deaths do not primarily come from large bombings like this pretty much of the larger incidents were already well reported by the world press and media. targeted assassinations, drive- by shootings, executions, checkpoint killings, these are the small but relentless tragedies of relentless adding in the deaths, and combining with other previously reported deaths, we are now able to say that more than 150,000 people have been killed in total since 2003, of which 80% were civilians. fees blocks often turn numbers

into human beings. 35 bodies were found november the first, 2006 around baghdad. however, media reports did not identify any of the victims, nor give details on each. the iraq or logs also report the bodies, but specify a wide range of details, including the precise neighborhood, time, and date in which the bodies were found, and in many cases the identities of those killed. most surprisingly of all, we have found a huge number of names of the victims, meticulously recorded. it is unfair to us why it --

does not clear to us why the united states wants to go into such detail, but it did. the only routes are at a final death toll that will satisfy all parties, including brief families. we have already found over 100 previously recorded civilian names, and we estimate many thousand more will be discovered. for instance, and the 29th of november, 2006, 28 bodies were found in a mass grave south of baghdad. this was comprehensively reported, but not a single one did the name of a victim. the iraq war blocks lists each of these names, one by one, so, today, for the first time, if they have been put into the public record, nearly four years later. decaling these logs is important for -- be telling these lots is important in

another way. the totals are lower. this has people mistakenly assert that there is nothing new in these logs. in conclusion, we believe having received these logs, wikileaks was right to publish them, but the real story was not about the release, but the great content. all much -- almost every tells a story, and far too often, it is a previously unknown story of suffering and death. it would take many months, even years to extract every detail. we were committed to playing a part in this work, no matter how long it takes. if there can be no closure, or moving on from this or any war until every last victim has been properly recognized and and the full details of the circumstances of their death

acknowledged. these are the single largest contribution to achieving that goal that has ever been published. we want everyone, including the u.s. government, to support this work, which is in the public interest and brings recognition to those in this war the desert. >> a question you're probably asking is what not? i will tell you about some of the legal action that will follow here, in the uk. it would be wrong to assume that as these are u.s. logs, this has nothing to do with the uk. public interest lawyers representing many iraqi civilians dead and killed -- that have been killed by the use of lethal force or in custody --

no one knows how many iraqis lost their lives. we now wait the corner toward the most notable at the end of 2011. the iraq war logs and hugely to the effect and subsequent invasion. what can be said comes under three headings -- of three era in -- all three areas are, or will soon be subject of legal action. the first, unmuffled killing of civilians, or adjust -- on just killing of civilians. it may never be known the how many survived, but the previously known number of deaths is likely to have

increased by a staggering 15,000. some of these deaths will be in circumstances where the u.k. had very clear legal responsibility. this might be because the iraqis died under the care of you pay forces. these deaths will all fall within the jurisdiction of the european convention of human rights. if the judge asserts that once you take forces have authoritarian control over iraqis, there is the major distinction for the purpose of the european convention. public interest lawyers was a case where the u.k. tank stopped, and shot and killed and

eight-year-old girl. there were many cases like that. the logs add to the number of cases that will not be within the jurisdiction of the european convention, but we will argue that the common law here, in the u.k., provides the same remedy as the european convention. namely, there must not be a judicial inquiry into the legality of these deaths. if unjustified, or unlawful force has been used on the prosecution must follow. we are bringing forward a new case, seeking accountability for all unlawful debts. we argue there must be a judicial inquiry to fully investigate u.k. responsibility for civilian deaths in iraq. the second area his the huge number of clubs that the tell horrendous torture and abuse of

iraqis. the u.s. and u.k. appeared to have adopted a fragmented order that required them to take no action whatsoever once they established that this treatment was the responsibility of the iraqis. this is contrary to international law. it is known that there is prohibition on torture. it may never be used. all states owe a duty to each other to cooperate, and stop at out. the u.s. and u.k. forces cannot turn a blind eye on the basis that it was not their soldiers doing the torturing the the torturing. -- that torturing. both have the politicians to take effective action to stop the torture by the iraqis.

there was a second case brought forth seeking accountability for the u.k.'s failure to act in these circumstances. the third area concerns a huge and growing body of evidence about killings, ill treatment, and torturing of iraqis while in you take custody. there appears to be many cases where iraqis died in the u.k. costly, and were then certified as dying from natural causes. none of these have been investigated. many of the iraqis were looted and abused. -- hooded and abuse. there are hundreds of iraqis complained of ill treatment and torture, how often a resort of course of interrogation and

techniques by u.k. interrogators within secret facilities run by the joint forward interrogation team. insofar as the logs add to this body of evidence that will help us gain a simple inquiry south east iraq, a court of appeal and high court judge will hear a case about all of these judges from the fifth to the ninth of november, 2010. >> thank you. we will open up very quickly for questions. we have a surprise announcement. it is an unusual announcement because we have an unusual addition. we have in the front row, one of the most famous whistle-blowers in the history, the author of "the pentagon papers." i would request that all questioners ought to understand

that the speakers are pleased to answer any and all questions concerning the release of the document, and analysis of the data, and conclusions, but i would like, if i may, to answer -- what is the difference in the kind of material? the one in afghanistan has a more fundamental similarities than it has difference is -- differences. a couple of us here came over the ocean last night for the opportunity to stand with it julian assange and a recipe. it was a circumstance that i have been waiting to see for 40 years.

there was a film called arrested called "the most dangerous film in america." she is working on a film about julian assange and his sources. how'd you get to be the most dangerous man? first, and erica, if our country is pursuing for prosecution been the threat that is being made by the pentagon as we read over the last few days of warning newsmen to stand away from this material, to refuse to receive it, and if they do, to return it, seems absurd on its face for not dealing with the 7000 pieces of paper.

they never did return it. they refuse to stop the presses until the court order came down. whatsoever material, it is all over the world right now. the demand seems absurd. i understand the reason for those words. they echo the words of the worst first used against me, the legal words, which for the first time used the so-called as in-fact, as if it were the kind of official secrets act that you have in britain, which simply criminalizes the release of any classified material to any unauthorized person. we do not have such a flop. the irony now is that president

obama is making clear threats to apply in the slot to anyone that deals with disinformation, including the journalists, and even the people that read it and did not report it to the proper authorities. the threats are not entirely without credibility. he has started as many prosecutions for weeks as all previous presidents put together -- leaks, as all previous presidents put together. it is a small number -- 3. prior to bullish and obama took it for granted that any -- bullish and obama took for granted that any application of the espionage act would be over from as unconstitutional. now, obama is making a new experiment on this issue, which

will change the relationship with the press and its sources, as it . wikileaks would have to know that are facing a risk of being where bradley manning is right now, accused of these things. i do not know who the source is. if the president should approved it is readily manning, we can give him on reserved -- unreserved admiration. whoever did it, acted appropriately. it has one characteristic that is not want to come out clearly in these 400,000 pages. the origins of the war were clearly in the form of lying to

the public of britain and america. it was in the order of carrying on an illegal war of aggression. also, the non-civilian casualties are in the role of fighting against foreign occupiers, innovators, and by the standards of the world, the question is raised very much whether their death by the innovator is not also to be counted among the were -- among the murders? i want very much to congratulate all of you who are mining this material to learn what we could have learned as if it had come out earlier. >> yes. gregory is representing a group that was mentioned earlier

giving the sam adams award for intelligence, integrity, and we want very much to appreciate him. >> thank you. i am here as a former recipient of a sam adams award. my name is frank murray. -- cried murray. this award is being given to a number of people, including the last hurdle -- hurdle in the uk. it is given to people who in the public interest leaked details of the dark things that governments do. i am very happy to present this year's award to julian assange.

>> i think we will take questions from the floor. go ahead. >> i would just like to ask -- you mentioned a forthcoming case involving bid death and fortune of the iraqi civilians in british detention. how many? are you talking about? further, you mentioned the young girl getting shot. can you give us more details on where and when that happened? >> i will do my best on both questions. , 2003, a colonel, u.s. army

officer road and ordered that says chillingly to all of the troops there have recently been a number of deaths of iraqi civilians in custody with various units. the tape line ever since. -- live ever since. when they tried to figure out what it means by a number, they said two. it is not too little. it is probably seven or eight, or even more. the ongoing disclosure keeps turning on more and more cases. often, these men are arrested, and subjected to severe abuse in their homes.

sometimes, women and children are abused, and sometimes pregnant women have given miscarriages, etc. these men are abused, rifle- blooded, and sometimes h ooded , and not surprisingly die. they have never been seen by a u.k. dr. i cannot tell you how many iraqis we killed once we held them in uk detention facilities. he will have to ask the ministry of defence. as for the small girl, it was headed for her and her young friend to play in the street. often, uk tanks would stop, get out, and trying to win the

battle for hearts and minds, they would give the children and sweets. on the particular morning in question, for some unknown reason, the tank stops at the end of the street, she is there in her yellow dress, a rifleman pops up, and blows her away. you will have to ask the ministry of defence why that happened, because they will not tell me. that is one of the cases, one of the reasons why we are calling for a judicial inquiry into all of these deaths. >> yes, go ahead. >> a i am from "the times." the pentagon spokesman said the names of 300 iraqis had been released, and their lives can now be in danger. are you worried that the careful that in that you outlined this morning was not

careful enough? >> i am worried that the press chooses to credibly report statements like that from the pentagon. the pentagon would not have been able to review our material in those few hours. it is simply logistically impossible. we also have strong confidence in our reduction process, which is an opt-in process. that statement by the pentagon presumably, at its base, is referring to their own internal review of their collection of significant actions for iraq. you will notice that they do not say that fact. instead, they try and issue some deceptive statement to fool the world's press, as they did last

time with some similar statements into reporting something that is not true. >> yes, go ahead. >> paul harrison, from sky news. julien, you said in your opening statement you make a promise to all of your sources that you will "do them justice for all of their efforts here, but given that we have seen a shrugging shoulders attitude, thus far, will that not continue, and therefore the efforts of your sources well largely be in vain, or have you had a positive note is from the u.s. already? >> it is an interesting question as to how responsive government is to the condemnation of these people and the rights of other people.

the shrugging of shoulders is, of course, the second arm of powerful people. the first arm is silence. we have gotten the on the silence. now, we see an attempt to act in a nonchalant manner about something that is very serious. that does not mean it is not treated seriously, but rather is, or at least was certainly early on with the afghan material, and attempt to make it look like it would not be treated seriously -- to frame the material as if it was of no consequence. i highly recommend "the daily show" episode that collected all of the and there is nothing new in this material reports for

afghanistan. has it has turned out, that is not true. according to research, total war reporting increased 300%. the approval rating for the afghan war decrease approximately 15%, and barack obama's personal trading, depending on which poll you read decrease somewhere between four % and 8%. those are crude issues to speak about, but we can see continual reporting in the past two weeks from norway and espresso in italy. i will be speaking at the u.n. the early next month in relation to the afghan material.

by expect the same thing to happen babs been -- i expect the same thing to happen with this material for iraq, and maybe even more. we are talking about five times the number of deaths in the same time. we also put together a much stronger, a broader coalition this time, involving not just print organizations, but human rights groups, lawyers, and so on. i think we are going to see some concrete effects, if not just the consentual effects about how wars are conducted. an interesting note is that when i made the opening note about the truth being the first casualty of war, we actually see that most wars that are started by democracy is involved lyse --

in the vietnam war and involved allies. the start of the iraq war involve very serious lies. there were repeated and amplified by some in the press, which leads us to say it is not the world terrible because there is a lot of line by officials, but it leads us to a lot of hope that democracies do not start wars on the star our allies. if there's enough truth early on enough, perhaps -- been these kind of lies. perhaps if there is enough troops, they will not start these wars. -- enough troops early on, they will not start these wars.

>> can you comment on advertising? >> there is a lot of tabloid press surrounding our organization. i have seen no reports. -- no reports that are credible. >> in your reading of all of the reports that you have gathered, how would you characterize the conditions that existed in iraq in the time that you are reporting on? >> i think john is probably the best person to enter the >> could you answer that first, yourself, i am sorry, would you mind? >> i will give you my ignorant opinion, but i will let john answer first.

>> our focus is entirely on the victims, and those who died. what we can see, is simply a fighter-detailed picture of what was already well-known -- fighter-detailed picture of what was already well-known -- a relentless round of daily killings. checkpoint killings, drive-by shootings, with no end. the effect that that must have a the ordinary iraqi people is not calculable. in regards to the other kinds of information in the logs, we have nothing to say at this point. >> christian? >> no? >> the question, right here.

>> i want to direct this question at phil. of the importance of a full judicial investigation, if that does not happen, will they take each case on an individual kate -- basis, and string this out for a decade or more, thus lessening the impact. >> the government's position is that it can deal with one case at a time, and each case will take a year. we have won 42 outstanding cases, so that will take 142 years. the alternative is for the administrator to put teams of judges into courtrooms to deal with these cases within a proper time scale. both of those we said our

absurd. the only rational solution is to get it over with, and hold a proper inquiry, along the lines of the just-concluded its inquiry, and they really need to see stopped covering up, which they do with great desperation. we all know that many things went wrong in iraq. we know from the bombing mission, for instance, that we should have had a detailed interrogation directed in forced in iraq. that directive would have told interrogators what they could, and, more importantly, what they could not do. tate said we were very sorry that we did not have one, -- they said that we are very sorry

we did not have one, and that meant that the interrogators fell back on training technique. we are also very sorry to admit that the training was completely unlawful. it is involved forced new d., keeping people make it is they would not cooperate, the invasion of intimate space, the use of threats, one man said " the only limits on coercion where the limits of one's imagination." i am not point to explain the horrendous things that people did to my clients when they let their imagination run wild. a lot of it and loved heart -- involved hard-core pornography, sexual intercourse, etc., etc..

you cannot say this is all down to a few bad apples, or isolated incidents. it is horrendous. it has been covered up. you, the press, art those that often allowing it to be covered up. you are obsessed of what we might have done in pakistan, or known in the guantanamo bay. i say where it up, and have a look at what is happening in die -- in our high court about what we actually did. we intend to open that inquiry, and reveal material no one has seen the about the way in which we interviewed people. i invite you to turn out in force and find out what the u.k. actually did, and stopped going on about what we might have done, what might have known about what the u.s. was doing.

i can tell you a comparison -- i have to say, none of my clients have ever been found to be embellishing the truth. i invite you to come along and find out what we actually did, and just for one month stop going on about what we might have been complacent in. -- complicity in. >> like afghanistan, the to think iraq's public opinion has turned the page? >> to whom are you directing the question?

>> well, for afghanistan, we had, 14 pages in my coat the guardian." -- "the guardian." for iraq, we have nine. i suppose that relates a view about the importance. but, iraq is now just cool enough. remember, there are 50,000 u.s. troops there, and something like 150,000 contractors. iraq is now cool enough to probably take a look at. that is not something that is yet possible with afghanistan. we did a little bit of that because it was a primary source

of documentation. otherwise, the use of our patriotism and supporting of troops, and so on, i can see already in the news, a much more fair, and less defensive portrayal of what happened in iraq that is being revealed by this release. these two countries do not stand in isolation. these are both modern. the lessons of arad, which are ongoing -- of iraq, which are ongoing, it covers significant abuses going on during the first year of the obama administration, can be applied to afghanistan and other places

where western governments may choose either in isolation, or in a coalition to invade. the war itself, in the united states, is becoming more of an issue. the republicans are using the mismanagement of the afghan war against the democrats. we are one week before the congressional election. the democrats can point to come up rightfully, that's terrible abuses that occurred under -- the terrible abuses that occurred under a republican administration. i hope that will permit raising of this issue. in the last 24 hours, the press has been doing precisely what they should. the press, when there are cuts

in traded -- when they are concentrated on the press issue, can over playthings', the response to this issue has been -- de concentrate on the press issue, the response to this issue has been brought. >> can you relate the difference between the afghan target -- documents, and these documents, in terms of reduction, and making sure the names were not released? >> i think christian covered that pretty well. to make it simple, because it is a fairly long and complex technical process, which i can speak about later, the fundamental principle was to

start with every single word and number redacted, and then to wind that back by finding safe words, and modifying the safe words and phrases for the rare accounts where there were dual meanings of words. that also involved some of the investigative journalists and researchers consulting with us to give us a feel for what sort of a information needed special care. although, i must say, in that process the human rights groups were very helpful, and the bureau of investigative journalism was also helpful. none of the mainstream press

partners, in fact, provided any assistance whatsoever to the demands to get 400,000 very serious documents into the public record, and into history, where they can have an ongoing effect. and tell us if i may add, -- and, if i can add, the pentagon refused. its statement was they're not interested in a conversation about harmonization, they are only wanted to hear a on how the documents will be returned, and a legal counsel for the department of defense also issued a statement to us. >> a i am from italy. sometimes, you are portrayed

like a man of the run. are you worried about your safety? d.c. enemy is trying to hurt you, to get you? >> that question has been answered a lot. >> i can only sort of get people sit consider that we have a serious case here where the obama administration is trying to create new law been through changing the interpretation of existing law. it is in a similar manner to, i suppose, bush expanded the power of the presidency using lawyers to create new interpretation of previous arrangements. that is a serious business.

that is why it is not just me, but the statements are trying to be applied to all press in the united states, an outside of the united states. >> wednesday, you wrote on your twitter feed pepco wikileaks communication infrastructure was under attack. we have any evidence which could help pinpoint who was making these attacks, and you -- can you elaborate of what this attack was about? >> that matter is still being investigated. i think it is too far removed from the subject of this conference. >> you said you wanted the truth to come up. -- to come out.

i have the feeling now, when you said a lot of wars are started by democracies, you hope that this procedure will stop that happening in the future. has your team broadened altogether? -- aim broadened altogether? >> no. we are continuing the agenda. >> in the red? >> i am with canadian broadcasting. you mentioned that you hoped the lead. the lessons will be learned from iraq. what would you say are the main lessons? >> it is too early to tell yet. it is the responsibility of the press, and the opportunity of the press and human rights groups, and legal outfits to draw those conclusions.

iraq, as we can see was a bloodbath on every corner. the stated aims for going into that war of improving the human rights situation, improving the rule of law did not eventuate, and in terms of raw numbers of people arbitrarily killed, it worsened the situation in iraq. >> is there a microphone? right over here. thank you. munich, germany. your press release stated that the current lake is a pretty good account of the war in iraq without the months between may

2004, and march 2000 -- the months of may 2004, and march 2000 night. why? >> we do not know. it is important to remember that this material, while the most comprehensive and detailed report ever record -- ever entered into the public record, it is far from complete. it is based on the statements of u.s. soldiers who were often in a position where they have intended to lie, where they have reported on their own activity, and no one says i have unlawfully killed a civilian. it is only used on the secret level or below -- defense that were subsequently classified as top secret. i am not present. it does not cover u.s. special

forces, the cia, the military activities of any other nation in the coalition partnership, or the activities of the iraqi army, except where the regular united states army interfaces with them. sometimes, the regular u.s. army will engage in combined operations with the iraqi army, u.s. special forces, and you pay forces. we get small glimpses through a corner of the window for those organizations involved which are not the u.s. army proper. we do glimpse their activities, but it is not a full account of their activities.

>> we have time for one further question. i will pass it on to you. you right here. you had your hand up the longest. >> i am with voice of america. this is a question i'm asking anyone on the panel about week, the press. why do you think it is easier for us to cover things like race as a tool of war in places like west africa, where it has been widely documented, as opposed to some place like iraq? >> one of the things that we have to face up to, and we see a very clear, is a british historic colonial savagery, if we could put it like that. the techniques we were using, putting stress positions, food

and water deprivation, they go back to all of the collodion -- colonia wars, and into northern ireland. you might think that when they disbanded, it disbanded, but not at all. if you look at what the british did in iraq, it is savagery. these iraqi men did not exist. they had been completely dehumanized. now, my take is that one of the reasons is we just do not want to face ourselves. that is my take on the british position, and what we did in iraq. you would have to ask americans for their take. i think it is important that there is a horrendous racism, and we see it in the british army, and i think we can see it

very clearly in everything that is going to come out when we get this case heard next month. again, i invite the british press particularly to pay attention in this case. it is important >> we're sure have one or two minutes left. there was a hand over here. ok. >> secrecy is essential to the empire, and what i was saying earlier was the united states right now, no doubt is declining in various ways, but no doubt in intention. we're moving more toward the british system of the control of information, which is a legacy of empire. that torch is passing. the republican house and senate, if that comes into being in the next month, is almost certain to pass a british type secret sack,

essentially ending leaks of the sort we have seen, which means that wikileaks becomes more indispensable that has been one it comes to the future of unauthorized disclosure. it will become more and more important to make these disclosures anonymously. what has to be disclosed, honestly, wikileaks is not sufficient. what we have seen so far, is not what we need. it is only the beginning. it is not the pentagon papers. we still need the pentagon papers of afghanistan and iraq on the decision making. for that matter, the pentagon papers were not that adequate. what we need is classified documents that were shown to bob woodward for his latest book.

possibly, he could contribute to all of the documents he was shown. that would be very worthwhile. short of that, one of his researchers could give those documents to wikileaks. that would be very worthwhile. if not one of his researches, someone within the administration should give the material to wikileaks. bradley manning is accused of doing what he could to end this war. he did what he could. what he is needed is for people who lack access to information that will help us understand this war in a way that will enable us to understand it to show us what they know with documents, and actually, wikileaks offers itself as the best vehicle for their doing that. >> what we are going to do now is not run a fall of ", which

was booked here, four simple reasons of time. we have a short film produced by wikileaks to help explain some of the technical issues involved in reading the document. it is a short film. might be helpful to you because it comes from the knowledge of the documents directly. you have canceled it? ok. we are not going to see it. that is the one. we still have this film, the we not? -- do we not? [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> ok. let's do it. it is going to happen.

>> because we are so incredibly overloaded presently, you might not have actually seen this yet. this is a souped up from version of what we used. this is the interface to explore and analyze the 400,000 classified documents, but of the war in iraq. it is a similar interface to what we produced subsequent to our initial release for afghanistan, but a bit more sophisticated and able to handle many tens of thousands of people simultaneously. this is the website. you can see automatic drafting. you can search by keywords.

here is an example of selecting one of the categories on the side that is produced by the u.s. military and several other categories. these are the internal military categories. by clicking on these, you can see the type, criminal event, regions, and this is the list of reports. the underscores reduction. this is looking at a bit further down on the side panel, so you can see, perhaps, the number of documents on a numerical field.

quite a few of these. very easy to use. here is an example of going into a particular record. there were bodies found in a car. you can click on here, and expand acronyms. it is very important, almost unreadable if not. acronyms, killed in action would have been kia. on the left, the structure data concerning the events. this is interesting here. it is not often used. it will sometimes include a field which may cause international media reporting. if you want something to report,

you just click on this field, and they have done part of the work for you in some cases. odyssey, and some units were that are involved themselves do not like to suggest that they have done sell -- so. this is a slightly more interesting one. sometimes it is here as a type of unit. oga stands for other government agency. it is a euphemism for the cia or the defense intelligence agency, typically the cia. you can find the cia-related records. it can expand the acronym here. fortunately, the redaction is fast and heavy, but was

necessary to prevent any sort of political attacks to distract from the real issue. as time goes by, and we worked through this manually, we will be able to see the levels of redaction, but in this report, it is not too bad, namely the names, and some specific locations. that is it. pocket. we are done. select. -- thank you. >> " newsmakers" -- phil angelides talks about what led to the economic situation, and possible recommendations in his report that is due in december, 2010. it is expected to include the

role of regulators, institutions that are considered too big to fail, and what to do about freddie mae and fannie mac. it is sunday, at 10:00 a.m. and 6:00 p.m. eastern. >> this week, to the oil former parliamentarians -- one british, one american -- compare and contrast the house of commons and the house of representatives. sunday night, on "q &." >> a coalition were on capitol hill to describe their plan for changing the earmarks plant in congress. among the proposals limiting earmarked going to campaign contributors, barring a legislative staff from taking part in fund-raising

activities, and creating a public data base of all congressional earmarks. this is just under an hour. >> here markets have become a hot-button issue. many have agreed that your marks, which were once bragged about, have become a national red mark. as we have seen party struggle to outdo each other, with representative david obey curve and preventing for-profit entities from receiving in marks, -- year marks. the senate has said that out. most recently, the republicans failed to conclude anything

about earmarks' in their pledge to america, but eric cantor wrote an op-ed. it is very hard to know how this would play out, should the republicans take control, or what the democrats will do, given that neither party has a real coherent plan on this subject. a few months ago, rich gold and i started talking about what real reform would look like, and how we might get there. we agreed to try to bring together a group of lobbyists and groups in the public interest sector to come together, and see if we could come up with principles we could all agree to. i'm happy to report that we have agreed on five principles. . .

of would like to say there is paper in the back is so you do not need to take notes on this. it is written down for you. to cut the cord from earmarks and campaign contributions, congress should limit this to campaign contributors. limiting the total contributions to no more than $5,000 would help restore public confidence in the process. second, to eliminate connection between legislation and campaign contributions, legislative staff should be barred from participating in a fund-raising activities. the attendance at fund raisers

suggests a connection between campaign donations and earmarks. it may be awkward for such legislative workers to not want to go. congress should create a new data base of all congressional earmarks. information about lawmakers and are scattereduest its across. they are listed in a chart at the end of each spending bill. the data is virtually impossible to collect, understand, and analysts all of the intermission. -- analyze all the information. they should make this information available. to ensure taxpayer money is spent appropriately, the gao should randomly audit. because oversight is essential to maintaining the integrity, the gao should develop and

implement their program to systemically report on projects funded through earmarks. finally, to perot congressional responsibility without stifling. requiring served -- certification would increase accountability to make sure they are handed out with appropriate capability. greg bowman has drafted legislative language for a pay for play provision which has not been introduced. if any member of congress is interested that you know of, the language is here. two things i would like to point out is the earmarked data base legislation we talked about has been introduced in the senate and the house. finally come up for principle

four common the gao conducting audits, there was a conversion included in a jar-3268. all of this material is here. with that, i will turn to gregg pullman. >> thank you for being here. >> perhaps lead the most pressing problems is the perception of corruption my comes to campaign money and the awarding of earmarks. even if there is no actual quid pro quo going on, this is something the public and the press will see if there's a close relationship between large campaign contributions and receiving earmarks. and it is a problem not only for the public when the public looks at the operations of congress, but it is a problem for congressional staffers.

earmarks are one of the responsibilities that gets carried out by congressional staff and members of congress. you risk of the appearance of corruption if earmarks are awarded to someone who has given your boss a campaign contribution. as a result, the group pearson did agree -- the group here did agree on something which i consider controversial or effective with either legislation or rolls. i want to emphasize that this is a proposal designed to address the problem of the earmarks and clean up the earmarking process. it is not a campaign finance proposal. it applies only to the earmarking process itself. it should be viewed as a narrow

response to what is a very serious problem. it is based upon years of experience we have had in other states. there are about eight states. the sec has established pay for play proposals when it comes to government contracts in order to clean up the government contracting process. this is not a campaign finance law, but a means to make sure these are awarded on performance. we adopted the paper plant loss to the earmarking process and we think we can up with an effective solution. -- we adopted the pay for play ball. there is a definition of business entity is defined quite broadly trying to restrict campaign car attributions. it includes no principles of the

business entities. the president, ceo, chief financial officer, chief operating officer, as well as subsidiaries and 527's that may be run, and any other entities. if you put that together, that includes the business entities. it is so broad. if we cannot -- each component of that business entity would be limited to no more than $1,000

in campaign contributions. the business entity and its prospective component of being submitted to a ban on campaign prosecutions to the office holder responsible for insuring that earmark. we require a special disclosure system. this is one born thing we ran into. if you do not require the business entity itself, and we have a broad description, to be responsible that all of their contributions did not violate limits, it is difficult to expect a member of congress to know that. another very, very important element because you have so

many people sandridge of the restrictions. it is important to provide a cure for violations. if in the course of this, they should not be automatically disqualified if they can actually go back again to cure that violation and request the expenditures be returned. that is the model that states have set up to try cleaning the government contracting process. is the same type of model that the offer a charge and credit the earmarking process. >> thank you. now we will hear from congressman jim walsh. >> their work with the lot of

individuals and organizations over the years. this is one of the most unique groups i have worked with. it is great to see americans of all philosophies come together to solve some of these issues we have before us. historically, they have been referred to as "a preparations," but it is much more broad and it includes ways and means in addition to discretionary appropriations. i served on the committee from 1992 until to thousand nine. i chaired four different subcommittees on appropriations in the house. i looked at thousands and thousands of earmarks. is there a discipline and in the

congress to sort this out? yes. does always work? it does not. public perception is very powerful. public perception in many cases dictates what congress needs to do. we come together around these five principles to try and resolve the fundamental problems as well as dean perception issues. we have had members go to jail. we have had lobbyists go to jail over the process which is a good thing. that is where the discipline is. we all applaud that. article one of the constitution created the legislative body, not the executive. those individuals have lived off of kings. in order to force merkel one,

this was given to the legislative body, those people directly responsible for those people. it is key the power remain with the legislature. president obama and more criticized earmarking. if congress does not control those dollars, the executive will. is there some fundamental good in what they say? i suppose. there's also a certain degree spending and the -- envy so it is natural they will be tested. i firmly believe this power should remain. this is not the exclusive power of earmarking i am sure my colleagues will roll their eyes,

but we need people of both parties to support the bills. is the suggesting this entire reason, but part of the reason we have so much partisanship is because only one party can win in the current state of play. it is still a lot of money. that is where the earmarking spending is focused. i do believe it needs reform. i believe the principles are good. the issue of pay to play is in

mind. i do not think staff should attend fund-raisers because of the pressure on the staff to purchase a pay and also the perception issues with lobbyists and others going to those fund- raisers. i am old enough to remember. i started in politics in 1978. fund-raisers were about politics. it was about republican politics and democratic politics. it was not about legislative issues. it was about helping a candid it win in helping the candid it win. -- helping eight candidates to win. the connection between money and politics is not a good one. i applaud this effort and i'm

glad to do my part. >> someone who takes a less rosy view of earmarks is with citizens against government waste. >> i will not get into a long dispute with the congressman, which you probably probably took this information back home. we have identified more than 109,000 earmarks for "pork barrel projects" in their time. the numbers go up and down. and has drawn down to $16.5 million in the most recent fiscal year and no one knows what will happen in 2011 in terms of what is being done or if they eventually do the bills themselves. there is a dispute in the house

with the democrats and republicans to the senate which is unrepentant dealing with any kind of reform. they have 29 votes to establish the moratorium on that. regardless of whether or not the number of candidates who signed the pledge get elected, that is still not enough to hit 51 in the senate to get any kind of moratorium. if we adopt some of these principles, we will be moving in the right direction. it is a very small part of the project, but it has a disproportionate impact. the staff and members on the appropriations committee --

i will speak about the gao. there have been very few studies about the impact of earmarks on higher priorities, on the agency, and that is something i'm not sure the legislative branch may think of all that much. if anyone speaks to those people dealing with earmarks, they really do not like them. one reason is in a study that came out december 2007 by the department of transportation. one of which was the replacement of the faa priority towers. there were three years behind in replacing the towers on their list. it had gone through the normal process. there had been so many earmarks added to the transportation appropriations bill. there was also a study done at the university of virginia on

the administrative cost of earmarks. he found him not necessarily received sufficient administrative support. sometimes the earmarked to not necessarily fit the program. there's also inconsistency in how the agency's use the money to a minister the program. there's also some differences in how this analyzes earmarks. there's a lot of room for improvement and certainly having a random audit of earmarks will help address the accountability part. it is equally important to determine how these are affecting the building of these agencies to carry out the statutory duty. that is what they do 99.9% of

the time to carry out the statutory requirement under the program as congress has approved. we have addressed this within the context of the definition that appears in the house rules so that everyone is looking at the same parameters. i have been pleased to work with everyone as well and we continue to look forward to doing this, because regardless of what has happened, this will be an issue when everyone comes back in january. >> next have it dave wenhold, president of the american league of lobbyists. >> i will reiterate what everyone says. it is impressive to look at the panel here, working lobbyists, ngo's to maturing decreed a solution to the perception.

i actually do earmarked appropriations and i am proud of that. some of my clients may be in that book. without those earmarks, universities, and nonprofits would not be able to create the next generation of biofuels and helped americans back to work. i am a proponent of earmarks. i think congress should be war -- should be running towards earmarks. the 1% of the budget or the half of 1% of the budget gets a lot of attention in the press. this spending will be in the bill anyway. why do not just make it as transparent and responsible to be accountable for those earmarks. quite frankly, i come from new

hampshire and i really do not want someone who has never been to new hampshire making decisions on what is important for new hampshire in. that is why you elect a member of congress. i am a proponent of that. with that comes transparency and accountability. yes, there have been abuses, but there are abuses in any industry. principals go a long way to creating more transparency and more accountability. that is always a good thing. it has truly been an impressive collection. we tried to will lead down to things that we could agree on. if you look at the makeup of this panel, and there have been a lot of discussions. we feel members of congress could really get behind the principles, and they should.

i disagree with tom that i think earmarks should never go away. they are the most transparent form of earmark spending out there. but i think we need to know how the american people know their money is being spent. the lobbying community is pairing up with the unlikely partners to come up with this solution to try and enhance the solution and the negative perception of earmarks. >> now we will hear of -- hear from steve ellis. >> this will continue going. i'm the vice president of taxpayers for common sense. we were gone tracking and exposing earmarks to eliminate abuses to be more transparent and accountable. our database on our web site,

taxpayer.net, and we just completed our analysis of the fiscal year 2011 earmarks. i think that congress is coming to some extent our realizing there's a challenge. you look at the house and look at the democrats, from fiscal year to dozens ended fiscal year to thousand 11, we saw 18% reduction in the number of earmarks, so i think there is some recognition. we know where our work is cut out for us. not to push back too much on some of my esteemed colleagues here at the table, but we have had concerns about earmarks not just because of the amount of spending and the amount of dollars, but also it has become a political muscle system. we should not be deciding in our perspective about how to fund

projects based on where you happen to sit in the congress and if you are on the appropriations committee instead of being a rank-and-file lawmaker. it should not be one lawmaker from new hampshire deciding with the best project is in their district. it is a zero sum game. the money being spent there will not be available somewhere else. new hampshire happens to have a powerful see at the appropriations committee. there is no doubt in my mind the earmarked system would fare worse than they do now. we see that in alaska and places like pennsylvania. it will be a boom and bust economy in that committee. just leaving some of those issues aside to talk about some of the taxpayer views that will be more competitive in their view, we are happy to be here for our colleagues also lobby on

your marks. whether you are for or against earmarks, everyone agrees the public has a right to know what is being spent and why. what we have in the house and the senate is legislation that would create a downloadable, searchable online database across all of the bills. this has moved through the homeland security and government affairs committee in the senate. it is something that could potentially be taken up in the lame duck session. it would be a good harding thing for this congress. we of basic information that we can talk about the dollar amount, who is asking for the project, what the project is, the location, but also some amplifying information like the justification from the lawmaker about it.

whether there are non-federal sources of funding, so if there is cost sharing our matching, all documents provided by the lawmaker for the unjustified price dart, there should be one- stop shopping for the taxpayers so they know where their dollars are going and why. but taxpayers for common sense bills congress should go even further, but these basic reforms make sense and represent a step forward to a more transparent system.untabilite >> thank you for coming this morning the show -- think of for coming this morning. the only thing is that i have not been sworn in. that would have been a 2:00 a.m.

in the morning nightmare. the fact we are sitting here to a fair amount of work and a fair amount of the faith. a representative on what is not happening in town today, the fact that we were able to come together with the diverse interests with a lot of experience and all this in the budget appropriations process over the years, and certainly as it is currently structured, and come up with a group of principals to be fair amount of work. i want to take you back in time to give you more color on how we actually got here today. we did not start this from the perspective of, ok if we're going to do press availability in october, how do we get to that point? as melanie mentioned, a number of us have been on panels over the last 12-18 months or so and we have found ourselves on those panels saying the same thing to

the crowd. the people we were putting on the panel's wanted us to engage in a cage wrestling matches, but we ended up pretty much on the same side of things which laid the groundwork for discussion million nine -- melanie and i had. republicans decided they needed to largely voted against legislation because it was "an earmark. we are at the point where economic relief for industries in congressional districts is look that as a remark that everyone needs to oppose because it is bad. we are clearly going beyond the realm of reform and into the realm of the absurd.

similarly we see efforts revolve -- bold which both parties have made initial efforts at into political one upmanship on both sides of the aisle. we need to be in a place that fixes the process going forward, not focusing solely on who will have an id vantage with their voter base based on what they say or do. this is a process issue at the end of the day. that is why we approached this as a process issue and not a political issue. if the parties want to use earmarks to beat each other soundly, they can clearly continue on that, not just in the next congress, but for those congresses to come. those of us to critique the budget and appropriations process or her work on it, this is a path forward. we sat down really for the first

time in the middle of july and we found that, in all honesty, there was more common ground than we thought. it made sense for us to sit down over the august recess live or via telephone. we wanted to do the time frame is pretty astounding that we were able to come together with that degree of time in that timeframe. what we're trying to do two things. we're trying to bring some merit-based selection to the earmarking process through things like the gao so the things being funded in their

districts have a federal connection, are agreed upon, are merit-based, and whether or not they would receive money from an executive branch perspective, they have gone to some kind of process for funding from congress of people can feel confident not only in this destruction of side of them. the second piece of the equation is cutting the cord between fund-raising and project selection in the preparations con -- appropriations process. i believe this is the case in 99.9% of the cases right now. perception is otherwise. when you look at the polling and focus group data, getting funding for a road project in your district is overwhelmingly

90% supported in most instances by the public, by the voters, but doing that in someone else's district is in earmarked. the public is of two minds. i think if you can provide them with a relatively reasonable reform with the assurance that only things that are worry will survive the process and get funding and that there will not be a connection between campaign fund-raising and the selection of the projects that the public will have more assurance and feel better about the process. as everyone has stated, we view this as the beginning of the process, and this is a group that is committed to working on this issue as it moves forward. i guess i would just concluded that there are a lot of differing views out there and the sense of principals, whether they are enacted in the

beginning of the next congress represent the ability of divergent parties to come together. that is what will need to happen in the congress to make a policy on this issue. we need to fix the process problem moving forward. >> we are happy to take questions anyone might have. yes? [unintelligible] i am an issue with the statement that this is about [unintelligible] you do not hear about positive earmarks, but you hear about mergers to nowhere. is there any kind of mentor to that statement? >> not about worthiness of the

project or on worthiness, but simply the vast majority of the appropriations committee members to my defense, for instance, get a disproportionate amount of the projects funded through their bills. if you decide those members actually have the best projects in the entire country and they should be deserving of a much bigger piece of the pie, it is hard to not argue in the political muscle system, so certainly it does not mean that every project funding is a bad project or a grateful project. no one can tell me if it is the best, most important, or the most critical for the country to spend their federal tax dollars on it. it is a priority of the individual lawmaker and maybe it is worthwhile, but we do not know if it is the best. >> to put context to this, when

i came in the late '80s -- the late 1980's, the only people who benefited from your marks were the appropriation chairman and sometimes the ranking member. i like to think that we democratize this process of that everyone benefits from it. appropriators to benefit more, but they work on these things for hundreds of hours. maybe that is not fair, but my mother told me a long time ago that life is not fair. we created a system where all members have the opportunity to take some of that federal money for a priority in their home district. if there is a bottleneck, that could be fixed because the

federal formula may not have the wisdom to see that problem will be geared to see that problem. if the executive branch to determine all of those funds, they have their own engenders, too. if there's an opportunity in the budget for a representative to address a singular problem. that is changing. >> one more thing to mad, we firmly believe in the power of the first. i believe we have a more robust

belief in the power of the person in simply just looking at earmarks. it is a very small percentage of the total federal budget. the legislative branch works with the executive branch to design the map turks, design the programs for competitive awards and hold the executive branch accountable. we do not know whether or not the project got built, if we got what we were paying for. we do not know if it is done well or poorly. none of that comes back for the process, really, in any transparent way. i imagine the lawmaker who requested the earmarked knows, but the rest of us footing the bill do not necessarily know if we are getting the road built. how many years in the future will they continue to pay for it? the need to be in the process in continuing the feedback loop. we think that is important for

congress to hold the executive branch accountable for how they are spending the funds in these earmarks. we have heard concerns that the agencies are skimming off the top of the earmarks and taking some of that money and siphoning it off to other things. we do not know if they're getting 80% from 95% of the cash. that is stuff we'd be looking at going forward. >> yes? >> i the question about the staff for dissipation. i come from california working in the legislature. we would go to fund raisers and literally you do not talk politics. you talk weather, football,

baseball, but there is a strict rule about talking about legislation or what is going on. it seems that there be a fire wall. >> we include this in the principles because over the last few years, it seems both parties have began of the events because they would advertise that legislative staff would be present which suggests there is a tie between legislation and campaign contributions. when we think could be done is the ethics companies -- the ethics committees could establish rules about the staff participating. we think that would be sufficient. >> i think the other side of the equation to what you were saying in having dealt with a

lot of younger staff is there is the perception in the offices that you need to attend the sittings as understaffed. in maine are really be what you want to spend your tuesday, wednesday, thursday night doing, but you better be there. if your boss does not see you, you send the wrong message. how committed are you? the peer pressure or institutional pressure that comes out of that participation is a negative aspect. on the other hand, i have heard staff having on meager salaries say they're getting a free meal from a public policy perspective while i think we are saving money in the back end. do you really want to make the connection in that way? and understand what you're saying, and this, again, is not

an issue that has been abused by everybody in every circumstance, but there have been examples where the staff is there for not exactly the right reasons. >> i worked on the hill during the 1980's. the legislative staff would be in a meeting, and that would be the end of it. once in a while there may be a huge events that may be attended, but they were not necessarily the kind of fundraisers ago to now where we see ali contractors getting your marks. it is a perception issue. it may not be the same for everyone, but it does address some of the outside the beltway view of how things are going. having been through this a long

time ago, it allows the individuals to focus on the legislative issues and not worry about these other pressures. >> this rule would not apply to campaign staff. we are purely talking about legislative staff from the director on down. >> we briefed capitol hill staff and members. there were a lot of smiles in the room when we briefed them. some said the only way we could see these people was to go to the fund raisers. that is not the way it should be.

these fund-raisers in washington, clearly, that is what is going on. >> i think it is good that you all got together. my question is about where the coalition is right now. i'm wondering what reaction year received on the principles and what your plan is going forward? i am wondering where you might go to educate the public about this. i am curious where ya at right

now. >> a senate appropriations committee staff, it was not really in as high because they do the earmarking. i only spoke with members of the minority. on the house side, we talked staffongressman boehnor's and congressman cantor's staff. there was will -- real interest. whether they make it into the house rules, it is hard to say. there was real interest. i know others can speak to the interest. >> i want to talk about the lobbying community.

they did not want earmarks to go away. some of the things make our jobs easier, you know? a database of all the earmarks for instance. >> i would like to emphasize because of the nature of this total issue of the group here we have had a very easy time getting meetings with the leadership of both parties in both chambers as well as in the white house. there appears to be a great deal

of interest in this and in perhaps introducing the pay to play proposal either through legislation or as a rules change. it is quite remarkable how much interest there is in both parties. >> we are in a heated place right now two weeks before an election. everyone who you would want to be brief has been briefed as far as house and senate leadership. it wahas been spotty in the senate, i think it is fair to say, because they are focused on the next senate. is the majority party, whoever it is, going to be able to

approach this? is there going to become in this instance, a much more bipartisan discussion on things like this? instead of making a split decision, but really taking a step back to consider what is doable and what is right to do from the congress perspective, not just one party perspective on what is inherently a process issue. >> i think it has been said that certainly we know the next congress will be more concerned about earmarks or earmark reform oriented than the current government. that is the way it is going and it seems clear that is where we are going.

we are certainly continuing to plan to talk to the freshmen members to see what we are proposing and looking at we started in 2007 where reforms went into the rules. everything since then, it has been done by committee. the disclosure of lawmakers' requests on there website, that was chairman obi. separately and they are disclosing on of the earmarked requests that have gone through. part of this is, let's get everything together and figure out the best ideas and figure out something that is consistent for you and you know they will not pull the rug out from underneath you two weeks before the deadline for earmark requests.

we want have some consistency so everyone knows what it will look like. >> we know it is a tricky issue and there is a lot of partisan politics involved. we are all across the political spectrum. we are ngo's, those who lobby for corporations, if we can all work together, congress could. there just needs to be some will. by promoting these principles, which we think is very common sense, pragmatic reforms to take politics out of the issues, we hope we're giving people a road map. we hope that once it is clear, once elections are over, that members of both parties can sit down and have a serious, real discussion not just about politics and trying to bash the other side over the head, but this it down and work out a real common-sense reform that will

make sense so that americans will feel like congress is taking it seriously. no matter how small a percentage of the budget this is, most americans care. congress needs to sit down and deal with this issue. we hope that this could help establish a way going forward for them to be together and talk to each other seriously. >> if i could add one other thing? the house when forward with their roles. then there was a vote in the senate about earmarked reform. as i recall, one senator said to the democratic majority, why will you not even adopt what nancy pelosi put into the land -- but into the rules? they wanted something much more watered-down. again, whenever occurs will

start with the house. they have indicated they are interested in reform and they have had various changes. the senate has done nothing other than the down a potential moratorium by a large majority. i think the senate will have to follow. >> anybody else? >> there will be more anti- earmark people coming on. is there an attempt to try and reach out to them? >> as i mentioned of fraud, we have a weekly event we are planning to do between now and thanksgiving. as mentioned, a briefing of the freshmen members and staff is something that would be relevant and warranted. we are committed to actually looking beyond the scope of the current five principals in

talking to the white house. there is a general interest in one of the executive branch can be doing to make things more transparent and be working in this area as well. i think there're are a number of things we will be doing between now and the start of the new congress and then into the new congress that will include things like those types of activities. this is an ad hoc coalition. >> this is part of the reason why we're going public with this as well. this is something that candidates who are not here yet will hear about. >> there is a threshold question of course, particularly on the republican side whether they go forward with earmarks at all. if they do, we would like them to adopt this form and get them over to the senate. that is something the leadership will have to work out. again, whatever party is in

control in a couple of weeks. it will be an ongoing question. >> we had a no pork pledge and 84 candidates have already signed on. some just go out and say that. there are a lot more people out there, a lot more candid its, and a lot more new members who in just say that does not mean they cannot support reform. >> we thank you all for coming today. please, feel free to call or e- mail any of us if you have further questions or what decals about any of these. we are happy to work with any given the congressional offices to help talk about this further with your bosses. thank you very much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> tomorrow on "washington journal", omichael jordan will talk about the latest wikileaks report. patricia murphy and yvonne -- vaughn ververs talk about campaign 2010. also we will talk about the unholy alliance between barack obama and wall street, the new book by charlie gasparino. that is live at 7:00 a.m. eastern on c-span. >> landmark cases on c-span the

radio. >> christmastime in 1965, they decided they would wear small black armbands to express views they had regarding the war in vietnam. correct the principal suspended them which led to the case, a tinker verses the moines independent community school district. hear the argument today at 6:00 p.m. eastern on c-span radio nationwide on xm 132 and cspanradio.org. on monday, the commonwealth of california how the discussion with timothy geithner. secretary geithner provided analysis of that the economy is feeling that still feeling the impact. other impacts included business it infrastructure investment, the housing market, chinese

currency, and u.s. job creation. this is just over one hour. >> it is my pleasure to introduce the u.s. secretary of the treasury timothy geithner. secretary geithner was sworn in as the 75th secretary of the u.s. treasury on january 25th, 2009. he joined his treasury department in 1988. he has worked in various positions in three administrations and has spent two years as undersecretary of the treasury for international affairs under secretary rubin and larry summers. he was head of the policy review department at the international monetary fund. prior to heading of the treasury department, secretary geithner served as the ninth president and chief executive officer of the federal reserve bank of new york.

there he was vice chairman and a permanent member of the federal open market committee. secretary geithner has served on the board of directors for the center of global development, a trust before the economic club york, and has also served on the g-10 committee for payment and settlement systems for the bank of international settlements. ladies and gentlemen, please join me in welcoming u.s. secretary of the treasury timothy geithner. [applause]

>> thank you. i greatly admire you and other organizations like this working to improve the quality of public debate in america about the basic policy situations we face. we need more of that. my compliments to you for doing that. i will start by saying a few things about the economy and then making have a conversation. is that ok? >> yes. >> i want to look past the political moment and start by giving you my sense of where the economy is now in with the me challenges are ahead and what we should be doing -- and what the main challenges are ahead. the economy is definitely healing. we are making progress in repairing the damage caused by the crisis, but it is still a very tough economy. you can see this in housing, if you are a small bank in some parts of the country, is small business trying to get credit.

it is still very hard. the stars were very damaging in terms of people's basic confidence. we see across the country people still uncertain about how strong the economy will be going forward and if washington is up to the challenges facing the economy. we are growing. we have been growing for more than 1.5 years, or little more than one year. private sector growth has been growing of little bit faster than in other recoveries, so people are getting pushed back to work. we grew at a rate of 20% in the the first half of the year. it has been a little bit slower since then, but we are still growing at about 10%.

exports have been quite strong. manufacturing came back quite strong in the face of the crisis. you are seeing the u.s. economy go through the difficult but very necessary changes to heal the damage caused by a crisis like this. households had a negative spending -- -saving rate. savings are now much higher, something like 4%-6% of income. that is an encouraging development. people are bringing down their debt burdens. that has the character of making the economy feel weaker than it actually is, but that weakness masks things start are encouraging the growth in the future. financial -- masks things that are encouraging the growth in the future. financial crises are caused by a buildup of debt. to come out of the crisis, you have to reduce leverage in the

financial system and have people going back to living in their means. we are doing the right now. i believe that most of the adjustment we face as a country in real estate, in the financial sector, is largely behind us now. and i think that is reassuring and comforting. the question though is, what can we do to make growth stronger, bring down the unemployment rate more rapidly, and improve the odds of coming out of this crisis stronger and not weaker in the future. i want to just list the things that we think the government should be doing next. by far and away the most important challenge is to find ways to make sure that we are strengthening economic growth in the near term. that is the best way to make sure that we get jobs more quickly, the unemployment rate comes down and people become more confident in our economic future. the most important we can do that is to strengthen the incentives for businesses to invest in people here at home.

the president outlined in september two very important initiatives that will help us go in that direction. one is to give businesses, for one year, the chance to write off against their taxes, investments they make in new capital equipment. so this very generous incentive is one way to get businesses to put more money to work more quickly, for a temporary period of time. you combine that proposal with a proposal to make more simple and substantially more generous and permanent, a tax credit for companies that invest in research and development in this country. so again, he proposed to expand and make permanent one of the most important things government can do to encourage investment year in the united states. alongside that, he proposed that we start a very substantial multi-year program of investment

in public infrastructure, in our transportation infrastructure. that is important not just if you look at the quality of construction across the country. if you can see that we are suffering from decades of under-investment and relative neglect. we look like we are falling behind in the basic quality of construction that many countries face. investing in public infrastructure, we think is one of the highest returns on the use of a dollar of taxpayers' resources. it is good for long-term growth too. it is very good at helping people get back to work to have been hurt most by the crisis, in terms of construction and manufacturing. these are relatively good jobs that pay relatively well. again, we are not country with unlimited resources. we have to make dresses about how we use those resources. we want to -- we have to make choices about how we use those resources. we want to make sure we are using those to develop long-term prospects. we want to make sure that we are

expanding exports to foreign markets and we want to be tougher and smarter in terms of how we do that. most of the growth in the world is going to come from outside of the united states. we are unique in being a country that still makes, quite things that thefensi world needs. we want to make sure that we continue to be a part of the growing demand that we are seeing in china, india, and emerging markets around the world. to do that, and we not only have to make sure we make things better for u.s. countries, but we have to engage with other countries and make sure that they are opening their markets and opening opportunities for american workers. what congress has to do when they come back from the election is to extend the tax cuts that are now in place that go to 98% of working americans. 90% of small businesses. it is very important that we do

that and we would like to do it as quickly as possible so that people do not live with uncertainty of what is going to happen to their tax rates going forward. the imperative of the congress to legislate in the tax cuts to see if we can add to that important policy act some additional incentives like the ones i described to strengthen public investment, private investment in this country. it is very important to understand that we are going to have to start to make more progress bringing down our long term deficit. we started, before the crisis, with an unsustainable long-term fiscal position. part of what eats away at the confidence in america today is whether washington can find the political will to restore gravity, restore a sense of discipline, restore fiscal responsibility to deal with those long-term deficits.

even though we are currently overwhelmed by growth and job creation, it is important that we do things to help near-term growth that will be responsible fiscally and give people more of a sense of what we can do to bring down the deficit over time. the president has started that process by initiating a very tough freeze on non-security discretionary spending to make sure that the government is not growing in areas where it should not. he has joined with secretary gates to propose substantial reforms on how the pentagon spends money. he is proposed some carefully designed modest tax changes to demonstrate to the united states and people are around the world that we are prepared to go back to living within our means. he has just started that process. he formed a bipartisan fiscal commission that is supposed to recommend additional reforms on december 1st.

our hope is that those recommendations will help us start to build some political consensus in the united states and washington for a set of longer-term reforms as we recover. i think that, i want to just end on an optimistic note. if you look at the country today, how deep the scars of the prices went, i think it is important to note and to recognize -- the scars of the crisis went, i think it is important to note and to recognize that we are a strong and resilient country. -- the company's operating uc companies -- you see companies operating on a frontier of innovation. our challenges are much more modest than those that face any of the other major economies,

and i am very confident that if we keep finding ways to get people to come together in washington and act on these long-term challenges that we face that we are going to come through this crisis stronger than when we started. i will be happy to take your questions. >> thank you, mr. secretary for sharing your thoughts with us. thank you also for your lifetime of public service and thank you for coming to silicon valley today. i have the pleasure of moderating this afternoon's question and answers se ssion. to kick things off, let me ask you this. the word is that on occasion you urfer.search fi

is your real reason for being in silicon valley to check out santa cruz? >> if only that were the case. by the way, i am a great believer in public service. i am here in a place where people believe that people in government do not have a real job. [laughter] it does not really count. we have never had to make apparel, run a business, and of course you -- make payroll, run a business, and of course you are right. i have worked in government all my life. i work for a president that does not come from a business community. he understands and we all understand that the business of america is business. the role of government is to help them create jobs, innovate, grow and expand. but as we have all learned in this crisis, that requires that the government be better at doing things that only the

government can do like educating our children, like making sure that the financial system does not leave us with a huge risk endued collateral damage when you have a recession, that you energy morend dea efficiently, that our citizens have a broad range of health care. that is something that governments have to do for markets, businesses, to thrive and function. we have not been good enough that doing those things. we have to get better at it in a world that is getting better at it more quickly than we are right now. that should be a priority in washington and in state and local governments around the country. >> i can see this is going to be tricky. i did not get a direct answer about santa cruz. let me try another one. [laughter] there is a general perception, and i understand that a former

colleague of yours is making the round of job interviews is shocked at the perception that the current administration is anti-business. where do think that emanates from? >> i am aware of that perception. we hear from businesses across the country and i spent a lot of time, of course, talking to people who run businesses across the country. i think it is a very damaging perception. where does it come from? it is very complicated. a lot of it comes from what they view as unfair, generally indiscriminately vilifying rhetoric from people in washington. a lot of it comes from concern about whether washington is going to be capable of making hard choices, part of it comes from concerned that we are not making enough progress quickly enough on things that matter to business. part of this is uncertainty about how the new reforms in health care and financial markets will actually paplay

out and affect business as a whole. it is very important that we try to fix it. we are like you. you judge people by their actions, not just what they say and what you have heard. you need to see from us and washington that washington is able to make progress on things. i think washington is going to improve the incentives of how business can make progress in the country. that is why i referred to the proposals the president pulled out in september for trying to create a better environment for businesses to hire. >> do you think it was helpful for the president at the end of last year to demonize large bankers and many of the people working at large banks on wall street when he labeled them "a bunch of fat cats on wall street"?

i answer it this way? no human could look at our financial system and say it did an adequate job of meeting the big needs of the country, stable access to reasonably priced credit, a family able to put a child through college. mistakes made by people running some of our major financial institutions, by small and large banks across the country, and by people in government responsible for overseeing the system were catastrophic. it is absolutely essential that as we put out the financial fire, which we have done at a much lower cost, much more quickly, much more effectively than anyone thought was possible, that we change the basic rules of the game under which institutions operate. i believe, and i will take the optimistic side, that the reform congress passed this summer is

going to -- is the most powerful, the most effective model for the world to make sure that you bring a more modern structure of oversight to a market for a financial system. we have already moved very quickly to raise capital limits for banks to make sure that they are operating under much more secure circumstances in the future. we of moved to give consumers better disclosure about the terms of a mortgage or a credit card. we now have the tools we did not have before the crisis to make sure that we can dismember a large institution safely at less cost to the taxpayer and less damage to the economy at a whole. that reform was very important and i am much more confident now, because of those reforms, that we are going to go back to having a financial system that is the envy of the world and can

do what needs to do, which is to take the savings of americans and channel them to businesses that need to grow. we were once the envy of the world in doing that. we lost our way, and we are going to make sure that we go back to a country and a system that serves the basic function better. >> a question following up on the point that you made about the bill. it was about 2500 pages. one of the audience members here wonders whether the lack of clarity surrounding the legislation is going to hinder the u.s. and businesses from making investments at home because they are confused about the possible interpretations that might come out of legislation as large and encompassing as of this bill? >> i do not think so. of course, we are going to make sure that the regulations that

implement the new rules come out in a way that has the right balance. what is the right balance? again, you cannot look in our system and say we did an adequate job of protecting consumers and investors. we have to do a better job. i would say we need overwhelming economic imperatives and we also need to make sure banks run with less leverage. we have moved very quickly to provide clarity on what those new rules are going to be and give banks time to catch up with the capital to meet those standards. the virtue of having a transition period of that with clarity is so that people have time to know what they have to plan to. as we build a more stable system, we are not reinforcing the kind of headwinds that could slow the economy going forward. of course, people want to know what the details are going to be, what the new rules on derivatives are going to be, for example. that is complicated, and you want people to take some time to

get them right, but we are going to move as quickly as we can. of course we recognize that clarity sooner in these areas would be good, but i am very confident that these reforms will help make this system a more resilience, more stable, but still remarkably innovative financial system, and we are going to work very hard to make sure the rules meet that test. >> switching gears up slightly, another member of the audience wonders whether you are concerned with all of the money that is being printed of the last couple of years. we are well on our way to debasing the value of the dollar. >> not going to happen in this country. it is very important for people to understand that the united states of america and no country around the world can devalue its way to prosperity, to competitiveness. it is not a viable strategy and we will not engage in it.

it's very important to us the people have confidence in our capacity to meet our long-term fiscal obligations, to make sure that the federal reserve does its job of keeping inflation low and stable of time. we recognize that the u.s. plays a particularly special financial role in the financial system because the dollar serves as the principal currency in the global financial system. we are going to work very hard to make sure that we preserve confidence in a strong dollar, and we're working hard to strengthen confidence in our capacity, in washington post the capacity to, as i said, responded to this "-- washington's capacity to, as i said, respond to this crisis. >> do you see a time when the dollar is not the world's currency? >> not in our lifetime. of course, the world is going

through a very dramatic, very important set of changes in terms of economic power and the activity around the world. most of the growth coming from the -- is coming from the emerging economies and that will be true for a long time. but i think the u.s. can operate in ways that makes us stronger. i think one thing we can keep working on is trying to make sure we are improving our long- term growth prospects and restoring the basic sense of discipline and balance to our long-term disposition. >> one of the topics in the last few days has been the federal reserve chairman's talk about inflation target. where do you stand on that? do you believe an inflation target of more than $0.60 would be a good thing for the country? >> that is an excellent question.

i believe that finance ministers and secretaries of the treasury should never comment on finance policy. we give those responsibilities to the federal reserve. >> i can see that i am not going to get a direct answer. [laughter] unlike your predecessors, you have spent a lot of time in your life living overseas in different countries. i know you are a student of what happened in japan. based on your special knowledge of japan and other -- another member of the audience wonders, what kind of lessons did you take away from the brutal japanese experience of the last 20 years the will help us through the capital dynamics we face in the united states today? >> excellent question. japan, as you know, got into a situation where they had a huge,

unsustainable financial real- estate bubble. that was a product of a lot of policy decisions in the decade preceding. when the world turned and that bubble collapsed, it suffered a very, very deep recession. what has been remarkable is how long that last dogged, more than a decade of growth has persisted -- that lost decade, more than a decade of growth has persisted. i do not mean this to be critical of them, but i believe the basic lesson is that when you face a crisis like that, you have to move very, very quickly, but overwhelming financial -- use overwhelming financial force to break the back of the financial panic, restructure the

system and take out the weakest parts. if you adopt the alternative strategy, which is to wait, to be more gradual and how you escalate, to hope that is going to heal itself, to hope that you can grow your way out of the large losses the banks take on, if you are not aggressive with the full arsenal of tools that to the government has, then you will be consigned to a long period of slow growth. it just to go back to the beginning, you can see in the recovery of the united states the benefits of an alternative strategy. we had growth come back much more quickly in the united states. the cost of credit fell much more quickly than happened in japan or elsewhere. use of businesses started to much moreain and highere quickly than -- use of

businesses start to invest again and hire people much more quickly than in either the last two recessions. that is because we let that reallocation of capital have been with much more force. it makes it much harder in the short term, but it is much better for the prospect of actually coming out of this durable a with a sustainable level of growth going forward. we are not consigned to this. there is still a lot of work to do, but we are not going to make that mistake. >> i am not sure that everybody is aware of this, but over the course of your long term career, you have had a lot of experience with financial meltdowns in different places of the world, mexico, brazil, indonesia, thailand, korea, russia, reading down the list, as i am starting to think you

are a dangerous man to be near. [laughter] >> i had no role in causing those crises. [laughter] but like right now, i have the privilege of cleaning up a bunch of them. >> looking at canada, germany, sweden of the last 10-15 years, are there lessons that we can learn from what has gone on in each of those three countries, canada, germany, sweden? >> absolutely, and i just go back to how we thought about the basic strategy of financial reform. the big mistake that we made in our financial system is to allow the basic architecture of oversight to get a little rusty, to let the loss accumulate on -- i am mixing metaphors, to allow huge industry of finance to build up outside of the

protections we had in place for consumers. we had a system designed to protect banks. it was designed after the s&l crisis, a quaint crisis compared to this. but we let a huge industry build up outside of government protection, and that mistake was catastrophic. if you have rules here and no rules here, all of the risk will move to where there are no rules. now, the rules for banks obviously were not tough enough or well-designed either. both mistakes were consequential. canada looks like a much more boring -- in an and an end this way -- a financial system, more stable. - in an envious weighinay --

financial system, more stable. they made sure that they constrained the amount of risk they were able to take against capital. it sounds simple, but if you get the right you can prevent a lot of damage. government officials can sit at their desks and try to imagine the next financial crisis, try to imagine what innovations today will cause the meltdown of the future. smart people will not be consistently good at doing that. even if they are wise in foresight, they may not necessarily have the tools to actively preempt those types of risks. the most important thing you can do is force your financial system to operate with a bigger shock absorbers. if you get that right, you will not solve all problems, but you

will make your country much less a vulnerable to a future crisis. >> speaking of germany, and i noticed you did not -- [laughter] >> there are virtues in the german model, and maybe even the swedish model, they went through a crisis about 10 years ago and fix things early. the irony of this crisis is that this crisis started in july of 2007, when you had a classic run started by the european institutional investors, money market funds that had helped a bunch of affiliate's of german banks by a bunch of subprime real-estate in the united states, and the size of those losses for german banks were very, very large, larger as a

share of the economy than even the losses we face in this crisis. so even there in a much more conservatively managed financial system, use the banks take on a huge scale of losses. in fact, the scale of losses relative to their size of the economy, the united kingdom, spain, greece, were much larger than what we face in the united states because they were not careful enough about getting ahead of that leverage soon enough. >> one big difference between the german economy and to the u.s. economy is that to the level of homeownership in germany is much lower than it is in the united states. do you think it is time, given everything we have gone through, to question whether in the united states, and ownership is really a desirable thing for home ownership- , ownersh

is a desirable thing for everyone to respond to? >> you cannot legislate what people aspire to. but the united states did was to provide a generous amount of -- what the united states did was to provide a generous amount of subsidies in various forms. they did this for a number of noble reasons. they wanted more americans to have access to houses. they thought the basic economic security of the middle class would be enhanced with bunning house with the chance to earn equity over time -- with owning a house with a chance to our integrity over time. earn equity over time.ti

we are in the process of correcting that right now. that was not included in the recent bill. it is a huge issue. >> you have made public statements in the past few weeks revealing how far we have been able to recover. those two government entities, fannie mae and freddie mac, you have not said much about. could you share with the audience today where you think things went wrong and what we are going to do now for the next generation as those due in norma's, a government sponsored combine's -- as those two enormous, a government sponsored combines debt restructured? get restructured?

>> we made two huge mistakes. fannie and freddie followed the market down. they took on a much more risk than they had capital to cover. in washington, as you know, washington did not require them to hold capital to cover those losses. they came in the crisis most exposed to the collapse in housing with almost no capital to back up their risk. that is a mistake we can easily avoid in the future. to do that is not rocket science. we have to make sure we take a decision making away from politics in washington so the politicians do not have the ability to use those institutions for objectives

that they were not designed to meet. we have to make sure that they can be forced to run with less risk, just to repeat a consistency. it is not rocket science. >> we talked about the subprime fiasco, obviously. would you care to share your thoughts about what many people around the country would see as a crisis that blooms are right in front of the windshield? it is one that could potentially be even more destructive than the subprime crisis, and that is the burden of obligations that encompass many cities and states around the country. >> i think anyone who is the mayor of this city today sees the full scope of that pressure still. it is getting a little better as revenue structures recover, but

it is still very hard, and it is going to take quite a bit of time still to force states to get back to the point where they know -- for states to get back to the point where they know how to finance the needs that only government can me. in the recovery act and in the summer, washington provided a very substantial amount of assistance to states so they could meet their balanced budget objectives without letting more people go, firing more teachers or cutting back and critical services. that critical contribution from washington was very large but it did not fill the hole completely. we found it quite hard. the president proposed several times that we provide more assistance, but he sounded very hard to get more support in washington for a greater near

term contribution of temporary assistance. it is getting a little bit better as we come out of this deep hole. as i said, i think there is a very good case that as we repair the damage from this that we make sure we maintain critical services and do not cut into things that are critical for future growth such as services for our children. >> many people would say that is wonderful and great to hear, but here are some examples. we have the city across the bay that had to declare bankruptcy because it could not meet the benefit and pension obligations that encumbered it. the former mayor of los angeles has warned that los angeles is

on the brink. there is a heated proposition in sandron cisco over it the same issue. how is this -- in san francisco over the same issue. how is this problem going to be solved given all of the obligations that states and cities 0 to their employees? >> would you see here you see in new york, in illinois, and a small number in other states. you just have to work through it. there is no great, grand solution that is going to be offered by washington. it is just not going to happen. it requires finding a better copy -- a better political consensus at the state level and the local level to make sure that they know what they need and have the resources to

support that. it is not a financial challenge, it is a political choice. we are at a time now where americans are having to rethink -- we are having a great national debate about, what do we really need government to do? what should government not do? as the large deficits at the federal level demonstrate, americans have not yet figured out how they want to pay for the services they think are essential. people are going to have to figure out how to bring our commitments, commitments we have made in the past, commitments we want to make in the future, how we're going to find the resources to provide them. >> there was a very provocative piece yesterday comparing the way in which the u.s. and china deal with older people and the

older generation. the author made the point that in china, there is no safety net for old age. his remark was global growth depends on how willing the country is to neglect its older citizens. >> it does help us think about our challenges from a slightly different perspective. if you compare what is happening to our demographics, to our dependence, to our aging population, we are in a much better position than all of the asian economies. make a comparison to china.

we are growing faster and then other major economies, slower than china, of course, but faster than other economies. that puts us in a better position to manage this challenge better than the rest of them. but we also live with unsustainable long-term commitments in health care and social security. part of the challenge we face as a country is how to bring about federal reforms that will reduce the rate appearof health care c. our challenges are much more manageable than what is faced by other countries, including china. that is one reason i think we will come out of this looking stronger and more resilient than we feel today. >> can we turn to china for a

moment? do you have -- how much do you feel that the chinese currency is undervalued today? >> a really important question. i really almost any measure, and we use the independent arbitrer to tell us what to think that the judgment, it is significantly undervalued, more so than any other significant emerging market currency. it is not tenable for china in the long term, and it is unfair

for all of the chinese trading partners, american and others, because this creates a playing field that is unbalanced. it provides a huge economic advantage to chinese companies and it is very damaging to what is important to everybody, which is the sense that we operate in a world where people play by a set of consistent rules of the game. china is a very large, independent economy, and if you tie your currency to the dollar, then in effect you're letting that country run your monetary policies. that is not in china's interest. if china wants to have the independence to reduce of future risk of inflation, it needs to

have a more flexible exchange rate and to soften the link to the dollar, which is what china is doing. between 2005-2008, china allowed the currency to rise against the dollar. they saw docked that because of the broader incident -- a stop to that -- they stopped that because of the broader incident of the economy. >> how far would you like to see it go? >> higher. [laughter] >> almost as high as the waves. >> you cannot know with certainty how far it should go. they knowledge that it is undervalued. it is better for them, and of

course for us, for them to lead a move. it is going to continue. >> de think a lot of the comments coming from different political corner -- to you think that a lot of the comments coming from different political corners in washington are really just using china as a scapegoat and trying to distract voters from what really needs to be fixed in the united states? >> the chinese certainly think that and that undermines the basic core of our argument. i will tell you my view of the question. by far, the most important thing that we can do about future job growth, future income and the basic economic security of working americans, are things that we control in the united states. they relate to how we are educating our children. making sure we are strengthening competitiveness, creating stronger incentives for

companies, investing in science and research development on a much more substantial scale. overwhelmingly, the things that determine our state as a nation will depend on those choices we make your at home -- the things that determine our fate as a nation will depend on those choices we make here at home. that is the bargain we have all made with each other in this open trading system we have created. it is perfectly appropriate and legitimate for us to try to expect china to work by the basic rules that most of chinese trading -- most of china's trading partners work under. >> andy grove's was formerly the

ceo and chairman of intel. he raised the notion of job creation, in particular in china. it is formed by the innovation of many companies right here in silicon valley. and he points to the fact that foxcomm employees -- employs 400,000 workers and plans to add another 400,000 in the next year or so. compare that to the way payrolls and job creation are happening here in the united states. how do you think we should go about turning that around so that perhaps those four hundred thousand jobs, where people go to build products for hewlett-

packard or four apple or for intel, that those jobs that created in america and not outside of america? >> better education, more engineers, more investment by the government in universities, in basic science and research and development, better incentives for businesses as i said the beginning. you know, our tax system today -- i will give you an example. if you are indeed company in the united states and you make -- if you're a company in the united states and you make things and you build things, our tax system makes it more attractive for you to build outside of the united states. that does not make sense. it should at least be neutral. there is a very good case for

targeted tax benefits that strengthen the economic incentives for companies to invest here at home. now, it is also important, as i said, that we are a large part of the growth that is going to come from china in the future. it is good for us as a country for u.s. companies to be a part of that. the economics of this will require that there are -- that people built close to those markets. there is nothing wrong with that, nothing threatening to our future in the basic economic dynamic. there are a lot of things we can do in the united states to make it more likely that we can go back to doing something we are very good at doing which is to come here, i get an education, start a business, raise capital and build a huge company. even if a large part of the company's sales will be outside

of the united states, there is no reason why a fraction of the highest earning most education intensive jobs are still in the united states. this concern is three decades old now, that we will lose the ability to make things in this country. but think of is overstated. you can look across the country -- i think that is overstated. you can look across the country today penzias doing things that people thought we had lost the -- and see us doing things that people thought we had lost the ability to do, building's steel for example. education would be good, good to get better results from your government in that incredibly vital function of government. >> andy grove goes one step

further. this may not be an approach that you favor. he suggests that there should be a tax on products brought in from overseas. his point is that there are some virtues in the way that the planned economies of asia in particular have developed over the last 25 years and that -- he calls for what he terms the scaling bank and suggests that the taxes levied on those sorts of products should be made available to u.s. companies who sign up to build factories here and create jobs. what do you think about that idea? >> i have enormous respect for him as a business leader but i am not an enthusiast of those ideas. if you look at the record of government on those sorts of things, even our government, it

overwhelmingly turned the to be a crutch for weaker, unproductive companies, and a big tax on people who buy those goods or need to import those goods to produce things competitively and efficiently. i do not think the record is good. i know this is not exactly fair as an example, but when -- if you think back more than 20 years ago, when americans were deeply worried, coming out of the recession of the 1980's, about whether we would lose our capacity to compete as a country. japan was the biggest economic threat to our country at that point. we faced a similar debate, a similar lack of confidence in our basic economic future. i think nobody would look at japan today and say that we would not have been better off

as a country if we had -- we would have been better off as a country if we had adopted the features of their model in 1982. look at taiwan, korea, much of southeast asia. they have a long period of very rapid investment growth in the years before their prices in the 1990's, but a lot of that capital was used very and productively, and of course it did not save them from a huge crisis. i am not a big enthusiast of those things, and i think governments do a pretty bad job of trying to pick those that are worthy of protection and making those trees as well. there are some exceptions to that. again, investing in basic science in research and development, in university research, in education, and

targeting generally available incentives for innovation i think is generally called for, and i think we can do much better at this. >> k.i.a. but touching question from the audience. a touching question from the audience. what do you say to the 65 year- old unemployed autoworker from detroit. >> this crisis has been incredibly devastating. it has touched the basic fabric of our country like nothing we have seen since the great depression. it is not as the unemployment is at 10%. as you know, in communities across the country, it is substantially higher, 50%. it is very concentrated in particular industries and sectors. that unemployed autoworker is in a situation like many people in construction and parts of

manufacturing. it is just one example of how powerful and damaging this crisis has been. i think the only answer you can say is that it is important that we all recognize that the government has more work to do to solve these problems, to repair the damage, to get those people back to work as quickly as possible. this is going to take a long time. there is no easy quick fix. but, washington's job is not over. we are not going to be able to offer people a quicker path to employment if people decide the merits challenges now are -- decided that our challenges now are -- how should i say it? i do not want to make a political observation, will not say that. to have a government to protect the richest americans is not a

good responsibility or response to this crisis. >> you of the proposed $40 billion california high speed rail project. could that increase or decrease the nation's unemployment rate? >> that sounds like a soft question from the press. >> we can skip that and go to something else? [laughter] >> again, investment in public infrastructure, in transportation, is a good investment. our government is not perfect in how they do it. there is a lot of inefficiency and how those dollars are allocated. it is one reason that the president has proposed that we

establish an infrastructure bank that can bring a much more structured approach to deciding what we finance. it is good for growth short-term and long-term and has the benefit of getting some of the people hardest hit by the recession, people in manufacturing, autos and construction, back to work more quickly. >> here is m. i hope slightly harder question from the -- an i hope slightly harder question from the press. what is the united states the right to have the cheapest gas of any country in the world? >> that is a trick question that i cannot answer. [laughter] how can i put this delicately?

i think it is fair to say that we are not smart, not wise, not responsible with how we use energy in this country. we used types of energy that are worse for the environment. it is something we should not tolerate and except, and to change that is going to require a broad based set of reforms to how we use energy, how would is priced, how expensive this for companies -- it is for companies. the president has fought for substantial increases in renewable and some important improvements in standards, but he has not yet been successful in finding political support for the broad based challenges to energy reform that we think are important. is going to keep fighting for that, but it is not something we

can do with a broader -- without a broader consensus. there has been a lot of support from the business community for sensible sreform in this area. they recognize that we are not an unsustainable position. we have a ways to go. >> on a personal basis, what do you think would be a reasonable rate for a gas tax? >> i am the wrong guy to ask, and it is the wrong time to ask me. [laughter] >> this sounds like a washington press question. what was the latest currency report delay?

>> excellent question. it does not sound like an interesting question, but it is. one of the reasons is that an ambassador was excepting a petition that asked us to challenge a broad range of practices in the trade area that act to subsidize preference of chinese manufacturers at our expense. he announced that he would accept the petition and undertake a long-term review of what aspects of the petition he thought we could pursue. at the same time, the treasury announced the we would delay the semiannual currency report. the chinese currency is moving up at a more rapid rate and we would like to see that

sustained. the major leaders of the g-20 economies are going to be convening in korea, and we want to maximize the chance that we can mobilize broader international support behind the exchange rate policies for china and other emerging economies. it is not an issue that we can resolve on our own and we thought the best way to advance those objectives was to wait for the meetings. we are going to delay temporarily in service of the broader strategy. >> unfortunately, we have reached that point where we have time for just one last question. it is a question of burning importance. i was going through my wallet in my car coming over here. >> what kind of currency do have? >> i was looking at my currency, and i found that i have a dollar

bill signed by larry summers, a dollar bill signed by john snow, a $5 bill signed by hank paulson, and to $100 bills, one signed by robert rubin and one by paul o'neill, but i did not have a timothy geithner. i was wondering whether i could exchange one of these four >> i don't carry those, but they do exist. we are using up the old currency before we spend your money printing the new. >> i hope you enjoyed today's program, brought to you by the commonwealth club of silicon valley. again we would like to thank timothy geithner, the 75th secretary of the u.s. treasury. or audience here in palo alto and those of you joining us on

the radio. i michael morris in this meeting of the commonwealth club, celebrating over 100 years of enlightened discussion, is adjourned. [applause] >> tonight, live from denver, a debate with senator bennett and republican ken up. it begins tonight at 8 here on c-span. >> on thursday, the federal communications commission held a summit on the wireless spectrum. chairman julius genachowski announced the release of the spector report that emphasizes the spectrum shortage in the united states. more airwaves need to be freed

up to accommodate the mobile devices. steps include broadcasters releasing spectrum for broadcast. this portion of the meeting is about 40 minutes. >> i am she of the office of engineering and technology. >> together we chair the commission spectrum task force. today's summit will focus discussions on the opportunities and risks associated with skyrocketing demand for spectrum and potential policy solutions to help insure that the demand is met. today we will be releasing a report that provides an in-depth analysis of demand projections and the benefits that can be

realized if we have the additional spectrum that the projections call for. the data in this report provides support for the repeated calls by the president, but the chairman, and the broadband plans, by many others, to unleash more spectrum. clearly from the number of peoples in the room, and the lines that security, these issues are of great interest and importance. >> thank you, ruth. chairman genachowski will be setting the tone with a speech that will help frame the debate today and help -- highlight the critical importance of getting this right. the deputy chief of the wireless bureau, who played key role in organizing the summit, as well as the broadband plan, will be presenting the conclusions from our spectrum demand paper. following john, will be our first panel which will discuss the economic imperative of new broadband spectrum.

the panel will be moderated by jason berman, the deputy director of the national economic council, who will be joined by a number of distinguished panelists from industry and the financial world. we will then have a chance for lunch, but we cannot consider it a break. our lunchtime entertainment will feature a discussion between the chief technology officer of the united states and owned commissioner, meredith baker. commissioner mcdowell will kickoff the afternoon session and introduced the second panel, featuring a discussion of policy solutions to spectrum demand moderated by tom wheeler. this panel will include key .taff from the house and senate again welcome, and thank you for coming to take part. now is our honor to head off to chairman julius genachowski.

[applause] >> thank you, everyone. thank you both very much for your incredible work on spectrum and innovation issues and for leading our spectrum task force which is driving so much of our work in this area. thank you to the members of congressional staff who are here and will be participating in our panel. we appreciate the show interest in our work and our ongoing efforts to work together with congress to address these important issues for our country. thank you to brookings for helping organize and host today's lunch. we have a terrific group of moderators and participants today. i wanted to thank in particular jason firman and tom wheeler who will be moderating or two panels.

arledge speaker -- over lunch speaker, my fellow commissioners who will be participating in this. commissioner baker delivered a terrific speech earlier this week. it is clear that all five members of our commission share a strong commitment to smart spectrum policy. let me thank the members of the team who worked so hard to bring today's summit together. many staff throughout the commission. we hold a summit at a critical time. our economy is struggling. people are hurting. the number of americans living in poverty is the highest in recorded history, more than half of u.s. households have someone who is unemployed at some point during the year.

at the same time, we face increasing global competition. "newsweek recently ran a cover story ranking the best countries in the world. the not so funny punch line, we are no. 11. as president obama said last week, to create jobs today, to lay the foundation for economic growth and u.s. competitiveness in the future, we need a smart system of infrastructure, equal to the needs of the 21st century. history confirms the benefits of smart infrastructure policies from the erie canal in 1820 to the transcontinental railroad in the 1860's to rural electrification in the 1930's to the interstate highway system in the 1950's. smart infrastructure policies not only sustain commerce, they strengthen our communities. as president eisenhower said, together and the uniting forces of our communication and transportation systems are

dynamic elements in the very name we bear, united states. without them we would be a mere alliance of many separate parts. in today's world, that connecting and uniting force is broadband. communications technologies in general, broadband in particular, are key parts of the successful -- successful economic engine. it is the key to the american dream in the 21st century, the key to a brighter future in the u.s. and for all our people. we have focused on the extraordinary opportunities of communications technology. this is a transformative moment that we must seize. that is why we put the time and effort into producing the most comprehensive and dynamic broadband plan in the world, and one of the most important components of the national broadband plan, an innovative part of the plan, is that

recognizes how central wireless broadband is to our future. we are all becoming increasingly familiar with them. there are 293 million mobile subscribers. there are 61 million americans with smart phones. i think we can see where that number is headed. then we get to i pad and the coming wave of tablets. it does not think that will follow a similar trajectory? it means that in addition to the importance of our physical infrastructure of our green table, we must have a laser light focus on our invisible infrastructure, our spectrum. many do not realize that every time they make a call on their mobile smart phone, downloaded documents on their laptop, open an application on the world's tablet or use any remote control

or listen to the radio, they are utilizing the power of our electromagnetic spectrum. it beams from the cellular, radio, and tv towers and enables the mobile devices that have become increasingly essential parts of all our lives. in my case, that would be a couple of smart phones and a tablet. spectrum is the oxygen of our mobile communications infrastructure and the backbone of a growing percentage of our economy. spectrum enables wireless innovation that will grow our economy and create jobs of the future. the mobile revolution has spawned what you could call and apps economy. but tens of thousands of developers including many start- ups creating new jobs, in being more than 250,000 applications,

driving billions in sales in the last year, even in this economy. the ebay application has been down loaded 12 million times. ebay sellers are largely a collection of small businesses, many on-line only, and many traditional of foreign businesses that have added online sales. small businesses are the biggest engine of new job creation in our country. they are increasingly using the mobile platform to start, to grow their businesses, to expand their markets, to create new jobs. as i heard from the founder of the popular local chain of bakeries, which even in this economy has grown as business and created jobs, i need to go where my customers are. they are online and on their smart phones. mobil has tremendous potential

to grow our global economy as well, opening new markets for u.s. businesses around the world, helping us meet our export goals for the united states. more than 90% of the world's population has access to mobile networks and three g, broadbent mobile networks are becoming a world wide. our invisible infrastructure support schools to improve education and health care such as ever updating e-readers that can replace outdated textbooks, and remote monitoring devices that can help diabetes or cardiac patients tracked their glucose or heart rate levels. but we are at an inflection point. the explosive growth in mobile communications is outpacing a or ability to keep up. if we don't act to update our spectrum policies for the 21st century, we will run into a wall, a spectrum crunch that

will stifle american innovation and economic growth and cost us the opportunity to lead the world in mobile communications. spectrum is finite. demand will soon outpace the supply available for mobile broadband. it is not the first time i have said this and will not be the last. the coming spectrum crunch is of vital issue for our country. it is of vital consumer issue, since increased congestion will lead to growing consumer frustration with their mobile devices. we already see it in drop calls and some frustrating consumer experiences the consequences of mobile congestion. we have to saw that for our mobile broadbent future. we need to focus on the spectrum crunch and employ all of our leverage to unleased the opportunities of mobile. today you heard a little bit about this from ruth and julie. a white paper is being released

that offers insights into looming spectrum crunch. it qualifies the size of our spectrum deficit. based on leading industry forecasts, we are likely to see a 35 times increase in mobile brought in traffic over the next five years. i believe those estimates are actually conservative, as we see actual uptake of broadband use it on mobile phones and i pads and i think we will see in other tablets. it finds that even it spectrum in device efficiency doubles in the years ahead, even if the number of cell towers continues to grow at its current pace, we will need another roughly 300 mhz by 2014 to accommodate the growing demand. that is the near-term spectrum deficit. few people out this -- outside

of this room knows what mhz this, but everyone knows the value of the dollar. the economic value of the spectrum is estimated to be as high as $120 billion. we are standing at a crossroads. we are looking into potential futures. if we act of folly and execute on a strategic mission to ensure the highest and best use of this precious national resource, we can drive billions of dollars in private project creating millions of new jobs and enabling enlistee products and services that can help improve the lives of all americans. if we don't, we will put our country's economic competitiveness at risk and squander the chance we now have to lead the world in mobile. we will read more stories like the one about applied materials, which moved its advanced solar

operations from silicon valley to china because it believed china was a more attractive market for what it was doing. how many technology companies need to move overseas before we declare a crisis? imagine if lincoln had not led the effort to build a railroad across our continent. imagine if fdr had not pushed through rural electrification act which brought millions of americans out of the dark and lit up one small business after another. imagine if eisenhower had left a large swaths of the country in the slow lane, bypassed by the commercial activity our highways enabled. think of the economic opportunities we would have missed, the human potential that would have gone untapped, the jobs left on the table. the choice is clear. we have to pick the path that promises jobs and economic growth, innovation, an opportunity. we must close the spectrum gap.

we can build a national invisible infrastructure appropriate for the digital age with government acting as the catalyst for massive private sector investment. that is helicon build the transcontinental railroad in the that is how lincoln built the transcontinental railroad. as larry summers put it, public action, private investment. infrastructure is constructed here in the united states by american workers. cannot be relocated. if transportation infrastructure was and remains a key source of competitive advantage, digital infrastructure will be a key source to competitive advantage in the knowledge economy. the good news is, we have a head start on mobile broadbent. we completed our transition before the countries and are poised to begin reading the benefits of the digital

dividend. u.s. company -- u.s. companies are head of the pack on4g. we are ahead of the world on mobile apps. millions of americans will be enjoying mobile connections through 4g on their smart phones or on their tablets at speeds we are used to on our desktops. global leadership is not a given, and must be earned. we had an early lead on the mobile revolution in the 1990's, but fell behind. we don't want to lose our edge again. we know what the challenges and we have to solve it. we know that historically it takes some time to read purpose licensed spectrum for new uses. we need to get moving. we don't want to find ourselves

in a spectrum crunch with consequences we could prevent. and that is what we have convened the spectrum summit, to highlight the opportunities of mobile broadband and put the challenges on the table and identify how we can best utilize our spectrum for the benefit of our country. knowing that it would be difficult for our participants to solve this problem in half a day, we have been working around the clock to develop ideas to kickstart today's conversation. the national broadband plan spectrum recommendation rests on two pillars. one, making more spectrum available, and two, using the market in technology to ensure more effective and efficient use. president obama, who has long

advocated unleashing the opportunities of spectrum, issued in june and executive memorandum directing the federal agencies to work together to unleash more spectrum. the commerce department is working to find ways to make more federal spectrum available for mobile broadband. cathy fcc, we have not -- at the fcc we have proposed rules that would make available 90 megahertz of satellite spectrum to be used for a terrestrial broad grin. we have released the tv white spaces, robust spectrum that will bring innovations like increased access in both rural and urban communities. we need to do more. innovation in policy will be required to accomplish our spectrum goals. historically we have led the world in spectrum policy

innovation. the national broadband plan contains a new, big idea, incentive options. we propose that current spectrum licensees such as tv broadcasters could voluntarily relinquish spectrum. the sec with an auction spectrum for -- fcc would then option the spectrum. tv broadcasters could either continue to broadcast, share a spectrum with one or more stations. i am pleased that broadcasters are thinking seriously about what this value proposition means to them and for the country and how can help your business as well as help the country. i appreciate the constructive engagement we have had with broadcasters. these incentive options have the chance to beat what the very

first ones were, revolutionary. the country can benefit from freeing up spectrum for mobile use. taxpayers can benefit from billions an auction revenue and the current holders of spectrum can receive a capital infusion and still be able to distribute their programming by sharing spectrum of other stations or through other platforms such as cable and satellite. obama endorsed this proposal earlier this year. it is the basis of bipartisan bills in both the senate and house. swift action to authorized incentive options will be a critical step toward more efficient spectrum use and ensuring that wireless broadband can meet its potential for economic growth and job creation. incentive options are a big idea, but are spectrum challenges are so great and the stakes for our economy so high that we must proceed on many fronts to seize the opportunities of spectrum. at our next meeting in november

i will ask my colleagues to consider three items to maximize the use of our invisible infrastructure. the first is a notice of proposed rulemaking that would lay essential ground work for implementing incentive auctions quickly. it will look at lifting technical restrictions so spectrum can be used for mobile broadbent. it will explore licensing framework that would allow stations to voluntarily channel share and it will examine new ways to improve the digital reception of vhf to make it more effective option for tv broadcasters. the second item is a notice to expand our experimental licensing program. experimental licensing has played a valuable role in many wireless innovations. you have probably seen the tv ads featuring new potentially life-saving antipollution systems in cars. that technology requires

spectrum. it was developed using an experimental license granted by the fcc. it also played a key role in white spaces in the development of super wifi. i will ask for steps to expand an experimental licensing including research organizations and other institutions that are developing innovative new services and devices that efficiently utilize spectrum. the goal is to accelerate innovation, to reduce the time for an idea to get from the lab to the market. it would also help the fcc make smarter and faster decisions on the ground. the third item is a notice of inquiry to accelerate opportunistic uses of spectrum. the key word being opportunistic, including technological advancements that could enable greater use of

secondary markets for spectrum. right now there are swaths of spectrum that are being used but not to their full potential. fcc is looking at a number of different ways to unlock that resource 3 improve databases are new innovations in the works at various private companies today. building on our innovative public spectrum-board, we held this will help us identify ways to improve the efficiency of spectrum and launch new value providing markets. to make real progress on spectrum, to move forward on the best ideas, we need lots of input from a broad spectrum of the public. that is why we have organized this summit today. i am pleased to announce that the fcc has formed a new

technology advisory committee, comprised of some of the leading technology and business leaders of our country. it will be led by tom wheeler. tom is the perfect person for the job and i am grateful he agreed to take it on. he is a true leader both in private sector investment and innovation and also in public policy development. on the fcc side, ulie knapp will be running the point on tac. but looking forward to them and generating concrete ideas that a at and spurring fcc action. we are here today for your ideas and input. i thank you all for participating and i very much look forward to today's

discussion. i expect a panel to address the opportunities we can see if we address the spectrum crunch, and what exactly will happen if we don't? are the ideas we have put on the table right ones? how can they be improved and executed upon? what innovative policies that i have not mentioned can allow us to meet our spectrum challenges and drive tremendous consumer benefits? what can we do to drive greater spectrum efficiency? how can we spur secondary markets for spectrum and similar ideas? finally, how exactly can we unleash the maximum amount of private investment and spur the maximum amount of innovation in and around spectrum? the future is being billed on our invisible infrastructure. let's work together to update our spectrum policies for the

21st century and make sure this invisible infrastructure truly serves our country's needs. so thank you very much. i am very much looking forward to today's discussion. [applause] >> john is exactly the kind of person we are very proud to have been public service with a terrific mix of background in the private sector, small and large companies, and now bringing his considerable talents and brain power to spectrum issues. he took the lead on organizing the summit today.

thank you for everything you do at the commission. >> thanks, mr. chairman. thanks, everyone, for coming today. i am here to present some of the top line findings from our spectrum demand paper which we are releasing today. can we turn on the screen over there? just give it a moment for that technology to warm up. it is in its research and development stage. as some have mentioned earlier, we are releasing a paper today on the spectrum crunch and we are essentially qualifying and explaining a figure that has been talked about and has been

in most of our proceedings over the last year, which is our spectrum goal of 300 mhz in five years. so let me talk about that. the national broadband plan recommends that the commission free up 500 megahertz of licensed and unlicensed spectrum in 10 years, of which 300 mhz should be available for mobile use in five years. there is analysis behind these numbers, and this paper essentially attempts to explain some of our thinking behind the 300 mhz number. the full paper is available today on broadband.gov. we hope people will download the paper after the summit is over and give us their feedback. the paper essentially is a spectrum forecast. it attempts to about you --

quantify the value of making more spectrum available, and like any forecast, it is based on a number of assumptions. we are interested in knowing how to change various assumptions as the forecast changes. the approach we took was to use publicly available data. we wanted to do an industrywide forecast for the country as a whole, and we wanted to avoid what we call the problem of arbitrary precision where we have a forecast based on so many variables that it is impossible to communicate and difficult for people to get their arms around it. we wanted to focus on the main drivers of demand. let's start with some current trends. over the last five or six quarters, the growth of data consumption on mobile networks has been staggering. these are actual historical numbers.

we have seen the average data consumed per user grow by 450% where it now averages 200 megabytes per user per month. this is a mix of different types of factors and users including smart phone users, mobile phones, and more traditional cell phones. one thing is clear as we think about the market. the number of users is likely to increase. the number of devices per user is going up and the data consumed per device is going up. all this combines to lead this very dramatic use in data usage which we expect will continue. when we think about spectrum demand, the way we think about it is the intersection between

the man from the consumer or business community for network capacity and the ability of wireless networks to me that capacity. we think about our demand forecasts, we are looking at how these two different aspects come together and what is the value at the point where they meet. the approach we took in the analysis was to use publicly available data. we started with publicly available analyst forecast. we took a consensus average few of them which turns out to be about 35 times daily growth in the next five years. we took this demand forecast and adjusted it for some of the factors that the chairman mentioned, such as the ability of new technology to increase spectrum efficiency, more cell

sites being deployed that makes more efficient use of the resource, and put these different factors into a pot. we end up with a spectrum demand multiplier which we then apply to what we understand to be the current day usage of spectrum for mobile data on today's networks. we use that to project out in five years what we think the demand will be. so this is the analyst report that we mentioned before. there are different ranges of projections with a different set of assumptions about different user behaviors and provider behavior's. the central point is centered around 35 times growth and that will be the anger that we used in our report. -- the anchor that we used.

if you have a 35 terms increase indebted the man, you are also seeing -- of 35 times increase in data demand. we also expect the number of cell sites out there to increase by about 40%. this takes into account the fact that it is getting harder and harder to put cell sites out there, but the commission is taking action to alleviate some of those difficulties. we see about 12.5 times growth. the headline here is that even a caring for all the technologies and the new cell sites, we expect data traffic to outpace the growth of those other means of meeting them by three terms.

there is clearly a need for more spectrum. this chart shows how the spectrum crunch is expected to develop over time. by the time needed to five years out -- by the time you get to five years out, we see a nearly 300 mhz deficit. as we mentioned before, it is not really a matter of having enough spectrum or not. there is an economic trade-off between spectrum and other ways of meeting demand such as more network infrastructure. we attempted to model what we see as the cost, the incremental cost saving she would have if you had enough spectrum to meet

demand against the baseline of what the industry is already spending and investing. we estimate about $120 billion. that is the value of the spectrum that would be freed up through the policy initiatives we will discuss later today. it is an estimate, but it provides a marker that we think is useful for the discussion. one other thing i would like to point out, most economists also believe the value to society, the macro economic value of spectrum, is several times with the cost savings are. the actual economic value in terms of creating new industries could be several terms that $120 billion. it is a really significant piece of the economy, one of our most

valuable national resources. that is why there's so much interest here today. the paper goes into other considerations that i will not go into detail with right now due to turn restrictions. we considered a number of different issues that come up. we looked at a bunch of different trends in terms of using unlicensed spectrum to complement lawson spectrum. we did a sensitivity analysis. we talk about -- thought about how it affects the forecast. the conclusion we take away is, what we are putting forth today is a forecast, but from where we sit, the numbers we are putting out really are a matter of when and not if. the demand trends are so strong and the growth is so incredible

that it overrides most of the other considerations in the analysis in the near term, to the point where there is tremendous value to be unlocked by making more productive use of the spectrum resources. that is an overview of the paper. we hope you'll down loaded and give us your feedback. the main findings, the demand for mobile broad ban is growing at an exponential rate. need will outpace the supply by a factor of almost three. our modeling shows the value of bringing up 300 mhz. given the time it takes to make spectrum available, anywhere from six years to 13 years, the term to act is now. we are not acting for today, we are acting for years from today by the actions we take today.

we have a great learn of the panelists. we are grateful they could all come in from various different places. we hope you will enjoy the discussions, and thanks again for coming. [applause] >> tonight, live from denver, colorado senate debate with democratic incumbent michael bennett and republican ken but. the coverage begins at 8:00 central on c-span and. >> now discussion on information technology and its impact on the federal government. john chambers, chairman and ceo of cisco systems, highlights the importance of strong business government partnerships. he emphasizes using new technologies to improve health

care, education, energy supplies, and u.s. economic develop. dean garfield moderates the discussion, hosted by the association for federal information resources management. it is about 50 minutes. [applause] >> it makes perfect sense for us to kick off this series with you. i don't know if you know but this concept is loosely based on a show called "inside the actors studio." the very first guest on that show was paul newman, so you are in good company. before we start talking about leadership and innovation in

technology, it would be useful to give some context by starting with you. tell us a little bit about your background and how that background has helped influential leadership style. >> i think i might have been a surprise to my parents. i was raised by my grandmother in west virginia for the first year or two. i am proud to be from west virginia. i love their sports teams and their great universities. i have two sisters, one in los angeles and one in north carolina. my wife is my high-school sweetheart. she has put up with me for 40 years. i have a granddaughter is the love of our life who is 2 years old. she loves to cuddle. i hope that never goes away. i am very proud of my two young adult children. i believe in trying to make a

difference both in our family and in life. we do a lot of things right, but we cannot always do better. >> how does your background influence how you perform as a leader today and you are out local leadership? >> i think most people from west virginia are just plain good people. if you have education and the power of internet, you can do almost anything. i have lived in ohio and atlanta and boston and chicago and pittsburgh and indianapolis and silicon valley.

i have seen much of the country. my wife is a speech therapist. >> i have two young girls, and their aspirations change every day on what they want to be. did you always envision yourself being a ceo, or when did that hit you? >> both parents being doctors, whatever broke, they could fix. their ability to really see the future is what i learned from both of them. i think both of them prepared us from the beginning to go on and they may move out of the state court clerk before their aspirations. my one broth is a ceo at the university of north carolina. my other brother-in-law is a ceo

of a pharmaceutical company in los angeles. it shows you that with education, you can do almost anything in life. that is why i am so passionate about education. >> there is a growing connection between silicon valley and the silver screen. " is one of networkin the top movies in the country. when they make the movie about cisco -- >> that is one of those where you can see the curve ball coming. >> who would play you on the silver screen? >> in 1990's, a lot went very well for us. for a short time we read the most viable company in the world.

we grew our head count from a couple of hundred people to 70,000 today. i said the goal was to put our whole leadership team on the cover of forms. -- the cover of forbes. i think the leader of its way to much of the credit and more of the blame than they deserve for our company goes. it is kind of like airports. you name airports after did aviators. i would rather see a movie about cisco, but definitely after i retire. there are two actors are really like very well, matt damon had a

great series of movies, and also will smith. both of them portrayed very good characters and they always get the bad guys. if you were to ever penny down on that, i would be honored after a retired for one of them to do that. >> you started the answer right talking about up-and-coming. one of the things i observe is cisco's investment in an up-and- coming markets. most recently in russia. if you could talk a little bit about that and the reason for you moving in that direction. >> we are an american company in very proud to be. the majority of our employees in our company, out of 70,000, 30,000 are in america. a large part of future growth

for every company in the world, regardless of where are you -- where you are located, would be emerging companies. different from our counterparts, we often go in leading in court soc -- corporate social responsibility. it is good for business. the second thing we do is work with government leaders on their top five priorities. you suddenly see high-tech not just enabling the top five priorities such as health care, job creation and industry transformation. it is so deeply embedded in the strategy. government leaders get that and understand where it goes. the third thing, the innovation is coming out of emerging countries.

remote health care, like what we did after the terrible of earthquake in china or what have occurred with hurricane katrina or what we did in the middle east after the -- you suddenly see the ability to transform a country. in russia specifically, president medvedev realize that this country cannot stay with just one industry, energy. they are losing their young educated work force. they have to diversify and create jobs. cisco is taking the lead in helping to create a silicon valley outside moscow. they talk about how to bring innovation their, along with a dozen of our peers on a daily basis. we sit in cabinet meetings with president there and go back and forth on open issues. what you see is the ability to

change health care or innovation our job creation. the same thing is happening in india. the prime minister talks about delivering $1 per doctor visit. i hesitated when i first got the assignment. that is an unbelievable concept when you look at 1.4 billion people. on education, 40% of the students in india did not even have a teacher on a given day in the classroom. you could suddenly use video capability and transform the education possibilities to create world-class education for $1 a month. in china, you talk about what to be done in terms of new industries. in mexico, the president's priorities are health care, education, and security.

we were to achieve job creation, health care, industry transformation, etc. last year we did $16 billion in india. in mexico we started with $1 billion and will take it up. we know how to part with governments around the world. perhaps for the first time, 3 billion people making less than $2 a day, with the power of the internet, bringing education in virtual jobs to them, perhaps we can address issues that we should have addressed a long time ago. it is amazing how often it is occurring in emerging companies. >> you use the term transformed a couple of times. just last week, the movie " transformers 3" was released.

>> i am not sure where this question is going. >> what does the u.s. really need to do to transform itself and create with these -- compete with these emerging markets? >> it is a question that deserves a transparent answer. i will give you my impression. i think presently we are losing. we are getting beat on education, innovation. business and government are not working together. other countries want to be like america, and yet we have all these natural capabilities and innovation, the use of i.t., and

the best innovative business system in the world, and yet we are not working together at all. when i was growing up, 18 of the top 20 countries in the world were american. we no longer can dictate terms, tax policy on a global basis. there are many areas where if we just sit down and work together , really set out goals, let's put america back to work. let's rethink how we encourage companies to invest in america. right now we discourage companies from investing in america. i am appealing to governments to form a partnership with business, to look at issues like repatriation and stop arguing on an academic level. if your an unemployed american

and have low prospects for getting a job next year, they don't want to hear about the radical discussions. they want to know what you can do now to put us back to work. there are a lot of creative things we can do, starting with repatriation of funds. the stimulus package was $800 billion. there is $1.20 trillion outside of america that most of us would bring back if it were done at a lower tax rate. that low tax rate is what every exporting nation in the world already does. three to five years from now that door is going to be closed. russia, china, brazil, and mexico will require you to invest in those countries. if you could take $1.20 trillion and bring back a hundred dollars billion, it would produce jobs.

when you get companies much stronger, if you see the stock go up in that country, there are a lot of issues we could go after. i hope both sides including myself accountable for doing a good job here. we have to quit on constructive dialogue and make it happen. >> let's talk about leadership and your thoughts on the key skill sets to be an effective leader. if it is a't matter small company or a big company or even government leaders. i have a chance to talk to almost every single government leader and business leaders in the world.

the characteristics are remarkably similar pre great leaders are able to do three or four things well. set out a vision or strategy for company or a country, understand how that strategy will be different than what others have done. the second thing they do is surround themselves with people, develop and recruit them, and the third thing, you develop a culture. you helped influence what you want to be as a company or as a country. you have to be the communicator who sets out the vision, that pulls the company we do in terms of where you go. each time i talked to a government leader, i will ask them, what is the one thing you have learned in your career that will help me or help others? it is amazing when they give you answers how much they are very

accurate and how much it comes to bear later in helping you run a company. listening is the last thing. i think it is those kinds of characteristics, as leaders the ability to listen but also act on what you hear. >> are those skill sets that are innate, or can they be developed over time? >> i think you can develop them over time. all of us have the capability to do that. we are an old-fashioned company in some ways, and in other ways we move with extreme speed. we can do an acquisition and haven't through approvals and the board of directors in a

week. we have done 141 of those. or exceeded what we told the board of directors we would do. -- have hit or exceeded. you want to teach people why you do what you do. an example -- win your employee family needs you the most. you have to leave from the top. now it occurs automatically. as a leader, part of your job is to explain to people your vision, the elements of your culture. here are the skills you think it is important to do. every company will have different attributes, but i think you can teach that and learn it. we have people who cannot be a

part of that, it is probably better they are somewhere else. if they are looking out for what is best for them at the expense of the company, they are better off doing it somewhere else. >> a lot of the folks in this audience work with the federal government, so your last point touches on something that it would be useful to get your advice for a person working in the federal government who wants to be a leader and innovator but is running up against barriers. what it buys would you give that person to break through and continued -- what advice would you give that person? >> i am going to assume that the base of a lot of people in the room is a technology base. several questions you have raised. the first is the risk reward standard deviation is tighter,

and it has to be to be practical. if you don't take good business risks are good government risk, you never achieve anything. you have to understand that -- the understand thati.t. is playing. there is a rapid transformation occurring with business and government leaders. it is now deeply imbedded in how business works. now, almost everything we do, from health care, to education, to citizens, to defense, will have a network fabric behind it of a mighty. -- of i.t. i see the u.s. government really leading in the first time for probably two or three decades.

part of it is, realize that i t can be the enablers for change. it could improve the quality of health care, transforming healthcare in places like appalachia or the indian reservations of montana. i think the first thing is to understand that the time is probably now that i.t. can play a dramatically different role. the second thing is, you want to identify where your leaders are. the first thing i asked the leader of the country or a

business is where do you have i.t. issues? and as soon as i get those priorities out of a russia, china, north carolina or mexico, we can align with anyone. understand what your leaders objectives are, understand where you can make a difference. go after the groups that will support you. very often, the most successful groups are the slowest to change. i usually lead with manufacturing or operations first, and then get the success is going. then paint the vision of what you can do together. if people can feel that they can buy into it or have a chance to participate, there is almost nothing you cannot do. i think we are on the cutting edge of a 3%-5% productivity

gain. that was done from 1997-2004. asked alan greenspan. ask president clinton's economic advisers. we're about to see it happen again with this new technology, this collaboration, video, clouds, fertilization of data. what is really does is it -- of virtualization of data. what it really does is drive productivity. we did the same thing in the 1990's when this first wave came about. i think that not only the time is now, i am saying that with new technologies that are much easier to use, you and i can use it very effectively as our parents could or our children

can. i think he will see the transformation. >> you have had on a couple of things that i want to come back to. you also mentioned n.c.. the mayor of charlotte is a law school classmate of mine. >> he is a good guy. >> he is a great guy. >> if he was a republican, he would be perfect. >> i will tell them you said that. >> actually, my friends could kill me, but my favorite president was president clinton. the job growth, the transformation of the internet, he did remarkably well. >> i know that you hosted the cisco cio conference a week ago and you were talking about new

trends. it would be useful to get some of your thoughts about the key themes that came out of that. >> at the clinton global initiative with mayor fox, he took the lead. a lot of what we talked about our emissions issues and making the world a better place to live and constructively. a majority of these issues have been in china. whether you are in beijing, charlotte or amsterdam, you have to deal with these issues. in the u.s., we got caught up in the debate about, if we smart that grid, it will not only hurt the economy, it will cause a lot of lost jobs. they were very effective of

painting a picture of where we need to be 5-10 years out. the mayor of charlotte said i am going to lead a city that shows people how to do that. i will bet my future on it. he had specific leaders, business, labour and other, say this makes sense. he then brought in the energy provider of the area and cisco to say, let's build a smart city with 90% of the commercial real estate and do it with courage in the geography that has 13,000 energy workers and was one of the top 05 banking centers in america, bank of america, wells fargo, wachovia. together, we can do things that no one could do separately. the power of public-private partnerships is collaboration. the biggest productivity driver in the next decade will be around video and collaboration.

it is hard for critics to say, what about the job impact? did you get business results? we are going to do both. if he thinks that the industrial revolution, as simple as it sounds, it was bringing the work to the worker on an assembly line. that completely transformed how things are bill. it drove the standard of living and productivity in this -- transformed how things are dealt. it transformed the standard of living and productivity in this country for a decade. if you bring the work to the workers in virtually -- to the workers of virtually on the

assembly line, they can work anywhere in the world. next meeting you are working on corporate social responsibility, next meeting your engineering, if you change meetings every company you go into. it's like our kids on social media. we have a lot of time on a and a lot of discipline. we are committed to a decade and we think we can completely transform business in companies -- in countries like the u.s. and europe. a large reason is how internet technology will be used on everything from health care to energy. you see industries like walmart get it. ec industry leaders like g.e. understand what is possible.

these concepts that we talk about and get excited about and talk about, cloud, collaboration, the power of video, social networking, you do not frame it that way. you frame met with, how do you do business? how do you do health care? how do you do government? how do we not taught in our language, but how do we identify that this is what we can do for job creation. this is how you can transform the country. this is how you can do education in ways that can create world- class education. there is no reason we should not be number one in education again. the only reason is a lack of innovation and the courage to do it.

what i saw of the clinton global initiative was a person who has committed to a project for six years. he has a way of outlining a vision, and people's groups together to achieve those goals -- and he pulls peoples together to achieve those goals. all of the initiatives we have created at the last clinton global initiative are on schedule or ahead of schedule. at that lunch, he suddenly for the first time had business leaders, there were about 12 of us around the table, talk business, technology and collaboration spontaneously as one conversation. you saw that with government leaders, the ability to grasp that.

i have a lot of weaknesses, but i am pretty good at catching market transitions. what we have to do as a country is we need to really get excited. what president clinton did on the internet, he literally in many ways was the poster child for what you could do for the country. he was 10 years ahead of his peers. i think we have a chance to really lead with this new technology, to suddenly be able home, tour parent granholfrom deliver health care to remote areas, to deliver collaborative education. if you do not do things differently, you can play up the hand of our standard of living very quickly. >> that is great.

i'm going to turn it over to the audience in a second, but i know that a firm does a survey every year of the top issues on the minds of the sea i oppose -- cio's in the government. one thing that comes through in sustainability. i know that cisco is making some real investment in those areas. >> there are different ways to focus in the company. i personally do not focus on competition. i think that is like driving a wedge to virginia highway very fast. -- a west virginia highway very fast. i think you need to look a what is ahead of you, not what has been done over the last two or three years. i think the transitions are exactly what you said, all are

beginning to occur if the same time. sustainability, anything that connects to the network can be great. you can monitor. you can charge a different rate for electrical capabilities that have different emissions. you can cut down the load on the american electorate of bread and reduce the infrastructure cost by 40% -- american allowed to electrical grid and reduce the infrastructure costs by 40%. one of the areas that may surprise you is the internet. the internet is bringing together of different protocols and languages. it is allowing everyone to

participate. the smart credit sustainability has 360 different protocols -- smart grid sustainability has 360 different protocols. there is not the data center in the world that we cannot break into. and if we can break into it, what is to stop the bad guys from a rogue nation from breaking into it. as you do this, you have to have security in mind. the pieces of the networks have to work together, otherwise the bad guys find where to attack and get into your system. i think we need to learn how to i think we need to learn how to discuss this in