♪ [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> you are watching c-span, presented as a public service. here's what is ahead. live programming gets underway in about 90 minutes, looking at monetary and economic policy. it gets underway at 11:30 eastern live right here on c- span. today's white house briefing with robert gibbs. we expect him to talk about the reported deal reached last night involving tax cuts and unemployment benefits. that is scuttled for 12:45

see it live you can' here run c-span. the center for american progress it discusses u.s.-china relations and you can watch that live from here on c-span3. >> as you work on your documentary, here are a few tips from our judges. one of the things, look for when watching your videos is you, the student. i want to see you and your personality. that helps make your video standout. >> i like to see a real investment and a care in the topic that you will be telling us about. be sure to be interested in what you're telling us. if you are not interested, chances are we will not be, either. >> i tiebreaker is using c-span video. i am looking for people who have

looked at the c-span content and seen what makes the most sense. >> for all of the rules including deadlines, go to studentcam.org. >> a discussion now on the rules of journalism in the area of new media. speakers include clark hoyt and mark whitaker. scott simon is the host of this hour-long event. >> if i could please ask everybody to take their seats. good evening. i want to welcome everyone to

tonight's special meeting. to be clear, i'd like to thank every meeting we hold here at the council is special. but some are arguably more so. tonight's qualifies. first, partnering with national public radio and the president. npr is smart, global, and is not limited to sound bites. it educates and it is a bit of a throwback to the era of broadcasting rather than narrowcasting. secondly, we are here to honor dan shore. welcome. most of you think of dan is a

distinguished journalist. that youderstoandable would do so. we like to claim dan as one of our own. third, the subject of tonight deals with new technology in the digital era. for us, it is a priority. it is apparent that -- in our websites, cfr.org. it is inherent in our facebook and twitter technologies. the current issue of "foreign affairs," there is an important article on digital disruption and deal economic consequences -- and geode-economic consequences.

at a senior -- we have a senior fellow working on these issues. this is part and parcel of the economic and political agenda. tonight's meeting cannot be more timely. the title is new media and new standards. where does quality-control come from? how do we know who to trust? how do we insure the quality -- that quality journalism is feasible? can it be done for profit? what role does government have? do we have to look to non- profits to step bein? intentional non-profits. [laughter] work with the year. -- work with me here. as someone who was part of the council on foreign relations,

which we think of as an important example in civil society, sunlight is said to be the best of disinfectants. it is necessary to have this openness if we're going to carry out the oversight to fill the obligations of a citizenship. i am a former government official. i'm mindful of the need to balance any consideration of openness against the need for secrecy and confidentiality. would have to protect intellectual -- we have to protect intellectual sources. the idea of open covenants is a prescription for diplomatic failure. it is what to do about this tension. we can't agree to prosecute leaders, but what about -- we can agree to prosecute leaders. do we discriminate between "the

new york times" and wikileaks? what kind of rules do we need? these are some of the questions that one could ask and one will last. and with mark whitaker and clark hoyt scott simon and scott simon, i expect we will explore these questions with sophistication. speaking of sophistication, i turned my floor over to the president and ceo of npr. [applause] >> i want to recognize lee shore. i am so pleased to see you here tonight as we remember her incredibly wonderful late husband and my former colleague, the great dan schhore.

cedric is about the changing nature of journalistic responsibility in the area -- in the era of media. this is top of mind to me at the moment. we are about to undertake our first top to bottom review of our new standards and ethics since 2004, in part to address the changing media landscape. we're going to put together a task force for people from inside npr and public broadcasting including some citizens. we are going to be asking a lot of questions. some of them are -- what does it mean to practice journalism with integrity in the media age? how are old-fashioned virtues of accuracy, fairness, and balanced record -- represented in a tweet? we have greater opportunities

than ever before to express ourselves, to have a voice. what new responsibilities come with those responsibilities? how can new media helpless be more transparent than ever before? how can digital media help us to forge direct relationships as we have begun to do at npr with our audience in ways never before imagined? to have conversations with our audience about how this story is reported, about the challenges, the limits, the on answer unobtainablehe o source. this is interesting stuff. there is no one better to get us to those answers then to mr. will million-plus twitter followers himself, scott simon. how many twitter followers?

>> i know them all by name. >> they are all your own personal friends. scott recently celebrated 25 years as a host of "weekend edition saturday," the show up probably listen more than any other show on npr. scott is an extraordinary journalist, a great storyteller, and author of multiple books, including his most recent book, "baby, we were meant for each , and a a super father call super colleague. [applause] >> thank you. always good to see lee. the new set up this conversation as a testament to dan by

reminding people that dan schorr was not a fuddy-duddy. he was not somebody who said that things are always better in the old days. he enlisted the old days included a lot of mendacity and closeness and simple deception. when he began his extraordinary career, an amazing 70 years ago, band often noted he cannot be hired for several years because he was -- dan often noted he could not be hired for several years because he was jewish. african americans and hispanics as employees were rare. he was training for a great news

organization -- i cannot remember which one it was. the most esteemed one of its time, i am sure. he cabled that the leader of everybody has a first name in this organization. what is his first name? he said, he is japanese. japanese people typically have just one name. and then they said, need his first name for story. thinking quickly, dan said ahmed. when i checked last night, he is akmed sakarno. desperation is sometimes the mother of invention. in the old days, the 1930 's 1940's, what is this new thing called radio going to do to journalism? news can be reported

instantaneously without the chance for reflection but esteemed journalists. welk merit events be considered with news? -- will mirrored events be considered with news? it can't responsible journalism respond? today, everybody is wondering as people report the news around the world themselves. with their own camera and their own phones and their tweets and messages. dan schorr is not a fuddy-duddy. when -- dan was one of the first to sign up with twitter. he saw that new technologies were first and last, a way to reach new people. they were an inspiration, sometimes a caution. but first and last, a challenge.

let's turn now to clark hoyt, the editor at large to bloomberg news. and mark whitaker, from nbc news. shall we talk about wikileaks first? let me mention it this way. three or four years ago, there was a story that came up and we were in a meeting and dan said something like, if this had been the case of watergate, we would not been able to of report that story. someone said, you folks have to come up with something better than watergate for people in my generation. we were not around for watergate. richard nixon to us is a guy who opened the door to china. we now know that he probably did nothing worse than people in any other administration did.

he just got caught by journalists and ultimately by other politicians. if you guys are going to make some of these principles of journalism worth defending, please come up with something new besides watergate. so let's turn to wikileaks. we often talk about the chilling effect. is there a chilling effect when stores like this get reported from data that is just released? to the american people have the right to say that you're casting a chilling effect on people who are practicing diplomacy in the name of my country? >> sure. i was having a conversation with someone in the state department. they're almost will be a chilling effect on diplomacy. inon't think this equates any way with watergate, which we remember it brought down a president. this does not have that potential in it in anyway.

while that may have a chilling effect and cause diplomat to do their business in some different way, i think you could look at wikipedia with what they have released -- wikileaks. >> wikipedia , too. >> and help responsible news organizations like "the new york times," how the have handled it, and you could say it reveals some encouraging things about u.s. diplomacy that is educational for the american people. and also for those for those who believe that we can't move everything in the world but our will, i think it shows the limits of american power and the limits of american ability to control events. those are good educational think

for the american people to have. >> what if there is but said the pakistani government who has some information about the insecurity of nuclear weapons? and he is reluctant to talk to someone in the american government because he said, you cannot keep the fact that muammar qaddafi has a voluptuous ukrainian nurse a secret. how are you guys going to sit on this? >> i think the primary reason that he might ask the question right now is not that the "new once the have action and it was the u.s. government created a communication system that allowed a private person in iraq with nothing to do to take all this information off a hard drive.

i think that as a citizen, a kind of hope it's sort of does have a chilling effect in the sense that as much as i still think we journalists need to do our job and we need to bring important information that the public has it right to know to the public, it disturbs me that we have all this information floating out there in the government that made it accessible and that way. so, that is actually more harm potentially to be done by that than anything that journalists did. >> the fact that it was so easy to find. >> they thought after 9/11, by creating more sharing within the government that it would be easier to go after terrorists. they did not do it in a very smart way, if bradley many could sit there and get all this

information and pass it along. -- bradley manning. >> is that passing the buck along? >> the other thing that is different with this situation is that this was not the result of what the papers and other news organizations that have gone with this, wasn't the result of their own reporting. it was something being doumped laps.tiir somebody who thought was a specific policy agenda that was wrong headed that somehow the american people needed to know about because perhaps if the public did know, they would do something to stop it. i'm not quite sure what the skype -- we didn't know what men are.g's motives it strikes me he had too much

time on his hand. he sort of talks about transparency. if you examine what he said, he has this anarchistic agenda to actually buy through exposing this massive security breach, to get the u.s. and other western governments to shut down in a way that will actually hurt them. so again, i think that if -- the times and the guardian, once they have access, and to proceed with some caution. they vetted the information carefully. the talked at length with the government at what would cause harm to national security. "the times" did a good job in presenting it and letting it

out and explain it. i still think we also have to look at what the sources of our information is. in this case, the sources disturbs me quite a bit. into other areas before we turn to questions. i will refer to the deprofessionalize addition -- ization. professionals asi the uprisings in tehran or more last all covered through the social media platforms and cell phones, a rear benefit on hand. what are some of the benefits of this? >> one application is speed and public service. i was in the newsroom of "the times" when the u.s. airwaves

flight was set down in the hudson river. the first photographs that went up on the website of the newspaper were taken by somebody with a cell phone who happened to glance and see this strange sight, an airplane about to land in the river, and snapped off some good shots that in fact were not equal by professional photographers because they were not there to see it. if that is all a news organization does is relied on amateur eyewitness accounts, i think that is an abdication. in that simple case, a full news staff was scrambled immediately with photographers, reporters, who then supplemented and unverified information that was coming to them via the web and the ability to talk to the newspaper.

>> what about the demonstration in a part of the globe where somebody sends out a tweet where they have opened fire. >> there is no question that social media will give us access that are going on, particularly in countries where those countries do not want us to know what is going on. that can be a good thing. to the degree that responsible news organizations are going to want to vent that information, it becomes very difficult, not just because we do not always know the sources of that information. we do not know whether the information has been doctored. there is a convergence of social media with digital tools that make it easier for people to take or to make what is not genuine information look like genuine information. that is the thing that disturbs

me. i think that a situation like the green revolution in iran, there is no question we should rely and those sources of information. but how we can tell whether that piece of footage or whenever that has been uploaded on a cell phone is a genuine has not been doctored in some way, that is a tough one. >> if you find out 100,000 people, to enter gaza people downloaded the deal that purports to be significant events or demonstration. does it create a pressure on news organizations to follow through and report that themselves, and thereby apple fought a story that they cannot be certain about? >> yes. increased the pressure. >> if you say, we cannot agree to this secret. >> news operations have always

faced this kind of question. there are rumors out there. shouldn't we just report the rumors? after all, but people are talking about the rumors. most responsible news organizations would exercise and some serious restraint on that and say without verification, depending on the nature of it, we should not. but it is unquestionable that technology increases the pressure. it makes it greater. i think some news organizations fall into a kind of a trap by saying, we will put it up there because of the speed, we can quickly come back and fix it or create -- correct it if we're wrong. we can put it up. we could be wrong. you can put up and then you can

fix it later. but what about all those people that saw it incorrect report and laughed and did not come back to fund the corrected report later. >> many in the old days basically -- if you had one edition of "the new york times" that's something wrong -- it could be corrected the next day. "the new york times" has something wrong, in lives on forever in cyberspace. >> people assume it was not corrected but chains. >> nefarious powers intervene. 24there's no question that hour news, the web, everybody has it website. urban is a journalist. you're competing with other

amateur and journalists and bloggers. on one level, it increases the sense that in order to be first or competitive, you have to get it out in time. i think we have reached a point where for really big powerful news organizations, it cuts the other way. it is hard to be first. unless you have been working on an investigative report. once you get into these competitive situations. so the trend of between chasing that idea somehow being first versus maintaining your credibility by making sure you get it right, i think it has become easier internally to have. it is futile to think you're always going to be first. the 1 h we do have is this idea of credibility. will we decide to report it, we

checked out and we're confident that there is something there. >> first is not the issue so much as someone else is first and someone is second and third. a low point we feel, we look foolish, even though we're not able to verify what is out there? that is a serious problem. >> one of your predecessors, a colleague of mine, tim russert, used to say beware of the pamphleteers. he felt something the people have expressed keenly, that the news organization -- news industry is getting close size. do we now have source of inspiration -- the news industry is getting politicized. to would have news organizations

that are right of center, left of center? -- do we now have news organizations that are right of center, left of center? between nbc and msn d.c., you preside over both. -- between nbc and msnbc. was it a market choice to go in that direction? >> first of all, i think it thing in this debate about are getting so politicized, to remind everybody, it is what the size of the audience is. the highest greatest show msnbc has 1.5 million viewers on hours. the major competitor is bill o'reilly, who has less than 3

million viewers. both have less viewers than you. bill roth has about 1/st. of the viewers that brian williams has hashe -- bill o'reilly about 1/3 of the viewers that brian williams has on the nightly news. >> you will not be happy if 9 million people were watching. >> the thing about cable television is that it is not -- is almost intentionally not just in the news put an entertainment sort of niche. that is help cable has evolved. more choice means people can look for more specific kind of programming. it has worked financially. advertisers will pay a premium to reach a small audience of

people who have a defined profile. in the same way that in entertainment, lifetime and espn and the food network sort of speak to very specific audiences, i think cable news has the same thing is true. the one cable news network that has stood for being more middle of the road in this promotion, cnn, over time it has lost viewers. that does not mean there are people that are not interested in non-ideological news. but they are going to -- they are sticking with network news, which still has pretty big news audiences. they are going to other sources. msnbc and nbc picked we run into this all the time.

the was an episode with mr. olbermann if you weeks ago. there is no question that msnbc , once it took on more of a political flavor, partly in kind of contrast with fox, the ratings did pick up. it developed not only that beyond pure ratings. for the first time, there was a phenomenon which it became a default channels for -- not a huge audience, but a real audience. there were people out there who basically, the walter"morning joe -- they will turn on " morning joe" in the morning, and that is their channel now. we like that. it has worked out from a commercial point of view pretty well. the idea that somehow we cannot

keep it separate from nbc news, i think that has been discovered by the fact that if the people who want it or less ideological treatment of the news on our network were disturbed by the fact that it was within the same wepanies mas msnbc, would not have the ratings success. we also have within our company another cable news network, cnbc, which has a guy that some people started the tea party movement. there's not a deliberate corporate strategy of going left, right, or center. >> there might be a corporate strategy in creating a niche. >> that is true to run cable. -- that is true throughout

cable. >> this is not uniquely it broadcast or cable problem. in my time as public editor "the times," i came to believe that the best ted was the liberal"new york times," and there was a strong sense that the newspaper was edited illogically among a certain set of readers. i think the what happened m fox is that,nd they do, we do it. the first public editor of "the new york times" asked if it was a liberal newspaper? the answer, of course it is. my answer to that was somewhat different. it is a liberal newspaper on the editorial page.

by design, it is a liberal newspaper on the op ed page. you could say there is a liberal sensibilities in sort of the brought liberal arts since in the newspaper. it reflects a market where it is published and a readership. it does not take intelligent design or creationism as serious alternatives to darwin. many people believe it gives too much attention to skeptics about global warming. it publishes same-sex marriages and unions in the sunday style section. many other newspapers in the country would not to. at the same time, i think "" the does anes" excellent job of professionally reporting the news -- i cannot use the term "fair and balance,"

but i think the newspaper strives to be fair, accurate, fact base in its news columns, and to reflect as many aspects of a situation as are warranted. i have often asked people -- if you are persuaded it is -- if it's a little newspaper, how do you explain winning a pulitzer prize for democratic governor eliot spitzer of new york? how you explain the newspaper was a catalyst in the agent for the downfall of charlie rangel, democrat who was chairman of the house ways and means committee and until "the times" exposed his ethics problems. blumenthal exaggerated

his service. i think there's quite a list that would suggest "the times" is not illogically selective in terms of a corporate investigative targets. >> we are going to open it up to questions. i see that judgment has a raised hand. >> if i may go back to the wikileaks. where first heard about it, i was in shock. i thought, this is another nail in the coffin of a superpower. and then i started to think about it and read what "the new york times" and others were writing about it. what is the big deal here? this is the kind of stuff that

we hear on the council of foreign relations, we hear about all the time. it is the kind of thing that eventually leaks to journalists. and so i wonder, is it such a big deal? when i came away with was two conclusions. one was basically people in the state department are no better writers but funnier then sometimes they are made out to be. i thought that was reassuring. secondly, in terms of our intelligence services, the number of people we have on the grounds to report things was abysmal. for the rest, there was nothing that i read that was really. is it a big deal? >> limit point out and ask our guests. for his another story were obsolete -- let me ask our

guest. another story mentioned 50 about a high security targets in the united states. there are a lot of people that were about that. are these high security targets that they might not have figured out on the run? they are -- there are a lot of people in government and the state department, people who have been in government and people who served in diplomatic service that do think this does have a chilling effect, even if it was not news to you. they think it will make it harder for them to do their jobs in the future. >> i think it is a big deal. this is an audience the problem has been much deeper sense of foreign policy without wikileaks. but the general public has had maybe only a dim understanding of these and it comes into high focus.

there has been plenty of reporting that the arab states are very unhappy about iran. but now you have something quite concrete figures to a much deeper sense of that. or that china is concerned about the internet. now we learn about specific operations that were targeted on u.s. government computers. >> let's not also forget that by the count of the news organizations that have published this material, there's a lot of stuff that they did not publish but they still had access to and they could have published. if you're a diplomat or a source for an intelligence agent abroad, the very fact that there was after information that did not get published could inhibit you. the sources for our best diplomats and our best spies are sort of like the sources for journalists.

there are not out there talking on behalf of their governments. but sometimes they are giving you extra information. they are not violate a trust. they are telling you more than they are supposed to tell you. that is what a good diplomat or spot will get out of that. the thing that is not going to be kept in confidence. there will say it is not worth the rest. i'm not going to say more than i am paid to. >> whenever journalists get subpoenaed, we say we're not going to share our sources of information because it is important that our source on a news story know they are talking to us and they are not talking to the yen state's attorney. so now when -- to the united states attorney. >> i think eventually it will wear off.

i do think this will cause a major review of the internet information-sharing protocol within the u.s. government. to the degree that sources shut down a little bit and are less forthcoming, i think that will last for a while. it is kind of human nature to want to blab and bill. >> secretary gates said this has been going on forever. he quoted john adams. he said that governments deal with us because it is in their interest to do so and they know it is in the nature of the united states to leak information. yet the continue to deal with us because they need to. >> i do not know where the microphone has gone. any other questions. >> my name is mercedes and i'm

with the u.s. department of defense. what transpired from a few months ago when the first leak to a place that concerned dod in barack and afghanistan. i was surprised there was not a more forceful u.s. response. now because it is all these cables you see this up corporate would be sensing about the tipping point that took place and what wasn't there a more forceful response from the u.s. government earlier? >> the first material that came out was almost unintelligible to most people. it was material that was written in the field in military speak and a lot of it was impossible to understand. this is material produced by a higher level by people who were

quite good writers. as a much more dramatic impact. >> the other thing is that some of this is unfolding because of julian assange and his motives and his strategy. he got this information that he got from manning all at once. manning is in custody. he cannot give them any more information. julian assange decided to dole it out slowly. he wants to stay in the media eye. he now is doing things, revealing information and threatening to reveal other information to protect himself legally because he has a lot of

powerful enemies. so the way in which the timing that this just come out in the press is much driven by that. >> the answer is all the information came in at the same time. >> i don't know whether the the information that is coming out, whether it all came from manning. >> we heard a major bank and also china, which will be interesting if it is forthcoming. >> go to the microphone. >> i want you to address the business model question because we're all very interested in quality news continuing, and can it continue for profit? i am here somebody from bloomberg is here. somebody from bloomberg is here.

the business model question -- how does nbc news survive in the age of the internet when people don't need to wait until 6:00 p.m. to get the news? how does "the new york times" survive? what are the various business models that we can pursue? the rupert murdoch model of charging for the internet. you have done this thousands of times, i am sure. >> you take first swing at that progressed to start a bloomberg news trick i'm a veteran of a little over a month, which at the rate they are hiring, makes gave veteran. there will be somewhere north of 400 journalists in washington for bloomberg news. by early next year. i spent my career at the

newspaper company that no longer exists, knight ridder, which was the second largest newspaper company in the united states and publish"the philadelphia inquirer," "kansas city star." the company was forced by wall street trader who would make a large baet on it. it was broken up. the general newspaper business model is broken. it depended on circulation revenue to pay essentially for the distribution and it depended on advertising revenue to pay for the news. all that news room and correspondents around the world and all the rest of it. the good news in newspapers

these days is that it is falling less fast than it was before, but it is still falling and nobody knows where the floor is. i think the big newspapers like big brands are the likeliest to figure it out and survive in the transition from the printed page to the internet and follow it where advertising is going, but a much lower rates than was true in print. an organization like bloomberg has an entirely different model. it produces news and analysis for people who will pay substantial amounts of money for it because it is actionable for them in some light in their business, whether it is the original bloomberg terminal that traders use to make decisions about investments or whether it is a new service that is coming " bloomberg government that will be aimed at people who love

relationships with the government in one way or another. that is a robust business for which there is substantial demand and a willingness to pay. will people pay when it is considered such a commodity, general news about government aimed at the citizenry? that is still kind of an open question. >> two points. the key, i think, in past business models and future business models that will be effective starts with create a product that individual consumers will pay for. is not just about advertising. it's also about -- in newspapers, he used to be about prescriptions -- subscriptions. for npr, viewers sending donations to support appeared

cable television takes a slightly different form. you open your cable bill partly because you get all of these cable channels and the cable operators feel the have to pay to offer you that package. one of the things that is sort of tragic about what happened with newspapers and other media organizations is that they essentially went down a road that depended only on advertising, thinking that could support them and threw a way the principle that you have to charge the consumer as well. i think a -- what is happening financially to the news asitess, i implementlament i t as much as the next guy. we had to start giving away

contact on the web for free. they did it because they didn't take the web serious enough at the beginning. when they did take it sears account the viewed it as a marketing tool and not a true source of competition. when it started to generate some advertising revenue, they thought, ok, that will grow to the moon and that will support it. that has not been the case. a love horses are out of the barn and they are trying to figure -- a lot of horses are out of the born and they are trying to figure out how to put them back. >> the newspaper industry was very profitable for many years. when threats like the internet for coming along, it was difficult for someone -- asked general motors. it is difficult when you're extremely successful to change in the face of external threats, even when you can see them.

>> less a major story before the world. is it responsible for the disappearance of foreign bureaus with the relative lack of foreign news that has been observed in many news organizations? >> as a general principle, it is true that the less money you have, the less you can afford to cover. on the other hand, it always comes back to this question of foreign news and foreign bureaus. i think it is too bad that a lot of -- there are not 50 great american news organizations that have bureaus all over the world. now there are more like less than a dozen. on the other hand, i think that in response to a lot of the changes and consumer habits and available to of information, i think news organizations have to

do what they always do which is to focus on where they can add value. anybody with a computer and an internet connection can now get original source information from foreign papers. it is not so simple. it is not clear to me that because there is -- there are fewer american news organizations that have fewer and bureaus that the availability of smart information about the rest of the world is not available to people. >> is there -- is it a possibility news business will be largely d-professionalized -- de-professionalized?

>> i don't think it is mutually exclusive. i think there will still be a professional -- a profession of journalists who are trained and who have standards and so forth and probably have bigger audiences than a lot of those non-professionals. the non-professionals are going to be in there too, partly because they can. is to be noted to be published, you had to buy innk by the barrel -- buy ink by the barrel. now warner people have those tools. we have to compete. in aggregate -- now ordinary people how those tools. i think it adds to decaffeinate -- to the cacophony.

i think news organizations will still have the loudest voices in a louder tower of babel. >> there is a larger proliferation of sources. old emily, i think -- ultimately, there is going to beat a shaking out, and people turn to professional news organizations with standards they can't recognize to help them make sense of little. >> there is an example in the film business. nicki fink sold for blogging business for thousands of dollars. she operated out of a studio apartment in west hollywood, just filing, filing, filing. >> which is had a reunion of " newsweek," and she could not make it because she was on the west coast. she said, now that i'm a rich, i

will send a nice big check to help pay for drinks for everybody. >> thank you. when we talk about the news outlets, television, cable, newspapers, weekly magazines, it seems to me that it is pretty much homogenized unpasteurized. nbc has many more viewers and you have a lot alex. if you look at the content of abc and cnn and cbs, the content is pretty much the same. i consulted with abc for a lot of years. i know how that works. everybody looks over their shoulder. if the other guy is not going with that story, should we? but it seems to me that all media -- new, old, in between -- has missed the boat on wall street.

joe and his colleagues -- mclean.any >> has just written an extraordinary book. in terms of daily journalism, the guys who cause the problem are still there. they are making more money than they have ever made in their entire lives. nobody has been fired. they gave back the tarp but as fast as they could so they could keep doing what they were doing before to make some much money before the new federal regulations come in. there has been no deep, deep reporting about who these guys are, how they are operating, and what the doing. there is an interesting new film, "inside jobs," that i

recommend to all of you. why isn't this on the front page? >> they are working journalists. >> he is on our program. >> one guy. we have hundreds of people covering wall street. >> i went back and read the times" that' "the produced on this because people said there was never any warning and it came out of nowhere. i actually was pretty impressed with what i saw. i think you're putting your finger on something that you hear a lot with a lot of different stories, which is people may be asking of news media more than they are able to deliver, results. you sound to me quite angry about what is happening. as many americans are. they are angry about the bonuses, about back to this as

usual. somehow, why isn't the press and the news media's doing something about this? >> we have an hour on msnbc every day if you like to watch it. it comes on 4:00 p.m. every day before "hardball." that is all he talked about. exactly what you talked about. with the same passion. he even ignored the world series to talk about that. >> a lot of people think he is too passionate because that is all he talks about. >> one observation. the chilling affect. this is to be confidential.

once we discover this has all changed, at least i have not seen it in 8-matter. the chilling effect was immense. one of the very best religious students. and so it gives you a sense -- the law was changed. can't leave their medical fires. -- files. they note you have a good taste for winds. they also learn to clean up their language. i understand it. it is not an american tradition.

in effect, not disclosed our resources. >> my overall answer to that is no. when the president asking a bunf questions, i was mentally going no as you were going through the questions. i think that we haven't managed and meddled our way through for all of time without that. talk about a chilling affect. let's remember, this is a government that a few years ago tried to reclassify the fact that a british intelligence cooperated with the united states during world war ii. there is a certain absurdity to a lot of classification, and you

can get that administration that feels a politically hostile towards the media at a moment and if you haven't acted like that that is available court prosecutions, the potential for mischief is great. i have not seen demonstrated the compelling case that without it we have suffered some sort of a grievous harm in damage through the ages. in the case of wikileaks, who are you going to prosecute? i heard just sunday on television, a republican campaign strategist said julian committedas create treason, but he is not a u.s. citizen. i do not know how you commit treason when you are not a u.s.

citizen. i think this would be a recipe for a great deal of harm. >> it is ironic that to the guardian of the british officials would not be criticized. >> i want to thank everyone for being here. we have run out of time. they do so much. -- thank you so much. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> a live picture of the u.s. capitol to hear word of the house and senate are in for business today. the senate dabbled in at 10:00 eastern and lawmakers are spending the day considering the impeachment of a federal judge

thomas of pulte's. you can see that live on our companion network. the houses and at 12:34 general speeches with legislative work starting at 2:00 eastern. -- the house gavels in at 12:30 eastern for general speeches. the deal calls for extending the tax cuts for all income levels for two years. it also reinstates the expired estate tax fire raked up 35%. and reduce unemployment benefits for 13 months. the social security payroll tax would be cut from 6.2% to 4.2% for one year. the expired patch that allows of millions of american taxpayers to avoid paying the minimum tax would be extended through 2011. now to take us to the bottom of

the hour and a discussion on monetary and economic policy, here is a look at u.s. relations with south korea from today's " washington journal." we will show you as much of this as we can. host: here at the table is a guest to talk to us about the trade tax that still needs approval in congress. it was announced this past weekend. what is in this deal? guest: this is an agreement that was originally negotiated by president bush in 2007. it has the full model of the foreign investor protections, financial-services role. it deals with what types of policies we can use. tariff cuts and rules about the order of the food safety and private inspecon. it covers the full range, not so

much trading but more commerce. host: it gives five years to phase out of a 2.5% tariff it has on the cargo for self correa. what is your view? guest: the itc is the independent government agency that analyzes all u.s. trade agreements. i think their analysis on the tariff cuts and in tariffs going to zero [unintelligible] i think what the itc said it will increase the u.s. trade deficit. they think it would cost 100 to 9000 u.s. dollars, mainly in manufacturing but not -- 150,000 u.s. dollars mainly in

manufacturing. host: here are the phone numbers that you can call. our guest is director of the public citizen's global trade watc. we will dig into some of the details. how big is the u.s. and south korea trade? many do not know this. the trade in 2009, $67.8 billion. $39.2 billion u.s. exports. what is your take on that number? -- $39.2 billion in u.s. imports. what is your takon the number? guest: we have done a series of trade agreements.

those relatively speaking have been smaller countries. this is a huge manufacturing country. we have an $11 billion trade deficit to there in manufacturing goods creating a huge player. for u.s. jobs in competitiveness -- this is in the debate about this particular agreement. host: what does this mean to you overall for the country? guest: it is a bad idea in the circumstance. almost 10% unemployment. they should consider implementing another trade agreement, given what has happened since na went into effect in 1994. it has lost $5.5 million of manufacturing jobs. median wages whe they burned the most in inflation control places. it declined to 1972 levels.

even those that support the nasa think a large share of those declines deals with our policies. not just nasa but china as well. we havseen a huge export of u.s. jobs. there is a role in these agreements to promote those outcomes. we should not replicate things that we see maging. host: one person's vote in north carolina about it. the president. >> we can closer to meeting that goal by finalizing the trade agreement with our allies, south rea. this nation offers one of the fastest-growing markets for american goods. in north carolina and across the country, many say we are not sure that helps us. it may hurt us in areas like furniture. right now, the status quo, south

korea is selling a whole bunch of stuff he. we are not selling it there. the current deal is not a good one for us. there are many hyundais on the road. .here is not as many ford's some have said let's cut any deal without thinkg ahead about how this will impact americans. this boosts our annual exports by $11 billion. it will support it least 70,000 american jobs. 70,000 american jobs. [applause] host: exports and jobs. guest: he only talks about the exports and it will only support 70,000 jobs. a trade balance is like our bank account. if you only look at the

deposits with out looking at what you take out, you will never balance your book. the international ade commission says that caribbean imports would grow even faster. we would set a bigger -- south korean imports would grow even faster, so we will have a bigger deficit. you would lose jobs. we lost 159,000 jobs to this agreement. and with our unemployment so high, that is unconscionable. host: our first caller is on the line for democra. caller: this is missue. i have been involved with free trade and the damage it has done to our country for years. if you want accurate information, there is nobody better than this guest.

the website is fabulous. they have tremendous search facilities and everything you wanted to know. it is that accurate, absolutely right. i am afraid of groundhog day. we will see the same thing that happened with clinton where ever democratic president does mo -- more damage to the country and the work force than any republican has ever done. i am afraid we are seeing that again. i hope that a public revolt can be led. we have to stop this. it is killing us. host: what do you think about this going forward? guest: pretty much have the same view. we have a lot of information on our website. the polling shows the majority of americans agree. and the phenomenon has become bipartisan. manufacturing jobs have been

wiped out. thousands lost since nasa. small-business owners, management, according to the most recent "wall street journal" nbc poll, a huge majority of republicans, democrats, independents comity ea parties.tr they need to know what this is. and congress has to agree to it. host: hello. this is one of my favorite subjects. i think we have a 14 active trade agreements and trade deficits with every place. d our country agutte

chance to rebuild ourselves. it seems these trade agreements are negotiated by people that we never hear of. do not know anything about them. it seems so lopsided. every couple of months, mexico can slap a new tariff on us and we have no defense against that. it is as though somebody wakes up every morning and says, what more can we do to destroy america? these trade agreements are simply a vehicle for businesses to go offshore and make more profit, at least that is the perception. i think the perception has become a reality. host: what would you like to add? guest: what is important is who negotiates them.

are almost 1000 official corporate advisers -- the are almost 1000 official corporate rogers, trade advisers, who get access to documents. there are some labor unions in there, but it is not even a balanced hand full. there is no consumer group with representation, for instance family farmers or groups representing the elderly. the trade agreements represent very narrow, special interests. weould have trade agreements that would beef -- be good for all of us. it is not magic. with career, it is literally identical to nafta, ca -- with korea, it is literally identical to nafta and cafta, it means we know what we're going to get. host: good morning. lawrence yun i

caller: was going that ask about that. we walk around with r or d on our forehead and we do not care who is running as long as they have that emblem. we better get on of that mode -- out of that road and make congress be held accountable. the trade agreement people we have now came out of the insane asylum. guest: yes, sir -- although not on the insane asylum, although that may be accurate well. -- accurate as well. the only good news is that we get to decide. for each ofs, calling their members of congress, telling them how we feel about the agreement is really important. it matters.

i will tell you why it matters even more now. in this last election, 208 of the current members of congress ran, criticizing the trade status quo. they got elected, many of them, including republicans, pledging to not do more nafta's. we need to tell them, if you support the agreement, we do not support you. we have in our control to send this agreement back and try to get some then that will not kill jobs. we have to do that. host: what is the process? the president and the career leader have their agreement. there are problems on both sides. what is the process on the hill? guest: this agreement has a very arcane procedure called fast track. it was originally created by richard nixon. under that procedure, congress cedes its norma trade

authority -- which it has exclusively on trade -- it gives back to the president. what happens next is the present this as an legislation implementinghis agreement to congress -- to congressget -- the president gets to send legislation implementing this agreement to congress. they have to come out of committee, go to the floor, 15 days, mandatory vote, no amendments allowed, 20 hours of debate, the same in the senate. it is a legislative luge run. we basically need to get our members of congress to find out what is in it and to let them know what we feel. if the majority of americans think this is good, then congress should pass it.

if the majority of americans, as the polls show, dnot want this, then congress should not pass it. it is a very interesting dynamic. in this last election, of the incoming, freshmen republicans, quite a few of them campaigned against these trade agreements, and understandably. it is a very important point -- what is our country's strength? our manufacturing base. e did not pulling shows united -- one thing that pollinghows we are united on is no more trade agreements. many of the incoming freshmen talked about national security, having our manufacturing base strong. others talked about preserving the middle-class. what is our democracy without a class? there is no middle class there is no manufacturing.

there is no manufacturing if we keep doing these trade agreements. the incoming class of freshmen have a very different position than when the reboot -- then where the republican leadership is. their lock, stock, and barrel for it -- they are lock, stock, and there'll for --nd barrel for it. there are some very strong and smart republicans to have foresight and say they are for trade, acknowledging this is not a good idea. host: take us deeper into your strategy, especially on the gop side. what does that do to your effort? guest: it does not change it that much. this is about letting the american people know that this is another nafta-style agreement that will kill jobs and increase thtrade deficit.

american public should understand that the new deal that president obama just signed does not change that. as a result, whether you are democrat or republican or independent, this is going to affect you do you have it in your control. it is one of these issues -- it does not matter your political official asian. this agreement -- it does t matter what your political affiliation is. this agreement has a whole chapter about the regulation of financial services. it was signed before the financial crisis. parts of that chapter of this agreement forbid things like limit on a ridge to london to services or goods. it does not allow regulation based on the size of the firm. -- like limitations or regulations to services or goods.

it allows for an corporations -- for incorporations to privately enforced this. -- foreign incorporations to privately enforced this. 300 of these are established from korea in the u.s. right now. it will be able to demand compensation from the treasury, the taxpayer, for any domestic policy that they think undermines their right as foreign investors under the agreement. under nafta, $400 million have been paid out in these cases. things like zoning, land use, health laws -- the domestic company has to meet those. the foreign companies get compensated. host: let's go back to our calls. ruby for democrats in denton, texa. are you there?

caller >> the question i want to ask is -- caller: the question i would ask is -- we have a lot of old people who've been injured on the job, cannot work anymore. all we keep hearing is that things keep coming further down. paying out the money is not coming down. it is taken all of that away from new -- taking all of that away from you. we have nothing to support us other than our family or whatever little money you are getting. it has to go to the nursing home. that is where you're going because you cannot take care of yourself. my thing on that is -- what is helping us? can you tell me -- give me an answer -- where is there something to help us?

we done work hard and made our money worked -- worked hard and made our money. where are the jobs at? all of the jobs are either getting smaller, meaning they pay less money, or you do not have a job. host: lori wallach. guest: yes, ma'am. the issue, happily, is in our control. it is not an t of god that we have these trade agreements that have exported over 5 million u.s. manufacturing jobs. it is bad policy. we can change that. it will not be easy. there are a lot of people in the same circumstance. people are very upset. the korea agreement would make that worse. the only way we're going to change it is by making members of congress, particularly now --

this will be the biggest trade agreement since nafta. this is the big pnt where there will either be a turnaround -- hopefully, we will get a different model of trade when this is defeated. there is one out there that can help bring us good, high-paying steady jobs. it can be done. it is in the our control, but we cannot sit by the sidelines. -- it is in our control, but we cannot sit on the sidelines. host: let's hear from joshua on our republican line. caller: a good morning. i want to thank you for everything you do. and 20 years old. 10 years ago, my father owned -- i am 20 years old. 10 years ago, my father owned a couple of small businesses. it was very different.

hundreds of thousands of jobs lost -- what are they thinking? what are they thinking? to give up jobs in this recession -- whenever you want to call it -- it is ridiculous. i work 70 hours a week as a kitchen manager. it is all i can do, all i can find. most of my friends, most people i know are struggling without any job at all. when is it going to get better. how long is it going to take? what do we have to do, what do we have to do to change? >> -- host: your response. guest: your generation haste make congress represent your interests. we have republicans, democrats, independents.

the american people, across the board have had it with these jobs trade agreements. we're seeing in our country's strengths gutted. that was one of the caller's phrases. this has to stop. we need to come up with a ne trade policy. 150 hours of congress have sponsored a bill -- members of congress have sponsored a bill that would be a win for us. we need toass that legislation. nafta's need to stop. it really does matter. particularly when members of congress saw what happened when their constituents are heartbroken, disappointed, betrayed.

they will listen to you now, especially. calling is the thing to do more than writing. host: lori wallach has worked on capitol hill, for electoral campaigns, and for news and is founder of the citizens trade campaign. she is the director of public citizen's global trade watch. citizen.org/trade. from green's bill -- greensville, ohio, our next caller. caller: thank you for taking my call. a question i have is, how does this trade pact actually help the united states? does it help usn any way? i hear the obvious ways how it will hurt us as for is losing jobs and losing our

manufacturing, our ability to export our manufacturing. host: do you see any good? guest: a guess it depends -- i'd guess that it depends. the banks -- this is the regulatory and gives them new rights in korea. if the banks of the united stes -- that is not what i think -- then they are happy. a lot of big u.s. manufacturing companies are happy. the automobile companies are in favor of this. why? because of the exchange between u.s. and korean cars being exchanged duty-free.

this goes back to whether it is good for america. a korean car companies are celebrating this because it will increase their market share in the u.s. for most americans, there is not an upside. one argument is that mrs. -- that this is good for our peace and security in, even if we lose jobs and have all these problems. i do not buy that. in career, this pact is despised by the public. -- in korea bang and -- in korea, this pact is despised by the public. there are a sovereign country like we are and the democracy -- they our sovereign country like we are and a democracy. they do not think this is right.

there have been huge protest on the street since the deal -- huge protests on the street since the deal was announced. host on new -- "obama and trade." what a long, strange trip it has been for the south korea-u.s. free trade agreement. the two sides announced this week and that they have reached a deal on revolution -- on revisions to the draft that was signed in 2007 but never ratified. the president rediscovered its benefits once in office. he was forced to reopen negotiations to justify his earlier opposition. the result of the deal is slightly better than the excellent 2007 tax in some ways, but slightly worse and the others. this is after a delay that has

cost the u.s. global credibility on economic issues, not to mention the cost to u.s. growth." any thoughts to that? guest: is not surprising that "the wall street journal" would ." >> we're going to take you live to lahore where discussion of the federal reserve and the u.s. economy. -- we're going to take you live to a discussion of the better reserve and the u.s. economy. kreuz live coverage trump hall on c-span. >> what happens when we correct in the economy, and we're seeing some of those down sides right now. as president of freedom works, i have had the opportunity to tea party but a lot of activists

around the country, and one thing you hear consistently from americans both in the election and as they show up across america is that we have to stop spending money we do not have that. we have to follow their roles and we have to live within our means. what you have seen over the past three to four years is a substitution of bad fiscal policy for that monetary policy. it is sort of pouring gasoline on a five-year period it is no substitute for living within our means. the two-party started with the bailouts -- the tea party started with the bailouts of the bush administration. at the time, the treasury secretary got a visit from the chairman of the federal reserve who said publicly that federal reserve cannot do this, i need legislation.

fast forward to timothy geithner decision to let the tarp expire, it was a political decision that no longer could the administration defend the tarp. then we saw back from bailout in a way they could not do politically. now perhaps in the most outrageous bailout scenario we are using the imf and the american taxpayer dollars to bail out europe. the expansionary monetary policy has to stop. we to start living within our means. that is what this panel is about. icing with the new congress we will see important ships in the conversation -- i think with the new congress to will see important ships in the conversation -- shifts in the

conversation. with that, i would like to recognize the president of that outlay of economic research foundation. alex is also the founder and president of the hispanic american center for economic research. i first met alex at gross city college many years ago. we both had long hair at the time. [applause] >> thing to do. -- thank you. our goal is not to pass any particular piece of legislation, but elevate the level of the discussion and bring the best university centers, economic departments, to give their opinion about how to solve the economic problems of the day.

we work globally and economists -- i am tempted to say things about economics, but i will not bore you with that. i would-share a little bit of personal experience. great countries have to come to the temptation of money and credit. we also remember germany of the past. i come from argentina. i am a proud american citizen. i saw how the manipulation of money and credit became an essential element to destroy role of law, to corrupt the morals of my native country. i have with me a quote of one of the argentinian dictators who began using the central point of

argentina and a politicized way. after he was ousted, the so- called conservatives continued with the same policies that damaged so much of the country. he in no way teasing the opponent to took him out of power by the libertarian revolution of 1956 rose this. "the set of power and delicate allegations that make up the central bank, turned this institution in all embracing and regulator of almost all the entire economic life of the nation, manipulating exchange rates, foreign exchange, setting discount rates and policies, restricting or expanding credit from the comfortable and flexibility of a bureaucratic decision making, signed

declarations, one can increase or decrease its trade with any foreign nation, creates a mandate or destroyed in the industry, helped certain regions of country or let them sink, or undercapitalized chosen activity, promote the building industry or repress it, encourage or discourage an average of congress -- branches of congress." he called this this institution of an almost diabolical nature. i really get passed and it -- passionate when i speak about this. it is a pity what happened to argentina, and i am confident that it will not happen to the united states.

the federal reserve does not have the power of that argentina central bank did. they could work towards the weakening of law. when people believe that in order to be successful they have to be close to those that decide credit policies and those who give away privileges against rule of law. we have a wonderful set of speakers today. i am confident that united states will once again regain a strong dollar and a currency pact that serves the name of a constitutional money. -- that serves the name of a constitutional money. since you all for coming. -- thank you all for coming. [applause] >> next we are fortunate to have

mike pence who joining us. he is a lifelong cruiser, a conservative.iti he was the one republican who stood in the breach in the very first days of the wall street bailout debate and said no, i will not compromise on this issue. at the time it was an incredibly unpopular thing. it turned out to be the wisest thing he could have done. an[applause] >> thank you to freedom works in the atlas economic research foundation. it york consulting your program- neither jim digman or paul ryan, but i am delighted to be here. this is an issue that's along

with a longstanding leadership at congressman ryan has provided a sounder money and the proper role of a reserve, senator corporate and i have joined the battle. we are grateful for this form to have this conversation. having been invited to come over in be the warm-up act, let me share a few basic costs and yield to my betters. -- few basic thoughs, and tehn my betters. we live in difficult times. nearly 42 million americans are on food stamps. we have a housing crisis in dismal gdp growth. as we gather today in the belly of the capitol building, it feels more and more to millions

of americans that policymakers from capitol hill to the white house, to even the central bank, no less and less about what to do about it. sound money is the very foundation of our prosperity. it must be addressed. before that, let me speak, if i can, about these times and about growth in general and then i will close in a few minutes with that you thought i have on sound money and the proper role of the federal reserve. with more than 50 million people looking for work, so far president obama and democrats in congress have tried to borrow and spend the country back to prosperity. trillion annual deficits to this runaway federal spending, the government takeover of health care. the attempted to pass a national energy tax in approve one bailout after another. hazmat was kind enough to mention, i helped -- as matt was

kind enough to mention, i helped to lead an unsuccessful effort to do something other than taking 700 million from main street in transferring it to wall street. let me state emphatically those of us that oppose the wall street bailout did not do so because we thought policy makers should do nothing. we just thought that was the wrong thing. we stood firmly on that principle. my belief and my concern when i came out against the wall street bailout was that if we passed it that we may fundamentally change the relationship between our national government and the citizenry in the marketplace. sadly i believe that has occurred. one need look no further than of frank bill tuesday that too big to fail has been enshrined in the land.

the list goes on. tax payer funded bailouts are no substitute for economic policies that will create real consumer demand and growth. i would submit respectfully that to restore a growing economy we must end of a runaway federal spending and get back to the practice of free-market economics without apology. the three market is what made america's economy is the greatest in the world and we cannot alter in the willingness to stand on those principles of freedom. and now, even though our economy is struggling and america seems at a low point, i believe we can restore our economy, but it will take courage and a new vision. everything starts with a sound dollar in fiscal responsibility in washington, d.c. the good news is with the impending advance of the new republican majority in the house of representatives, there is no shortage of plants or energy to restore fiscal responsibility to

washington, d.c. we have a pledge to america, constructive elements of the president's that commission and thoughtful proposals, blueprints. noteworths know where th roadmap. for my part i co-authored a spending limit amendment to the constitution of the united states with jim hensley. this would limit federal spending to 20% of our nation's economy in the constitution except certain conditions of war. believing that would create a framework that we could live with and are a means and have incentive to grow the economy. in the midst of all the talk about fiscal discipline, let me say to grow the economy we must shrink the size of the federal government, of fiscal discipline alone will not suffice to bring

jobs and prosperity back to america. i think of a similar time in 1977 when margaret thatcher spoke into the economic malaise besetting great britain. she said "a course will not solve our problems eyecups and restraint. it was not restraint that started the industrial revolution, it was not restraint that at inspired us to explore the north sea. it was positive, driving, individual incentive to into that we must repair." was true in england then it is true now. -- what was true in england then it is true in america now. i said that the new republican majority must embrace of bold agenda for economic growth to build on the timeless principles of free economics. they are sound monetary policy.

tax relief and tax reform. access to american energy regulatory reform and trade, start. that is a deal i can support. let me close with a few thoughts on monetary policy and yield to my betters. sound monetary policy is where growth begins. sound monetary policy is the foundation of our prosperity. a strong dollar means a strong america. the american people know we cannot borrow and spend our way back to a growing nation. and it does not look like the administration got the message, and sadly it does not look like the federal reserve did either. during 2008 and 2009, the federal reserve appears well over trillion dollars into the financial system and attempt to rein in more spending.

the federal reserve second and latest round of quantitative easing actually seeks inflation in an effort to bring down unemployment. printing money is no substitute for sound fiscal policy. while there is no guarantee this policy will succeed in reducing unemployment, it is near certain that the value of the dollar will be diluted. despite promises by mr. bernanke on national television on sunday night that there was a 100% guarantee against inflation, history teaches otherwise. as economists have said, the federal reserve cannot print money -- can print money but it doecannot print money. print jobs. the problem i believe with the

better reserve began in 1977 when the congress imposed a dual mandate. too hot often does conflicting and it has pitted job gains against long-term costs to the economy. qe2 is an example of when the a reserve involves itself too much. in that effort we joined a long- standing efforts of congressman paul ryan, who you will hear from in just a few moments, and this effort. we have been criticized by all of the right people on this count, but we started a national conversation about the proper role of the federal reserve, and i want to take this opportunity to publicly commend congressman ryan for his lonely leadership on this issue. timothy geithner recently said the administration will oppose any effort to end a dual mandate, arguing it was very

important to keep politics out of monetary policy. let me be clear on this one, but speaking for myself and a broad range of congress, there's no interest among members of congress and eroding the independence of the better reserve. we recognize the independence of the central bank, but congress created the dual mandate in 1977, and giving the federal reserve act to its original mission on price stability is how we get politics out of monetary policy, not the other way around. i submit it is time the fed reserve focus exclusively on price stability and protecting the dollar. in doing that, we will place the onus for fiscal policy where it belongs. that is on either end of pennsylvania avenue. just the canal as a layman in this area, i have to tell you,

we should be looking to policy makers to be making decisions that will encourage economic growth and create jobs. we ought not to have a fallback with the fed reserve. the fed reserve cannot create conditions that take the pressure off of policy makers that should be making the hard choices to put the fiscal house in order and make the kind of reforms of growth the economy and create opportunities for every american. i think it is time the fed reserve focus exclusively on price stability. one last point before i move on, i would like to note that in the midst of all that has happened recently, a debate is starting anew over an anchor for the global monetary system. my dear friend billy jack kemp who sent is here, jack probably would have sought made before i got of of the room to adopt the

gold standard here and now. despite press reports to the contrary, i have not done that do not intend to do so today, but i am here to say it robert zelig recently encouraged that we rethink international currency system, and i agree. >> the time has come to have the debate over the currency in the proper role is to pay and our nation's monetary affairs. -- the time has come to have the debate over the currency and the proper role it is to play in our nation's monetary affairs. i want to commend atlas and freedom works for talking about things that are foundational in our society. i have been a washington, d.c. for 10 years, and too often it seems that the event horizon that washington, d.c., considers is the next headline is the next week, the next quarter, and next year.

what we should be thinking about is the next generation. we should be thinking about how we should once again build american prosperity on the foundation upon which it was originally built. there is nothing that ails the economy that cannot be cured by returning to the time-honored principles of pro-growth tax policies, a sound dollar, regulatory reform, access to american energy and expanded trade. i will leave one other thought as well. in the midst of the economic times, as we pursue the timeless and time-honored policies that have always and will always creates economic growth, let's recognize one more thing -- let's recognize that the present crisis is not just economic and political, moral and nature. -- but moral in natur. ane. any observer should recognize that we have recogwalked away

from the principles of honesty and integrity and the simple notion that you should treat the other person the way you want to be treated. the truth is we have to get back to basics. public policy alone will not cure what ails the american economy and restore american economic greatness, it will take public virtue for it was on the foundation of the character of this nation that our boundless prosperity was created. so as we consider policies to strengthen the market place, let us also prepare -- repair of those institutions that are the character of the nation. pour it is -- for if the foundations crumble, how can the nation stands? thank you very much. it was an honor to address you today. i appreciate the opportunity. [applause]

>> thank you, congressman. next i would like to introduce dr. judy shelton, who is one of policies inetary policy the world. she is the co-director of the monetary policy of the atlas research foundation. she is author of numerous books and articles, including the forthcoming "money meltdown" in various articles you will see rate yearly. atlas and judy were kind enough to include freedom works in the joint publication of her guide to sound money, which she will talk about. we're honored to help get that out to the grassroots america where it belongs. recently she has joined freedom works as a senior fellow and

director of monetary policy. dr. judy shelton. [applause] >> thank you. sounder money is one of those phrases that sounds good -- sound money is one of those phrases that sounds good, but what does it really mean to be in favor of sound money? and my days as a university professor, i taught a course andht moneya d banking. to teach anything, you have to go back to the basics. when we talk about money, we need to focus on those primary functions of money that you were all taught in your economic course at college. money is meant to provide a

measure of value, a reference point. it is like a roller. we all made building apart houses, but we use the same measure. this is a put, this is a yard. -- this is a foot, this is a yard. it is a common reference point when applied to money that allows a perfect strangers to convey to a untethered a value of what they bring to the marketplace or what they see, from the marketplace, because money is the measuring stick through which you set a price. price conveys the value. it is the hold reason free markets work -- whole reason free markets work.

so the standard has to be meaningful. it has to be accurate. so that all market participants understand the value of goods and services, and that enables them to make optimal choices, which enables free-market us to deliver economic outcomes, which lifted whole societies by delivering maximum levels of prosperity. the money itself, the quality of the money, the soundness of the money is a critical factor if you want a free market economy to work. the primary functions of money to serve as a medium of exchange, a unit of accounts and stored value all arise as a result of people needing this honest and accurate measure to convey those of price signals so they can engage in commerce with each other. so they can bring to the marketplace what ever their talents and energy and creativity can offer and reached

their maximum potential toward achieving their dream, what ever they are. it is called economic freedom. entrepreneurs are the in richter's of the society and deserve sound money. -- are the enrichers of the society and desserts on monday. the achieve their own aspirations and benefit society he process.spe-- in teh the invisible hand cannot function properly if the money it does not provide an accurate units of accounts and a reliable value. this brings us to the core principle of sound money. you will find them in the back of the sky at, which is being made available today as a joint

project of the atlas economic research foundation and freedom worworks. 100,000 copies are being distributed any initial run, because we want people to understand cast down the money should be seen as a fundamental right of of three people. the integrity of money should be upheld as a vital element of three markets and not be compromised to serve as an instrument of government policy. if you had your guy, you can follow along, but these are the core principles of sound money. money should serve as an honest measure and reliable store of value. money should convey price signals with clarity so that free-market can operate efficiently. when price signals are distorted through loose monetary policy, economic resources are a miss -- are misallocated and financial

capital is misdirected. sound money for just a link between effort and reward by providing a dependable store of value over time. otherwise, why should anyone save money? inflation, even low inflation, makes us suckers out of savers. money has to be trust worthy. the money's most important function is to provide a useful tool for private enterprise not to serve as an instrument of government policy. the founders specifically limited the money powers granted to government to prevent abuse of that authority. to prevent debasement of the currency. they were well aware that currency debasement is one of the oldest forms of tyranny against citizens. and now it's a special privilege

for me to introduce the man who is here to help remind us of the views of an individual quoted in this guide, jack kemp, an american statesman, an economic conservative was a champion of sound money and an honest dollar. i would like to invite jimmy camp who heads up the jack kemp foundation to say a few words about his father's ideals. jimmy. >> thank you, judy. my dad loved talking about a sound dollar and talking about a dollar that would be as good as gold. and after the success of kemp roth in 1981, monetary policy and addressing the soundness of the dollar was the next task on his list. it never got finished in his time, but as the head of the

jack kemp foundation, whose goal is to develop, engage, and recognize exceptional leaders one of the levels of engagement is on the critical issues and our monetary policy and soundness of the dollar is certainly one of the key issues that my dad cared about deeply and believed is the foundation not just for us met to live within our means, which i agree people want our government to live within our means, and dad appreciated that. but what dad got and what you and i each understand is that we don't want to just live within our means. we want to grow into greater means. and you can't do that without a sound dollar. and so having this discussion it's incredibly exciting for me because i got sick and tired of hearing my dad talk about a dollar that's as good as gold and nobody else would listen to him. he would talk to me because i

was the only one around. he would talk to the wall about this if he had to. but the debate is taking place, the discussion is happening, and it's thanks to congressman paul ryan, mike pence, freedom works, atlas, and so many other people. we need to engage this discussion and the jack kemp foundation looks forward to being a part of that discussion and fostering a real engagement in the civil competition of ideas. and we have two great leaders here today who embody the civil competition of ideas, mike pence and paul ryan are men who respect their adversaries, who don't see them personally as enemies, but want to engage in a real debate of ideas and lord knows we need that here in washington, d.c., and throughout the country. and it's an honor to be here and be able to channel what i think would have been dad's enthusiasm

and he would have been much more involved in the actual issues than i am. but it's an honor to be here and see the debate going on, judy, thank you so much for including me, and thank you all for being here. >> thanks, jimmy. and now let me close my remarks by saying it is the moral dimension of money, the idea of trust, the idea of having this stable foundation on which to build a free society, based on personal responsibility and individual economic freedom, that's the crux of free market capitalism. nobody puts aside capital, no one sacrifices consumption today to have financial seed corn for the future if they don't believe in a greater future harvest. capitalism, free enterprise is an expression of faith in the future which itself is a moral outlook.

there are all kinds of economic reasons to insist on sound money, to achieve optimal economic outcomes, maximum prosperity, things i discussed. but in the end the cause of honest money is important for reasons, even more profound. in deuteronomy we read that you shall have a perfect and just measure. so that your days may be lengthened in the land which the lord your god is giving you. you know, every bank note, every coin issued by the u.s. government has engraved on it, in god we trust. that should be a very sobering reminder that we should never take our money or this great american experiment in self-rule through accountable government for granted. thank you. >> thank you, judy.

next up i'd like to introduce congressman paul ryan. paul is what dick armey, the chairman of freedom works, called a legislative entrepreneur. he is a one-man think tank which is what they used to call dick armey as well and his road map, i think, offers an important path towards not only fiscal sanity but economic growth. most important to me perhaps is that paul ryan will be the next john kasich and i think paul knows what that means, maybe you guys don't. john kasich was the chairman of the budget committee and the ranking member of the house budget committee in the days leading up to the republican revolution of 1994. and we would all point to kasich as the discipline yarne, the -- disciplinarian, the guy that said no to appropriators and his own leadership when it came to questions of living within a budget. and we expect paul to be that continued font of ideas, that

continued source of new ideas as we tackle all these problems. paul ryan. >> thank you so much, matt. first of all it's nice to see a lot of old friends here. i was raised on these issues by jack kemp, judy shelton. i see ralph and john in the front row here. so i guess we are all getting the band back together is what's happening here. this is probably the best 25 pages on money i have read in a long, long time. i'm going to be tweeting and facebooking this all day, all week long, encouraging people to read this. this encap sue late it all. -- encapsulates it all. i'll try to pick up where my betters, as mike said, left off. sound money is a necessary precondition for economic growth. it is something that only civil societies can function on if

they want to remain civil societies. so you cannot have a system of civil society, of strong, organic, real, true economic growth without the soundness of your money system. now, i would simply argue as coming in as budget chair, our fiscal policy is on a collision course with our monetary policy. take a look at what is happening now. no matter how many times the federal reserve and all the folks representing it come here and pound on the podium, we are not going to monetize the debt, we are not monetizing the debt. what on earth are they doing right now? the point is this, they would like to say that they are not monetizing the debt. that it's really the intentions behind the motion, the movement, the action that matters not the action in and of itself. they intend to modify, to buy treasuries for the purpose of lowering interest rates for economic growth. not to monetize the debt. look at the intentions, don't

look at the actions. what is happening here in government is a systematic replacement of the rule of law by the rule of man. look all over the place. look at our regulatory policy. look at our fiscal policy. look at crony capitalism. look at our foreign policy. of course look at our monetary policy. the rule of law is being replaced with the rule of man. it started a long time ago. the philips curve and doctrine that was in placed in the law was another good reference point. where are we? we are right now in an era and generation where a lot of people aren't familiar with the precepts of sound money. we came off this period we all call the great moderation where we had fairly noninflationary environment. we had some sound economic growth. and so those of us who are in the x-generation or y-generation on, i was born in 1970 so i'm not that old. i see a lot of young people here

born in the 1980's and 1990's, we didn't know what this stuff was. we weren't around during the stagflation days. we were in grade school when the jimmy carter stagflation, we were just little kids when nixon pulled us off the gold standard. we didn't go for these fights. we didn't understand these ideas. we better come up to speed as a society now. we better get back into understanding what sound money is, how it's a necessary precondition for economic growth. these are the things we have to get involved in because if we don't understand what's happening to our money, then we won't truly undertan what is -- understand what is happening to our country. there is nothing more insidious that a government can do to its countrymen than debase its curncy. this is what's occurring. the federal reserve believe they got this thing figured out. they believe that they can think this stuff through better than millions of individuals acting in their own self-interest in the market can ever figure out.

they believe because of some of the new powers they have received, paying interest on reserves, and other exit strategics, they can move this up in time. they think they can put the cruise missile through the goal posts. meaning they believe they can turn all this stuff on, gloy all this money -- throw all this money, run the printing presses over time and mop it up just in time to prevent inflation from getting out of control. it's a fatal conceit. i see we have a great quote on the back here from the author of those phrases,, all those who wish to stop adrift toward increasing government control should concentrate their efforts on monetary policy. we couldn't have said it better ourselves. here's the basic point. they believe that they can figure all this out, rig the economy, kind of fool us into growth which is inorganic, and then pull it out just in time. that we can mop up all this money supply. what are we looking at to measure inflation?

we are driving down the highway looking in the rear-view mirror, the problem is with this kind of driving, looking at the output gap model, looking at corn inflation which has historically been upward, not looking at the dollar, not looking at the yield curve, gold, and other commodities, we miss it. that means when you are driving down the highway, you have already passed your off-ramp and missed your turn. so what are we doing right now? we are driving the car with two feet one on the brake and one gas pedal. it's a bumpy ride. we are undermining the precepts of sound money which is the necessary precondition for economic growth. there are no short cuts, no sugar highs that will get us for the foundations of a pro-growth society. low tax rates that are predictable and fair. regulations that are transparent, fair, equal to everyone based on sound science. the rule of law and contracts and everything else, getting ready of corny capitalism.

getting spending under control and getting this debt taken care of. of course first and foremost is sound money. these are the basic foundations of economic growth that are so necessary and important. what is it we are going to do? those of us from our corners. capital are going to be advancing this conversation. judy has done a phenomenal job of getting this into the hands of americans so they can understand what's at stake up here. i will be reintroducing a bill -- i have been in congress for 12 years now, it's strake to admit that, ever since then connie mack and i, the senator from florida at the time, introduced this bill. getting hum fully hawkins amended and changed to focus the fed on its primary mission which is money. price stability. the soundness of our dollar not on all these other things. because oftentimes with this dual mandate what we have here is the fed running all over the place, embracing doctrines that are necessarily in conflict with one another. number one, let's get the fed like mike pence said, back on its primary and significant

guelar mission, sound money. it's the only arm of our government in charge of currency. all these other arms of government are in charge of employment policy, fiscal policy, the fed is the sole guarantor of our money, the soundness of it and the value of our dollar. that's what they should singularly focus on and that's what we want to get this law back to get the bed back to a rule where they are pursuing the policies of sound money and they are showing the marketplace how they are doing it, where they are going. so we can take a lot of the guessing came out of it, so we can stabilize investment, so people have faith that they can say, they can take risk, they can invest. as judy said it's all about restoring the value of the dollar. it's all about restoring it as reliable, standard of unit of measurement of value. we are the world's reserve currency for now. and we will not become the world's reserve currency in the future if we abrogate this responsibility. if we try to game the system on the cheap. if we try to do things in the

short run to get a short-term stimulus at the expense of medium and long-term growth. these are the things that are going to effect our future. these are the things that are going to affect our living standards and the sooner we can reclaim those founding principles that made america so unique and so exceptional, the better off we are all going to be. all of these issues sort of come in confluence with one another. and i'll simply conclude with what i began with because i want to get us back on schedule. do we want to reapply the rule of law so that each and every one of us has our own right, our own opportunity to make the most of our lives? so that we are not picking winners and losers in government. so we are not gaming the system for the few, for the special interests, for the people who can rig the system through their connections. do we want to get us back to our system that is as good as gold, a system that is reliable, a system 245 treats -- that treats every single one of us the same and a system that says no matter who you are you can be what you want to be if you just take on

your own effort. if you just work hard. we don't want the government setting the rules and rigging it for something against others. we want the rule of law re-establish. it's a society built upon the firm foundation that our founders fought for, our veterans fought for the rule of law is a society that can grow and prosper. it's a society where america can lead in the 21st century like it did in the 20th century so we can push the bounds of opportunism. we can bush the pounds of economic growth and prosperity. that's the society we want. we are at last coming at a tipping point in this country. this tipping point comes to us in a couple of forms t comes to us in an economic form. one where our debt gets us. where it puts us in a tailspin spileral -- spiral. where we are lose our standard of living. another tipping point where we take individuals and society and we take away their chance of making more of their lives. we don't want a society of a majority of takers versus

makers. we don't want a society where we transform our safety net into a hammock that lulls people into lives of dependency on the government who think nothing but of consumption and where they get that from versus taking risks, planning, investing, working, being a entrepreneur. these are the tipping points we are reaching in this society and the sooner we acknowledge this, the sooner and better off we are going to be. i would simply say sound money is an issue that has to come back into our lexicon. it's something that people who have enjoyed the last few decade or years cannot take for granted anymore. it's something that we have got to get our money system back on track. if we do and i believe we have time, america's best century will be this century no, sir the past century. thank you so much. >> thank you, congressman. next up is my other favorite monetary economist, dr. larry white, who is a professor of

economics at george mason university. he's also taught at the university of missouri st. louis, the university of georgia, and at new york university. he's been a visiting lecturer at the swiss national bank, a visiting scholar at the federal reserve bank of atlanta, and a visiting fellow at the american institute for economic research. he's the author of a number of books and academic journal articles, including the theory of monetary i.n.s. 250ugses, free banking in britain, and competition in currencies. dr. larry white. >> thanks, matt. when freedom works announced the schedule of this event on its facebook page yesterday, fans made a number of comments and my favorite of those read, how the fed has failed. really? in 10 minutes? so i don't have time to talk about every case and every respect at which the fed has failed us. especially how it's failed those of us who think the fed at least

as long as it exists should stay within the limits of its statutory authority. those of us who think the fed has no business conducting fiscal policy let alone to the tune of $1.25 trillion. has no business bailing out the creditors of failed financial institutions, has no business deciding which sectors of the financial market should be allocated how many hundreds of billions of dollars. the documents that were released last week detailing the fed shenanigans have only confirmed that the fed has failed those of us who believe in the rule of law rather than the rule of central bankers. but i don't want to focus on recent events. i want to focus on the big historical picture. and here's the bottom line and this is based on a working paper i have co-authored with george selgon. it's available at the cato institute website. the bottom line is the fed has failed on its own terms. it's failed to achieve its own stated objectives as judged by the best available statistical

evidence. it has amplified the business cycles. even if we put aside sthrule objections to the fed, the fed is failure on pragmatic terms. recessions haven't been less frequent, shorter, or less severe on the fed's watch. now, defenders of the fed will say, but, surely we don't want to go back to the system that existed before the fed, and it's true in the half century before the fed there were three major financial panics. over its history the fed has not made panics less frequent. under the fed's watch we had according to most authoritative count five banking panics, in short order, between 1930 and 19 33, those were worse than any of the panics under the pre-fed period. led of course to the terrible collapse and output known as the great depression and more recently we had the financial panic of 2007, the worst since the great depression by some

measures. which ushered in today's economic woes. defenders of the fed no longer say that it has abolished financial panics. they used to say that before 2007. now they say, let's not judge the fed on one mistake because after all the fed is learning, but how many times will they have to say that? has the fed lowered unemployment or has it increased real growth or has it lowered real interest rates in the economy? no. but we shouldn't expect the fed to do those things. as congressman ryan just said, the fed should focus on one objective which is using its control of the stock of money to maintain the purchasing power of money. using that lever, the fed cannot improve real economic growth in any permanent or sustainable way. so there isn't any rational for the fed to have a dual mandate or some people say a bipolar mandate.

what the fed can control, what the fed does control is the purchasing power of the dollar and of course it's notoriously failed to preserve it. before the fed silver and gold standards kept the dollar's value constant over the decades. on the fed's watch since 1914, as judy's guide emphasizes, the dollar has lost 95% of its purchasing power. a dollar today buys only what a nickel bought in 1914. so is having the fed in charge consistent with sound money? i think we have to ask ourselves that question. on a blackboard perhaps, but they haven't done it in practice. well, the fed's defenders say, isn't inflation at least steadier and more predictable under the fed than it was under the gold standard? well, no. somebody buying a 30 or 100-year bond or thinking about making a 0-year mortgage faces more uncertainty today about the purchasing power of the dollar, the dollars that will be paid

back, than investor faced under the classical gold standard. the best evidence for that is the market for 30-year-plus bonds has collapsed. should we give the fed credit for at least preventing deflation? well, first we need to recognize a distinction that seems to escape ben bernanke which is not all deflation is bad. when productivity is increasing, when say, computers become cheaper to produce, it's a good thing that their prices are allowed to fall. and that's the kind of deflation we had in the 19th century. there's a second kind of deflation which is bad and that's when prices fall because people are hoarding money or the money supply is shrinking. but prefed deflation was mostly good and the fed has wiped out episodes of good deflation, where the purchasing power of the dollars people held grew over time and goods became cheaper and cheaper. under the fed's watch, there have, however, been several episodes of dad deflation, 1920 to 1921.

and most recently 2008 to 2009. so no credit to the fed for that. has output been more stable? the great hope of discretionary mon tarry policy was to stabilize the macroeconomy to smooth out business cycles as they used to say to fine-tune the economy. it hasn't happened. of course the feds' record is especially bad in the inner war period but even since world war ii, although the statistics used to seem to say that the economy was more stable, it -- the statistics that we now have thanks to the efforts of economists who have made improvements to the real output measures, no longer say that. one of the leaders in that statistical revision by the way has been christina roemer. while she has an academic economist before she became head of obama's council of economic

advisors. in any case she's never been a tea partyier so this is straightforward statistical work. the older statistics were biased because they only include add few commodity series. today we measure more widely. that by itself gives a misleading picture of the stability of the economy. but when we adjust the statistics to take account of that, the pre-fed period looks actually slightly more stable than the post-world war ii period. the fed cannot claim to have improved economic stability on its watch even if we discard the great depression. which is a big -- spotting them a big one. we don't see any improvement even though today the economy is much better diversified. it's much less agricultural. we should expect improved stability even if the fed had no effect. but the fed has done worse than have no effect. the feds had a naturally more stable economy to deal with and under its watch the economy has been less stable. why? because they tried to do too much with monetary policy.

fine-tuning has turned out to be destabilizing in practice. we can try measuring stability in another way. look at the frequency and length of recessions. if you redate the old recessions using the new statistics, as christina roemer reported in 1999, the average length of recessions is actually one-month longer in the post-world war ii period than it was in the pre-world war i era. she said that in 1999. if we add in the recent recession, the case for the fed's failure becomes stronger. just as an aside let me say that the feds bailouts during the recent crisis did not save the economy. what they have done is sharply increase the bad incentives for reckless bank and financial market behavior going forward. now, i'm not saying we should go back to the exact system we had before the fed. that system was far from the best available. because it was far from a free financial market. various regulations weakened the

banks in that period, setting a stage for these three panics i mentioned. after the pan erik of 1907, congress convened a national monetary commission. congress had concluded rightly, i think, that the system was broken and a serious regime change was needed to improve it. instead of trying deregulation they gave us the central bank. today in 2010, in the shadow of the panic in 2007, we have just as much reason as people had in 1910 to conclude that our system is broken and a serious regime change is needed to improve it. hopefully this time around we will learn from our failed experiment with the federal reserve system, hopefully we'll try free banking and sound money, banking without artificial restrictions, without privileges, without bailouts, and commodity money regulated by market forces instead of by a committee of political pennsylvania pointees -- political appointees, thank you.

>> this panel represents what i believe is the kickoff on a major national grassroots education campaign. we are going to make sure that every activist that cares about economic issues in this country gets a copy of a guide to sound money. that will be the building blocks for a serious national debate as we go into the next congress. finally, i'd like to ask brad lipps, c.e.o. of atlas economic research foundation to come up for closing remarks. brad. >> thanks so much, matt. on behalf of atlas i want to say how thrilled we are see to see this conversation moving to the front burner of public policy discussions where it belongs. the history of our organization is intertwined in different ways with the legacy of f.a. high yack, the great economist of the austrian school which has been rediscovered in recent years because it's been the cycle

theory explains so much of the turmoil we have experienced. as representative ryan noted, our guide to sound money that judy has authored -- >> we'll cut away from this discussion now and take you live to the capitol where the u.s. house is about to gavel in to start the day. general speeches first. members will take a short break before starting legislative work at 2:00 p.m. eastern. a number of bills on the calendar including one supporting run away prevention month. all requested votes will be taken at 6:00 p.m. eastern. now live to the house floor. here on c-span. joritynd minorit

leaders for morning hour debate . the chair will alternate recognition between the parties with each party limited to 30 minutes and each member other than the majority and minority leaders and the minority whip limited to five minutes. the chair recognizes the gentlewoman from michigan, mrs.

miller, for two minutes. mrs. miller: mr. speaker, since wikileaks has begun releasing top-secret information that was obtained illegally, there has been a debate of how our nation should respond to this. i believe the -- it should be treated as a terrorist organization. . well, consider for a moment by the founder of wikileaks which shows exactly what he is, a terrorist. he has spread across the world an encrypted document which he claims has even more vital national secrets that he's going to release. and he calls these files his insurance files and he's

threatened to release this information if he's captured or if he's charged with any violation of law. those, mr. speaker, are not the actions of a journalist. those are the actions of a terrorist. even president clinton recently said that life will be lost because of the release of this information, but still, mr. speaker, we still have not heard anything on this issue from our current commander in chief, president obama. the silence from president obama, our commander in chief, is absolutely baffling. i yield back. the speaker pro tempore: the chair recognizes the gentleman from kentucky, mr. yarmuth, for five minutes. . mr. yarmuth: mr. speaker, there was a time that the gorgeous waterfront park in my hometown of louisville, kentucky, was a junkyard. it was a time just 25 years ago if you found yourself downtown

after dark you were either working late or lost. this was a time, believe it or not, that the louisville slugger was in indiana. you can't make this stuff up. no, these days it's hard to picture louisville before 1985. hard to believe how much has changed in the last quarter century. hard to imagine louisville without the mayor. you know, january 3, 2011, that's exactly what will be when we say goodbye with gratitude to the man for whom the title mayor for life proved just a little too optimistic. don't get me wrong. with our diverse and storied neighborhoods along with our hardworking community oriented families, the derby city, the town of mohammed ali, has long been a source of pride. if you could have dreamed it would be a world class 21st century city it has become. %%%. am,

but in reality tarp is not dead. and american taxpayers still face a daunting economic recovery with the federal reserve now downgrading their -- as it simultaneously engages in a dangerous quantitative easing plan which is a monetary policy used to increase the money supply by simply buying up government securities. this could further damage our financial recovery. . the special inspector general of the tarp, which is called sig tarp, quote, remains very much alive, end quote. in fact, his report states, quote, as of october 3, $180 billion in tarp funds were still outstanding. and altogether no new tarp

operations can be made. money already glated to other programs -- obligated to other programs may still be extended. dividends remain outstanding and unpaid. this is money that is owed to the taxpayers. the november report also criticized treasury's tarp program for failing to save homeowners from foreclosure. out of the $1.7 million american homes that have been foreclosed on january -- since january, 2009, tarp has only supported a little over 200,000 permanent -- now, that's less than 12% -- of the mortgage modification. disservingly, the report also indicates that treasury concealed $40 billion in taxpayers' losses on the a.i.g. bailout by changing its valuation method. our united states treasury is now saying that taxpayers will only lose $5 billion on a.i.g.

when it previously stated that taxpayers would lose $45 billion. mr. speaker, the treasury department seems inclined to paint an artificial picture of taxpayers' losses and clearly shows the ballparks isn't being straightrd -- the obama administration isn't being straightforward. on november 3, the fed announced that it will purchase $600 billion in government debt, treasuries, over the next eight months, initiating the second round of quan stay tif easing. -- quan tative easing. they -- quantitative easing. quantitative easing is a dangerous gamble and in many ways is akin to the creation of simply another tarp program. but without congressional approval and without transparency for american taxpayers. with this q-2, the second round of quantitative easing, our

nation's central bank will become the largest holder of the national debt in the entire world. the fed already holds $834 billion of treasury, and is on pace to have over $1 trillion in treasuries by august, 2011. that's more than china, japan or any other foreign creditor. the printing of new money as a way to deal with our economic issues is just as worrysome and misguided as the creation of the tarp program. the fed's q.e.t. program could lead to trade disputes to other countries. it could lead bond traders to believe that inflation will run wild and they could then themselves derail the fed's efforts by pushing rates even higher. it could also create bubbles as hedge funds and other speculators borrow cheaply and make even bigger bets on stocks and commodities. the two costs of tarps are not known. as are the dangerous monetary

policy the fed it pursuing. even in the improbable event that the tarp program will recover all of its funds, american taxpayers will continue to bear the cost of the federal government's demonstration that certain financial institutions are just too big to fail and likewise the cost to the economy are the fed's second round of quantitative easing will be unknown as the fed continues to operate behind a veil of secrecy. the american taxpayers are only finding out about the fed where it spent over $3.3 trillion in emergency programs propping up banks and financial institutions all over the world. mr. speaker, the incoming new republican majority, which the american people resoundingly voted in on november 2, is poised to take control of our disastrous economic situation by dramatically reducing federal spending and creating jobs through the elimination of this economic uncertainty that exists today and implementing

pro-business policies. we are committed to reducing the cost of government and the proliferation of burdensome regulations and we will usher in an area of growth that benefits all americans. the speaker pro tempore: the gentleman's time has expired. the chair recognizes the gentleman from massachusetts, mr. frank, for five minutes. . mr. frank: mr. speaker, before proceeding to the topic i plan to discuss, i do have to comment on the gentleman from florida. it's striking to which republicans are siding with the central bank of china and the chinese government and objecting to american federal reserve actions taken in our self-defense. there was some debate what the fed is doing. this could lead to trade disputes with other nations because of the affect on our currency. yes, the nation making the argument is china which undervalues its currency and is objecting because of a potential side effect what the fed is doing to stimulate

employment could be to reduce our currency vis-a-vis theirs. this notion that taking the side of these other countries in trade disputes, given the extent to which many of them have unfairly abused trade rules seems to me quite shocking and i'm continually surprised that my republican colleagues side with china, with germany and with other foreign central banks in their crit simple of the fed because -- criticism of the fed because of the effect it could have on our currency. i want to talk about the censure of our colleague from new york, mr. rangel, because i voted for a resolution amendment that would have had him reprimanded. mr. rangel did things he should not have done and should have been recommendry manneded. i do not believe, however, that they rose to the very severe level of censure. in my mind, a reprimand is the house telling a member that he or she has done things that

were wrong. but when you get to censure, if you look at the historical precedence here, you go beyond simple bad acts. you talk about a serious character defect. you are talking about someone who is a bad person. the ethics committee itself said that the gentleman from new york, mr. rangel, was not trying to enrich himself. he was careless, he was sloppy, he was too zealous in trying to get money at a public university for a center in his name, but it was not to him personally, financially. so i do agree he should have been reprimanded. given that he was not enritching himself he should not have been censure. i honor the members of the ethics committee. they do a very difficult job. they were fair with the procedures. i honor the gentlewoman from california and the gentleman from alabama. he said if mr. rangel had comported him self-differently

-- go back and look at this -- he might have been reprimanded instead of censured. that's inappropriate. the punishment voted for behavior should not be affected by what goes before. but there's another element of what goes before in the process. but there's another element to this that i need to address. i think i'm the only member still in the house who was not in fact reprimanded. i want to deal with those who consider reprimand a slap on the wrist saying, well, a reprimand was a no big deal. mr. speaker, it is a big deal. i'm very proud of my service in this house. i am about to start my 31st year of service and i'm very proud of the many things i have done. but reports of my service will include the fact that i was reprimanded 20 years ago for things that were done 24, 25 years ago and that is not something that anyone ought to consider simply a slap on the wrist. i bear the stigma of being

reprimanded. i am enormously proud of serving in this body that embodies democracy. it is an enormous source of pride to me that hundreds of thousands of my constituents choose me to serve on their behalf and to have marred that record which i am generally proud with a reprimand means a great deal to me. so i would just say in summary that given what mr. rangel did, given that he did things he should not have done but not for the purpose of enriching himself. they were careless, there were occasionally overreaches but not for his personal enhancement financially. given what we have traditionally reprimanded people for and what we have censured people for, reprimanded was the appropriate response. i voted for an amendment that would have made it reprimand. i do not think you should trivialize censure by censuring someone by engaging in the behavior that mr. rangel took part in. although he's not here, i'm

sure that former speaker gingrich, who was also reprimanded, would share my view that being reprimanded is not a slap on the wrist. i don't know how anyone who serves the pride that i feel serving in body and selected by american citizens to make the laws of this country could i trivialize something like reprimand. i yield back the balance of my time. the speaker pro tempore: the the speaker pro tempore: the chair recognizes the gentleman from pennsylvania, mr. thompson, for two minutes. mr. thompson: mr. speaker, last week the democrats fought back the death tax. now, this calendar year there has been no estate tax, and i guess in some ways it was the year to die. but on january 1 because of the actions of the house democrats, the death tax roars back at a rate of 55% after the first $1 million.

that means that your hares pay nothing on the first $1 million you leave them but they pay 55% tax on every dollar beyond that. i talked to a constituent recently who said his family had just during his lifetime, he and his family has bought the family business back from the government three times. every time a generation passed away. in other words, the hares have had to essentially buy back that family business over and over again. a million dollars sounds like a lot of money to most of us, but when you are talking about acreage or buildings or equipment homes, inventory, even livestock if you are talking about a family farm, it isn't hard to exceed the first exemption. small businesses can easily be punished by this tax. why is it fair to esectionly ask people to buy back -- esectionly -- essentially ask people to buy back family farms or businesses which they already paid taxes?

i yield back. pursuant do clause 12-a of rule 1, the chair declares the house in recess until 2:00 p.m. >> members taking a short break now before starting legislative work at 2:00 p.m. eastern. a number of bills on the calendar including one supporting run away prevention month. all requested votes will be taken at 6:00 p.m. eastern. more live house coverage at 2:00 here on c-span.

>> this is a live shot of the white house where white house spokesman robert gibbs will begin at 3:20. we expect the president to brief at 2:20 this afternoon.

in the meeb time -- meantime here's a portion of this morning's "washington journal." y weekend on c-span3. >> "washington journal" continues. our next guest is here to talk to us about the dream act. what is it? guest: there has been an issue by partisans to force enforcement by any means necessary on an immigration -- on immigration. this has been going on for decades. there is a big push to promote amnesty. but having the unsuccessful at pass an amnesty, which the call comprehensive -- having been unsuccessful at passing an amnesty legislation, they call

that comprehensive immigration reform. they feel that the parameters make the bill more appealing. the reason why the dream that is so controversial is that it is being overlaid against the template of no credibility in the executive for enforcement and a strong sense among the american people that this is not a priority that congress ought to be pursuing in a lame- duck session. the dream act is essentially a big, private bill. in the 1970's, it was about a bribery scandal -- getting a private bill through congress. it is a legal form of graft. people are brought here under a certain age and. they have been here for a certain amount of time. they may be the sponsors to

open, but then maybe as old as 30 or 35. through this debate -- this dizzying array of complex versions, harry reid and nancy pelosi are trying to get through this very complex piece of legislation without even seasoned washington observers understanding what is precisely in the bill, what it entails, and what it means for downstream immigration numbers and policy. it allows certain people to get non-immigrant or temporary status, like a visitor visa status, which can be renewed indefinitely. you can get this if you meet certain educational parameters, get a ged, enroll in college. it is nominally designed to try to encourage people to get an education. you do not have to graduate from college. you can enroll in the military.

the idea is, if you graduate, you can get your green card treaty can petition for relatives and then start the -- you can get your green card. you can petition for relatives and get as -- get the chain started. this continues a pattern of politicians -- some politicians, not jeff sessions from alabama -- some politicians continue promising amnesty in a way that promotes further illegal immigration. there is no question that the big batch into the dream act -- the so-called dream act is that it would continue to promote illegal immigration at a time when the administration is attacking the american people who are trying to get the situation under control. host: let me invite the viewer to phone in with questions and

comments. we have separate lines for republicans and democrats and independents. we will get your calls in just a couple of minutes. the house and senate could take votes on this item as early as tomorrow, from what we're reading. we want to show you the other side of the issue from a guest we had on the program on sunday. . here is the clip. guest: wheeler talking about a targeted group who grew up in it -- we are talking about a targeted group of people who grew up here. the are willing to put their lives on a line. we're talking about kids with degrees in science, law, medicine. i have met a lot of people who are very impressive, yet we deny

them the opportunity to contribute to the country they grew up in. it does not make sense to me. host: "upstanding, impressive people which braque what is the problem? "upstanding, impressive people." what is the problem? guest: under an entirely different tableau, they would have been increasing robust employer sanctions and enforcement. it would have supported the arizona immigration law. it would not be in the supreme court trying to attack the employer sanction law. ubermensch and nevers clear signal -- they would be sending a very clear signal. it will solve problems that would prevent recurrence. once again, frank sharry os

misrepresenting the bill. you do have the right to petition relatives. we have dramatically underestimated immigration levels. the census is having to adjust their numbers higher than they projected, soaring to 350 million people. this bill will have downstream implications for that. the administration of the train act will hamstring the department of homes -- of the dream act will hamstring the dhs for years. it will decimate immigration enforcement. people who get benefits under the bill will have equity to argue that their parents should not be deported. when they're 21, they can petition for their parents. then their parents can turn around and petitioned people. it will dramatically increase immigration. what he and his allies are doing is politicizing. it is not going to pass the

senate