guest: we have a long way to go. companies are holding off. this has historically been a stable regime of predictability to invest in from a village where standpoint and a political standpoint. companies are putting people on rigs doing nothing. at some point, they're going to have to make a decision on where to make the investments. jobs could be going overseas. host: our guest from the american petroleum institute. thank you for being with us this morning. guest: thank you for having me. host: that is all for "washington journal" today. we will be back tomorrow morning

at 7:00 a.m. eastern time. have a good day. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] 10] >> today in california, the ninth circuit court of appeals hears oral arguments on proposition 8 that voters approved in 2008, after an appeals court ruled it unconstitutional. live coverage at 1:00 p.m. eastern today on c-span. later, former "new york times" editor for a conversation on the changing nature of responsibility in an era of new

media. >> without the new s.t.a.r.t. treaty ratified by the senate, we do not have a verification method to ensure that we know what the russians are doing. when you have uncertainty in the area of nuclear weapons, that is a much more dangerous world to live in. >> find out more about the expired s.t.a.r.t. treaty with russia, what it might accomplish, as well as its history online at the c-span video library. it is washington your way. >> coming up later, attorney general eric holder will lead a news conference of the financial fraud financial task force. live coverage from the justice department and 30 p.m -- at

10:30 a.m. eastern. in the meantime, hemlines and your phone calls from this morning's "washington journal ." but this look at "the wall street journal" reporting on this proposed deal.

our question for you this morning, do you think this would make a good compromise? something being considered here during the lame-duck. it would not extend a tax cut permanently. it would be a temporary move, perhaps two years. continuing on to the discussions and deliberations that are going on, "the wall street journal" says -- what do you think about this

proposal? let's hear from mike on the democrats' line from apple valley. caller: i think john boehner said when he signed the bill years ago that it was going to end december 31, 2010. now he is reneging on it and blaming the democrats for anything. i don't like that. but, that is how they are any way. they are multimillionaires. they don't care. agee -- host: compromise, or do you say no? caller: i don't think it should be. the rich have made the most in the last 50 or 20 years and the middle-class and poor and the working people are losing money constantly. taxes, taxes. all they are doing is making more money. just like barrel -- $303 million and now he is saying, no?

host: let's take a look at a story coming to us from "the new york post." mitch mcconnell saying it is pretty clear that taxes are not going up on anybody in the middle of this recession. with a different point of view, senator dick durbin spoke yesterday on one of the sunday talk shows. let us take a listen. >> if you get the unemployment benefits, will you be willing to go along with extended these tax breaks for the upper income people, because it sounds like that is what is going to take. >> we are moving in that direction, only against my judgment and my own particular view of things. it appears that the republican position is -- and it has been consistent, i will say it for them -- we saw yesterday in the senate, we have to continue the bush economic policies and the bush economic policies of tax cuts for the wealthiest individuals have led us into this recession, cost us 15 million jobs, have utterly

failed. you can't point to those policies as successful. h. deede >> the you sound like you will vote for it because there is no other way to get this done. it would these tax cuts be temporary for everybody or would it be something permanent? >> i am not voting for any permanent tax cut for people in the highest income tax -- categories. i don't speak for anyone else, but when it comes to the president's position and democrats in congress, we are laser focus on the jobs issue. host: democratic senator dick durbin is speaking on "face the nation." let us take a look at paul krugman's take on some of the negotiating going on in washington right now. his story is called -- "let's not make a deal."

as far as the deal goes, he writes --

let's go to cleveland, ohio, where herald joins us. do you think this is a good proposal? caller: i think it is a great idea. compromise is great because we have 9.6, 9.8 unemployment rate and you don't want to raise taxes, especially on businesses, at this point in time because they will not have incentive to expand or hire new people. but the last caller, you always hear liberals talk about the rich or people moving jobs overseas. there is nothing wrong with being rich, nothing wrong with being successful in this country. they are essentially hypocritical because they are the first one who complained about jobs going overseas, but they are leaving wal-mart and k mart with a shopping cart full of stuff from taiwan and china and then they call c-span and complain. it makes no sense. we have a $40 trillion gdp but

close to $14 trillion debt -- 14 trillion dollar gdp. how much is it enough for the people of washington? it makes no sense. host: let's go to jail in san diego, independent line. caller: when they started this, but promised they were going to stop it in 10 years. what is the deal? now that it is time to stop it, they don't want to stop it. they said know that -- for everything barack obama wanted to go. people out here need the money. not the reach money. they don't need the money. they have extra houses. i knew beryl issa when i was a kid and he was a car thief and sandia, a smart one. he did not do it to make money but he did it for thrills. then he invented lo jack, smart guy. now you can still guide -- cars without getting caught. i think all the people who have

millions and millions of dollars to represent us have not got a clue what is going on with us on the streets. host: paul krugman writes that america cannot afford to make these tax cut permanent. on to joe on the democrats' line in louisiana. caller: good morning. how are you today? a couple of comments to make. as far as the tax cuts. i would say absolutely not. and the president needs to understand that every time he sticks his hand out, all of branch, they have it off and now the only thing that is wrong in this country is no one wants to pay taxes. let us go to a flat tax and then

we could get something done. on top of that is if we really wanted to be a common sense -- a deal, let's make a deal with the republicans that they will permanently finance unemployment and put all of those millions of dollars from iraq and afghanistan into social security to get those two things solvent. it would take care of two things. the people unemployed will always have an income coming in so they can find jobs, and, two, the money that is going out of the country will go into social security for the people in that age where they really need that money. not talking about a whole lot of money to start with. let's go to a flat tax, everybody will pay a flat tax and i guarantee the budget will disappear as far as your deficit and the budget will be a big fat treasury. host: let's take a listen to comments that senator mitch mcconnell, leader of the republican minority, made over

the weekend on "meet the press." >> we had more conversations among last two weeks than in the last two years. i think it is a good sign, route 1 awareness -- that the power will be more symmetrical in the next congress and i am optimistic. >> what might the deal look like? >> i am not going to negotiate it here this morning, but at the you are familiar with all of the issues. the big issues on the public mind is whether or not we are going to raise taxes on anybody in the middle of a recession. it is almost laughable that we were in the session yesterday. it reminded me of the movie "brown hold de" where we do the same thing over and -- "groundhog day" where we did the same thing over and over again. here we are at the end of the year. i think it is pretty clear taxes are not going up on anybody in the middle of this recession. we are discussing how long we should maintain the current tax

rates. and there are other issues that many people feel are important to address. >> how long of an extension could you agree to? there is a lot of talk of it being temporary. >> i don't want to frustrate new but i am not going to negotiate it here on the show this morning. >> temporary is something you could live with? >> i would prefer to do it permanently. you and i have discussed that on earlier shows. i think the current tax rate is appropriate for our country. it has been in place for 10 years. obviously the president will not sign a permanent extension of . e current tax rate i would like one as long as possible. host: republican minority leader senator mitch mcconnell speaking yesterday on "meet the press." let's go to gettysburg, pennsylvania. phil on the independent line. do you think this is a good potential compromise?

caller: our country is being hijacked by the new religion, political party. people referred this a bush tax cut to attach and all presidents name to it to demonize and another saying it is class warfare. nobody is talking about what is really happening. to the country and caring about the people but they are caring about the big political power shift that just occurs in congress and we are all pawns in this game of who will be the next president. host: chris writes to us on twitter. it is it -- republican color from alabama. caller: how are you today? host: what is your name? caller: victor. i think it is a decent compromise. as some callers stated before it

is the definition of the wealthy. you define over and over again that these tax cuts are for the millionaires and billionaires yet $250,000 in certain parts of the country actually would be that of two professional college professors, for example. i am a physician. i went to school for about 14 years. after school i worked 80-plus hours a week. i are in the high -- i am in the higher income bracket. i am pleased to pay taxes and support the country but at what point do you would respond to the loading for the people spending the money rather than the people who are working hard and making the money and pay their taxes and trying to be fair about it? host: you mentioned your concerns about bumping back up the tax rate for families making more than $250,000. democrats proposed on saturday to only raise it, let the tax cut expire for those making more than a million dollars. that was shot down by

republicans. what do you think about that? caller: again, at some point it is dependent upon where you are in the rank-and-file. part of the problem is that i did not really think anybody should be taxed beyond what we are taxed at the rate currently. for example, for me to make $250,000 it theoretically, and then say it is ok to attack somebody who makes a million just because i am in the lower income level than they on, is somewhat hypocritical. i think at some point we have to get to the bottom of the problem and that is the spending. i don't need somebody else to spend my money and more and more of it every year. i and one of those guys who has four children. i chose to have a large family, i have my own retirement plan, i pay my own insurance, a pay for my kids college funds. i am putting forth a lot of money. fortunately god has blessed me to make a fair amount of money. but again, at what point do you beat on the maine and other people like me who have chosen

to go the courts or who have been blessed to have had the opportunity to go the course of many years of education and a decent income level to tax, tax, tax, and again beat on me because i am a wealthy, hard- working guy. at some point we have to get to the spending and do it in a manner that is fair. the gentleman who talked about a flat tax, not a bad idea. however, again, we need not to encourage people not to work by the handouts that we tend to feel free to give but encourage people to go to work and encourage people who can hire people to pay for those things. host: thank you for your call. let's talk a little bit more about what is actually in a potential compromise being negotiated right now, from "the wall street journal."

the delay could also delay other goals of the senate does not

have time to debate them -- allentown, pennsylvania, tony, democratic caller. caller: i am opposed to the temporary -- i am a little bit nervous. i have not been to active on calling. i believe that the people who have the means to pay more taxes should. i think they have gotten many benefits over the last 10 years, and it was supposed to help with increasing jobs so that people could become employed. this has not happened. so, to give an additional tax increase -- tax decrease, or, you know, to give them more money, how much does one person need? how many homes and other

possessions does one family meet? host: victor called early and mentioned that people " are better educated, in his opinion, invested their time and effort and earn more money should be able to hang on to that. here is an article jiggly -- "jobless rate rises among educated." atlantic beach, new york, joe is on our independent line. caller: so many things here. i thought this was supposed to be about jobs, jobs, jobs, jobs. nobody is talking about jobs. taxes go up each and every day, each and every week, school tax, property tax, water tax,

cigarette, liquor, sugar tax. they are taxing everything. it just never goes down. it is a permanent increase, it always goes up. my fear is that if you gave this government overnight we found $100 trillion and handed it to them, and three months they would be in a deficit. they know nothing but spend, spend, spend, take, take, take, waste, waste, and we have to find a way to rein this government in and have less control of our lives and our money. let's get back to jobs. host: are question for you this morning is the potential tax cut deal, extension of the bush era tax cuts across all brackets for a couple of years and as another part of that, the flip side, extension of the unemployment benefit. you think it was a potentially good compromise? on twitter, dennis rights -- writes --

christine rights by e-mail -- writes by e-mail -- cristi does not want to see either extended, either that tax cuts for those making over a million dollars or the long term unemployment benefits. maryland, john on our republican line. caller: how are you? the last time republicans compromise they took a shellacking two years ago and learned a lesson. you have a caller who had it backwards when he said some big about extending the olive branch. this is what the republicans did -- it used as a tool against us to say, oh, look, we are extending the deficit. here's the thing with the deficit. apparently they have taking --

taken the talking points for bush reneging on the promise of ending it. but nancy pelosi, when she took office, what did she say? no more deficit spending. $5 trillion since she took office. it is all about spending. it is all about class warfare. they led us into this mess and now they want to kill the private sector by taking money from the rich. assuming they can get the money from the uber wealthy. it is not going to happen. it is their plan to destroy the economy of the usa. thank you very much. host: from "the wall street journal," looking at how long the extension of the tax cuts could last in the negotiating process. a senior republican aide close to the negotiations saying it 1- year extension of tax cut is unlikely.

the comments from twitter -- let's hear from cookie who is a democratic caller from indiana. good morning. caller: thanks, again, for your service. we love you out here. i learned so much. host: what do you think about this potential deal? caller: i hate to see the democrats blackmailed. it is just a same that the poor and middle-class over and over again vote against the their own interest. it is just a shame. i hate to see the democrats

blackmailed. i am still an obama fan. i walked on hot coals for him at least one time. i think it is pure blackmail. host: all right. let us take a listen to comments that senator kerry made yesterday. >> david, i think there will be an agreement because yesterday's vote made it very, very clear this enormous divide between the republicans and democrats. the republicans are fighting to keep in place a tax policy that has failed over the last eight years. it has failed. we have had a net loss of jobs. what we have seen is a republican party that is absolutely prepared to deny unemployment insurance to people will have been laid off who can't pay their bills, who want to put food on the table for their families, they have said no.

what -- we are willing to hold that hostage so we can give the wealthiest people in the country a bonus tax cut. what i mean by that is, people are not focused on the fact that under the democratic proposal, everybody in america got a tax cut. the wealthiest people in america got a tax cut, up to the $250,000 of income. what they are fighting for is to give those people who own more and million dollars a year a bonus tax cut above that even though it is the least effective way of creating jobs and putting it back in the economy. >> isn't it true that the president's own economic advisers said, look, you may feel like you have drawn a line on the sand, no extension for tax-cut on wealthy americans but uncertainty right now in the economy means that you could lose more jobs, you could have a worsening jobs a tuition if you don't extend these tax cuts for now, for a temporary period. >> we want to expend tax cuts for every single american, but up to a level that makes sense in terms of our economy. host: senator john kerry talked

about a potential tax-cut deal and his take on it. robert writes to us -- let's hear what dennis has to say from independent line calling from new york. caller: good morning. thank you very much. please give me a little bit of time. i was -- retired engineer. i work for three fortune 500 companies over the years and three small businesses. my answer to your question is, i think there ought to be a compromise along the lines of, say, three years for people up to a million dollars and not cut

it for people over $1 million for three years and see what happens after the president's election. or after the next, which would obeyed -- host: the 2012 election. caller: before it. give them three years to see what happens. just to give you an idea how some of these small business people were, i actually lost my job from a fortune 500 companies because of the outsourcing and i joined a very small business and actually saved them from going out of business with the technology i brought in. five years later, the owner, an older couple, who all they ever did was keep the books, they sold it and profited two million to $3 million.

as they were leaving the company and selling off, me and the other fellow who pretty much ran the place had to ask for some type of bonus. he gave as $500. and you could imagine what party they are affiliated with. thank you. host: looking at "the washington times" talking about -- talking about the potential for compromise. senator richard lugar, indiana republican, credited the president for reaching out to republicans. certainly an element of reaching out, he said sunday, and i think that has been appreciated.

let's go to new york state, edward, republican line. good morning. caller: good morning, how are you? host: do you think this is a potentially good compromise? caller: i am a conservative republican. i have been unemployed for over 99 weeks, and employment just got cut off on november 8. there is not many jobs here at all in rochester. my problem is backed -- that people are saying it is a tax cut and i am looking at it as being a tax increase. i believe you need to leave the rates the same. the united states has the highest corporate tax rate in the entire world. 27%. the democrats are saying that

the u.s. economy, you have the highest tax rate in the world, now we want to raise taxes on you, and not only do we want to raise taxes on you, we want you to hire people. that just doesn't make any sense at all. now, john boehner, mitch mcconnell, scott brown of massachusetts, have always had a plan to extend unemployment. i am on unemployment. but they want it to be paid for. there is over $40 billion in the tarp that barack obama has had that is unspent. i am not hearing a lot of people saying that this is a tax increase. this is not a tax cut. everybody's tax is either going to go up or remained the same -- a tax increase. what happened to the $997 billion economic stimulus package that the democrats passed and promised that unemployment would not exceed

8%? host: let's get a comment from twitter -- 9 "usa today" has a front-page piece. bush tax cuts, how they affect you? it visits one community in michigan to gauge the effects of a much debated policy. a look at the history of when some of these cuts actually started. percy, democrats' line, new

york city. good morning pity caller: i would like to say that people should listen to their hearts and not the john banners -- john boehners and mitch mcconnells. there are so many lies. the stimulus package did not start with obama. it ended with obama. everything that is being said that is now obama. obama was not here at the past eight years prior to his not quite two years in office. i would like you to say to the people, it is not obama's, this mess started before him. two years of democratic congress, yes. but not obama. and they need to work together. and this money -- the rich, it is the coach brothers. yes, there are jobs.

in new york we can't get jobs if you are 60 or over. and i am almost two years on unemployment. host: if you have been on unemployment for almost two years how eager you to see the benefits extended? caller: i am very eager because at 60, it is very hard to get a job. host: ok. charlotte, north carolina. independent line. caller: i just want to comment -- the rich, i just don't understand. i have the three slices of pizza and i have to give two of them up for taxes and you have a whole pizza pie and all you have to give up is two for taxes also you are telling me that is fair? where is the humanity, people? i am unemployed.

i am a dislocated worker. i look for a job every day despite what people might say. i am getting unemployment -- first of all, you pay into unemployment -- it is your money that you work for, your employer, paid insurance on you for you for. everybody is talking about -- it is your money that you worked >> we go live now to attorney general eric holder and other officials. they're expected to announce the results of an investigation this morning. >> the fbi director, john henry, as well as the united states postal inspections chief postal inspector, irs criminal investigation deputy chief, and

commodities futures trading. we're here to announce results of operation broken trust, a three and half month investigation of investing fraud schemes throughout the country and a crucial step forward in law enforcement work to protect american investors to ensure the strength of our markets and to prevent financial fraud schemes. well there's nothing new about conducting a nationwide operations and sweeps, this one is different in that it brought together a broad array of criminal and civil enforcement tools at both the federal and state level to attack investment fraud schemes collectively. operation broken trust was the first national operation in history to target the many different types of investment fraud schemes that trade directly on the investing public. this effort has been coordinated, executed, and led

by members of the financial fraud enforcement task force that president obama created in november 2009. this task force is the broadest coalition of law-enforcement, in investigatory, and regulatory agencies ever established to combat fraud. multiple federal agencies at the state and local level are working together to ensure that no stone is left unturned when it comes to protecting consumers and investors. our mission is simple, to bring financial fraud schemes to light and those who operate them to justice. are aggressive, coordinated approach is working. since operation broken trust was launched on august 16, all across the country, investment fraud cases have been priced. to date, the operation has involved enforcement actions against 343 criminal defendants and 189 civil defendants, whose

conduct armed more than 120,000 victims. several people have been charged with defrauding men and women across the country of thousands and sometimes millions of dollars. the case of this operation involved eight friday of different investment fraud schemes that have led to more than eight -- $8.3 billion in losses in criminal cases alone. these are staggering numbers. the losses represent hard earned money and even life savings in some cases. they represent needs that may not be met and dreams that may not be fulfilled. all of these victims can tell a tragic and cautionary story of being misled and exploited. often by someone whom they trusted. in fact, many of the scam artists we identified were ownying on their neighbors. several of those prosecuted during this operations solicited victim investors from their own

churches. one man in texas allegedly targeted his fellow parishioners, asking them to invest with him, and claiming that his success in foreign- exchange trading was "a blessing from god." in florida, one defendant was convicted recently for his role in an investment scam that specifically targeted the local haitian community in ohio. a former police officer operating a ponzi scheme solicited investments from active and retired police officers and firefighters. in chicago, another ponzi scheme resulted in $30 million in losses to hundreds of victims, many of them elderly italian immigrants. as a result of our prosecutions, the man who operated the scheme has been sentenced to more than 20 years in prison. many of the criminals we have identified used investor funds to support a lavish life styles. ponzin operating an

scheme in florida dupe investors from across the country and used the money to buy four seats at professional basketball games and to make payments on his personal yacht, a beach house, and mercedes. a new jersey man charged with operating an investment scam allegedly used investor scams funds to make payments on three different of three cars and to pay at least two country clubs. with this operation, the task force is sending two messages. a message to the public, you have to be alert to these frauds. take appropriate measures to protect yourself and report such schemes to proper authorities when they do occur. the second message to anyone attempting to or operating an investment scheme. we will use every tool at our disposal to find you, to stop you, and to bring you to justice. cheating investors out of their earnings and savings is no longer a safe business plan. along with the agencies represented here on stage, i also want to thank the federal

trade commission, the united states secret service, the national association of attorneys general because of their work and the contributions of everyone involved in operation broken trust, dozens of criminals who hatched fraud schemes now face significant time behind bars, including one sentence of 85 years. although this operation marks an important step forward, our fight to combat financial fraud goes on. the task force will continue working with consumer groups to increase financial literacy and to raise awareness about the warning signs of financial scams we encourage investors to by visitingnwith us fraud stop visiting -- by visiting stop fraud.com. now i would like to turn things over to fbi assistant director, john henry. >> thank you.

good morning. i would like to thank the attorney general and all of my partners standing with me on the stage. operation broken trust is a large nationwide investment fraud schemes investigation. the focus was fraud against individual investors, including ponzi schemes, high-yield investment fraud, and market manipulation cases. highlights of the pervasiveness of the threat and its impact on individuals from all walks of life. the perpetrators of these crimes are those who you might trust. friends, colleagues, people you were some good, people in your workplace people from your kid'' soccer team. ediminals have always prey on the trust of individuals with offers too good to be true. one victim of a large ponzi scheme in tennessee said, "we

were such very good friends. we went to his house often. he was a brilliant man." that's how he was able to from people for eight years. criminals live lavish lifestyles, stealing their victim's life savings and leaving them with uncertain financial futures. victims who might have to postpone retirement and find second jobs, victims who might lose their homes, victims who are left wondering, "what do i do now?" in this one sleep alone, we have investigations in 48 of the fbi 's offices nationwide. the mission of operation broken trust was two fold, to stop and bring to justice those who are responsible, focusing on 231 high priority securities fraud cases, ranging from ponzi schemes and foreign-exchange

fraud to the classic pump and dump schemes. the second goal was to raise the awareness of the general public. the american people need to understand the threat they face and their responsibility to remain vigilant. the american public is a big part of this. more americans are investigating in the securities and commodities market. as a result, we've seen more fraud and misconduct in these markets, and the creation of complex investment vehicles, coupled with the increase in the -- hasof money developegeneratd created more opportunities of fraud. there are many on going frauds. in the past three years, we've increased the number of agents by 47%. by january 2007 -- will open more than two hundred ponzi cases alone. we've had great success in shutting down these schemes and putting those responsible behind bars. there's always more work to be

done. we must continue to focus on intelligence and information staring, -- information sharing to predict and prevent these types of investigations. fbi agents and analysts are trained to identify emerging schemes and threats and we will continue to use sophisticated investigative techniques, including undercover operations, to successfully prosecute our adversaries and to find and stop criminals. the most important weapon in our arsenal is collaboration. we need the help of our many partners, including law enforcement in the private sector. there's no coincidence representatives from so many different agencies are standing here on stage. postal inspection service, secret service, the department of justice, the irs, the sec, the ftc, the commodities futures trading commission, the national association of attorneys general. together we are smarter. together we are smarter. together we will continue to

seek out those who look to profit at the expense of the hard-working men and women of the united states of america. thank you. >> thank you. today's announcement is called operation broken trust for a reason. trust is broken when a 24-year- old financially unsophisticated blind man with a disability was -- whose mother is unemployed, is misled with lies and half truths to invest the money he obtained from the very accident that caused his blindness and loses his entire investment. trust is broken when financial predators take aim at the death, the elderly, and the retired, for the unsophisticated, and convince them to invest their hard-earned money and then steal the money and squander it on lavish weddings, fine restaurants, exotic vacations, and vacation homes, as is the

case and many of the matters brought today. trust is broken when victims of investment deceit lose their retirement income, their home equity, or their home savings. repairing their broken trust is a sworn duty and obligation of the sec, an agency primarily involved in protecting investors. when we work in close collaboration with our law enforcement colleagues, represented here today and others, our effectiveness is strengthened. working together, we repair the trust by pursuing the con artists responsible for so much financial ruin and the personal despair of the victim's that sadly so often comes with a it -- with it. putting some offenders in jail, turning available funds to investors, and barring the culprits from working in any regulated industry. in so doing, we achieve more of

the holy grail of law enforcement, deterrence and the reduction of new frauds, new victims, and the amount of despair in the future. some cases make big headlines and some perpetrators are high profile. many of the cases announced today do not share those characteristics. all investments deserve equal measures of justice, regardless of who led them -- who lied to them, who stole from them, and regardless of whether it gets news coverage or no coverage. all deserve to have their chesttrust restored. honest citizens deserve this. we're all united by the principle by those who follow the rules, those who live honestly, those who save and sacrifice and invest, and those who rely on the promises of others to safeguard their financial security are the regis and respected majority who should be protected from those who would prey upon them.

that's not only principle that drive all of us in law enforcement, but is one integral to economic freedom, which is itself fundamental to democracy and the strength of our society. thanks to my colleagues. thank you. >> for more than two centuries, the postal inspection service has been committed to ensuring the public's trust in the u.s. mail. postal inspectors have worked hard to protect the public from fraud since the passage of the federal mail fraud statute in the 19th century. today, it is still one of our top priorities. postal inspectors have arrested thousands of scam artists using a variety of techniques and operations. unfortunately, those who commit the acts are just as a relentless and just as invented.

the postal inspection service have launched a number of public service initiatives. this past october, we rolled out our latest campaign, delivering trust. by mid december, we will have distributed millions of brochures with tips for spotting and reporting fraud schemes. we established a dedicated website, deliveringtrust.com. as part of operation broken trust, postal investigators investigated a new york man who defrauded many members of his church. he convinced them to invest in in electronics company, promising an unrealistic rate of return. he mailed phony stock certificates to his fellow churchgoers and used mail in money. the victims in this case were not the wealthy or well- connected. these were working-class heads of modest households. these were families whose better

judgment was hampered by the sales pitch of someone they thought shared their beliefs and values. in many cases they lost all or a big part of their savings. this meant a lot to them. one victim in this case lost over $32,000. he later told the local newspaper, "it hurts." attorney general eric holder, i'm proud of our participation in operation broken trust. you can continue to count on the support of postal inspectors throughout the united states. now i will turn it back over. >> questions? >> thank you very much. >> mr. attorney general, could you address the trends in these types of cases, given the financial situation in many households these days?

either dollars, victims, or perpetrators? >> unfortunately, a lot of the cases that are included in today's announcement are ones that are here in good times and bad. ponzi schemes, offering frauds, perpetrators engage in these across sort of an economic cycle. i do think that we see situations where, as more and more people look to third parties to invest their money, the frequency with which we might see these types of schemes is on the increase. the internet, as you see in some of the cases announced today. people are vulnerable to that sort of vehicle and the anonymity that comes with it

makes it challenging for law enforcement. i think those are some of the trends we are seeing. >> wikileaks -- the daily question period wikileaks. a treasure trove of infrastructure targets around the world which could be damaging not only to those countries but to u.s. interest. why hasn't the government just gonna hand -- just gone ahead and shut down the site? >> let me condemn the leaks of information that have come as a result of the actions that you just referenced. national security of the united states has been put at risk. the lives of people who work for the american people has been put at work. the american people themselves

have been put at risk. -- risk by these actions that i believe are arrogant, misguided, and not helpful in any way. we're doing everything that we can. we have a very serious, active, ongoing investigation that is criminal in nature. i authorized just last week a number of things to be done so that we can hopefully get to the bottom of this and hold people accountable, as they should be. >> has the government explored the ability to be able to seize the site? you cannot do that in this case. what are the primers -- what are the parameters that are limiting that and what are the actions going forward? >> it is an ongoing investigation. i can say that i personally authorized a number of things

last week. i think that's an indication with the seriousness of which we take this matter and the highest level involvement of the united states department of justice. with regard to all the tactics that we can do or can use to ameliorate the consequences of these actions, i do not want to get into those. we will do everything that we can, both to hold people accountable, and to minimize the harm that will befall the american people. >> someone mentioned this scheme involving foreign exchange. i'm curious if you can explain that a little bit more. >> vince from cftc. we're talking about investments in foreign currencies. the retail public believe they are investing, essentially, and transactions in foreign currency and making money in the fluctuation in the currency rates when in fact they're dealing with on registered

entities for the most part. the money may end up in foreign currency, but it is only in the bank accounts of the rosters -- of the fraudsters. >> how many people were arrested in these various cases since august? >> well over two hundred people in the last three and half or four months. >> mr. attorney general, going back to wikileaks, can you help us understand why you cannot shut down these web sites? is there something within the law? is there something missing within the law that prevents you from doing that? >> i do not want to get into what our capabilities are at this time. i will simply say that we have a very serious criminal investigation that's underway. we are looking at all the things that we can do to try to stem

the flow of this information. >> several members of congress from both parties have offered to contribute legislation to close gaps in big issues in the espionage act and elsewhere. are you working with the h ill to do that? >> that is something we need to look at three of the espionage act, as everyone knows, is pretty old. several court decisions cast doubt on some provisions in the act. i think people should also understand that is not the only tool that we have to use in the investigation of. this. i do -- of this matter. i do not want to get into specifics. it is certainly something that might play a role, but there are other statutes and other tools that we have at our disposal. >> the things you authorized last week, are you talking about

search warrants? can you be more specific? >> all i can say is they were significant things that i personally authorized. >> when a decision is made on how or where to try the 9/11 suspects, who is going to make that decision, you or the president? >> i think the national security team will make that decision. obviously, i will make a recommendation to the president. the national security team -- we will make that decision jointly. >> does that differ from the decision you took initially, that you made that decision on your own? why shouldn't this be your decision and not everybody's? >> the decision i announced in november of last year was one that was the product of an interagency effort. the president was brought into the decision making at that time. this is a national security matter. it is one of the highest national security priorities

that we have, making that decision. therefore, i think it's important to include in the decisionmaking process all of the key players. >> de think a recommendation on that would be any different from the decision you made back in december? >> we will see. we take into account a variety of circumstances, those that are the same and those that have changed. all with the aim of bringing to justice people who purchase -- perpetrated a heinous acts of september 11 and bringing them to justice as quickly as we can. >> political considerations? any political considerations? >> no. the only thing that guides me in the decisions that i make are what are the facts, what are the laws that i have to apply, and make -- and then make them perspective of the political consequences.

one only has to read the newspapers to see that the decisions that i make are not necessarily politically popular. i get that, i understand that. i did not go into this job with the thought that i would be necessarily a politically popular person. i went into this job because i thought i was here to do justice, to protect the american people. if that subject to political criticism, so be it -- so be it. >> earlier this year you said the decision was just a couple of weeks away. roughly a month ago you said something similar. why isn't the decision being made? >> the process is ongoing. it involves a variety of factors. it is something that involves an interagency process. it involves a number of people in the executive branch. and it just takes time. >> do you think you made the right decision initially? >> yes, i think i did. thank you.

>> today in california, the ninth circuit court of appeals hears oral argument on proposition 8, the ballot measure on same-sex marriages. after the appeals court ruled unconstitutional the ninth circuit agreed to feel the case. live coverage at 1:00 p.m. eastern here on c-span. later former new york times editor will join nbc news washington bureau chief mark whitaker on the changing nature of journalistic responsibility in an era of new media. from the council on foreign relations. it begins live at 6:25 p.m. eastern right here on c-span. >> middle and high school students, and you work on your documentaries for c-span's

studentcam compass -- competition, there are a few tips. >> one of the things i look for is you, the student. i want to see you and your personality, and that helps make your video stand out from all the rest. >> what i'd like to see most in the studentcam entries are a real investment and care in the topic that you will be telling us about. the sure to be interested in what you are telling us. if you are not interested in what you are presenting, and chances are, we probably won't be, either. >> 1 tie-breaker for me a lot last year was the requirement of using c-span video. i am looking for videos where people have looked at the c-span content and said, what elements of c-span video make the most sense for telling the compelling story i and trying to tell? >> for all of the rules, including deadlines and price information and help of loan your video, go to studentcam.org. >> an update on the u.s. housing market from today's "washington journal."

yun is chief economist and senior vice president of the national association of realtors. are you seeing any signs for optimism? guest: let's remember, we had a home buyer tax credit stimulus throughout last year and the first half of this year, so the home sale activity has been respectable. i will not see great and good. respectable during the period we have the tax credits and once the tax credit and we saw a sharp op off. in a couple months we have seen the natural revival given the job creation, very high affordability conditions, meaning that the mortgage rates are very low. so, we have seen buyers returning to the marketplace. host: you are looking at numbers, the state of the u.s. using market, international association of realtors. existing home sales in october down 2.2%, pending home sales and october up 10.4% and medium

sales price about $170,000, down nearly 1% from last year. what do those numbers mean to you? guest: existing home sales measures act of the closings. signing at the closing tables, getting the keys. the pending contract refers to contract signing that is not yet closed. given that it rose 10% implies that months of november and december could be a little that -- a little better than people anticipated. of course, with the normal seasonal downturn in the winter months but perhaps of this winter when not be as bad as what we encountered in the past. host: have you seen a number like that in the past year, pending home sales rising so much? guest: that would ba very sizable ju so i was quite surprised and welcoming the figures. remember, coming off a very depressed level. obviously there is additional

10% increase that needs to occur to say that we are back to more normal, sustainable, market conditions. host: you mentioned the tax credit went away. what sort of efct has that had? did it play out like you expected? guest: i think it did its intended impact. the intended impact was to stabilize home values. right before the tax credit went into effect -- it was falling in a double-digit pace. a sense of the tax credit became available last year, home values largely stabilize and have to remember last year there were 5 million job losses, but despite the five non in job losses home sales actually rose. so, that was a stimulus measure of bringing the buyers back into the mart, stays up -- stabilizing home values. w the tax credit went away -- it should not be extended, should be short-term measure -- now we are sing the natural market forces -- job creation,

affordability. people are becoming more comfortable buying a home. host: was a precipitous drop off after it ran out? because the incentive may have given re people that normally would have a move rward on first-time home buying? was there a backlash or pendulum swing? and how severe is that? how lasting? guest: compared to june -- june was the last month the tax credit was available. then we went over to july and there was a huge tumble, about 30% climb in sales. that is naturally expected because we have to rember that consumers are smart and they see the money on the table, a thousand dollar tax credit to close in june, no money available in july, therefore people rushed and so there were fewer people on the pipeline in july and august but we had the big drop in july and august. but now that we are about six months after the tax credit and as we are beginning to see some healing process. the skull --

host: our guest is from the national association of realtors, talking aut housing trends, guesses on home sales and mortgage foreclosure price is going on. at the numbers to call -- we got this from your web site -- realtors say mortgage interest deduction vital to homeownership and the economy. talking about the mortgage interest deduction being on the table out as something to negotiate over at a place to maybe rain in some of the tax cuts that americans get. tell us your opinion? guest: we have to remember the mortgage interest deduction has been in place for about 100 years. it is not a new tax break that suddenly occurred in the past 10 years. it has been arod for 100 years. americans are accustomed to it. bass middle-class homeowners

have benefited from it -- vast middle-class homeowners have benefit. great for the middle-class who want to move up in their career, thr family life, to have the access to buying a home because of the mortgage interest deduction. if that is taken away, natalie, that will hurt the middle class from becoming property owners in the u.s.. so, something that is in place for 100 years,i would say it is a issue in the tax code. host: dallas, texas, where catherine johnson is on the democrats' line. caller: how are you doing today? $8,000 tax credit. what happens with that is that it expires -- you have to pay it back eventually after the third year. host: talking about the first- time homebuyer credit? caller: the tax credit with $8,000 offered last year? host: that is now off the table. caller: after three years, that

is what i have been told because people i know in my job have gotten it. but in housing, it does not matter about giving any time -- kind of tax credit. any kind of tax credit because if people don't have jobs they are not gointo be able to keep their houses. in my neighborhood, i work hard to pay for my house but i have so many foreclosures. i am not sure how the housing market is booming when people don't have jobs. guest: the intent of the tax credit was to stabilize the housing market. there was a steep downturn in the marketplace and we have to remember with 5 million job losses last year, that is a severe economic stress. but nonetheless, there are 129 llion americans with jobs. and some of the people with the financial capacity may have been holding back, sitting on the fence. but the idea of the tax credit was to say here is money on the

table, let' change some of the psychology about the housing market conditions. if people enter the market, it will help stabilize the prices. stabilizing the pris will help limit some of the foreclosures. if the prices have somehow clined 10% or 20% additional rather than stabilizing, we would be at much larger foreclosure prices than the much higher level we are currently encountering. host: catherine mentioned homes in her neighborhood being foreclosed upon. what is that doing to the optimism that americans have about buying a home and be able to stretch to afford it? guest: at the beginning stage when foreclosures were rising, saw much hesitancy with buyers. they did not want to buy distressed buyers. then over time the buyers became more comfortable buying distressed properties because that is where the deep discount of prices were occurring. buyers entered the market. hours -- our sales data and lied

that one-third home personages today are distressed -- our sales data implied that one third home purchases today are distressed. all bad loans are made during good times. the defaults that are occurring ramon's originating back in 2005 and in 2006. recent of origination, they are performing super well with very low default rates. that -- but because of the past mistakes unfortunately we have to go through the process of distressed sales. host: let us go to stefan, independent line. caller: i basically have a comment on your conversation earlier about the benefits, tax cut negotiations. it really shows how out of touch the republicans are with mainstream society when they want to give tax cuts for people who have more than enough money and there are millions of people

with no money, th are hungry wi no place to live and you really have to negotiate with them whether to get unemployment benefits and you have corporations and thousands of other people who are just living free and they don't really have any income issues. host: to pull you into this conversation we are having, what do you think about the brakes and a tax code for home buyers, for those paying mortgages? caller: i think it is fantastic. anything you can to help regular or people out there who are just having a hard time. it is a good idea to help people don't have any financial issues, it shows how out of touch the republicans are because a lot of the people who did not have monetary issues bid, there are people who cannot feed themselves and we have to negotiate whether we should give them type of help. host: let go to tyrone who is a republican in louisiana. caller: how are you what -- are you doing this morning? i want to ask you a question

concerning the federal reserve in all of this. it seems to me it seems to me that if we follow the constitution and that the congress print currency and regulate it, then when they want to make tax cuts, it is fine for the people who are having trouble with their housing. but we could get a handle on it if the congress would take the money, regulate -- and if we don't like what they are printing the money for spending on, we can vote them out and protect themselves from what they are doing with our money. they are supposed to be of the people, for the people, by the people. they are supposed working for us. host: the federal reserve is an independent agency here in washington. they are supposed to be immune from any political pressure or pressure from the administration or congress and they determine how much money to print or set the short-term interest rate policy. right now they announced

something called qeii, quantitative easing two, printing the money, because they perceive the number one priority of the current economic times is to stimulate the economy and create jobs. that is the intent. in other countries where you have the legislature in control of printing the money, you often see that they tried to balance the budget by printing of the money but there is no free lunch. what generally occurs is there is high inflation which at sometimes turns to hyperinflation. so, the lessons of the past is, if the political players control the money supply it may lead to short-term benefits but there is always a long-term harm resulting. the u.s. is in a very unique position having an independent federer reserve. europeans also adopted the u.s. method having the european centl bank being independent of political pressure. host: let us take a listen to comments federal reserve chairman ben bernanke made last

night on "60 minutes." >> it doesn't seem likely we will have a double dip recession. it is because, among other things, one of the most cyclical parts of the economy, like housing, are already very weak and they cannot get much weaker. host: federer reserve chairman ben bernanke. what is your reaction? guest: right now holding mart is trying to stabilize under its own powers. i did some calculations about the people who want to buy a typical home in the u.s. back in 2005 versutoday. what one finds is that if a person was to buy it's a book home today, their monthly mortgage payment would be lower by about $500 compared to five years ago. and that $500 saving is not a one-time saving but it is occurring every single month. it is a great affordability conditions.

and this will steadily induce buyers back into the market. we are in a job-creating environment. we have a long way to go t we created about 1 million jobs since the beginning of the year. the combination of job market, affordability condition, i think this will steadily help stabilize the market. host: senior vice president of research and chief economist of the national association of realtors is our guest. france is on the democrats' line from indiana. caller: good morning. have i got something to tell you? we just got back from floda. we went to cocoa beach to see my mother in law. we went to mcdonald's and when i was standing in line there was a guy from massachusetts standing behind us, and my husband was from massachusetts and they got to talking and you would not believe what he told us. he said that he was on line in massachusetts, and he put a bit in a on a property, two-bedroom

condo, take a bath, 4 $5,000. it was a short sale. then he went to the next one, 17,000 -- this is bids he is making. did it 20,000. it $200,000 condo. and they sold it to him for 20,000. okay, i got a 20-year-old son, i am going to buy another one. he bought one for 58,000, the bids went up to that amount. so, he got two condos worth $400,000 in cocoa beach. water on both sides. one of the most gorgeous beaches i have ever seen and bought them for less than $80,000. it can you imagine? all you have to do is go on line, buying these properties, selling short through the banks. this gentleman you have as a guest, i wish he would talk about the short sales and how people with money, cash, can buy

property right now for 10 cents on the dollar. guest: we have seen particularly in a very distressed mortgage -- like florida, las vegas, parts of arizona, where we have seen the buyers' rush in for the exact reason you mentioned, that home values have fallen so much, because the construction is much greater than buying the existing standing home already in place. people are recognizing the value so they are coming into the market. one hurdle that people faced with trying to obtain a mortgage. the underwriting standard, the pendulum has probably swung too much toward strict -- very lax during the boom years and we do not want that condition ever again. but the underwriting standard maybe perhaps too strict, which is the reason why we are seeing greater percentage of all cash purchases returning to market.

but the caller is absolutely right. in some market, total bargains out there. and often with a multiple bids process. host: on twitter -- tell us about the tax credit? guest: the very early phase of the tax credit back in 2008, it was something people had to pay back. in 2009 and change the codes as a people do not have to pay it back. people who made the purchase -- i forget the exact date, february of 2009 all the way through june of 2010, this is a pure $8,000 tax credit they do not have to pay back. host: jack, independent line in illinois. good morning. caller: i have a couple of questions for the gentlemen that hopefully he will answer.

since the backbone of capitalism is kind of supply and demand, i do not understand what the people -- corporations to get him on this tax cuts and there is no one to purchase their products, i can't think of one intelligent business person who will create one single job if there is no consumer with money. and i believe in the long run, consumers pay all taxes in the hands. i don't know any business that has a tax money tree out back where they just go pick up and send it to washington. it all comes up from consumers. so, i did not understand why middle-class an especially low income are not getting the tax cuts because they will spend the money. money. guest: regarding the overallax code, reasonable debe on both sides. but the home buyer tax credit is

directly aimed at middle-class home buyer. first-time tax credit or the young family starting their careers. our data shows that about 45% o the purchases of first-time buyers. first-time buyers typically have income lower than national median, talk about people right in the middle, low or middle class. but underwriting standard has been very tight and therefore people are getting into the market, having financial capacity. anotherrend we are seeing in recent market conditions is homebuyers to t want to overstretch. they want to stay well in their budget which is another reason why i think the rate originated are very low. host: talk about the idea of stretching to afford a mortgage or not stretching. what impact does it have on the market? our buyers looking at a

different kind of property? guest: you have to remember that this dece, the housing market boom and bust, unprecedented. we have never seen such activity in u.s. history. why did the housing market bubble occur? essentially a credit market bubble, the money was available for anybody who wants to buy home. it was the credit market bubble that led to the housing market bubble. the old-fashioned way is to go to the bank and say i want to buy a home and the banks would say show me documentation. that was the old-fashioned tent -- checks and balances. now we are back to old-fashioned underwriting standards -- banks are saying, no, you cannot overstretch. independenofhe banks we are getting a consumer survey report showing people what to buy smaller homes, want to stay well within their budget.

rather than buying a home -- line host: from "the new york times." a report that during the great housing bubble -- guest: absolutely, the case o people who may not have under normal circumstances able to buy a home, given the mortgages a as a result there was additional excess of demand that skewed the prices. now recognize that people overstretch the their budget and some cases banks coming out with a very, very long documents, very difficult for the consumers to understand what they are signing.

the payback period -- very unfortunate the housing market crash. host: have you visited any neighborhoods in the u.s. yourself that have had the foreclosure epidemic happening, where there are blocks and blocks of homes dotted throughout the neighborhood that are being foreclosed upon or which are now vacant or in hands of banks rather than in the hands of a homeowners? guest: i would say i go out in the field about 50 times a year in very different places -- st. louis, las vegas, all different parts of the country. in just about every place, and countering economic difficulties, job losses. foreclosures are high. in some neighborhoods, very high. one sees a subdivision being built, but halfway through a completely stopped. now you have a situation where there is a line of vacant homes. but the previous caller mentioned the discount prices. .

they are getting some return, so we are seeing the market forces inducing buyers to buy those vacant homes. host: steve, republican in boise, idaho. welcome. caller: good morning. how are you doing this morning? it is pretty cold over here. i got a question for you. one thing i noticed the first two times, back in 1991 and in 1992, as well as this time, from 2007 until now, is the false reports given out about the housing market. what i mean by that is you gave it you -- give out existing

house reports, in the summer and spring time, and then give out new housing reports in wintertime which causes panic in the market. number two, all the major problems that appears in the housing market is that you guys, the realtors and the brokers, all right, all through 2000's -- anybody says they did not see this, and should not be there in the first place. you guys inflated the heck out of prices to all of these contract in businesses that preyed on saturday morning cartoon contractors. you guys just bringing up the prices. anybody who says by 2007 they did not see this crash coming around the corner should not even be in it. now, i am -- on a double-dip

recession, because this housing market should be lowered much for that and capped at 2% for the next 30 years. host: did not mean to cut you off but we did get your point. yun to hear his response. guest: just on the data question, there is monthly data produced by the processes from the federal reserve,ç except on the credibility. new-home sales released by the senses. both are released on a monthly date -- basis. you can look through the website for that data. regarding the housing market bubble, as mentioned, prior to this decade, there was always a natul checks and balances. some young couples wanted to buy a million-dollar home. they did not have the necessary income and they had to do the old fashioned way, stay within

their budgetç limit, and in orr to trade up, demonstrate credit history, equity built up. then we have on the housing market bubble which was fueled by the credit market bubble. wall street came up with complex mortgage securities, collateralized debt obligations, charges, many people did not understand the concept, but the money flowed into wall street, and wall street subsequently lend money to bank of ameca, çciticorp, and because of the loose credit writing standards, people should have waited a few more years to get their down payment, develop their credit history, but they got their loan right away, and we had this unfortunate situation where the prices were rising 50% while the income was rising only 4%, off of a percent sign.

-- 5%. i would suggest, i would think thatç the normal average of 3%o 5% annual return is something likely to take place once housing normalizes. we are not there yet in terms of normalizing but we are approaching. middle of next year, we may get there. host: loretta in cleveland, ohio. caller: how are you this morning? çhost: we are fine. go ahead please. caller: i was really finished when president bush came out with his ownership society program. the ownership society program was his effort to reach out to the low and middle class

consumers, first-time home owners. host: why do you say you were finished? caller:ç republican do not do anything they do not expect a return on. look at what we got. it fattened up america for slaughter. it was a factory. they passed all the people through there. they did not care whether any of the information was correct. most of those alications for mortgageç loans, it was the agency that added and tweaked it to get it through. it is sad, when you look at how the system is set up, all we have is a pool of consumers.

the way bush ran the past eight years, his billionaire buddy is, you were just passed from one to another. then wall street came. they are sll making their money off of us. çguest: home ownership rates historically has bee about 65%. there was a continuing upward trend from 65% through the clinton years and halfway through the bush years, reaching zero most close to 70%, now it is closer to 66%. so we are returning to the home ownership rates that were historical. we need to keep in mind, not çeveryone can own a home in tht particular stage of their life. if property can be sustained, within their budget, iis good

for them, owning a piece of america, but it has to be sustainable. people who own a home should be able to stay in their home, not where they are overstretched and subsequently foreclosed upon. host: critics say it is creating an unrealistic goal, theç potential for everyone toe a homeowner. it can lead to a problem of people not prepared to take that risk, taking it nonetheless. guest: we need more responsible home ownership. there is a habitat for humanity's program, for example. you have families who cannot get a home through the traditional channels, and you see the joy that they have when they are gen a home, soç we want to do things to extend this

feeling of home ownership. these types of things are showing that, yes, people can stay in their homes. however, these complex wall street products that say, let's lend to them, as long as housing prices go up, housing prices will cover the cost. of crse, the price of houses went down. mqi lawrencyun is the senior vice preside of research, chief economist for the national association of realtors. james on twitter says -- do you agree? host: in a normal stable market,

there is -- housing on to the north, they buy distressed property and they fix it up. that has always been the norm. what was unusualç in the housig market, people were buying property without seeing it, without putting 1 foot of equity, hoping to flip it within six months. so we had huge amounts of buying activity with the intention to fix it, hoping thamarket forces would naturally push up the price. many people lost money just trying to flip a property. the old fashioned way of raising values, that is still working today. host: james in chicago, illinois. it independent line. çcaller: please do not cut me off. i have three statements i want

to make. inflated mind power and led to inflated cost. why don't we talk about the inflation of cost, instead of talking about how the value of the house is going up and down. it is a sad thing. it is something for someone to live in or something for someone to sell off later. çbecause i can get a loan for $100,000, the person selling the house wants it for $100,000. this goes back to the tax breaks. if i pay less taxes, i pay more money into the economy. we have had lower taxes for the upper echelon of the economy

for, nine years now? the economy has been going down. when taxes were higher, the economy was getting better and we were saving more money because we were responsible. çguest: the caller is right in terms of the value of the home. historically, it was the cost of construction. he looked at the material and the cost of constructing a home, a margin for homebuild prit, and that wasthe value of the home. historically, over time, it rose 3% to 5%. what happened in the boom was lenders were giving excessive loan amounts, so home bodies were being put above the normal correlation betwe cost of construction and home value, so you had allç of this artificial inflation. that has now come down.

home values have come down to their historical level now. host: story from upi.com -- çguest: 91 third of home sales activity has been distressed loans.

we were encountering a paperwork problem from the banks, and it was the bank's mistake. they need to correct it. we have to recognize, many of çthe distressed properties, homeowners who have not been paying the mortgages for 12 months, unfortunately, has to go through the foreclosure process. we need help the buyers coming in, and we have seen that. the interruption coming in, maybe for about three months, maybe we have a residual impact of that process, but in large part, foreclosures are being started. many of them are vacant homes or homes where the owner has not been making a payment for a period of time. it has to go through the legal process. people who said i have a

property, understanding that i would make payments, but if they're not making the payments, the foreclosure process has toç go through. host: monday in new jersey. caller: i am listening to all of this and i remember, he did not have to be an economic genius to see what was going o it all comes down to grade. everyone stop there and in the pot. everyone was happy to take the money out, but nobody wants to stand up to the plate and say, i made a mistake, i was wrong. host: since lawrence yun isç wh the nation association of realtors, do you feel like they are partially responsible, too? caller: the value of a home is

what it is. if it is $100,000, then in ballooned up to $600,000. if you knew he did not have the money -- absolutely knew it, and they still sold in the home. they walked off with a profit and said -- they cannot afford it. and then they were off to the next guy on theç street to buid him. host: what is your response to that? guest: in the home buying process, there are many players involved. there is the mortgage underwriter. historically, there w a checks and balanceso say that you cannot overstretch your budget. that was broken during the housing market bubble. also, some of the people involved in the transactions,

realtors who wereushing their clients to overstretch was unfortunate. one thing we find with successful realtors compared to non-successfulç realtors, the successful ones are the ones that get their clients throu referrals. they have served their clients well, so they are getting friends and others referred over to them. they have to serve the client's interest over the long term, not about that single transaction. from a consumer's point of view, they need to talk to people. which real-estate professional has treated them well? host: olney, maryland. chuck. caller: i get so tired of the bush bashing, the partisanship, but if you look back, the

community reinvestment act, that is the start of where this happened. you look back at the last çcaller, which is true. when you buy a house, real estates in the bubble were going way beyond the parameters of finding comps. they were going out six, 10 miles to find a home that they could comp. then a home appraiser says that it can sell for $840,000. they put the stamp on it, then they go to the banks and lenders. çthe people cannot afford this process. they raised their levels of income, they go back to look at their assets nurses in come to say that they can put more or less down.

a great big circle where everyone was trying to make money. if you look at the guarantees from a.i.g., fannie mae, freddie mac, from buying all the mortgages, and you have these creative people in the investment world that said, if we can do this, we can find a way to sell these and make money. the whole thing mushrooms. the government got what they !wm'>u(uy home ownership, but a lot of people cann afford a home. guest: very good analysis. the one thingç i would disagree with is the community reinvestment act. that has been in place since the 1970's. to suddenly say that only during this decade it caused a problem , and more of the study is coming from think tanks, academics, say that the community reinvestment act was

not necessarily because of the bubble. i will sympathize with your view that some government policies -- there was a mandate to buy mortgages from low income neighborhoods. therefore, fannie and freddie were chasing mortgages where buyers were not necessarily apply credit quality. another reason whyç is because fannie and freddie became arrogant, created this hedge fund portfolio, having good times while the home owner can suffer. that cannot continue. there needs to be a fundamental restructuring of what the >> today in california, the ninth circuit court of appeals hears oral arguments on

proposition 8, the ballot measure banning same-sex marriage that voters approved in 2008. after an appeals court ruled unconstitutional the ninth circuit agreed to hear the case. live coverage at 1:00 p.m. eastern on c-span. a little bit later former "the new york times" editor mark wheat will joint mark whitaker in a conversation of the changing nature of journalistic responsibility in the era of new media. you can see it here on c-span. >> the c-span networks, provide coverage of politics, public affairs, nonfiction books and american history. all available to you on television, radio, on line, and social media networking sites. and find our content any time through the c-span video library. we take c-span on the road with our digital bus, local content vehicle, bringing resources to your community. washington your way, the c-span networks.

created by cable, provided as a public service. and at his annual state of the nation address, russian president dmitri medvedev warns of the potential for a new arms race if the country does not reach an agreement with the west on a new missile shield. most of the speech concerned the russian economy and outline the government's domestic and foreign policy agenda. this last about one hour and 10 minutes. >> [speaking in russian" >> [translator] -- dmitri medvedev. ♪ ♪ please, be seated.

dear citizens of russia, is deemed deputies, and members of the council of the federation. a year ago in this very room that i presented my political strategy, relying on the values of democracy and modernize the economy and create incentives for progress in all areas to raise a generation of individuals that would be free, educated. also to raise the standard of living of the people in this country to a new level. to reestablish russia as a modern world power that has achieved successes based on innovation. modernization in this country began amidst a difficult period

of time for the whol world. it was a time when the world was struck by a global crisis, and also last year, who were in the middle of an unprecedented heat wave and forest fire, and yet despite all the difficulties, we on the whole have been able to do quite a lot, and i'm here to thank everybody who made a contribution to the rejuve nation of our society. we were able to stabilize our economy following a significant decline, and this year, the economic growth will amount to 4%, although the prices are food, unfortunately, the world over, the prize of food has risen and prevented inflation from increasing rapidly, the three year goal is to reduce up flags to -- inflation to 4% a year in order to mitigate the consequences,

almost 150 million riewg les were allowed and to establish this important area in t rural areas and improve the living in the regions from falling, and i will keep an eye permly how -- personally on how that is going. we have unemployed indiduals, 2 million fewer than at the crisis which in itself is a significant achievement. the sovereign debt is minimal. the current level of russia's international reserves, and that is almost $500 billion is considerably higher than in late 2008. following anticrisis measures that were unprecedented, we are now transitioning to what is now

a more balanced budget policy. regrettably, the budget deficit still remains high. we will reduce it. all the leading world nations have taken on identical commitments and obligations. of course, the economy remains complicated, and some of the consequences of the crisis have not been overcome yet, and this has to be said directly for what it is. however, we will comply with our social obligations in an unconditionble manner. the real population income over the last few months have grown by roughly 5%. for the next year, the wages of individuals employed in budget funded areas will be increased and targeted programs to provide housing to veterans and the

military are being executed. we're finding opportunities to annually increase pensions, and the stated goal, goals that was stated by me to make sure that all pension is receiving titles that are at least as high as the assessment that is civil. that goal has been accomplished. .. > translator: for a small buness in the production or social area, wo year

transitional period will be provided for where the contributions to the health system will be effected at a lower rate. that of 26%. [applause] >> reporter: during this year, we have been purposefully working to implement projects in what are the main areas of technological modernization. our goal is to increase the energy efficiency of the econy by 2020. this goal is feasible and realistic. i have no doubt about that. what it will do, it will reduce the industry expenses and save the personal funds of he individuals in the first place which could be the most important thing in terms of paying for housing and utility bills. and we have discussed this issue and reached the main conclusion. in order to prevent continued deterioration of the utilities and at the same time to more

effectively use energy, private capital needs to be engaged more actively in the housing and utility sector. i have issued appropriate sections. i would like to say we have scored certain successes in the high-tech area. the nuclear power industry is now once again building on a regular basis and annually putting into operation facilities. currently nine energy units are being built in the country. and russia is implementing projects in india, iran, china, and other countries. over the last three years, the contracts with the nuclear power industry with the machine building industry have increased by a factor of 10, and compared to 2005, a factor of 25. that is a very nice number. [applause] > translator: that of course also means budget director and

employees for the industry. another subject. as far as the world rating, the so-called top 500 of the super computers, currently comprises 11 russian systems. next year, the prductivity of the domeic super computer will increase by over 150%, making it one of the most powerful computers in the world. before the end of this year, the group will be completely formed and over the next two years, the construction of the principal digital navigation maps will be completed and the systems -- systems satellite navigators will be applying and available. over the next year, digital access to the mandatory tv networks will be made available

in most borderline areas. we have the broadcast network. this year we have taught the worldwide web to speak the russian language. it's important for the country, the rf domain is open and increasingly popular. quickly so. also we have started implementing a new strategy in the russianpharmaceutical industry. during the next few years, the sre of domestically manufactured pharmaceuticals are -- is to be increased from 20 to 50%. whereas innovation medication -- innovation-based medication will increase to 60%. it will make medications more accessible to the public. i hopethat the exports of pharmacticals will become an important revenue item for the country.

the most well known innovation project is the caucasus center. the project is already becoming reality. there's a -- there's a management eam. there's also a special note that has been passed which is unique preferences for those that are part of the project. there are proposals from private and government companies who are ready to start working at early as today. i'd like to emphasize the text benefits and breaks and the government funding for research should be made available to any and all who have ideas and who meet the established criteria. in addition, over the next three years, we are planning to spend about 30 billion right els along with industrial companies. it is not small potatoes. in the event of success, we ill

need to increase the funding for the program. another project that's important, is the project that involves turning moscow into a major internional financial center. responsibility for! -- for implementing this project sits with the federal entities, and the new mayorf moscow. the work is already being contributed to by the major russian and foreign financial institutes. i am positive here too we stand a good chance of success. also, the benefits of having an effective financial market will be obvious for both the public anthe companies who will be able to take advantage of the entire spectrum of modern financial services. obviously for the hole country of rssia due to the flow of capital in taxes received as a result of expanded economic

activities. indeed, a great deal has bee done. if, ofcourse, we look at it om the perspective of just one year. i hope that everybody understands that we are still at the very beginning ofthe road. the resources that we have available to us have to be used not to patch up but to modernize the economy, to create new, competitive goods and services, to create millions of new jobs, to create a demand for innovation to promote, to expand professional and social prospect of our people. i'm instructing the government to spend at least half of the saved expenses, as well as part of the additnal revenue in the federal budget to support modernization priorities. [applause] >> translator: what i'm referring to are the well known increa