of cloud-based services to attack, and consequently, they did not take even the most fundamental steps to safeguard the systems and protect their data. as all previous speakers said, in many cases, they are left to trust their providers, at least until, as an industry, we develop technologies such as rights management, which can allow the users to control access to their own information, even when he is in the cloud -- when it is in the cloud. so there is clearly a need for educational awareness and the building of trust, as well as

systematic training for policymakers along with the overall population. this will help the development of proper legislation in cooperation and educating and standardizing private security concepts. there also needs to be a call for separate metrics to be put in place to evaluate progress of international standardization. not enough to form our own metrics. we also need to be able to communicate with other jurisdictions. standards need to be international because we have to recognize the reality of the cross border and global nature of r&d that will allow us to innovate to solve many of the current cyber threats. if local internet property and should becomes the basis for market access, and collaborative innovation on a scale will suffer, and this would probably not only be against free and open trade, but it would also lead to a much less secure

global cyberspace. some people have suggested setting up a legal framework through inside the convention that would be more comprehensive than the current international legislation. there is, however, a need to find a consensus agreement on the definition of threats before we switch to a global framework. there is also a need for education awareness and trust building as well as the training of judges, the development of proper legislation and introduction of reciprocity clauses that will help smooth international cooperation. then, consideration of new treaties is warranted. others oppose it, arguing that there are sufficient legal instruments, but while others have argued that the convention of europe is outdated and that post-two dozen one technical changes have to be taken into