abuse joins us and then the former chief accountants of the security and exchange commission will talk about what new financial regulations means for investors. this is "washington journal". .

inside the newspaper this morning, they have this picture of an army staff sgt holding a sign up saying that data is coming home. the headline on that story, umar -- a state department widened role. that is "the new york times" story about what role the state department will play. here is a graph showing totals for the end of each month of u.s. troops in iraq. october, to about seven, 166,300. -- in 2007. 50,000 today, august 2010. that is "the philadelphia inquirer." and "the new york times" story, a front-page. the state department will assume responsibility for training

iraqi police, largely carried out by contractors.

that is "the new york times" this morning. we want to get your thoughts on the last u.s. combat brigade leaving iraq. terry on the republican line from detroit. caller: i am a very proud american this morning. as a republican, i just want to say, i'd like barack obama because i am proud of the fact that we have a president who keeps his word. he continues to do the things he is doing and working as hard as he is working for america, this is one republican that is going to support him. and i am proud to see him working so hard to keep his word in spite of all of these negative things. i think the republicans ought to try running on their records and stop tearing america down. host: you agree with the

president's decision to withdraw troops from iraq? caller: yes. i think he made that decision during his campaign for president, and it has only been a year and a half he has been in office. i think it would be wise to just step back and take a deep breath and give him some support. because i think we have a great president right now. and i holden continues to do the things that makes america proud. host: we will go to scott on independent line in connecticut. your thoughts. caller: it is encouraging to hear a republican with that perspective, as an independent and obama supporter, that is encouraging. but war goes beyond politics. there was an expression after world war ii that says the advent of the nuclear age, with the atomic bomb, war itself has

become the enemy and in the current environment, you know, talk about a war on terror, which is really an impossible result look for, you cannot win a war on an idea like that. i think you have to really reevaluate the way that we go about resolving our conflicts. so, i am encouraged and glad that the troops are coming out of iraq, but with that being said, we are still going to have to really decide what we want to be as america and what our role is going to be in the world, and it cannot be the bully, the policeman. we have to look at ourselves as part of a global community. host: let me get your reaction then to the role of the state department will be blank in iraq. "the new york times" story says the department's plan to rely on 6000 to 7000 security factors also expected to form a quick reaction force to rescue civilians in trouble, is a sensitive issue.

it says -- what do you think? caller: you are dealing with now really the corruption of the military industrial complex. that is an issue onto itself you could devote several shows to. and that aspect of it is that maybe at its heart, we want to believe we are doing the right thing by having people over there, but i personally did not think it is the way to go. i am a john lennon fan, i believe that peace is the right approach. i think we've got to clean up our own house and the way we are

throwing money around that problem is thinking that is going to solve it, and we are really just hurting our future. we have to reevaluate our entire position in terms of where we want to be in a global context as part of a community and not the leader of the world. host: scott, talking about the next u.s. combat brigade leaving a record 50,000 troops will remain. the timeline of u.s. action in iraq. october, 2002, the war is authorized. march 19, 2003, invasion begins. april 9, 2003, iraq regime of saddam hussein collapses. it december 14, 2003, saddam hussein is captured. it goes on to say april, 2004, of rising -- uprising by insurgents. it december, 2006, gold and mosque destroyed. december 6, 2006, the study

group issued its findings. december 30, 2006, saddam hussein is executed. january 10, 2007, president bush announced a 20,000 additional troops. november 2008, iraqi government calls for u.s. withdrawal of january 2009, u.s. turns over airspace and green zone to iraq. that is the timeline we have put together this morning to talk about your thoughts on this last u.s. combat brigade leaving iraq. we will go back to the phone calls. tommy on the democratic line in the or libya, washington. go ahead. caller: good morning. first off, i am proud of the troops. that is number one did they fought hard and did what they had to do. i am very happy with our present right now. the fact that he has drawn them out, making the iraqi people and government stand up and do what they have to do. that is a good feeling in itself and us as americans should support not only the president

but our senators and just make it happen and that this country grow and prosper and get back on track, especially since the young generation is watching us. it only makes sense. host: we will go to new jersey. kurtz, independent line. good morning. caller: good morning. i would like to make a comment about the phrase combat troops. i have been hearing that and it seems like that has only been used just recently as a phrase. host: why do you think that is? caller: if we are going to leave trip -- 50,000 troops behind, if you are and listed in the service, you are a combat troops. they can move you from a coat and put a rifle in your hand at any time -- they commute -- move you from a cook and put a rifle in your hand. it is not fair to leave them behind as a 50,000 and say we

are moving out combat troops. they are all combat troops. i never heard this phrase years back. that is the only comment i have to say about that. host: we will go to bill on the republican line in indianapolis. caller: yes. this is bill from indianapolis. your first caller that called in this morning -- yes, your first caller, he calls in just about every day. his name is hank one day, independent, jeff, next that, he is a democrat, one day he is a republican. he calls and, that obama, he is such a great man, such a great president. and you guys let him go on and on and on every day. build a commentator is the only one who will call people down from calling in every day. and you guys have a 30-day -- host: i apologize. i did not recognize his voice this morning.

i am getting a note from the producer saying it has been handled. but if that is the case, you are right. we do ask people to wait 30 days. my apologize -- my apologies for not recognizes -- recognizing his voice. with selected, and on the issue? caller: if no, i just got upset. but i watch every morning and i enjoy the program and meet you said around and let the same guy call. host: hawaii, go ahead. caller: i believe the first caller the guy just criticized, whatever, i believe the president is doing a great job -- job. i just love -- lost my folks in florida and i came back to hawaii to help the natives and get the right guy in office. god bless america. host: as we go to the next phone call, here are some of the faces

of the fallen of the war in afghanistan. "the washington post" has two phases -- pages this morning of those who have fallen, this is in afghanistan. dallas, texas. douglas, independent line. caller: good morning. i would like to say that i think you are reasonably fair in varying points of view. i don't agree with a number of them. but i would like to say this, that we have already seen what the results of failing to respond to bill clinton was, and that is a bomb at the trade center and was not successful and therefore the next president who was george bush, in the context in which he had to respond decisively and not in

the same mode that bill clinton did. now, he made mistakes, yes. but the point of it is, the very first primary of our constitution is to protect our government and the people of the united states. and we have to conduct military wars until the conclusions are satisfactory or admit defeat. and we have in the history of vietnam and korea -- basically democrats who ducked and run and cut and run, and that is the history of the two parties. host: "the washington times" has more on afghanistan.

using the media to press patients on the afghanistan war. on pakistan, lots of headlines this morning that aid for the flood relief does not match the disaster's scope. this is the front page of "the new york times" and a picture. it says in "the financial times" that they asian development bank will offer pakistan a $2 billion emergency loan. pittsburgh, brian of the democratic line. good morning. it caller: thank you for taking my call. i just have a real concern about getting that much power and that much technology to civilian defense contractors. they have been nothing more than mercenaries. a state department that has a private strike force, irregardless of its purpose, sounds a lot to me like a kgb

operation. we build all of these bases -- all over iraq. they were supposedly permanent fixtures, some of the largest air fields in the world. that now belongs to iraq. i just think we are setting up ourselves for disaster. i think all of the bases and the weapons and the technology was scattered around the world with mercenaries and single countries is going to come back to haunt us. host: talking about the last u.s. combat brigade leaving iraq. another story on that from "the financial times" this morning. "the financial times" takes a

look at the iraqis displaced and those scattered across the globe. democratic line. good morning. it caller: thank you for c-span. and you do such a great job with a lot of these nuts out here that want to throw cold water on such a historic moment. i watched it last night on an as nbc -- msnbc, and i actually got a motion of seeing the last vehicle rolling out of such a fiasco that the republicans put us in. one last comment. a few callers back, these right wing republicans, they have a tendency to want to act so sophomore toward any thing that this administration is doing and

has promised to do. it just amazes me. i love to hear them make their comments because it shows how this role and how much aid they have. you can feel it in their voices. i love this country. i am a vietnam veteran and i want to say god bless america and last night was such a historic night. host: "the washington post" from page, there had landed a truly historic and to seven years of war. hidden cost of conflict with memories of fallen comrades. that is "the washington post" this morning. in other news, the debate over the mosque in new york, the headline in many newspapers this morning. house speaker nancy pelosi, a california democrat, called for an investigation of those who are protesting the building of the mosque at ground zero.

"the daily news was what has this headline. nice job, kid. this was 19 and a former reality show contestant when he was hired to find a site for the mosque by the developer. saying the developers left the door open yesterday to taking cash from the iranian leader mahmoud ahmadinejad, that is "the new york post" this morning. inside they showed the poles of how americans view this idea. 63% of new yorkers oppose building the mosque, 61% of americans opposed building the mosque. an editorial in "the wall street journal -- excuse me, "the washington post."

that is "the washington post" editorial this morning. also of the headlines about this. u.s. spending about $60,000 for a mosque trip, a three-nation of reach visit, predated the new york mosque controversy. the imam is on a three-day trip to the middle east paid for by the state department. chicago, illinois. andy on independent line. talking about the last combat

brigade leaving iraq. go ahead. caller: i recently thought i heard that this means combat operations have ended in iraq. but i thought president bush said that several years ago, that combat operations have ended, and maybe another caller can answer the question, what does it mean. what do people mean when they say combat operations had ended? host: what does it mean to you? caller: [laughter] it does not mean a whole lot. i think it is something politicians say to make people happy. that is what it means to me. host: ok. new orleans. independent line. are you with us? caller: i am going to comment on a caller just now. after -- just about every war, left troops behind.

and they still have them behind. but the reason why i called is to say that all rivalry should stop against the president'. the right wing's saying -- i think the man is doing a great job and as far as the tea bag ers -- host: happening in washington, that two event you should know about. congressional budget office will come out with the latest report on the federal budget. live coverage on c-span2 at 11:00 a.m. this morning. that will be with the cbo director, north. by the way, he will be our guest tomorrow at 7:45 a.m. eastern

time to talk about the latest report. then around 11:30 a.m. eastern time this morning, the house energy and commerce committee is going to be holding a hearing about the safety of seafood. some members are coming back for that hearing. live coverage of that here on this channel, 11:30 a.m. eastern time. in other news this morning about the mosque, politics and the nation's section in "the washington post" has this headline.

that is "the washington post" this morning. also the headline in "the new york times" says and archbishop in new york looking to mediate the controversy. the latest poll today out in many of the newspapers. this is "usa today." america uncertain about obama's fate. almost 20% say he is a muslim. north carolina, democratic line. good morning. caller: i would like to comment on the troops coming out last night. i think the president and his staff did a heck of a job and i am so glad -- he did not let all the stations know about the. that is the way it should been bid if they left the rest to know about the everyone else

would know about it. i was so glad the way he handled. host: atlanta, georgia. fred, republican month caller: what did the president do? he followed george bush's policy. he was against the surge, which probably enable this all to happen. and he is just conducting the last phase of the bush initiative. i do not understand what he did that was so great. i do not understand why george bush has to stand up to this iraq -- mosque and put some out there gesso democrats can say it should go there. the president cannot be deciding new york or make a point which should have been in new york city. host: we will continue talking about this last u.s. combat brigade leaving iraq. bernard in north carolina. good morning. caller: give me the second to make my statement. can you hear me? you have to have a two-minute max ticker so someone can get their thoughts out in two

minutes. if they cannot get it done in two minutes, too bad. i think it is a good thing. greta and -- you spend too much time obama bashing. i do not know why you have to keep bashing the president. sent 33,000 more troops and afghanistan but i did not basham for everything. some things he does pretty good and some things are questionably. i have no party affiliation. host: the hosts of this program read the newspapers, not in an effort to tell you our opinion or c-span's opinion, we don't have an opinion but we are putting it out there to let you know what other people are reading, what is in the newspapers, and you can make a decision and called us up and give it to us and have the rest of the viewers know what you think about all of this. alexandria, virginia. tom, republican line. caller: i would like to say, congratulations to our troops. you did a fantastic job over

there representing the united states on a world stage. i am glad that we have accomplished what we set out over there to do. i would also like to remind people that there was harry reid who said that this war was lost, and i would like for the democrats out there who supported their representatives who said that this surge would not work, one particular, representative from chicago named barack obama who not only was against the surge but did not want general petraeus to lead that effort. it just goes to show -- and then obama goes a round of what does he do, he takes out the man his support for afghanistan and who does he put in, general petraeus. i hope george bush will get the credit he deserves for the leadership he provide -- provided in establishing a

democratic stand in the middle is over there and the lives he improved. we will see how much back on the president has when he turns around and congratulate george bush on a job well done rather than using him as an excuse for his failed policies the last two years. host: more headlines. anchorage daily news. thousands pay tribute to the late senator ted stevens. celebration of his illustrious life. if you were watching c-span this morning before "washington journal" you saw footage of his funeral yesterday. we did cover it. go to c-span.org if you want to watch that. also on both the chicago tuned" -- in "the chicago tribune," the blagojevich case. "the detroit free press," front page, gm to investors, that on our team. gm will go public. this stock offering could be one of the largest in u.s. history.

carolina, john, democratic line. good morning. go ahead, john. caller: thinking about president obama. i do think he is a muslim, especially now since he approve that prayer place for the muslims and i also bought bin laden is his boss man -- host: we are talking about iraq. caller: i love c-span but i was fortunate enough to watch some of your coverage of the war in iraq inquiry in great britain. it. that there was a lot of evidence that -- it appeared that there was lot of evidence that the united states rushed into the war. they should have given saddam hussein more time. they were finally coming around to what the west wanted in terms of showing that what was there

and what was not. but since we did what we did, i am thankful the troops are leaving and i am more encouraged that if we did some rebuilding of the infrastructure and did more humanitarian work, i think the outcome would be a lot better. host: the british iraq war inquiry will air today at 3:00 p.m. on c-span2. it includes testimony from former british prime minister gordon brown. georgia, joe, independent line. caller: good morning. thank god for c-span. thank you, c-span, for letting these not speak. what a great day it has been. i and a vietnam vet and remember coming home after the pullout to what we endured, and still endure to this day as an veterans. i carry veterans to the hospitals. people talking like a person

from north carolina, put him on and let him speak and show ignorance in this country because until the ignorance is dealt with we are always going to have these kinds of comments. let the tea party. i thank god for this great day. host: we will go to birmingham, alabama. republican line. caller: good morning, how are you doing? like the last caller, thank god for c-span and the ability to speak. you spoke about iraq inquiry that is being played today at 3:00. it is a very i opening event and i was a lot of c-span viewers would watch what is taking place in britain because we need that to happen here as to a real inquiry as to the lead up to that war. i think, in my own personal opinion, that i was -- the i was taken off the ball in the lost

war of afghanistan. we should have been doing things required there because the taliban in itself enabled al qaeda to attack us and right now the taliban is trying to mount a strong combat to allow al qaeda in those border regions of pakistan to come back. if we keep pretending that for the last nine years that we did not take our eye off the ball and iraq was the prize, we are wrong. host: ok, we will go to jackie on the democratic line, cleveland, ohio. caller: good morning, c-span. i have been watching this program since i was 19 years old and this is really the first time i have been compelled to call in 26 years. it is just amazing just to hear some of the things that some of the callers calling in and say. i think president obama is doing a great job and i don't say that because i am compelled to say that. i say that because it is true. we have so many people who are down on what he is doing and try to -- trying to do for this

country and right now the country needs everybody to come together and stand together behind the present of whether he is democrat, republican, green part. to the guy in virginia to call and say he is only following bush's plan, that is right. bush said it in place and it was obama's job to come in to see to it, but the conditions on the ground have to manifest itself in a way it would come to pass. we should be glad it is finally coming to fruition and it will be over. after all, we lost so many people over there based on a lot. you are right, bush should get the credit for war crimes and lying to this country about a situation that did not exist where blood and treasure has been wasted. host: we will continue to get your phone calls, but first, more on the blagojevich trial. editorial this morning says blagojevich 23, fitzgerald 1. "the wall street journal"

editorial calling for him to resign. that is "the wall street journal " " this morning with their opinion. and "usa today, also, that editorial on blagojevich saying the verdict is no exoneration.

the opposing view for this is blagojevich and his lawyers, experts -- exurbs from responses to the verdict. they did not respond to requests from the paper to give their opposing view. the democratic line. good morning. what do you think of this last combat troops leaving iraq? caller: i am so excited, truly

and. i really do not want to put this on a party affiliation. my heart goes out for the pullout. but we've got to think about how many troops we lost over there. we should be celebrating the fact that we are finally coming out of there and we did not have to lose any more troops. yes, i understand there are troops left behind but hopefully they are just in a situation where there will not be lives lost. we just have to got to stop this party affiliation stuff and looked at the real picture. thank god we are not going to lose the troops would lost over there. get aboard, we are all americans. host: the pentagon count as of wednesday of the u.s. death toll, 4415, that is not final. here is the associated press out of afghanistan. nc-17 service members died in afghanistan this month. one of the latest deaths came yesterday in a bomb attack in southern afghanistan.

detroit, michigan. pam, independent line. caller: hello? host: you are on the air. caller: new york just fill all of my thunder -- stole my thunder. i just want to say congratulations to the troops and god bless them for the job they have done and continue to do. it does not make any difference what they call them -- combat troops or what ever. the point is, some of them are coming home. and the ones left there, hope that they stay safe. also, when you read the thing about nancy pelosi, the news keeps doing that. she said before that she wanted an investigation on who is funding the money for the mosque. before that, she also said she one of both investigations -- both ways.

not just that one day, because it makes a sound negative. host: lorain, democratic line. philadelphia. caller: don't cut me off. you allow a caller to call up and call my president a muslim and then link him up with bin laden. that is a terrible thing. just give me a moment. you have callers calling, giving feelings though george bush should get the credit for this. let me congratulate george bush for lying on a sovereign nation and attacking a country that had absolutely no way of protecting itself. congratulations. what kind of courage does that really take? you thought you would go and attack that country and still the oil. guess what, you did not get to steal the oil and control that country the way you did the one that you stole and live in now.

host: all right. -- caller:r's point, -- caller's point. in defining obama, misperceptions. that is a story this morning. she notes that those americans who believe incorrectly that mr. obama is a muslim. the president is christian that 18% believe he is muslim, up from 12%. they characterize it as a misperception in "the new york times." next to that is a piece this morning, and analysis about why mr. obama's, president obama's ratings are so low on different issues. it is a piece saying -- boxed in by a legislative agenda, saying the president has gone after trying to get legislative achievements rather than focusing on the personality. it is a piece may be that some of you may be interested in in "the new york times" this

morning. nevada, democratic line. you are the next phone call. go ahead. caller: c-span letting us all get a word in. i think it would be interesting to note that the story on iraq is not over yet. do not know if the policies will end up creating a theocracy now -- there are going to go back into some sort of situation like it was under saddam hussein. these presidents are all human beings. i was against going into iraq but it may very well turn out that president bush was correct in what he did. i just think that all the name- calling -- calling people muslims or nazis or all the

scare tactic garbage really put out by both sides is really counterproductive. we really need to start pulling together. god bless our troops. and god bless president obama -- i think he is trying. i think george bush tried hard. i don't think any of them are on american -- unamericqn or against this country and i think this hate rhetoric and anger going on really gets us away from the real things that we need to be talking about, like good education and how to get jobs going and how to get out of these wars gracefully and how to do something about al qaeda. we've got a lot of really big important problems way beyond

all of this partisan rhetoric and salinas. host: on your point, in the economy, "the san francisco chronicle" frontpage. the economic situation there is not good. that is "the san francisco chronicle." "the l.a. times" -- and other economic news, "wall street journal" frontpage, mexico under it sees. -- under siege. about the drug gangs. and gm, the plans to take the

company public. also the money section of "usa today" has a story about companies' spending again. it cash-rich u.s. corporations sharply increasing capital spending after scaling back drastically during the economic downturn. that is a story in the money section of "usa today." kentucky, mike, democratic line. good morning. caller: am i on? i am glad the troops a coming home. can't wait till they come home from afghanistan and also can wait till they come home from germany. that is all i have to say. host: fairfax, virginia. george, republican minority caller: good morning. i would like to comment on a couple of callers ago. it is the long term results, the long view that really matters. we do need to cut the divisiveness.

i guess the one reason -- the comment you had after that or just before was regarding obama's poll numbers. i do have a question. i have not heard definitively whether -- i guess there is suspicion that obama does not have the country's interest at heart. i don't know -- has his citizenship been verified? host: the white house has put up his birth certificate, and according to stories i have read today -- again, go to "the new york times." they have a story about it as well as "is a today." -- "usa today." i think we lost the up phone call -- that was our last phone call. we will talk to grover norquist next about the cost of government.

>> after nixon lost the 1962 california governor's race, the owners offered the former vice president the job as commissioner of baseball. nixon was flattered. but declined. tellng the owners, don't pat. she would kill me for turning you down. >> whether it is baseball and the presidency or the cia and the korean war, find all of c- span's american history tv on line, any time, at the c-span

video library. it is washington your way. watch what you want, when you want. >> there are 48 hours of nonfiction books and authors every weekend on book tv. saturday, john samples and eugene sterling debate to the size and role of the government and the 21st century. then space and technology journalist says defensive research agency is america's greatest idea factory. and an investigative journalist looks at the history of malaria and questions why, visit book tv.org. "washington journal" continues. host: grover norquist is president of americans for tax reform, to talk about the cost of government. you are out with your annual report. guest: cost of government day is

different from tax freedom day. tax freedom day are all the taxes you pay, divided by how big the economy is and taxes are one quarter or one-third of the economy. cost of government day goes beyond that and it builds on what milton friedman pointed out, which is the true cost of government is not just taxes, it is total government spending. we ought to have total federal, state, local spending, including both taxes and deficit spending, accumulated debt, and the regulatory burden, so when the government says you have to do this and you have to do that, it may be a good idea, but it is not free. so, what is the cost? what we have this year is we are working until today, august 19, to pay the total cost of government spending, plus regulation. back three years ago that was a month earlier. so when people sort of know there has been this explosion of spending on stimulus spending and bailout and the trillion

dollars that congress added to the discretionary spending over the next decade, we sort of hear these things but when you look at it on paper, americans last year and this year are working in months more of their salary and their earnings going to pay the cost of government than in previous years. it has gone up and down in the past. it has sort of bounced around in a fairly steady state. the last couple of years, it will explode. not just a sense you get of the slow economy in the headlines but in the numbers. host: you break it down. 52 days work to pay for state and local spending. americans have to work 104 days more to pay for federal spending. 26 days work to pay for state and local regulations. 48 days worked to pay for federal regulations. what is the solution? guest: the solution is to, one, stop digging. one of the challenges is there has been this explosion of spending. the good news is we can stop --

there was money for tarp, the bailout. what has not been spent, pay down the debt and stop the program. do not rolled over, did not continue it. there have been several efforts to reinvigorate tarp and to begin. the stimulus spending from $800 billion that congress threw together and then without letting people read the bill, they passed it. we have seen up whole bunch of stories about some of the ridiculous spending. it certainly has not helped. the economy has worsened as that spending has taken place. what ever is left unspent out of the stimulus package, don't spending, and don't do what the democrats just did a week or so ago is just have many stimulus spending -- they call the stimulus, but they make the economy worse, not better. the theory behind the stimulus spending -- people say, what is the theory, why do they say the government spends a dollar and it will make us richer or create jobs?

the theory is as follows. if you take a dollar from somebody who earned it, i the pretax is, physically taking it, or through debt, borrowing it, and give it to someone else who is politically connected, that somehow we are all richer. imagine if president obama and harry reid and into pelosi went to one side of a lake and each with a bucket into the lake and walked around to the other side of the lake and poured it back into the lake and say we are stimulating the lead to great depths and we would do it 800 billion times and at the end of the process, obama, nancy -- harry reid, nancy pelosi, they claim there will be more water in the lake them before the process. host: the solution is to stop spending. do you consider raising taxes? guest: no, because the challenge is that taxes are what politicians do when they don't have the guts or the ability to govern. host: many economists say if the crunch the numbers, you cannot just cut spending alone in order to tackle the deficit.

the $1.30 trillion. that you have to raise taxes at the same time. guest: those economists are making certain assumptions, that the democratic congress will not go along with it or the president will veto it. that they want to continue certain spending. of course, if congress decides not to spend money, they can decide to do that. we have examples not just from the past, where we have actually reduced spending at various times. the first year of the reagan administration. the first year of the republican congress. but we also have it in the states with chris christie, who is a hero for taxpayers in new jersey. not an easy state. it is not a state -- democratic house, democratic assembly and senate in new jersey. and he stared down and tackled the teachers' union and the government employees union and wrestled down and bought the budget into balance without a single tax increase. the governor of virginia did the same thing. we see it at the state level where they have to balance the

budget each year, that you can in fact rain in spending. talking about a series of recommendations -- i testified before that commission that is supposed to recommend both tax increases and spending restraint. i would like to make the case -- if you put tax increases on the table -- we have seen it at the national level and the state level, if a politician says i am up for some tax increase and budget restraint, we did this with president bush 41 in 1990. remember, they went out to andrews air force base. they came back promising tax increases and spending restraint. we got the tax increases. those were very real. over the next 10 years after that, the next five for 10 years after bush's budget deal, spending went up more than projected, not just higher, but higher than projected. they took his tax money and spend it. host: proponents of raising

taxes -- here is a piece that points to clinton administration in that he not only raise taxes but he did, along with republican help because republicans were in control then, did cut back on spending. said clinton raised taxes in 1992 and a ship in a period of extraordinary robust growth and which cut taxes massively and 2001 and that meager growth in return. guest: i really would love to read this stuff on foreign policy because he seems so wise when it talks about countries i am not familiar with. in this case, our friend, mr. clinton, was not present in 1992 so he certainly did not cut taxes. he was president in 1993 and 1994 and he did not raise taxes. he cut taxes in '93. if you look at both the stock market, unemployment, and the measure of the economy and the deficit, in the two years when the democrats had the house and senate and clinton was president, things did not get

any better. there is an inflection point -- we have a chart on our web site -- on the day the republicans captured the house and senate in 1994 and all of a sudden the market and the businessmen and people who hired people saying, they are not going to -- there will not be another tax increase, they will rein in spending and they will not nationalize health care. we need to get away from looking at presidencies. there were three periods in the bush presidency. first two years the democrats controlled the senate were periods without spending restraint and a week tax cut. middle four years when the republicans at the house and senate and presidency, with 52, 50, then 55 senators, then you had strong economic growth and pro-growth tax reduction. the last two years when the democrats took the house and senate, spending started going back up even more and there were no tax cuts. host: let us take a closer look at the bush tax cuts.

last week there was a piece in the "the new york times" quoting a report circulated by the congressional joint taxation committee in congress and said that if you extend the tax cuts for individuals with income less than 200,000 and couples with less than two runs in the $50,000, that is what president obama wants to do. decouples was -- with less than $250,000. if you have an income of $500,000 to 1 million, the average tax cut under president obama's plan will be 6700, compared to tax cut of 17,500 it the bush tax cuts are not allowed to expire -- if they are going to extend.

zakaria be a foreign-policy expert but does cite the congressional budget office and he says by far these tax cuts were the largest of any expense under the bush administration, adding $2.30 trillion over 10 years. according to the congressional budget office nearly half of the cost of all legislation and -- enacted from 2001 until about the seven could be attributed to the tax cuts. could we go for it -- do we afford to go forward? guest: we need to continue to lower rates. what obama, harry reid, pelosi are doing are proposing one of the largest tax increases starting in january 1, 2011, in american history. they say they don't want to hit everybody, they will only hit rich people. remember, that is what they said when they ran for office. in days into the obama presidency with harry reid and to pelosi in the house, the first thing they did was -- tax rich people? the past taxes on cigarettes.

who smokes? the only person in the country who earns more than two runs and $50,000 a year and smoke cigarettes, is named barack obama. cigarettes are a regressive tax and that is the first thing they did it is taxable in the -- first thing they did it. taxing tanning salons. 10% tax on that. 20,000 tanning salons. i was not aware of this until the government decided to tax this. most of them owned by women. a tremendous blow to small businesses. so this idea that when you tax the company, somehow middle income people don't pay the taxes, is silly. what do you think when you raise taxes on general motors, who pays the taxes? people will buy general motors cars. the only way general motors has money. the idea that you can pretend you can tax some people and not others really is not the case. by the way, if the democrats

wanted to extend and maintain the lower rates, they could have done it in 2007 when they have house and senate, could have done it in 2008, could have done it last year when have house, senate, presidency or any time this year. they have not done it all that time. do you really believe they intend to? host: republican line. florida. you are first. caller: i am a republican. i voted for every presidential candidate that ran on a republican ticket since eisenhower but before we attack the democrats we ought to admit where we have fallen short. we should condemn the bush tax cut for the rich that ran up our deficit, condemn the part d medical care which he did not pay for, the iraq war which was not paid for and bush inherited

a balanced budget from clinton. host: we believe it there. let us talk about spending on those fronts. health care and iraq and afghanistan war efforts. should spending be scaled back in those areas? guest: look, let me address is bigger point first which is, i think all republicans and conservatives and people who preferred bush to gore or the massachusetts senator ran into a thousand four -- how quickly we forget -- john kerry, i am sorry. need to step back and say, bush spent too much money as president. the republican congress for the four years in between and the democratic congress's early on and later in the administration spent too much money and the bush administration never had on their list, spend less. they had a whole bunch of things

they wanted to do. spending less money was not one of them. host: it goes back to the previous point, why should americans believe democrats are going to lower taxes for the lower paying americans, why should americans believe republicans if they are put back in charge will control spending question on guest: that is a very important question and the key question. and i am truthfully optimistic on this for the following reason. one is there is going to be another contract with america by some similar name. and that is what gave the republicans an exoskeleton, a support system for the first two years when newt gingrich became speaker in 1995 and 1996. it forced the republicans to do exactly what they said they were going to do and that gave tremendous spending constraint. what he forgets is when bill clinton raised taxes, he also planned to spend so much that you were going to have $200 billion a year deficits over the next 10 years under current's plan. what changed was not the higher

revenue. what changed was the decision by the republicans not to spend as much as bill clinton and the democrats had planned to spend. that was the big shift. also republicans cut the capital gains tax which tremendously increased jobs, and limit, the stock market and capital gains taxes because people realize -- more revenue came in at a lower rate. there were two tax cuts during the republicans in congress. one was in 2001, which was marginal tax rates, a little bit cut, not very effective for making the economy better. the second one in 2003 cut the capital gains tax from 20% down to 15%, very helpful for job creation and investment. the other was taking the 35% cut of the tax to dividends down to 15%, had a lot more dividends paid to retired people and help people's pension plans become better funded and actually gain revenue for the government because of the stronger growth.

those were important shifts in the right direction. what happened in the last two years with the tea party movement was such a strong reaction to the overspending by the democrats that there came to be in the united states and anti-spending coalition. and i have been working on the tax issue for 30 years. and i have always agreed with milton friedman that, yes, taxes are important. spending is really what you have to wrestle to the ground and taxes are a key component of that. but spending is the big picture. .

>> you have everybody there because on the key issue, they want to be left alone. taxpayers, leave my property alone. gun owners. homeschoolers, leave my family alone. all the fairious communities of

faith. catholics, muslims, mormons. just leave me alone. they are not asking for baptist stafrps. with bush, you would say lower your taxes and spend too much, i'm going to leave your faith and family alone and spend too much, everyone sat there including me saying thank you for the big issue and mumble, mumble, you spend too much. there is a new group. we are here because where he don't want to you to spend too much. host: should the leaders from

the past that spend too much not be the leaders of this modern republican party? guest: i don't think you can blame bainer for any of this. host: the general point, it seems the same leadership there before is still leading the party. he saw a new willingness.

we are in a row of buildings saying spend less but on the issue i'm here to talk about, spend more. spend less, that's the tea party movement and luckily, the i coming elected republicans that changes leadership. particularly once he got elected. jo going to the democratic line. caller: this guy you have on tv this morning. he is seriously ridiculous. how can he with a straight face say the stimulus plan did not work. ask some of those people that

have jobs, some of the projects being done. >> what is the unemployment number and what is it now? caller: those figures can be manipulated but the people that didn't have a job and went back to work. they are back to work. what he missed is what happened first, they took $1 out of the pockets of somebody that earned it by borrowing it or taking it out of taxes. they want the tv cameras to

ignore the fact if they had not, that person's mortgage, their house would be worth less. down the road, they might have lost their job. in order to continue the economy going. guest: it is silly. i understand there are people who believe in that. i'm not opposed to witch craft, i just don't think it exists. if the economy turns around, i'll be wrong. in the last 200 years it hasn't worked. taking money from the economy and giving it to people that

collect it is bad for the economy. host: back to the lines. thank god for c-span and very balanced analysts. i recommend you have him back. two questions, have you issued a report and is it published. seems to be the 800 pound gorilla in the room. there's a known use or loose it directive. there's really no insensitive to cut spending. ask more, request more. it's a gain. two things. one, we have published the studies.

it's available on line at our website atr.org. we have copies we have been sending out but also available at our website. there are certain things congress does. i have a series of recommendations made to the commission studying this. we could require any piece of legislation that spends money go on line. if that would have happened, they wouldn't have voted on it without people being able to read it. within five days, people were picking shards of glass out of

it. you have 300 million americans looking at it. the other idea is that we do what governor perry of texas has done, which is to take every check that the government writes and put it on line. you can see all the expense reports the wording on read contracts. this could have been done less expensively. the more transparent si we have, the better decisions the government can make. people are looking to stop stupid. you should term limit

appropriate raters the budget committee can only serve for six years. appropriate raters serve for life. they come in and say i'm a spender for my whole career. i think we need to say six years on the appropriate operations committee. the oernl thought is to residence respect the bryd committee. reducing unnecessary expenditures.

there is an appropriate operation committee whose job is to spend on everything that moves. to would empower congressmen to spend for careers. >> the focus is on alaska where the attitude tends to be on the government, leave me alone. one person quoted in here says i'll give the government credit for every dollar they give me in taxes, they give us back $5.76.

>> i've asked -- i would urge politicians wanting to vote sgens those federal to state bail outs. alaska is a difficult case. the government forbids them from using their own land to drill for oil. if you allow them to drill, they could fund themselves and they wouldn't be in washington. i always felt the most important thing is the full out there. there is nothing out there. the idea that it is some sort of forest area. there's billions of dollars of oil there. let them drill for oil, they could take care of themselves. when you forbid that, they drill in the federal budget.

>> do you support simplifying the tax code and ending simple engineering veea taxes? >> yes, i think we should move to a single rate tax. i'm from massachusetts where we have bi constitution. a flat tax. can you not have a graduated income tax. five times, we've had debates where they said let's go to a graduated income tax. there has been conference on talk radio and newspapers where people say, you know year one, they may raise taxes on the kennedies and others. year two, they'll come for me.

we should move to having everyone tax at this rate. letting you know other people are ro at the same situation. i don't want other people having moeshl engineering i'd rather say one rate, simple as possible and as low as possible. >> going to baltimore on the independent line. go ahead. caller: i wanted to say thank goodness for c-span and the freedom of speech. first of all, i haven't called in three months, so please don't cut me off. give me my 2:00 to speak. this guy here has taken 20 minutes to speak some gib rish.

let me start off by saying, you say obama taxes cigarettes or the tanning salon. >> the thing is, cigarettes kills you anyway, the white corporate fat cats, they don't care if you die or not. >> accept the president said he wouldn't do it whether he got elected, so. host: going to mike on the republican line. good morning. caller: i have a concern that really this whole discussion around the taxes and who it a fafkts both sides of congress

have for years talked about the fiscal responsibility they say they are cutting taxes. the problem is, the deficit has never gone down. congress's idea is don't just stand there, spend. i think there's a trust factor that the public generally doesn't have with either party. as long as the deficit doesn't run up >> secondly, the cutoff at

$250,000 and $200,000. with the projections. they are saying they are going to cut some of the things you are going to write off. they don't realize that they'll be hit hardest in this. host: are you talking charity ability don't nations? caller: not just charity but mortgage interest. there's several things they have talked about removing from being write offs. that moves the bar. that middle income is something too. i'm right on that with me and my wife on that $250. if you tick away those write offs, i am hit like i'm the top

of the country. >> today, coming out with the latest report. tomorrow, the cbo director will be our guest. go ahead. guest: sure. there's been a big difference between them. the challenge is to get some of the changes on the roll. the argument that this is no difference between the two parties, something one could talk about during the bush years, spending drifted up more

than i am happy with. the jump in the last two years is night and day. that's why independence have shifted so dramatically. independence have looked around. i don't see a difference through the parties. what i'm most happy with is the republicans they are all running on the basis of i got the message and we'll tackle spending. republican primary owners have been firing appropriate raters used to come back and say look at all the cool stuff i stole from you and gave to the other people around. don't you like me?

host: on the republican line. go ahead. caller: whether you are democrat or republican. i'd like to know if we are the taxpayers of this country, would it be better to spend on us than on other parts of the world. look at what happened in the wars. i hope our soldiers can come home from afghanistan.

where is the best place to spend our money? host: the best is when we say to the government, you can have as much as we need and no more. you don't want to give the government your money and say, i hope they spend it wisely and then complain that they've spent it occupying off afghanistan. you make these decisions. you can always make a better decision about how to spend your resources for your family. people don't spend other people's money wisely. never have, never will. >> the "washington post" this morning calling on george w. bush to weigh in on this debate about developing this mosque close to ground zero. would you like to hear from the

former president? guest: not particularly. he has spoken out in the past saying, look, we have a conflict with al qaeda, not world religion. arguing the other team's brief on that. right now, it's important, we are about to have an election in november. the country is unhappy and scared by the amount that they are doing. everything that distracts from that issue especially since we have freedom of religion, no politician mouthing off about

any group having a church somewhere. the good thing about a country, they don't have a say in that. in manhattan, it used to be illegal to build synogages. when we got a constitution, that was all in the past under the dutch and british. when it become america, people could build in manhattan. we ought not to go back to the old european way of popular religions get to build and unpopular religions don't.

we have a way to go in some places those are very important issues. but for the political side of this. anybody who chases off on shiny things and gets distracted thanks are spending away from citizens. republicans need to remember that they skrued up in 1998 when they were about to win the house seats and they decided to spend the summer talking about lowinski. the republicans lost five seats because they weren't talking

about the economy. they are demonstrating in texas against a temple right now. it is a distraction from a very important election coming up. for republicans, it's particularly foolish. harry reid is stapled to obama's forehead. reid has already shown up and saying i'm not with that crazy person. he has made up imaginary space between them.

when in fact, they are joined at the hip when it comes to spending. it is worst than a crime. it is stupid. it's a focus on monica lewinski in 1998. host: going to the phones. caller: overall, it's refreshing of the tone to reducing the debt.

it could have been worst. is there an estimate of how much would be reduced in just identifying the tax people are paying? if it is simply receiving one plot amount. unemployment and the number has gone up since it passed.

explain to me how it moves it. it gave it to someone who didn't but it didn't make anyone richer. what you are missing is the picture of the guy that just lost his job or didn't get hired. >> name one thing you would like to cut? there are new studies that have come out showing that federal workers are paid significantly more than the private sector. somewhere between $19,000 and $25,000 per person. you don't have to lay anybody off. you don't have to not do anything you are doing.

you could continue all the services, helpful or not. at the state level, they would pay by the year. over time, we can phase that in. for new workers, we have to have pensions and taxes we can pay. the act put in as an explicitly racist piece of legislation because blacks were moving to the north. so they passed a law to require everybody gets paid the union

rate to keep young, unsxishsed black people from work. that increases the cost of the roads the government builds by about a quarter to a third. we could have more roads, better roads those are two examples. >> we'll need a quick question and quick response. >> good morning.

>> can you explain how 1% owns 70% of the wealth. i'd like to know a little bit about who funds you. this corporation or organization comes up all the time, koch. also, they contribute to freedom work who has started the tea party movement. do you have anything to do with koch industries, thank you. jo we have about 100,000 contributors to americans for tax reform. can you reach us at atr.org.

we would be delighted to have support from charles koch. >> you don't? guest: no. we'd love to. . there's a first part to that question that we missed. in the united stateses when everybody was a farmer, we have no limit on your opportunities to do whatever you want to do. some people decide to become priests and make no money at all. others decide to go out and reate thousands of well amth.

you can't earn money without employing people and getting jobs. i'm against people that use the state to kneecap their competors some alternative energy people want to tax others. as long as people don't use the government to kneecap or subsidize themselves, i think people should be free to do whatever they want or be monks and live on top of a hill. you don't have to make money in this country. it's not required to be rich. host: thank you for your time. guest: thank you. host: next, we'll look at a news report from substance abuse.

first, a report from c-span radio. >> the spokesman for u.s. troops in iraq, major general speaking on cbs's early show today says security forces have shown professional lichl and the little to improve. adding that iraqi police and military are up to the task of k50e7ing the country secure. he said the sooner the government is seated, the calmer the country will be. in pakistan, the senator is increasing flood aid to the country. from $90 million to $150 million. washington islamic does not want an increase on the back of this.

they could serve as a positive influence in the country in his capacity of washington based institute. those are some of the latest headlines on c-span radio. >> here is a quick look at some other programming. this morning at 10 eastern, the budget office will release the budget outlook for 2010. cbo director will talk to the bres before it. live coverage starts at 11 eastern. the house subcommittee will hold a hearing on the safety of sea food from the gulf of mexico. a look at how much oil could remain in the gulf and the possible impact. that's live at 11:30 on c-span.

today, new orleans mayor will speak about the state of new orleans five years after hurricane katrina that's at 1:00 p.m. eastern on c-span 2. >> the founder and chairman of the national center on addiction and substance abuse. our topic is a new report out on the national survey of american attitudes of substance abuse teens and parents. what is the attitude you are finding? guest: we have been surveying teens and parents for 15 years. we are trying to find out what the situations and circumstances are in an increase or decrease the likelihood that a teen would

smoke, drink or use illegal drugs. this year, we talked about gangs in schools. what we found was disturbing. 27% of america's public schools are full of gangs and drugs. that means 5 million to 7 million 12-17 year olds go to school where gangs and drugs are present. >> there's a chart here. 30% of schools without gangs, that number rises to 58% where there's gangs in schools. guest: those are twice as likely to have drugs. we did our focus groups.

i was making a presentation on how to raise a drug-free kid. they all asked about gangs. if you want to know what is wrong with public schools, they are riddled with gangs and drugs. think about the situation for a parent. in many states, it is a crime if you don't send your kid to school. to require parents to send their 12-year-old to 17-year-old children to school where gangs and drugs are present, is outrageous. host: what does that mean for the types of substances these teens are likely to use? guest: much more likely to drink and smoke and use marijuana and be in a culture where a lot of their friends are using drugs

like cocaine and meth. imagine if you came c-spans everyday and everyday you had gangs and drugs and people offering you drugs everyday. would you work here? you'd either get the cops to clean it up or get the hell out. these kids can't do that. host: what are you recommending? guest: the survey is not a recommendation. the survey is what the facts are. we have 72 reports on our website with all kinds of recommendations. host: we'll put that up on the

screen. the schools have got to focus on getting drugs and gangs out. if there's asbestos is in a cool, parents would say, we are not sending our kids to school until that is out. parents have to feel as strongly about getting gangs out of schools. host: how much is the federal government and state and local government spending on combatting gangs in schools? guest: i have tornado idea. my hunch is virtually nothing. i think this is the first survey ever to do this kind of an analysis and ask these kinds of questions.

this gang problem is very much a public school problem. host: so it is not happening in private schools? guest: 46% of public students said there are gangs in their schools. 2% of private schools. 6% of private schools say there are drugs. 27% said there are both gangs and drugs, not one single private or religious school student said there was gangs and drugs present. host: you also surveyed parents? guest: the parents of these

teens because over the years we have become interested in this whole issue of family bonds. what we did was take family ties. where family ties are strong. we measured this with a host of questions like what is your relationship with your mother and father. and asking questions of the kids too about the parents. do you have frequent family dinners and go to religious services together. parent that's engage in their kids' lives are parents that will have the greatest chance of raising drug-free kids. we have been surveying parents 8 of the 15 years. we have learned the more often kids sa dinner with their

parents, the less often they are to use drugs and drink. we have declared a family day. the fourth monday in september, a day to have dinner with your children. it's like the great american smoke out. it's a reminder. this is an important time, an easy time to communicate and talk. host: how much has your organization spent on these surveys and how do you get your funding? caller: our funding comes from the national institution of health. we have about 65 people. we do public policy reports. a lot of studies, testing effectiveness of studying the help for women and children on

welfare, homeless issues and drug and alcohol problems. this survey will cost us a hundred thousand dollars. our funding comes from the national institution of health and drug abuse, particularly. from state governments, corporate foundations, general foundations and individual contributions. we have a dinner every year, if you'd like to come. host: tammy on the republican line. you are first. caller: good morning. i'm very interested in this topic. i want to ask if there has been any research on the epidemic of prescription drug abuse? i know a lot of people, even in my own family. my aunt died at the age of 48 years old of an accidental

overdose. prescription drugs are more of an epidemic. you are talking about the family. a lot of families have lost many members to this epidemic. i would like to see if there's any studies on that. guest: in 2004, we did a study called under the country. it was the study that reveal theed problem to the country. you can find it on that website, the entire study as well as summaries of it. it showed a great increase of precipitation drug increase. over a period of 15 years before the study, the teen population increased 14%.

teen abuse of prescription drugs increased 212%. it is a major problem. the most abused drug is for kids is alcohol. number two is marijuana. number three is prescription drugs. it's likely at the rate prescription drugs is increasing, it will surpass marijuana in a couple of years. host: showing a chart of percent of middle schoolers using drugs on school grounds. 32% in 2010. for high schoolers, 66% in 2010. a gradual increase since 2006. is that number related to a component of that?

guest: yes, it's, you put your finger on important things. the middle school increase over the last couple of years. 23 to 32%. we are talking 12 and 13-year-old kids saying they are attending schools where drugs are used kept or sold. the terrible problem with that is that the younger kids get into these substances, the more likely they are to get hooked and ruin their lives. the high school figures you turn to, we do have that increase from 56% up to now 66% of high school students tell us their schools are drug infected. we cannot solve the public

school problem in this country without dealing with the drug and alcohol problem. we cannot solve the drop out problem. significant portion of those kids dropping out is because they got involved with alcohol or other drugs. host: if you look at this chart in this latest survey, the percentage of teens who say it is easy to get these types of substances, cigarettes is the highest followed by beer and marijuana and prescription drugs follows that as well. going to the phone on the independent line. go ahead. caller: i agree that drugs are a serious problem. i think drug laws are a bigger problem. in the state of michigan, we have so many people in prison, it's bankrupting our state.

at the sim time, we have drug companies purchasing elementary school kids full of anti-depressants because somehow naz -- that's ok. if somebody smokes pot, they are a criminal? guest: let me put the prison problem in perspective. we have done two major analysis. about 80% of the prison population are involved with drugs and alcohol. by that, i mean, they were high at the time they committed their crime, they stole money to buy

drugs, they vie lated drug or alcohol laws. the problem there is we don't treat them it would be hard to find somebody in this koibt r country spending a night in jail just for smoking a joint. the kids in elementary school, the drugs being prescribed for adhd, properly used, they can be good. what happens is, kids sell them and share them with friends. they are the most abused. host: atlanta on the republican line. guest: i think you are being a

little off about what you are saying about white americans. they abuse methamphetamine more than any other drug. you are not saying about european-americans going to lower class schools to buy drugs. comment on that. one last thing. wouldn't you agree that the people that are put in jail because of selling drugs are giving longer sentence if you are a minority than if you are a european american from a better class school. guest: quickly, meth and cocaine and herroin while they get a lot

of headlines are a tiny part of the problem. the drug that does the most damage by far for kids whether european, whites or blacks is alcoh alcohol. there's nothing close. the second one is marijuana. it's dangerous, 10 times stronger than it was in the 1970s. we have more teens in treatment for marijuana than for use of all other substances combined. the difference you point oud between the whites and blacks is the difference in sentencing between crack cocaine and powder, sentences for crack cocaine is much more severe. congress finally passed legislation to level that out.

host: on the democratic line in maryland. caller: good morning. i wanted your guest to comment on the fact that government policy as it relates to parents and gangs, do they extend that if the parents are off working long hours and not home to take care of their kids and the gangs step in and play the role of parents and these republicans are saying you can't help parents to spend more time with kids. how does that affect this substance abuse. lastly, you talk about this private schools, these are schools that are rich. they have money to provide for

their kids, take care of them. they don't have to work the long hours and stuff. this should be long enough. let the callers in some more. thank you and god bless. host: let me add to what you were talking about. there's a chart. the percentage of teens who have tri tried alcohol and maryjane. the percent jumps up with weak family ties. guest: exactly. there is no question but that family ties important. having time with your kids important. in terms of distribution around the country. there were gangs in suburban

areas and all kinds of areas and spread pretty much across the country. the gang problem is a national problem, not a local problem. the focus groups we did in which we heard the issue of gangs raised were in nashville, tennessee and when i was doing the presentation to parents, in rhode island. these are not huge cities like new york, los angeles and chicago. i think that's important. when you don't have time to be home with your kids at night, you all to find time to spend with them on the weekend. it's the quality and time and them knowing you care that is so important. caller: thank you. i have a concern that the

alcohol and drug problem is not being addressed about the white population. in the suburbs now, kids are drinking more alcohol. young people and also taking more marijuana and dangerous drugs among the white population. i'm concerned that when we talk about drugs, we focus on minorities. but we don't focus on the crisis among the white population. host: let me get your reaction to this chart. they asked teens if you wanted to get marijuana right now, who would you get it from. 76% said from friends, classmates, 25% said a dealer, 3% from a family member. caller: that is an interesting

note you put down. 76% that they get it from, who are these people? most of the drugs are coming from dealers that are not of minority background. why isn't there a crisis among the young, white population about drugs and alcohol and other methamphetamines? guest: the problem of alcohol is clearly a huge problem among every population including the white population and including the affluent population that has the money to buy it. one of the things happening, we asked parents that said would you suppose porlt a social host law. this makes it a crime to serve

alcohol to underaged kids not their own in their home. 86%, 9 out of 10 of the parents said yes, they would support such a law. more and more of those laws are being passed. indeed in west chester and long island, parents have gone to jail for doing that. >> number two, in that survey, kids get drugs from their friends and classmates, not from some dealer in a lousy classmates. the message here is parents, know your kids' friends. of those kids, do your parents

know the friend? the answer was a third of the parents does, yes. host: where are the friends and classmates getting it from then? guest: drugs like marijuana -- that drug is widely available. it's available ever where in this country. you can see in the response. i note that where there are gangs, a higher percentage can get it in an hour than a day. host: worth noting the method of contacting friends ordealers, 58% use texas messaging. 57% say talking to face-to-face.

caller: i worked in the field for many years in illinois. something that isn't addressed . . .

i have worked in the middle caulfield for many years -- in the medical field for many years. host: all right to accurate and joseph califano? guest: we do know that most teenagers to become pregnant, one or more are high at the time of conception. number two, we know that using drugs and drinking during pregnancy has a serious impact on the fetus and the title of -- and the child when the child is born. we did ask one question in this survey -- team to understand this. to the teens we said, to you think the teenagers who are smoking, drinking and using drugs are likely to be sexually active and the kids overwhelmingly said they are. there is no question.

i call and drugs and sex go hand in hand -- alcohol and drugs and sex go hand in hand in this population. caller: thank you for taking my call. i'm privileged to speak with such a high official, mr. califano. guest: you should tell my wife that. [laughter] caller: i will even put it in writing. no, my experience when i was 18 -- i am 59 now -- was i was a wild kid when i was 18. i was the purveyor of controlled substances. i was invited to this party were there were a bunch of big dealers. they were moving 500 lb bales of marijuana, kilos of cocaine and kilos of china white that the gis were bringing back from overseas.

that is how i got into the party. i was the and this person there. everybody there was in their 30's. but i have been raised overseas. i got to the party and this very pretty lady, she sat down and she asked me, what did i think the most important concern that there was in the united states and i said they are to legalize marijuana. -- they are to legalize marijuana. -- i said they ought to legalize marijuana. and they said at a party that the prices would fall and hit rock bottom. they threw me down a flight of stairs. host: do you want to comment? guest: on the point of legalizing marijuana, i think it would be a disaster. you have to come to this by

looking at our kids. the most important thing that we have learned in 20 years of research at casa is if a child can get through age 21 without smoking, without of using illegal drugs, they're virtually certain never to do so. people today say, well, let's legalize marijuana and tax it. we will make a lot of money. every dollar we -- every tax dollar we impose on our call and cigarettes, we incur $9 in health-care costs, criminal justice costs, and other social services. it is a losing proposition. lastly, today's marijuana is a serious drug. it is not the drug of -- the t h c content of marijuana in the 1970's was one, that was the potency of it. the most recent marijuana of a

few months ago has a potency of 10.2. it is 10 times stronger. we know a lot more about what marijuana does to the brain. i do not think anyone has and -- if anyone has any doubt about that, go to the national drug abuse website. we know it affects attention span, ability to concentrate. it has always affected motor skills. it is like smoking. we know a helluva lot more about marijuana today than we did 20 years ago. we know more about cigarettes than when everybody was smoking in the '40's and 50's. host: illinois on the independent line, good morning. caller: i have a lot to say, and no thanks to the media, and high influence of drugs and sexual behavior. a lot of children are growing up too fast. it is those life experiences that make us all do what we do. but we all do different things

in life. i just wanted to call in and say, like in science, will experiment. -- we experiment. we conduct studies and we find ... so that we are more knowledgeable about what we are learning about. yes, the drugs are 10 times as strong, but we are conducting the study so we know what to do and how to steer the general public in the future. but if you do not let kids -- if you do not let them experience something for themselves, they cannot learn from a situation. host: ok, let's take that point. guest: i think letting kids experiment with drugs is playing russian roulette with your

children. we know that kids who smoke and drink are likely to smoke pot and kids who are likely to do all three will use -- are likely to use cocaine and heroin and methamphetamines. most kids humam -- most kids will not, but those who do these things will. our experience and research is that affluent white kids, for example, and for my neidert -- and poor minority kids experiment at the same rate, but the poor minority kids are much likely -- much more likely to get hooked. the reason is they do not have any access to treatment. they do not have access to the health care that the affluent kids do. also, these kids are often from broken families, one parent or no parents. they do not have a structure of parents who know and can pick up the phone and get the best treatment people and have the

money to pay for the treatment services. host: next phone call, albuquerque, new mexico, debbie, independent line. caller: i have two questions. the first is, you are setting all of these numbers -- and i'm curious [unintelligible] guest: the me to speak to the survey. the survey was actually two surveys this year. each one was 1000 teenagers with an error margin rate of 3.1. the survey of parents was about 500 parents with an error rate of 4.1. those are the numbers. germantown host:, md., mike, republican line.

caller: first, i think your facts are way out of line. if they're coming from 1970, they are that bad. first, tatp does not kill. of all skills. >> cocaine kills. prescription drugs kill ordaz -- first, thc does not kill. cocaine kills. alcohol kills. prescription drugs kill. i would rather my teenager use thc than any other drug. guest: thc is the potency level in the marijuana. believe me, you are just as high smoking marijuana as you are drinking alcohol and you are just as dangerous trend -- behind the wheel. the likelihood of destroying it life is just a great -- are destroying a life is just as great with pot heads as kids to

become of politics. this is a serious problem. -- the likelihood of destroying a life is just as great with pot heads as kids who become alcoholics. caller: i want to say that i agree with the last caller. i think that, really, people like yourself and people like mr. norquist, you can really know if this is this? but your siding are accurate. you can believe that -- that the statistics you are siding are accurate. you can believe that they are. host: can i ask you about the maturity level of teenagers and do you think allowing them to have marijuana is a good idea, given their level of maturity? caller: i do not so much think it is a good idea to have -- to allow children to have marijuana. i think is a good idea to allow

people to evade -- to engage in behavior they will naturally engage in and not create this atmosphere of death and destruction that does not really so much exist except between the relationship between the state and the individual in the ways the laws work. host: you do not see a role for government to come in and try to prevent teenagers or adults from trying marijuana, taking marijuana, and buying marijuana? caller: not so much. i think more importantly, government should step in when it is clear that there is imminent danger, and in harm, and actual act on the part of another person to commit harm, not on beater's that people take part in. host: we will leave it there, rick. joseph califano? guest: it is the same question again and again. i think the reality is that marijuana today is a dangerous drug. as i said, we have more

teenagers in treatment for marijuana who are on all substances combined. you can serve a teen-ager's annual get answers all over the line. -- you can survey teenagers and you will get answers all over the line. roughly speaking, probably 80% of high-school seniors and juniors have had a drink or been drinking in the last month. maybe 19% have had a cigarette or a joint in the last month. there is no substance remotely close to all -- close to a lcohol that our kids face that is more dangerous host: last phone call, new jersey. caller: you said kids who tried

tobacco, our call or marijuana are more likely to become addicted to other drugs. don't you think that is because most drugs are lumped together? kid isou think that a going to try marijuana and say, hey, it is not the bed, i do not lose much control over my body -- is not that bad, i do not lose much control over my body? guest: sadistically, we did the working years ago that -- statistically, we did the work years ago that showed the kids to smoke and drink were likelier to use marijuana. kids who smoke, drink, and use marijuana were more likely to use other drugs. statistically, not everyone, but statistically likely would increase. -- the likelihood of increase.

in the last few years, studies done in california, and in italy in madrid have given us the reason why. that is kamal of these substances, nicotine, alcohol, marijuana, methamphetamines, cocaine, heroin, they all of that dopamine levels in the brain in similar ways. that is what gives you your pleasure. whether you are having sex or eating a meal, your team wins, your dopamine level rises. that is the reason there is this relationship. it is a similar impact of these substances on the brain. the current example is the kid who takes arks to gorton -- who takes oxycoton, that is the most popular among the teenagers, he crushes it and get high. in places like long island where

kids can not get it any longer because it is too expensive, by and large, they switched to hear when to get a similar kind of high. the only other point i would make is -- this chart is not up there, but we ask kids in the survey -- host: do you want me to show this one? guest: yes. host: go ahead, you can talk about it while we show this. guest: kids who have never smoked a nicotine cigarette, only 5% who had never smoked a cigarette tried marijuana, compared to 61% of kids to smoke nicotine cigarettes, they had tried marijuana. there are a couple of reasons for that. use to a mailingi

that stuff, but the other is this thing i just mentioned about the dopamine levels. there is a relationship behind it and i just want to be the science behind that. host: joseph califano, thanks for being here. we will take a short break and come right back with our financial regulatio series here on "washington journal." >> in his ninth 5:00 pm eastern time. jobless numbers are just in. jobless claims rose last week bringing the total benefits to the half-million mark for the first time since last forever. it is a sign that employers are cutting jobs again. stock futures are now falling on the news. the wall street journal reported today that the securities and exchange commission is suing new

jersey, accusing them of misleading investors about the health of its two largest state pensions while selling billions of dollars in state bonds. that is the first securities fraud case against a state. the sec is also conducting investigations into several other states. in afghanistan, a u.s. service member has died in a bomb attack in the service -- southern part of the country. those are some of the latest headlines from c-span radio. >> "book tv" continues tonight in prime time with a look at former cabinet members. james man talks about the core members of george of the bush's war cabinet. followed by a discussion of kissinger and foreign policy.

and david rahm and keith mcfarland profile the life and career of the country's second defense secretary, louis johnson. "book tv" prime time all this week on c-span2. >> "washington journal" continues. host: our washington journal -- "washington journal" summer series continues. we're looking at the new financial regulation law and the impact on financial sectors. monday was front of regulation and government power. tuesday was the effect on banks. and wednesday we looked at consumers. and on friday we will wrap up with a conversation on which portions of this law deal with prevention. today we are joined by lynn turner, former chief accountant of with the securities and exchange commission for 1980-

1998 through 2001. -- from 1998 through 2001. much of investors know? guest: i think -- what should investors know? guest: i think they need to know that congress addressed some of the shortcomings. and whether they did enough remains to be seen. but they certainly turned around and gave the sec some additional powers, which they really needed in terms of some of the toxic derivatives that have done damage to the markets. they got sec to go in and give greater powers for investors over corporate boards. and they will take a look at whether wall street has some conflicts that are contrary to their duty to investors. they have talked about giving the sec greater resources, which

they need to enforce the laws. the >> the story notes -- and what the story noted that it puts more cops and lawyers and accountants in this process. is that a good thing? guest: yes, i think it is. the sec has been underfunded for a decade and a half. it probably has less than half the number of people, the banking regulators per institution that is being example -- examined. if you look at what they have to regulate, there are over 30,000 out there and they are trying to do it with a small group of people. as a practical matter, it is just physically impossible at this point until they give the sec some resources. host: if your investor, this new law says it gives public

corporation shareholders non- binding votes on executive pay and golden parachutes. what about the nonbinding vote? does that do anything for investors? guest: you know, it has in other parts of the world where they have had it in europe and australia. what it really has done is come across the board, the -- it has brought the corporate board members to the investors to talk about the issues, specifically dealing with the cop. when a non-binding vote was put in place, the board hates to be embarrassed by negative vote, even if it is non-binding. it has been demonstrated that as a result, the corporate board members in a very responsible fashion now pick up the phone and talk to about what they are paying executives and whether

the investors agree with that or not. the vote is important because certainly it has been shown where there are not too many cases where there has been a problem. host: it also gives the sec the ability to grant shareholders the ability to nominate their own leaders. the bill includes provisions that may not be more is to begin to the financial sector's health in section 95 6.8, which says that they give expanded ability to regulate how financial firms pay. how will these agencies be able to dictate pay?

guest: what section 956 says is that the banking regulators have the ability to write rules that turnaround and specify when it would in fact -- when it would be considered excessive compensation award that it leads into banking behavior the results in losses at the banks. those are the two beater's physically discussed in spec -- in section -- those are the two behaviors' physically discussed in section 96. how far the sec plans to go with that remains to be seen. a lot of people consider the financial reform bill just to be in round one. 956 does not really do anything other than to tell the regulators to go do something. round two will be entering the

area of will making on these items. and we will see what the regulators do. in the past, for example, the federal reserve was given great powers by congress and then failed to use them. those contributed directly to the crisis. we will see if they do it or, as has been there a trend in the past, they go live or do not do anything with the rulemaking authority. host: a story in the "washington post says this -- do think a guidance -- do you

think a guidance oriented approach to artworks? guest: it depends on if they actually follow the guidance. if all they do is put out some flour words and broad general -- sunflowerseed words and broad general guidelines and do not enforce it, then no. historically, banking regulators have been very lax and that contributed again to the crisis. host: we are talking with lynn turner, former sec chief about the new regulation. st. petersburg, fla., you were the first phone call. caller: first, i hear about the different economy being taken the advantage of by different people and so many people got huge paychecks answer to so much money out of their companies and

there is never any accountability. no one ever gets in trouble for it. we know they make a ton of money. we know they have been doing a terrible job. and they do not go to jail. they seem to be taking a walk. how should we respect them if we have to live by a different set of rules and regulations than they do? host: lynn turner, any thoughts? guest: i think that is a superb question. there really has been a lack of accountability. even this last week we have seen the courts actually agree with the listener. in an sec enforcement action against citigroup. they hardly even did a wrist slap on a couple of executives there with an enforcement action and the judge came back and said, why should we ever agree

with a of a settlement like this? i think there has to be greater accountability. it's really gone two places. on the part of the regulators. congress has to do a better job of overseeing these regulators and making sure they do their job. if they do not, quite frankly, than this financial reform bill will be a serious flaw. the second places in the corporate board rooms where they agreed to pay these executives in some cases, not in all, but in some cases outrageous sums of money. and then they walk away and sometimes after having done tremendous damage. what the dodd-frank bill did is to allow people to put this before the board.

the sec is expected to do action concerning this on the 25th of this month and we will see if they make these your harder to get those people on the board. right now, the reports we are hearing come out of sec is, quite frankly, they're looking at provisions that may make it harder for investors to exercise that right. they're looking at whether or not to force investors having to hold their shares for a much longer time frame for a shorter timeframe. they're also considering whether or not to require investors to have a greater percentage of the company before they have the right. again, round two of this debate is going to be on august 25 and we will see if the sec actually tries to empower the investors or whether they make it harder for them to put people on the board.

putting people on the board on behalf of the investors really does at a trend is a matter of accountability. host: another provision in this bill gives the sec authority to raise standards for a broker- dealer who give investment advice. why is this type of device -- of provision needed? guest: right now when the law and regulations, they want to protect investors from abusive, unscrupulous investment advisers. when you go to buy your stock from an investment adviser, you know there are protections built in. at the same time, when you go by an investment from a broker- dealer, those laws and regulations do not apply to them. they can actually put their own interests ahead of the investor who is buying a product from them. and in fact, that may very well mean it is better to line their pockets rather than give a good

deal to the investor. what this law does is, again, it tells the sec to go put a regulation in place that says, when the broker-dealer is selling stocks or bonds to investors, they have to put the interests of that investor first ahead of their own interests. the sec has to do a study before they can do that, but we expect that within the next year, the sec will be doing something on this. host: california, henry, independent line. caller: the banks, they want you to save money. i have some money stashed away in the bank. i used to get 5% on savings persevered -- savings certificates. i now get 3%. let's straighten this thing out. they give me nothing. why should i even save a buck?

i altered the whole -- i ought to the whole. it would pay me -- i ought to dig a hole. it would pay me just as much. host: lynn turner? guest: it is the result of interest rates going down in this country to historical lows. the raid that the fed charges banks for lending are well under 1% now. they are abnormally low compared to what they have been. certainly, that we have expected in the past. -- then what we have expected in the past. the amount of money that you get on a cd goes down as well and that is a natural consequence of that. i do not see that changing any time soon. your caller, and any investor, is probably well advised to talk

to an investment adviser to see what opportunities for higher interest rates, bond funds, mutual funds, what they may offer, dividend paying stocks. they would be well advised to talk to invest in advisor to help them make those decisions. -- to an investment advisor to help them make those decisions. host: this law requires banks that package loans, these mortgages in two different packages and then sell them off to investors, they have to keep 5% of the credit risk on their balance sheets. i do think this is strong enough, that it goes and accomplishes the goals that they are trying to do here? it has been called a "having skin in the game." guest: you are right, it is talking about having skin in the

game. we know that the banks have made a lot of bad loans, along with eddie -- along with fannie and freddie, quite frankly. there are some who think that they were able to sell off the loans and have no skin in the game with respect to the loan, there is no consequence if the loans do not pay off. the problem is that, 5% is very low. a trip have been much higher than just 5%. -- it should have been much higher than just 5%. i do not think is going to have in big effect. for the most part, it just maintains the status quo. the reality is, it is not just point -- is just not going to change anything. and the reason that the banks had retained some of these in

small part is because they have not been able to sell them off and that is why they incurred their loss. there's also a provision in this bill that turns around and says, for certain morresidential mortgages, they do not even have to retain 5%. this is the part of the bill that has gotten a lot of hype, but with the percentage down so low, the impact of it is going to be relatively minor or nonexistent. host: 83 here from the viewer who asks, why did the sec catch my employer, and ron, -- enron, before i lost the value of my 401k? guest: the reason the sec did not catch and run is because they were not even looking at the time. the sec had gone to congress for a number of years under chairman arthur levin and had asked for additional resources. in fact, during this timeframe,

the sec did not even have any staff to look at those companies going public for the first time, let alone of thousands upon thousands of companies that were already public. they did not have the staff to do it. many of these filings are sick and they did not have the number to watch than. the accounts that were trying to overlook these was something like 80 accounts grand total. -- 80 accountants grant soetoro- ng. -- 80 accountants grand total. again, you can deregulate by changing laws or regulations, but you can also does not give the regulatory manpower that the

body needs to do the job, which was very much the case during enron. host: joe, democratic line, good morning. caller: good morning. we have money in a 401k, mutual, and stocks and bonds. but my real question is here, with the current administration, timothy geithner does not want to back the woman who is head of the t.a.r.p. fund to take over position. and yet today, we still have golden parachutes for so many of these corporations. host: lynn turner? guest: i think he is probably talking about the fact that elizabeth warren, the very capable, very competent law

professor from the university of harvard has been recommended and supported by many people, quite frankly, many of the consumer and investor organizations to head of the new consumer protection bureau, which will be part of the federal reserve. there are people in the business community and witthat just do nt want dr. warren to have that agency. and for good reason. she will undoubtedly protect investors and consumers. probably the best possible person for that agency. we are having a fight in washington d.c. even as we speak between the interests of investors and consumers on one end and businesses on the other hand. we will see which side of that fight the obama administration comes out on. to their credit, the of this region has said she is a very capable woman.

-- the administration has said she is a very capable woman. but we will see if they find it right to appoint her over the vociferous objections of the community of the banks. host: the financial crisis also points to the credit rating agencies and the role that they play. this new law revamps credit rating industry, potentially establishing a new quasi- governmental entity designed to after the sec review. the what does that mean? guest: there will be a new division put within the sec that is going to be charged with watching these credit rating agencies, which are very important. they are an important gatekeeper to the marketplace before anyone goes out and sell the bond or raises money from the public. these credit rating agencies tell investors how risky those bonds are. they have a very important role.

investors very much rely upon them. we saw in the last decade, however, they were much more concerned with the fees they were getting from wall street and the banks rather than issuing reliable credit ratings. what the law says is, no more of that. you have to put in independent boards. you have to put an independent compliance officers. you have to issue support -- issue reports that show was whether you are following procedures for issuing these ratings and it gives the sec some enforcement powers. more importantly, what it does for the first time ever is if these credit rating agencies issuing misleading report, it gives the investor the right to go sue that credit rating agency for having misled them. and as your screen after lee notes, -- and as your screen

aptly notes, if a credit rating agency knowingly does that, they should be held accountable. host: next caller, please. caller: i retired after 20 years in the insurance industry. the problem i have with this bill, the fdic and state agencies, demonstrated a total malfeasance in during of the regulations. why is the congress giving them such discretionary powers to revise what they're doing? that gives little confidence in these agencies were few heads are rolling and little criticism. guest: i could not agree more.

again, i think the regulators had some very good authority, which they never used. they were told in the early 1990's to go right rules that said you can only make sound -- to go write rules that said you could only make sound investments, and bernanke and alan greenspan just refers -- refused to do so. you have such an inside the beltway mentality right now that there is a lack of and accountability -- a lack of accountability on the part of these regulators. the ultimate accountability, though, rest with the american public. if the american public does not like the javed congress is doing with it again -- the job that congress is doing with a catalytic, then both about.

-- if the american public does not like the job that congress is doing with accountability, then vote them out. the caller is absolutely right, the banking regulators today when this job. in the original bill that senator dodd put out for consideration in november of last year, it would have changed that. it would have eliminated some of these banking agencies. it would have created a new and single agency with better cars. and more accountability -- with better powers and more accountability. the banking industry came in and lobbied very heavily. at one point, they were spending tons of money, millions of dollars to impact this legislation and they were very successful. they got the proposals that god put on the table that would have strengthened the regulators -- that the proposals that dodd put on the table that would of

strength in the regulators -- that would have strengthened the regulators substantially watered down. we will not know how good this bill it is or is not until they put in action. house ane denver post th article that talks about manchester, conn., david, democratic line, you are next. caller: thank you and good morning to you. you are talking about exactly what i want to talk about the misreading of mortgage bonds by moody's, standard and poor. these people who were involved in selling and reselling these bonds to investors knew they were doing something crooked. the for example, and this can be verified, they would verify,

say, a bottle of mortgages for $10 million and immediately sell them for $16 million. they knew something was wrong. you can write regulations until the cows come home, but if it says, between a buy and sell, singh drives its way in. they knew they were doing something crooked. nobody ever talks about these mortgages. host: we will leave it there. let's move on to have shunts, mr. turner. -- let's move on to hedge funds, mr. turner. what were they registered before, or were they at all? and why is this necessary? guest: the sec, back in the

first half of this last decade, tried to pass rules that would have required all the hedge funds to register with the sec. was reason the sec did that i about a dozen years ago there were about four dozen or fewer a hedge funds and now there are 8000 + and they have a big impact on the market. and they do have an impact on the value of the stocks and bonds. a lot of the money out of these institutions have gone into those hedge funds. you may have knowingly or unknowingly had some money in those hedge funds and they would avoid regulation whatsoever. the sec tried to regulate. they buy challenged in court and lost. congress came back in and said

we are born to stop that argument. we going to give the sec authority to make these people registered and give transparent information about them so we can see whether what they are doing is appropriate and above board. i think it was a good move. the impact is going to be somewhat mitigated because the largest of these had john -- these hedge funds, many of them were already registered. the top 20 or 30 were already registered. probably 40% into a war already registered with the sec voluntarily -- probably 40% total were already registered with the sec voluntarily. the sec is now going to have to bring in the other 60% in under the regulation. again, frank and dodd should be commended for that. host: to go back to the denver post. and let me add to this, a tweet

hear from a viewer. how long before this bill goes into effect? it was signed into law, but there were or certain aspects that will take a while to go into effect -- but there are certain aspects of the will to go while to go into effect, right? guest: exactly. i think it is going to be almost virtually impossible, especially with the resources that they have, to do it and do it right within the time for in the half. but if will take at least a year, i suspect, because they through this soto go fast. i suspect that they will find their first bite at the apple is not this is fairly good one. it allowed to come back in later years and get that fixed. -- they will have to come back in later years and get that fixed. there will be some delay before the rules actually take effect. the reality is, lot of that will

not occur until between 12 and 24 months out and to the extent that they did not get it right the first time, we will have to wait and give them some additional time, probably within five years to come back and fix what they did not get right the first time. host: denver post notes that the dog frank bill -- the dodd fank bill requires a 67 authorities to be established. caller: ago when and how they are trying to change who is on the board of our companies. by saying the investors can put somebody in. you know full well the investors are now people. it is unions.

it is the chinese -- the chinese communists. they're going to put people on the boards and if they do not make it fail, then the things like bundling, bundling of mortgages -- and i'm not sure to agree how that works, but i know that they sell it. host: let's take your point about foreign investors serving on these boards. guest: what she is driving at is really whether or not special- interest will be able to get into these positions and get on the board and the answer is, absolutely not. the labor unions, first, to play an active role in place of investors, but they are, in reality, a very, very small percentage of the investors. in order to elect someone to a corporate board, you will still

have to get a majority of the votes that are cast. that means giving the shareholdings that you are going to have to also get the support, even if you are a labor pension fund of some very large institutions like the fidelity and vanguards of the world. they take their obligations very seriously. they're not chinese or americans. you'll have to get the majority of the vote. labor unions on the road cannot get that vote. -- labor unions on their own cannot get that vote. unless you can get a broad coalition of investors to go with you, you cannot get someone on the board. and if you are able to get that broad coalition, then that shows

a tremendous investor dissatisfaction with the board. and in the past, word has just been the labor unions trying to do something -- but in the past, where it has just been the labor unions tried to do something on the road, they have not been able to do that. i do not believe it will be a problem whatsoever. host: karl in texas on the democratic line. caller: i'm all for financial regulation. during the bank bailout, they said, we need to bail out these banks, these corporations because it will be the greatest depression. i am not an orchestra anything, but i'm wondering, if we were allowed to let these -- i am not an anarchist or anything, but i'm wondering if we were allowed to let these institutions failed, would we be going through these mysteries? u.s. mr. turner why these things

happen -- you asked mr. turner why these things happen. they will not be able to tell you exactly why. there are theories. there are political party scapegoats. but what would have happened, really? what would have happened if we did not bail out these entities? host: mr. turner? guest: we have some good examples from the past. a couple of decades ago we had some large firms on wall street that failed, and the then sec chairman said, absolutely not, we are not going to build them out. i think he made the right decision. and he let them go through bankruptcy and there was no destruction of the markets whatsoever -- destruction of the markets whatsoever. into timber 2008, we have lehman -- in its september of

2008 we had lee macphail. it had a very destructive effect on -- we have lehman fail. it had a very destructive effect on the market. that is because these large banks have become very intertwined and interconnected as a result of the various contracts, these toxic derivatives that warren buffett has talked about. they all have their finger in the same pie and if someone got pulled out, then suddenly there were problems. and we did see that. it was not good for the economy, not good for the markets, not before americans who have the money -- their money in those markets when the men went down. and i suspect if they had to do it all over again, the fed would have bailed them out. the real issue is not whether we allowed a big bank to fail. the problem is, you never want

to let a bank into a position awhere you have to make the decision of will whether to let them fail or not. if the sec and everyone does their jobs right, you never get into that condition. that is where the focus needs to be. are we managing and overseeing these from a regulatory perspective? these institutions that are so important to our economy such of we never have to face this type of decision to wear we can let them -- this type of decision to where we can let them fail. i do not think this bill ensures that can occur going forward and as a result, could allow us to end of repeating what we just went through. instead occurs, that will be a sad situation -- if that occurs, that will be a sad situation, especially given the damage to millions of americans.

host: let's talk about insurance companies. under this new law, the bill creates a new federal insurance office within the treasury department to monitor insurance industry and to recommend which insurers are systematically important. why is this necessary? guest: i think this is the first up toward federal regulation of these -- of the insurance companies, which frankly, the insurance companies want. the state regulators in some instances have been fairly weak. but you've got fairly -- very large insurance companies that operate, you know, in 50 states. they have to do -- to deal with 50 regulators, some of which are lax, some of which are not. in some ways it creates a race to the bottom.

in this last financial crisis they were ... because of the problem, but there is a of fear that they could be in the future. -- they were not the cause of the problem, but there is fear that they could be in the future. it still leaves most of the regulation in hands of the state regulators. this new federal office will not do a lot of regulation. the impact of this from a consumer-investor perspective will be minor. but it will allow the federal government to start getting data and statistics on the industry. that is a good thing. if there is a block down the road, then congress will step back in at that point in time and put these large insurance companies under the federal

regulator as their primary electorate -- primary regulator and stressed that away from the states. host: let's go to dawn in new mexico. can you make a quick? caller: two-thirds of all trades on wall street are high- frequency trades. these are made by hedge funds, by banks during proprietary trading by well-off individuals. how does this law hope to control that? the image has really been news that wall street is a casino that is raised against the individual and the investor. host: all right. lynn turner? guest: there has been much more computerization of the trades, especially in the last decade or decade and a half. we have where it has commonly been referred to as the flash crash where a few months ago the

market to a serious downturn. it is a serious issue. the sec has not really have the resources to monitor the trades the way they should. congress has really [no audio] so let any one individual does not have a leg up, that is an area has been monitored more closely. the sec has started to do that. they are trying to bring in more insider-trading cases. more insider-trading cases. i think that i