success for the middle class means a better life for our citizens. it is central to america's continuation as a role model for the world. i want to say a brief word about what we have done over the past years -- over the past two years, to strengthen the economy. and then turn to what i see are the great challenges we face in the years ahead if the american economy will work for all people. just as scholars continue to debate how close we came to nuclear conflict during the cuban missile crisis, they will continue to debate just how close the american financial system and economy came to all out collapse in the six months between september 2008 and april 2009. what we do know is that, during that time, the stock market fell more sharply than in the six

months after black tuesday in 1929. will will trade declined more rapidly than in the great depression -- bull will trade declined more rapidly than in the great depression. -- global trade declined more rapidly than in the great depression. i have little doubt that we will be looking at a vastly different world today. yet, while the economy may be out of the intensive care unit the patient now faces the long road of not just recovering from previous affliction, but beginning to address chronic ailments. the slow process of recovery has caused some to conclude that

perhaps we have entered a new and weakened normal state of affairs. it is a state where we must lower our sights, lower our aspirations, and not be able to pass on to the next generation the kinds of dramatic improvements in economic american attentionpotential lead that was handed down to us. president obama disagrees with his future. we can and we will rebuild and renew the american economy. to do this, we need to do two profoundly important things in the years ahead of. both are necessary. neither is sufficient. first, we must generate for momentum in the economy to fully recover from the great recession. second we must put in place a framework that assures that our

growth productivity, and living standards continue to lead in a rapidly changing world. we must do everything we can to ensure that this recovery is as rapid as possible. without rapid recovery, all of our other goals will be compromised. there will be no prospect of reducing medium-term budget deficits while simultaneously increasing investment in human capital. there will be no prospect in remaining an example of the rest of the world. there will be no prospect of restoring and growing living standards for the american middle class. above all, there will be no prospect of putting 8 million people who should have jobs back

to work. what is holding our economy back? when unemployment has been above 9% for 19 straight months, when the job vacancy rate has hit near record low levels, when 8 million houses and countless shopping callous square feet of office space and retail, sit empty, when capacity utilization in the nation's factories and byways and railways are as low as any time since the second world war there cannot be any question that the constraint on our economy now and for the next several years will be the lack of demand. i am under no illusion that

increased the demand alone is sufficient to restore america's economic health. but it is unquestionably necessary component of a full recovery. unfortunately, the approaches we have become used to over the last 50 years to supporting demand in a market economy are not open to us today. short-term interest rates cannot be reduced below the current level of zero. in the face of excess capacity and excess debt, it is not clear that, even if it were possible, falling interest rates would be terribly potent in convincing consumers and businesses to spend more. we need mess withtraditional approaches. it is always the case that, when we export more successfully, we are more prosperous.

but when the economy is demand- constrained as it is now increases in exports have a far more potent effect because with excess capacity, more exporting does not mean less of anything else. that is why agreements like the one we recently concluded with korea are important as is the breathdth of the support it has received. the president has a goal of doubling our exports over the next five years and pointed toward specific ways for achieving that objective. in forcing a tree agreements, relaxing export controls, standing up directly and diplomatically for the interests of american producers, and perhaps, most important insisting on global flora on the rebalancing of the global

economy. promoting exports, however, will not be enough to ensure adequate demand. in the decade prior to the current downturn, the american household and business sectors if you add them together spent close to 2% of gdp more than they earned. they were net borrowers. as a consequence of the developments of recent years this situation has changed dramatically. private spending now falls nearly 6% short of private- sector income. that means the private sector has swung in its deficit by about 7.5% from a 2% deficit to

an little less than a 6% surplus. that's when, all of which means less demand, is one -- that swing all of which means less demand is one of the reasons why we are suffering in the after massaftermath of this great depression -- this great recession. even with all the fiscal measures of the last several years told barring in the american economy has -- total borrowing in the american economy has failed to grow in the last two years. that is the first two years since the second world war where the total borrowing in the american economy has not increased. let me be clear. even with our deficits the deficits have fallen short --

which means extra debt. but the amount of extra debt is less than the amount of reduced borrowing by the private sector. increased federal borrowing has offset the leveraging in the private sector. that is why the recent attacks agreement between the president and congressional leaders is so important. in what could have been a sears collapse in purchasing power and ads for more fiscal support than most observers thought politically possible. it as unemployment insurance a payroll tax holiday refundable tax credits and business expensing. that is why independent estimates of job creation over the next year or two years are being revised up by 1.5 million or more. these measures not only support jobs but also are medium-term goal of deficit reduction.

by retiring allowances a business expense and raises revenue collection after 2013. it accelerate recovery, the additional effect of these measures which is the most important form of deficit reduction. it 1% in fermented gdp in 2013 or any year afterwards -- a 1% increment in gdp in 2013 or any other year afterwards reduces the deficit. these concessions were the price exacted by the congressional minority for the fiscal support that will provide a significant impetus to the economy.

but the clear. compromises that were necessary with a weak economy in 2010 should be inconceivable as recovery accelerates in 2012. the extraordinary gap that i referenced a moment ago has opened up between private saving and private investing. the tax compromise will help. but it is not enough. at a time when real interest rates, even over 30 years are -- at a time when real interest rates, even over 30 years are low -- what better time to invest in renewing and upgrading our nation's infrastructure? working off a backlog of

deferred maintenance and insufficient investment, a substantial and sustained effort to rebuild america should be the top of washington's priority list next year. these measures, taken together, will accelerate recovery. accelerating recovery and increasing demand will mean more workers with jobs, more employers in a position to provide training more capital investment in capacity for the future more revenues for state and local governments to make the investments that are crucial for them. without increased demand, we're not in a position to pursue our longer-term objectives.

individual efforts to save more lead to less total savings. more educated workers may get jobs but with demand constraints, those jobs come at the expense of their less educated neighbors. with demand constraints increases in productivity may exacerbate deflationary measures and increases in efficiency may result in more unemployment rather than more output. that is why we have to drive recovery and remove the demand constraint on the economy. at the same time, it is essential that we recognize the fiscal and monetary policy or increases in demand never made a

society prospers fair -- never made a society prosperous, fair or safe. you do not succeed by producing a exactly the same thing that other people are producing in the same way just that lower costs. use exceed by establishing your own uniqueness in -- you succeed by establishing your own uniqueness in products. think of the distinctive with that southwest or new corps or even wal-mart deliver their products and services. the united states has led the global economy by building on its unique capacities.

by building on our distinctive strengths, we continue to lead in the next century. there is no going back to the past. technology is the accelerating production and mass production productivity in mass production, to the point where even china has seen manufacturing employment declined by more than 10 million jobs over the most recent decade for which data is available. we are moving toward a knowledge and service economy. another inescapable truth is that the world is shrinking. larry referred to baseball. when i worked in jakarta 30 years ago i tried to follow the red sox. when the red sox play on tuesday night, i learned how they had done on friday because i needed to wait for the international " herald tribune" to get there. it did not have the tuesday night game.

the thursday night issue was delivered early in the afternoon in jakarta on friday. it is different than smaller world. what does it mean to adapt to this? just as the american no. prospered even as the southern part of the united states caught up even as we drew a strength in a generation after world war ii as europe and japan's economy is or rebuild and converged toward our own, we will need to find ways to prosper and benefit as the emerging markets of the world take their place on the global stage. what should our approach be? some suggest that we have no

alternative but to compete with the world on price even if it means striving to win races to the bottom. they would have workers sacrifice wages, benefits, and bargaining rights to hold onto their jobs. they would slash taxes on businesses even as their profits rise in order to lure them to stay in the united states. they would shred social safety nets in the name of self- reliance. social darwinism? was that -- it was bad economics in the 19th century. it is no better in the 20th. by far, the largest part of the americans -- by far the largest part of the activities americans engage in and the things they buy remain low. recreation and education

insurance policies hotels and houses and i could go on. moreover, where we compete with other countries our strength as collective. few of us can hope to succeed as individuals in a global economy where any particular task or skill can be purchased at very low prices like much of asia and beyond. rather our strength must come from establishing uniqueness establishing that which is difficult to replicate that which comes from more collective action. if any idea or machine or individual capacity can be transplanted far harder to transplant, imitate, or emulate

are our great institutions, the national laboratories, the national parks, and the national highway system. great universities and great university city clusters. deep capital markets and tremendous traffic. where competition is concerned the lesson for us as a nation is the same as the lesson for business. it is far better to compete by innovating leading, and building on strengths than by standing still and reducing prices. let me highlight what i see in this regard as the three essential priorities for the years ahead. president clinton used to say that in a world where ideas can move, capital can move. a nation's distinctive strength lay in its people. our biggest failing as a nation

over the last 50 years has been with respect to education. we were once the envy of the world. now we struggle to get into the top half of oecd nations. the duke of wellington famously observed at the battle of waterloo that it had been one on the field of eden. the bell for america's future will be won or lost in its public schools -- the battle for america's future will be won or lost in its public schools. there is a debate for those who want more accountability and those who see the need for more resources. in truth no one who has seen the conditions in our urban schools can deny the need for more resources and no one who believes in incentives can deny the need for more accountability. the race to the top, the administration has sought to

provide resources and increasing accountability. these efforts will have to be greatly magnified in the future. even as we strengthened elementary and secondary education, but we must also expand higher education opportunities. the u.s. used to lead the world in the share of its young people who became college graduates. it is no longer in the top 10. worse yet, over the last generation in coming? in this land of equal opportunity -- income gaps in this land of equal opportunity and college attendance have widened. i would submit issues of subtle discrimination. to take just one example would suggest to you that the least averse questions in america are

in the s.a.t. prep schools that help some but not all students raised their admissions scores. this is why the administration has made major new investments to expand educational opportunities. since taking office, the administration has funded an unprecedented doubling of the pell grant program which will help more than 8 million low- income students. it will help them attend college. at the same time, there is the tax credit. in less tumultuous times, i would suggest to you that the largest increase in federal support for college attendance by students from low and middle income tax brackets would be recognized as a signal and

defining achievement. it is a reflection of the magnitude of the issues that we have grappled with over the last several years that this is not receiving the attention it deserves. education is closely linked with the second major priority for the years ahead. innovation, the other central pillar of economic growth -- for very long time, we have had in the united states a distinctive ecology that is the reason why we are the leading economy in the world. on the one hand, we have recognized venerated, and acted on the observation that it is

individuals, edison, 4 gates -- edison, ford, gates zuckerberg who would not dream of filing a grant application who drive an enormous amount of the economy's progress. we have maintained a culture where it is still true today that with all of our financial systems failures, and there are many, we're the only country in the world where you can raise your first $100 million before you buy your first tie if you have a sufficiently good idea. that is a great strength of our country. at the same time as maintaining a culture that supports the

entrepot nor, that sluice the rubble -- supports the entrepreneur, that salutes the rebel, that establishes major figures in business without college being complete, we also recognize that fundamental an ovation and progress will not happen without the public sector play its essential role. there would be no internet without darkpa no pharmaceutical industry without the nih. maintaining and increasing our american capacity for innovation thus requires both fundamental support for entrepreneurial innovation and

for the key foundations of science and technology. that is why we have to make it easier to patent a new idea or innovation, make it easier for entrepreneurs and small businesses to raise capital make it easier for the most promising mines and the most promising entrepreneurs to come to this country from around the world. but we must also take the steps that will not happen with setup -- without satisfactory education satisfaction. if we are able to maintain what is distinctive about the united states, the simultaneous capacity for strong public actions and for great entrepreneurs to emerge in the

years ahead you will be in a far stronger position to assure our leadership. the third and final thing that we must do is renew a fundamental public compact between the present and the future. perhaps the most important elysian that -- most important illusion that permeates our public discourse is the idea that budget deficits, as a way of financing government, is somehow an alternative to tax increases. it is not so. deficits are a means of postponing and magnifying ultimately necessary tax increases or spending

reductions. they are a tax on our future unless used to finance productive investments. i am not one who sees financial collapse on the imminent horizon. indeed, i believe that, at this point, the risks of deflation or stagnation in the united states exceed the risks of uncontrolled growth or high inflation. unless we change our course, we are at risk of a profound demoralization with respect to government. on one level this means a decay of essential public functions and a loss of our national self- confidence.

at eight people -- at a deeper level, we risk a vicious cycle where and inadequately resourced government performs badly and leads to further demands for to be cut back, exacerbating performance problems deepening the backlash, and creating a vicious cycle. that is why while recovery is our first priority, it is essential that we establish long run parity between revenues and expenditures. this is a more complex matter then is often supposed. -- a more complex matter than

is often supposed. one of the things to come out of the economics profession over the last generation or so is the phenomenon known as devil's disease -- bammel's disease. in some areas, rapid growth as possible. in other areas, it is not. it always has and always will take eight teachers to teach 96 students for one hour in class's of 12. product -- in classes of 12. productivity improvement is not possible as in other ways. think of nursing care as another example. moynihan's corollary to bommels

disease is that there are activities were the disease is more pronounced to migrate to or be relocated to the private sector. for example, every five years a share of gdp devoted to government spending on health care goes up by one percentage point. as we contemplate our long run fiscal future, we must contemplate this reality rather than to suppose that there is some past static pattern our revenues and expenditures that can be maintained indefinitely. that is why the work of the

bolls/simpson committee is so important. that is what president obama committed himself to health care cost reduction in the context of the recently enacted health care legislation. if there was never an area where president kennedy's doctrine demands man's problems were made by man and therefore can be solved by man, if it was ever any place that that can be applied it would be the budget deficit. greece and ireland are being called upon to make fiscal adjustments in the range of 10% of gdp. once our temporary fiscal support expires we need an improvement only in the 2% to 3% range of gdp to begin the process of putting our debt on a

declining path relative to our income. president obama has already taken several important steps in this direction, and multi-year freeze root out wasteful spending particularly in defense. he -- the particularly welcome feature of the recent commission report is its bipartisan recognition of the idea that tax expenditures are just like expenditures and need to be held to the same standards of efficiency fairness, and tough tests on government's intrusion into the economy.

they say that market's climb walls of worry. so it is with our nation. america's history in a certain sense, has been one of self- denying prophecy a history of alarm and concern but alarm and concern averted by decisive actions to ensure our prosperity. one cia director warned of our largest competitor that industrial growth rates of 8% to 9% per year for a decade would dangerously narrow the gap between our two countries. that was allen dulles in 1959 referring to the soviet union. when the soviet union collapsed instead, the harvard business

review of 1990 proclaimed in every issue in one way or another, that the cold war was over and germany and japan had onewon. now we hear the same thing with respect to china. predictions of america's decline are as old as the republic. but they perform a crucial function in driving the kinds of renewal that each generation -- that is as long as we are worrying about the future the future will be better. we have our challenges, but we also have the most flexible dynamic society that the world that ever seen.

if we can make the right choices, our best days as competitors still lie ahead. thank you very much. [applause] >> ar procedure now is that we are first going to take some questions from the audience. we give out -- we gave out cards earlier. i think they are being collected. we will take a look at a few of those. then we will go to the press. let me first start with one of the questions. in your speech, you pointed to the need for a greater

education. as you know, the typical college graduates is earning today what he or she did 10 years ago. the stagnant wages were the case even before the recession. what does this tell you about the additional need for policies to deal with wage growth so that every worker can benefit? >> if our college graduates or are high-school graduates find themselves imbedded and a individualistic competition with workers from around the world or if they develop skills for which the demand is going to fall because of a possible replacement by technology, their wages are not going to rise.

on that -- a necessary strategy for increasing wages is that we develop areas of unique strength that are less subject to international competition. that means the vast range of activities described in my speech where the market is inherently a local, that also means maintaining the capacity for innovation so that our production is producing things that are not what the business strategists called strategizing -- the modest sized businesses were that competition is going to the most brutal.

it also goes to the quality of education as well as the quantity of education. we have seen an enormous emphasis on the measuring achievement, raising standards increasing accountability on school systems, on teachers, on students. compound and i would predict that over the next two decades -- i would predict that over the next two decades, we would see the same accountability come to higher education. if carefully managed, that will be a very good thing. >> another question. given all the developments over the next -- over the last several years what has happened that might lead you to think that economics itself need

some accountability? and some change? >> look, i do not see how the events of the last decade can fail to have an important impact on economic thinking at a number of different levels. to take just three examples, in the standard introductory economics textbook, discussing about business cycles and the like, a financial intermediation is essentially not mentioned. there is a discussion of the interest rate, the interest-rate as it affects the mountain -- the money market and as it affects investment but the issues around the financial mediation are not mentioned.

obviously, what we have -- after what we have been through financial intermediation will need to be much more prominent as an issue in mainstream economic thinking. second mainstream economic thinking s still dominated -- thinking is still dominated by the production of widgets. it has a rising marginal cost. you have a competitive market. can the knowledge economy, the -- indian not -- in the knowledge economy it has very marginal cost. think about publishing a book. since about a program of software.

think about the pharmaceutical product. think about what has happened to the ratio of design cost and production costs in automobiles. if you think about such a market, high fixed costs low marginal cost, if you have standard competition, it pushes prices are back to marginal cost, and the firms will not be able to stay in business. in a whole set of ways, the canonical form of an industry is going to be different going forward. third, when i went to graduate school which was some time ago, one other thing she learned about was -- one of the things that we learned about was the stability of the income distribution. that was a reasonable reading of the data.

it is a manifestly wrong the reading of the data over the last two decades. what is especially salient is there are significant movements and skill differentials in terms of the relative demand for college educated and high-school educated labor and the like. but a striking phenomenon in the data is the fratto quality that has happened to the top 1% with relative to the bottom 99%. what has happened in the top 100% relative to the top 10 of a percent. economists are only beginning

to understand what the forces driving that car. that is also going to have to be a central part of economics going for word spread -- going forward. these events should force a very substantial reformulations. at the same time, i would caution that the fact that there is a lot to which economics has to adapt does not mean that everyone who has said that mainstream economics is wrong has been right or that every critique that has been offered has validity. i think we need to be rather careful about throwing out the baby with the bath water, even

as they recognize that any responsible synthesizer of what economics knows or thinks or needs to study will have very substantially revised their views over the -- driven by the experience of the last decade. >> in your top, you mentioned the substantial deleveraging process that is underway and will be going on for many years. several of deficit commissions -- several deficit commissions both recommended deficit reduction starting in fiscal year 2012. it means starting in october of to dell's 11. diaz think that that is too soon to start -- do you think that is too soon to start any deficit reduction?

>> the commissions also called for a short run the measures to increase demand. the right time to cut wasteful spending where you can identify wasteful spending is now. then you can make a separate decision about other kinds of investments with the revenues that you save more ways that can be used to maximize spending. isolate the objective -- i salute the objective of reducing wasteful spending as soon as possible even as i expected that the economy will be demand constrained for several years to come. i believe that buy only

operating on the demand side can you increase the demand and that the path of fiscal policy and the structural deficit is a very important determinant of demand. >> why don't we turn to the press? we will have people stand up and announced today are. come >> [inaudible] >> there is been a certain amount of employment of economic forecasters generated in the last several weeks revising their forecasts. to my knowledge, all the forecasts have been up towards -- upwards by malice that run in the 1% range. one said some of the commentary has

missed is that many of the forecast revisions speak about 2011 a relatively -- relative to 2010. if you think about 2011 gdp, the average is the gdp in july. you increase the growth rate by 4% over the course of 2011. the average level of gdp in 2011 but only be increased by 2%. when people speak of the increment from -- those often underestimate what the prospective growth rate is going to be going forward. clearly, it is positive and in the 1% range. the other thing that the bill has done is that it has

truncated the left tail of possible forecasts. forecasters to have been revising their forecasts all assumed that the middle-class tax cuts would be extended. it's a process had broken down and there had not been a tax bill this session in the middle class tax cuts would not have been extended. in that case, you lead a scene forecast revisions, but you would have seen that in the negative direction. the change as a consequence of this compromise is greater than the up towards our vision and forecasts. >> [inaudible] diaz think that it will be addressed individually? -- and do use think that it will be addressed individually? >> economic prognostication is a

hard. political prognostication is beyond me. it is inconceivable that the united states could allow any serious question to arise with respect to our debts. >> [inaudible] this been your last speech in your current office, [inaudible] what would you -- >> and the styles and regrets are slightly different. >> what was your worst major decision? [laughter]

>> i do not think -- the president has said many, many times that none of us can arrest or can be satisfied with anything like the current level of joblessness with anything like the income gaps between what people could be earning and what they are. that is where one would have liked to have seen more rapid progress. one does need to recognize and

that relative to what was widely feared the outcome has been a good deal better. i think one needs to let time pass to fully evaluate the policies that have been put in place. i tried to make clear we have a great deal left to do. we have very important problems to solve. for all of our problems, one looks at the other major industrialized countries in the world, we have a relatively good hands to play. i remain quite optimistic about the future. >> [inaudible]

anybody who looks at the financial crisis regulation or deregulation was the major factor. it looks like one of the highest items on their agenda is regulation. what do you think the role for regulation is in the years ahead? deal of progress regarding the financial sector? -- the you have regrets regarding the financial sector? >> i think it is very difficult to predict what will happen over time. to the size of the financial sector. there is no question that vast success built up in the period

it from 2001-2008. i think the volume of derivatives trading, for example, was 100 times as large by 2007 as it had been in the late 1990's. that is why in the implementation of the financial reform bill and its tough-minded implementation is going to be so essential. i said many times in the financial reform debate that it was a profoundly important one both for the issue of financial reform and for the broader

effectiveness of the democracy. there was $1 million being spent on lobbyist per members of congress. another lobbyist for working on that bill that every member of congress could be quadrupled. if that effort succeeded it was going to be a very serious thing not just for what it meant to the financial sector future. that effort to -- that effort that went into blocking financial reform had not gone away. it has been turned toward volcker rule writing process. it is hugely important that the efforts not succeed. we will have to find ways to assure that on the one hand, we

bring substantial expertise to bear on these questions of financial regulation. at the same time, we maintain the kind of objectivity and distance that is essential to successful regulation. that will be one of the very important issues going forward. >> [inaudible]

>> i think i had said on occasion that i was one of the few people who came to washington to get out of politics. i will stand by that. with respect to the tax bill, look, i think is pretty clear that anything that leads to an upward revision in the forecast leads to a downward revision to the probability that you attached to another downturn. there is a further point that there was the risk and it was a risk that had been growing that somehow none of the tax cuts would be extended and that led of had extremely serious impacts on the economy and would have

had extremely serious impact on congress. >> a follow-up on dan's custom. if you had it to do over, is there anything that you would have done differently? would you even have come down to washington? >> there is no question that i would have accepted the president's request that i serve as his economic adviser. this has been an enormously consequential time for our economy. i have been honored to be able to play a small part to in it. and to work with what i think has been was a remarkable president and what i think has been a quite extraordinary team of individuals working to

strengthen and support to -- support the economy. what i liked the results to be even better than they have been on a number of different dimensions? of course. but i think the president is right to take pride in what has been averted. that is not easy for people to understand. but it is something that i think is very, very important. i will leave it to people who have not to directly involved to do postmortem is on a particular

decision. >> with respect to the current tax expenditure framework on the estate tax, what was the president's position? why? it the position is not in the framework, why did they go with that? >> i think the president has spent extraordinarily clear in every stating his position of opposition to the estate tax relief contained in the del. all of the view that compromise was necessary to serve the most important objective of pushing the economy forward. his position was of opposition to the estate tax provisions, but of willingness to compromise.

>> [inaudible] >> i think the japanese example both disturbing and instructive. i think it carries less than that it is a serious mistake -- lesson that it is a serious mistake to be complacent partway through an economic recovery when substantial slack remains. it is very important not to be premature in the declaration of victory. a similar lesson is taught by the american experience in 1937 and 1938. as tempting as as attractive as it is to focus on long run, as

long as the economy is still well short of its capacity, it will be essential to pay attention to issues of demand as well as issues of supply, to pay attention to the kinds of spending that can directly create jobs. that is why i spoke about the importance of exports. that is why i emphasize the role of infrastructure investment. that is why talk about government's role not as misogynist source of demand, but in replacing the lost demand that comes out of the private sector. that is an important lesson to learn from japan. >> but just wanted to get back

to your point of counteracting the lack of demand. if there is a concern that a rise in long-term interest rates could offset some of the beneficial impacts of that, and on the in the stalls out question what did you like most about being in the white house? >> reporters like you. seriously, i will miss the opportunity to work with remarkable president, a great team and to be involved in the daily flow of events. at the same time, i look forward very much to being able to step

back and think about some of the very important questions we talked about today with the kind of perspective that is not possible when you are working on a daily -- when you are working in the daily grind of the white house. there are things that i will miss even as there are great things that i look forward to. well as the first part of your question? >> the risk of a rise in the long term. >> you have to make judgments and we will have to make the judgments -- judges will have to be made over time in the context of events as they unfold.

as i said, at this point the risks of stagnation and deflationary exceed the risks in the opposite direction. you do not want to find out how far you can push things. that is why i into size to -- i in besides having a framework and having a framework in place that provides that that growth to be matched with income growth. when you see interest rates rise and the stock market falls sharply at the same time, that is suggested that what is happening is some kind of major concern about the supply of private capital. when you see interest rates

rise and do see the stock market be stable or rise, it is more reasonable to attribute the increase in interest rate to an upward revision in the economic forecast a sense of better prospects for business and more investment demand. it the look at the pattern in recent weeks, the pattern would suggest that what had driven interest rates was primarily the greater prospects. >> how confident are you that this package is going to be enough to give the economy that boost? >> i think i indicated that i thought the tax measures were very important. i talked about infrastructure, about a range of other priorities. we were going to need to remain

attentive to demand issues for quite some time to come. thank you very much. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

host: devon chaffee is our guest, advacy council for their human rights work group. the senate is expected to consider a provision this week that would block the obama's administration's -- what with this prosion do? guest: it would prohibit the ministration from using funds to transfer any guantanamo detainee to the u.s. for nine months, the length of the funding provisions. what it would essentially do, in many cases, it might prevent the administration from seeking justice at all in many of these

cases. it is tantamount to obstructing justice in many of these cases. the administration has identified approximately 35 cases where ty believe should be brought to trial. many may not be able to be brought to trial except in a civilians heading. the alleged criminal conduct was, in fact, not a war crime at the time that the conduct was committed. if the military does not have jurisdiction over these cases and congress moves to prevent these cases from being heard in the u.s., these criminals may never be brought to trial, and the victims of their crimes may never see juice. host: this provision bars the transfer of any funds for any detainee in prison for nine months. so effectively, guantanamo bay

will not be shut down for at least nine months. guest: there are many obstacles the administration is working to overcome with the closure of guantanamo. there are over 130 detainees that are set for repatriation and the administration needs to find countries for them to go. clearly, bringing those that should be brought to trial is a huge obstacle to close in guantanamo. there is no reason why if there are cases that have been identified, that the administration should be able to move forward in this case, in this an error that is most -- in the venue that is most prepared

to handle this type of thing. it is the civilian courts that havehe experience in dealg with these cases given with the sensitive information the complex information that arises. host: a blog on "the washington post" describes --

your reaction? guest: i would say, first, the case that you are referring to, the east african embassy bombing, he wasonvicted on one charge. many of those charges were dismissed, but he was convicted and he faces 20 years to life in prison. moreover, in that case, it demonstrated that many of the concern that folks are concerned about did arise. none of th are rose in the trial in manhattan. there were no disruption to the

community. that case did move forward smoothly. i think you to see the administration coming out -- we heard from eric holder. the white house has come out strongly against a provision. i think the battle is far from lost, at this point. it is still uncertain what language the senate will use in the spending provisions. there is talk that the senate made strip out the senate language from the continuing resolution and propose entirely new spending legislation. we see the admistration opposed this provision. it is clear the attorney- general still want to have the option for civilian trial on the table. host: "the washington post" notes that at least one democrat who is influential indicated

he wanted this stricken from the final legislation. guest: his opposition to the provision is very important to know being a senior member of the committee that wl be working on the senate version of the funding language. i think there are many like senator leahy who have come in the past, been supportive of civilian trial the use of civilian trols as an effective means to combat terrorism but also preserving the president and administration's prosecutorial authority to decide the most appropriate form for these cases. this would be an unprecedented restriction on the administration's ability to move forward with criminal cases in a particular forum. it is unusual for congress to

step in and say you cannot try cases in a particular course and preven the administration from pursuing justice. so i think you hear a lot of members of the senate who are concerned with this ideaf restricting the president from being able to move forward with trowels in any given form. host: you said the the administration opposes the language in the house bill, but "the washington post" editorial this morning disagrees with you. it goes on to say this --

guest: certainly you cannot say that there have been no trials under this administration. i think there is a lot of frustration on the lack of progress. the administration has had the authority to bring individuals into the united states for prosecution for over a year and has that acted on that. it is understandable there is frustration around that. this issue should not be politicized. we are talking about burning individuals to justice -- bringing individuals to justice in some cases, for the most serious actions taken against the in that it states. we have -- united states. we have seen the attorney-

general speak. in his opinion, they have the evidence necessary to move forward in these cases. host: we are talking about what is next for guantanamo detainees. can we afford the risk to our national security to let the detainee's go? guest: when you talk about risk of releasing detainees, you have to think about the comparison of the risk of holding them. we have seen a number of national security experts including from past administrations who have stated that guantanamo is a recruiting tool for terrorism. you have seen secretary gates boys this conclusion, that

guantanamo is a national security liability, and closing it is a national security imperative. in regards to the director of national intelligence report, it is not clear -- those reports are hard to verify, they are hard to confirm. they did not list names. it is impossible for any outside group to verify the allegations made. in the past, we no reports about recidivism have included actions taken by detainee's such as writing editorials, participating in documentary's about their experience categorized as return to the fight.

there is a question of whether or not that is an accurate number. it is almost impossible to verify. host: according to "the new york times" the latest number information on detainees -- devon chaffee is an advocacy counsel at the human rights first group. norman your first. go ahead. caller: thi all started with george h.w. bush when he went intoanama. we do not deal with governments that all political prisoners, but we consistently hold political prisoners.

now we have these so called enemy combatants that are not fighting for any government. every war in the past has been between governments and not people. guest: i think you give a good point, citing the example of noriega. he stood trial, a civilian trial, and was convicted. in his case, there was a refusal to treat him as a warrior. instead, the government decided to delegitimize him simply as a criminal. i think that is one of the arguments for why these cases -- from a nation security standpointfrom a standpoint of delegitimizing terrorists and

their support groups, who are seeking more your status, -- warrior status, you are simply reducing them to a criminal. host: next phone call. caller: if you have cable tv, watch tru tv. you will find out at 9:00 central time, this coming friday this 9/11 this war that is going on and continues, was a

government cover-up, and it is with jesse ventura. host: that was more of a common than a question. next phone call. ross. caller: i am wondering why terrorists are not brought to court, in world court. their actions have affected not only the united states but the world. i was also wondering if your guest has ever visited guantanamo bay? guest: that is an interesting question your first question regarding why terrorists are not being held before world courts. that is an issue that has been raised by some who think the forum for criminal trials such as the international criminal court, should be expanded to try acts of terrorism.

that has not happened to this point. there is not an international forum for trying these cases. that is certainly an idea out there. unfortunately, that form the not exist at this moment. to your second question, i have been there a number of times. my organization goes dn to observe the military commissions, so i have periodically gone down there. although we are not given access to detainees, we do not have interaction with them but we have served the military commissions process. what i have found concerning, watching these proceedings, it is very evidt that thi is a new system, a system that is unted. a system where there are unanswered legal questions that have been answered for decades inside the united states.

that is one of the obstacles that has been preventing the military commissions from moving forward in any meaningful way and is one of the concerns, reasons why the regular federal courts are a preferred venue for these types of cases. host: what types of questions come up at these commission that would not at a civilian trial? guest: one examp when i was down there khalid sheikh mohammed and the other 9/11 defendants he asked the judge if he pled guilty, could he faced the death penalty? the judge could not answer the question. it seemed like a pretty simple question. it is a question that has long been answered,ere in the u.s., but because of the way the

statute was written there, he could not answer. there are also questions about when the military commissions actually have jurisdiction over certain crimes. there are certain enumerated crimes such as material support terrorism conspiracy, that traditionally had not been considered as war crimes. so there is a question as to any types of convictions to these war crimes would be upheld by the court even if they were to succeed at a lower level. host: has the deathenalty question been answered? guest: we have not seen an answer to that question, to this point. host: next phone cl. oliver. you are next. caller: i am deeply impressed

but concerned by the sheer length of time that this process has taken. on some legal issues, it might seem reasonable that this thing progresses' at the rate of 11 months at a time, but when we are talkin about individual lives people who have been incarcerated for eight, nine years, it seems to me, this is an egregious human rights violation in itself, and that should outweigh all other considerations. we do not know, at this point in time whether they are innocent. guest: i think you raise an

important point. we are coming up on the ninth anniversy of guantanamo being opened in january. i think some of the individuals are being improperly held. a number of them have won their habeas claims in u.s. courts, which means the administration does not have a lawful basis to continue to detain them. and it is going on for an incredibly long period of time. certainly, these indivuals reservedesert remedy for these human rights issues, and stepseed to be taken in order to facilitate the closure of the facility, and to end the legacy that guantanamo has come to represent. host: tweet from a viewer -- guest: as i stated before, over

400 convictions have occurred since 9/11. civilian courts have dealt quite adeptly, with acts of terrorism. the now-convicted times square bomber was sentenced to life in prison in october. we have seen a number of cases in the past year where the fbi has used the regular civilian system to pursue terrorists. our normal justice system has not been inhibited from gaining intelligence. they have been able to go forward with these cases. they have been able to secure individuals who are now facing life in prison. what we have seen in the military commission is it is untested, and tried -- untried

and the risk for a sentence being overturned through an appeal. it is clear our regular federal courts are the preferred venue for dog so. host: are more suspected terrorist being transferred to guantanamo? guest: no, at this point the administration is not sending y detainees to guantanamo. it has said a number of times it is committed to closing the facility. i think that commitment is important to our allies abroad. that is important to us being successful in our operations

abad. our commitment to close guantanamo is very important to our allies, important to assure our allies that they can cooperate with the u.s. in terms of intelligence, detention and they do not have to risk being complied with what they consider a right ofviolation of their human rights obligations. host: next phone call. caller: i wanted to congratulate the young lady, your guest, for bringing to light some of this in senate that -- insanity that seemed to be able to go unabated. i want to know why there is resistance at two public trials. there is an attempt across the media and in political

structures as it exists, to keep the primary reason -- to begin with the word terror can be applied to anyone. you can walk down a building in minneapolis and open fire and it is terror. it is basically the resistance we are dealing with. any one of these deranged individuals would glad they trade their satchel for an f-16. host: so what is the question? caller: when will we address the crux of the issue the israeli- palestinian conflict?

guest: i do believe the issue of public trials is one of great importance. we have seen in military commissions, and our eerience as a human rights commission, access to those commissionss very limited to the public. there are select media that go down there select observer groups that will go down to observe the trial but by and large, the families of the victims of these trials are unable to see the perpetrators be brought to justice. there would be increased transparency and access to victims and family members. i think you saw that in the trial of the east african bombings. they were in favor of using the civilian court option, and

remained so, even after he was convicted one that is transparent, one that allows the host: the jurors convicted and one could have life in prison. when will they settle that issue? guest: there is expensive information that can be -- expansive information that can be settled by the judge that was problematic at trial. host: mike, indepdent line. caller: thank you, c-span, and good morning. i have a common and then the question. first of all when president obama came into office and said he wanted to close guantanamo

bay, everybody was with that. but when they want to move these inmas to the united states, nobody wants them in their state. my question is this, are they willing to hold a civilian trial in say, a military complex like fort dix or any other military post? guest: i think that is a very good question. i think that is the option of holding a civilian trial in potentially a military installation is one that the military is considering, and should be considering. you are correct in identifying the political issue. there is a lot ofnot in my backyard" top when it comes to where these trials should be held end in the localities where local politicians have been in

favor of bringing them into their territory, there are me limitations because of many restrictions. but certainly, all options are on the table in terms of using a military facility. host: in the language in the house bill that passed last week, it also included a provision that you are talking about, building a facility in the united states. guest: that provision would limit the use of funding for building a facility for housing the detainees. presumly, you could use an existing facility for a civilian trial. i fort dix might not be the location, but there are a number of places with quarter is where you could presumably hold a civilian trial.

in the house bill last week, in the constructing of a new facility for housing the city's, presumably this was -- for housing the detainee's, presumably this was the facility in illinois. most of these detainees would not be brought to civilian crt for a civilian trial. we have prisons and there would not really be the need to construct a new facility. host: we are talking about this headline in the papethis morning -- it would put a ban on the transfer of new taye -- new detainee'ss.

arizona, at ford, republican line. your next. caller: i have three comments and one question. guantanamo bay should remain open. and why snatch defeat from the jaws of victory? why the extra money to retry this terrorist? host: thank you and word, for your question. -- guest: thank you edward, for your question. i do not think you see it on the battlefid in afghanistan were soldiers are taking pple into custody that you see them aggrandizing them. i do not think that is what we are talking are today. as far as khalid shaikh mohammed and the other 9/11

independencets i think that those attacked and their family members want to see justice done. they do not want them to be held preventative lee under some law or just in detention indefinitely. they want to see them brought to justice. the best and most sure way of doing that is by bringing those individuals to trial in our regular federal courts. khalid shaikh mohammed at an indictment facing him long before he was ever brout to guantanamo. for the 9/11 victims and their family members, the best chance of justic is, in fact, reduce civilian trials. host: how much -- here is a tweet --

do you know the cost difference between a civilian trial and a military commission? guest: i do not have those specific figures. it is an expensive facility to have down there. and the military commissions in particular, those are quite an expensive undertaking. you are talking about bringing down judges, attorneys journalists, ngo groups down to guantanamo every time there is a proceeding. it is quite a production. organizing the flights burning them all down there often and innate -- bringing them all down there often and any discussion between the attorneys and judges. it is an incredibly costly endeavor as opposed to holding them here in the united states where there would not be a question. the attorneys would simply be

able to go to visit the individual there representing when necessary. -- a day are representing when necessary. -- ordaz visit the individual they are representing when necessary. host: next call on the independent line. caller: i'm from westminster -- west chester, pennsylvania. a school teacher, he was decapitated and it is interesting that you are saying these people should have human- rights. and it is funny that americans are always out fighting trying to decide what other should have. these cultures have been a ground for thousands of years. we want to fight for the rights of everybody. we need to worry about getting

our own people more often and stop having bleeding hearts forever body else. host: this chafee, and a comment? guest: certainly, human rights are important to me and to my organization, human-rights first. many acts of terrorism are some of the worst human rights abuses that you could identify. i think what we are talking about here is we are talking about holding those perpetrators of terrorism to account and bringing them to justice. in many ways, we are talking about the rights of victims of the acts of terrorism. host: hawaii, alan, democrats. caller: it is kind of a hard situation all over the place, but i guess the cia has their own layer of prisons and i do

not know if any of them actually still exist in the media. sometimes it pops up about poland lithuania, all kinds of facilities that we have concealed for torture and interrogation. what do you do? besides gtmo, some of the worst cases may have been moved out of gtmo over to another facility. those people may be bad people, but the question is, how do we deal with those people and how do we decide what facility -- what to do with the facilities that have been established? est: i think you bring up a very important issue and that is, a legacy of abuse of detainees in u.s. custody including torture. on his second full day in

office the president did issue an executive order tt closed all of the secret a cia facilities and mandated that the red cross be given access -- access to all of the detainees in u.s. custody. there's no question of the ongoing continuing sites today but i do think the past existence of those sites and many individuals at guantanamo were, in fact, held in those facilities and subjected to abuse and that is relevant in holding these individuals involvedaccountable in court. part of the reason that many of the counts against one man in particular were dismissed although he still faces 20 years to life in prison, part of the charges were dismissed because

there was an issue of the evidence because he was abused because he was tortured. that is the result of these past policies of torture and abuse and these other illegal treatments. down the road when you are attempting to seek a conviction it is an obstacle. quartered evidence is t allowed in the military commissions, just as -- tortured evidence is not allowed in the military commissions, just as it is not allowed in our records. -- regular courts. host: next call is republican, you are on the air. caller: i just want to say to the woman, ms. chafee, is that correct? guest: yes.

host: you need to look at the human-rights -- what about women in afghanistan that are beaten and tortured? these people are the enemy of the united states and their objective is to kill you, me, and any other american. i say they do not have any rights. they forfeit their rights. they gained 20 pous per month on average in guantanamo bay. they are furnished a koran. you talk about torture and i think there should be waterboarding for everybody down there. guest: i think this is more about us and our values american values. it is about the united state and what we want to stand for and it is about them. -- than it is about them. do we want to ignore our core values and the rights that are

encompassed in our constitution in our approach in the fight against terrorism? i think that our values, many have stated, including general patraeus that our values are one of our best tls in the fight against terrorism. that includes a value that we do not torture. it is against u.s. law. and it is considered -- it is against our international legal obligations. and it is something we do not do as americans and is something we should not do. it makes us stronger that we embrace those values and that we fulfill those volumes in our counter-terrorism policy. host: the advocacy counsel at human rights first has observed the military commission proceedings at gtmo.

mr. chafee has a law degree from georgetown. next call, go ahead. caller: i would like to make a statement and i think i have maybe three questions. host: i will ask you to pick one because we are running out of time. caller: i will just say the question then. i would like to know, who finances you who you are affiliated with, and -- what i did notice is that guantanamo is not that far from haiti. and one thing i did notice they do is that in the united states they do make them work. why not make them do that in haiti to see if they have rights for other humans that are suffering? guest: we are in non-profit

organization. we get our funds largely from privateonors and we do not take any government funds. reintegration programs are really key in solving the problem in guantanamo. -- in guantanamo in closing the facility. i do not know if it would be practical to use the detainees in any relf efforts in haiti. but certainly pursuing reintegration programs in order to ensure that these days -- these detainees, some of whom have been detained over eight years now, are able to reintegrate into society once they are settled. the reintegration is important risk-management in moving detainee's art of guantanamo and

reducing any possible risks that they have with them. this might include helping them get jobs, maybe some form of modern terrain. -- monitoring.

center, this is one hour and 15 minutes. >> i think we are going to start a little earlier. welcome to the nixon center. i am marvin kalb a visiting

fellow at the nixon center. once a week, we have luncheon conversations about major issues of american foreign policy. today, we are dealing with afghanistan. we will all try to figure that out as the golan today. i have in mind a couple of time frames. last december, president obama promised that in july of 2011, the united states would began a withdrawal of its forces from afghanistan dependent upon conditions on the ground. that is an issue that has been somewhat superseded by another date and another issue and that is 2014. in lisbon, nato and afghanistan reached a deal that is by the end of 2014, combat operations

by naida -- nato would come to london, and at that time, afghan police and army would take over. within a couple of days or a week or so, president obama is going to come in with another report on afghanistan that has been in promised for mid december. i am aware that president obama has been quoted as saying a couple of times that he is not going to be the kind of president who goes along with a policy for which there is obvious evidence of failure. he has made it clear to a number of reporters including bob woodward that he would be prepared to settle for a good bit less, but he wanted to be sure that the policy works. if it isn't, you have to change it. we are going to see exactly what

this december review comes up with. we are fortunate to have three very knowledgeable panelist to help us understand this next up in american policy in afghanistan. to my right to glt. gen. david barno. he is now a senior fellow at the center for a new american security and he is co-author of a new report that is coming out today. i have my first question with the general. let me introduce to my left, the ambassador ronald neumann. he was u.s. ambassador to afghanistan in 2005-2007. to my immediate left, david

sanger the chief washington correspondent for the new york times. he is a winner of two pulitzer prizes. we are delighted to have all of you here today. i want to start with the general. based on your study, what do you think we can expect in july of 2011? >> the president will probably give us a fair understanding of that letter this week. i do think we will see the beginnings of the first elements of transition next summer and afghanistan, bills will be very, very small movements. i think realistically to get an understanding of whether the strategy in place now is going

to work, we will not be able to have a good approximation of that until late summer next year. those troops did not close in afghanistan until about september of this year. with our seasonal fighting season, there is less combat activity in the wintertime. the spring and summer are the real fighting seasons there. we will need to wait a bit to determine whether those 30,000 troops have begun to have a significant effect are not. >> don't you think that by the next spring, we should have a pretty good idea of whether they will or won't be the beginning of a withdrawal? >> i do not think the president will change his plan to start the transition next summer. how large will the transition be? where will it take place? it would be relatively easy to start a transition to afghan lead.

i think it would be relatively doable today to see that transition start in parts of northern afghanistan and western afghanistan, where there is very little caliban activity. -- taliban activity. >> thank you. ambassador we are pursuing a counterinsurgency in afghanistan. my understanding is that for a successful counterinsurgency policy to work, you'll have to have somebody at the center of the government with whom the coalition can work. can have professional relationships with. there was a story today suggesting that our relationship with president karzei is not very good. how do you have a successful

counterinsurgency policy if you do not have a good relationship with the guy in charge? >> that is a great question. it also goes campaign -- and also goes to a second issue which is the responsibility we have to understand how our policies affects others. i say this because i think that part of our problem with president karzei is his problem with us. to say this is not this to say that he is right and we're wrong. it is the starting point of diplomacy is if you want to change something you have to understand what is going on. that is why they hired diplomats. occasionally. what i believe is happening with president karzei is that he has great doubts about how long we

will stay. we will see it the policy works. it creates a considerable amount of doubt as to our fortitude. i do not think the issue is that president karzei does not understand. i think the issue is that when you go to hem and effectively say, we need to fire the people you trust and who you think will fight when the americans felt and we need you to gamble your survival on our staying until we get in place a government and an army, but we cannot tell you that we will stay. we will show you a lot of body language to suggest that we might not. you do not have a persuasive argument. >> president karzei was the one at his second inauguration who put the 2014 date out there.

>> i do not believe that president karzei is in a hurry to have us go. but he is now very doubtful that we will stay long enough. heat is -- he is on a post america's survival strategy. he is a perfectly valid model for that. the last communist president of afghanistan, some may remember, everybody thought he would fall within weeks of the soviet withdrawal. he lasted three years sustained major assaults, costing thousands of casualties. that is what i see karzei rebuilding because he does not trust us. if i am correct the point is not to argue that he is wrong court to -- that he is wrong and

more to say that we are wrong nor to think that we can give him assurances of our staying because we are not all that sure of ourselves. we can therefore, look for the points of convergence, the things that we can both agree to do together rather than constantly pushing for changes that are so large they destroyed his ability to survive without us. there are alternative policies -- policies out there but they come from having a policy that includes -- >> thank you. david, one of the things that president karzei has said in the last couple of days is that he might not agree with the counterinsurgency strategy, may not understand it, whatever, but that is not his world. he doesn't feel that that is

where america should concentrate its efforts. he believes that america should concentrate its efforts on the border region and in the sanctuary areas in pakistan. that he says, is where the heart of the problem is. president obama is going to come in with his report this week. do you feel that there is any likelihood that we will see a sincere discussion of the pakistan part of the afghan problem in this report? >> i doubt you will see much public discussion about pakistan. but i suspect that if one went into the much lengthier classified version of the report that will go up to the hill, he would probably see as much discussion of pakistan then you would afghanistan. think back to a year ago when the president set out his objectives. during a speech at west point the speech that had a lot about afghanistan and very little about pakistan.

he said in public that our major goal was to defeat all qaeda and its associates. that justified the war in afghanistan. al qaeda has 50 or 100 members. the central concern when it comes to al qaeda is pakistan. there was a second court national objective that the president identified and when it goes up to congress you to see a line saying that this objective has been redacted for security reasons. it is no mystery what that objective is. that objective is to prevent pakistan's nuclear arsenal from falling into the wrong hands. that just does not mean the weapons. it means the materials as well. how does the pakistan part of

this go so far? the president will be able to establish that he has made some significant progress in afghanistan and parts of its. this is all a question of how you identify which geographic parts of afghanistan that you want to emphasize. he will be able to show that in areas where the search was in the early, there's been a fair bit of result. he will probably talk less about those areas where the taliban have begun to go in afghanistan including some areas of the north. he is less likely to discuss the difficulty in getting a general and pakistan meet military to go into the hearts of al qaeda territory. the u.s. strategy there has been

pretty evident. there were 53, 54 creditor strikes in 2009. -- predator strikes in 2009. he did not have access to the creditors during much of that time. this year, we are well up over 100 strikes already. the year is not out. a nuclear -- on nuclear security, they did very upset when there are stories in the american media a discussion on american television, about their nuclear weapons. president obama has tried to deal with that by saying that the u.s. does not have any real concerns about security. if you going to the documents that work in voluntarily released by wikileaks in which

-- it is pretty clear that there is deep concern about the security of the nuclear weapons spread is three weeks after the president's first declared his -- declared that he was pretty sanguine about the weapons he gets a cable from the american ambassador to pakistan expressing great concern that they would not allow a group of american experts to come in and remove some highly enriched uranium that is under american control. they said that the reason was very simple. the more they read about concerns about nuclear security, the less likely they were to let the u.s., men and do this. >> general when you were in

charge there was the issue of a sanctuary as much on your mind as they are today? did you have a sense that this was a problem that was manageable? if you addressed, take control of that? >> the taliban today is a much stronger force, and much more capable force. if it appears to have very deep roots inside of pakistan. by the spring of two dozen 5 the insubordinate headquarters had a charge -- i saw a newspaper or a magazine. we saw a fairly significant change in the years thereafter. why did that occur? what is the genesis of that?

i cannot give you a definitive answer. one theory the lack of confidence in american staying power. in the summer of two dozen 5, the united -- 2005, we only had 20,000 troops there. in the space of a few months, we sent a message that was interpreted as the americans are moving toward the exits. six months later we saw a significant taliban offensive in southern afghanistan. some feel that they were not in areas that they work -- we were challenging them in. i do not buy that of view.

a very different period of time and things changed fairly significantly after that. it was a very good question. >> ambassador, you were in the hot seat at that time. >> happy to pick up on that. >> what is going on there? >> the taliban was rebuilding. we were not surprised. by the fall of 2005, we wrote cables which predicted quite explicitly a major taliban offensive in 2006. the writing was on the wall. by the fall of 2005, we knew

that we were against a much larger threats and we asked for some help. we did not get much help. i asked for $600 million for 2006. after prolonged delay -- deliberation, i got 43. we were under strength. we did see the problem of the sanctuary is getting bigger and bigger. the bush administration gradually took the more seriously. toward the end of the administration the private pressure on pakistan had done much larger. there are two problems. if we are going to -- this whole

business of davis has increased their believe that we're going to leave. why should they be entering a to-front war and they still see pakistan as their biggest threats? that is their view. what we do has an impact on how people respond to what we asked for. president karzei has had this view for years. if we would just put enough pressure on pakistan, they would flip the switch and the insurgency would end. that a view is conditioned, but i am guessing by the fact they had a great deal of control over what happens on the resistance. he does believe that if we pushed hard enough they would

close it down. we have never convinced him that that is not correct. we have to maintain a relationship that allows us to fight at the same time that we have to be able to put pressure on pakistan to do more. that is an issue on which we have never agreed with president karzei. he got a little more comfortable when we began to see that there was a problem. he has felt for years that we are naive in our approach. i am not making that my point. i am telling you where he is coming from. part of what you see with president karzei is the frustration of a man who feels that he has been carrying a message for five or six years and the message has been validated by facts and the americans will listen. >> ladies and gentlemen, we are here with c-span.

if you have a question, please indicate and i will try to get to as many of you as possible. >> i have three questions. >> try one. >> where will we be in 5-10 years? pakistan is an existential moment. how do we deal with pakistan? >> let's start with the first question. >> it reinforces what we have talked about here this after an already. there should not be a zero endgame for the united states in afghanistan.

it begins to solidify the afghans -- they have to make critical choices. we have heard that on both sides of the border, the government's are making decisions based upon what will this decision look like the day after the americans are gone? they have no confidence in our staying power. they have no belief that we will be there five or 10 years from now. then they will hedge their bets in ways that undercut our vital interests. we need to have a commitment to long-term small american presence there. 250 thousand-35,000 is what we suggest. a enough to keep the afghan army trained. if that army takes on the fight with the taliban, while the

american special operations continue to put pressure on al qaeda, that will not be over five years from now. the fact that we put this cloud of uncertainty out there about our long term ending undercuts our ability to influence the actors to get them to do what we want them to do. >> while must be be there even two years from now? who and understand the specifics strategic advantage for the united states to be there taking into account the enormous economic difficulties that this country faces and the preoccupation that the administration has with dealing with america before deals with afghanistan? >> we've much outlined the different strategic context right now for the united states. the long-term debt the u.s. is facing that will not go away. in may becoming the over -- and may become the overriding strategic influence in this country. 25,000 troops there is about

25% of the cost to are paying today in terms of the military effort. 100,000 americans, says one -- around $25 billion a year. we think we can achieve the same objectives by 2014 with a force of one quarter that size. that force is important and it cannot be at tiny force 10,000 or less, because it will not have sufficient capability to do the job. our vital interests are what drives us. we have a vital interest to keep pressure on al qaeda to prevent them from attacking the united states. we did that from afghanistan as well as with our friends in pakistan. if we took those networks out of afghanistan, we would lose that understanding of what is going on with al qaeda even inside of the pakistan. and we have a critical interest to help pakistan remain a critical -- as stable country and stay in control of its territory. that improves over time. if we are not there, we lose all

that leverage. >> david preoccupation with what the general just said, i suspect that if you are as most people at the white house, what are you thinking about today? the answer would not be president karzai. it would be economics jobs, the president's political future how do we build him up -- not the commitment that the united states has as outlined by the general very eloquently. how do you deal with the real world and the super imposition of the responsibility in afghanistan? >> is hard to know how people in the white house would answer that question. when you walk into those doors of the west wing and as which direction you pilaf -- peel off -- the nsc people are thinking very hard about afghanistan and

pakistan. they are also thinking about iran and north korea and the middle east peace talks and so forth. one of the dangers in these kinds of conversations that we have is that there is a temptation to think that american foreign policy these days starts and ends with afghanistan and pakistan. this administration recognized that there was the cost that the u.s. paid in the previous administration when iraq became such an overwhelming issue that it occupied the mind share -- a lion share of the administration. these two issues of where the economy is and what is going on in afghanistan and how much we're spending their, blood and treasure are not unrelated. at the moment that we're spending very heavily for a world where many americans do not fully understand right now what the objective is, the question of how long you can

keep 100,000 troops there is very right. general barno mentioned a number of 25,000 troops and at the number you will need to keep their in order to keep pressure on al qaeda in pakistan. and to keep the intelligence operations running and so forth. that number is probably right in the ballpark of what may be needed. it is also the number that was there when president obama came into office. 25,000-30,000 is right where they were. did -- that did not prove sufficient to stop the gain the momentum by the taliban. i think the question the president is going to reach in 2011 next summer when his first deadline comes out is this one -- if you kept troops and for 2014 at a significantly higher level than that 25,000-30,000

even if you are coming down, does that added margin of troops to bring about a significantly different result in those two or three years thing you would get if you brought those numbers down to defeat general barno number very quickly? that will be a very different calculation to make -- and we would argue that they should occur in -- that should not occur today but 2014. >> the question is of numbers and sometimes gets us into funny positions of have understanding. 25,000-30,000 troops at the time the a bimah -- obama administration took office we have afghan forces one-third of what we had in iraq, although iraq is a smaller country with an easy operating environment -- easier operating environment would be a sure risk for

failure. can you build up the afghan forces to a level where they can handle a significant share of the war? and therefore you could go down to this level general barno is talking about. i think the answer is a strong maybe. the fact is, the tw no -- two numbers are playing different expectations. you're not debating the same issue. one of the problems at the white house is going to face and i hope that they are goes back to what you can predict what you condition expectations to be. if we come out of this review with a political sense that the white house is pushing for a rapid movement on numbers down, then i think you will absolutely destroyed any credibility for

policy announced that the nato summit of pushing the data up to 2014. that transfer of the date 2014 is only useful in terms of how it conditions afghan and pakistani thinking, and taliban thinking i might add, if we were to leave. if you come out of the route -- to review with the idea the we keep the numbers moving down quickly because we're going broke, then what you get in countries where people have been at war for 30 years whether survival depends on taking the most dire view of the likely future and acting on it to protect themselves, steal more because you're going to have to run, look out for your room survival, do not risk other plans. the white house has to look at these realities that you're talking about. we cannot afford to do things forever. it also has to decide whether it has a serious policy of 2014.

if it called that policy into question in this discussion, then it needs to realize that it does not have a serious policy, whatever it says about it. >> very good point. yes, sir. >> i like to ask each of the three a slightly different question that might shed more light on the discussion of the intervention. if you were a senior taliban plantner i assume and correct me if you disagree i s and you cannot drive out u.s. and coalition forces by force of military arms. that is not on. but you do seem to think that you can get about. how're you going to do it and specifically i like to know if you have the same view, will be the primary tactics that you think would be most effective in -- to get the u.s. and coalition force out. that would appear on the question on whether we are addressing those tactics

successfully. >> general barno. >> that is a great question. we probably have not done and that effective job of thinking about were talking about and ultimately defeating the taliban strategy. i think that strategy is run out the clock. it as a fourth quarter game, they're going to control the football and a plan to be the last man on the field with a score in their favor. i don't even bring in redskins football. but that is a very sound strategy and it is one that they view july 2011 as actually helpful in the sense that they could put that calendar date up there for their forces. that date has moved ahead 3.5 years. that football game has three additional quarters and it. if you're taking that ideological blows i think they have taken that a serious. they have to adapt to these new timeline and that will take some hard work on their part.

i'm not sure they will be successful. the tactics they would uses drive up coalition casualties. the way that they do that and we see that tragically again this week is to suicide attacks roadside bombs explosions were they do not have to expose their forces to the capabilities of the coalition forces. but you'll probably see some spectacular attacks that garner attention in places we thought to be secure. that would be affected. >> i think general barno is right. you'll see many more asymmetric attacks, and i will make it all the harder for the president to conclude whether that dealt that i described it is working. if you keep 100,000 troops are near 100,000 troops in, as general barno describe, if you can almost calculate out what the casualty difference is going to be.

he has to go into the 2012 campaign making the argument that he managed to get the united states on a down tract in iraq very quickly and he can do the same in afghanistan. any has to do this, as ambassador newman pointed out without undercutting the commitments made at nato about the 2014 date. the more the allies see us on the way out the harder it is going to be to get them to stick around. that is the essential dilemma that he is caught in right now. >> there are some changes in the allies that we have not paid much attention to. the canadiens are leaving -- they're taking about 1400 troops. they just decided last month at the nato summit to put 900 of

those back in as trainers. that is a significant give of numbers for the canadiens a significant political decision to which we have paid no attention to. on the next question, remember my question of tactics for the taliban. it is a political objective not a military objective, and not directly responsive to tactics. tactics that caused more casualties does help. but ultimately it is a question of waiting us out not a question of a military price. you could see a change. right now the taliban which we uses a broad cover term 3.5 insurgents also have a tactic of preventing the projection of afghan authority pretty much anywhere that they can help it. that is very important to them. if you begin to see more capable afghan forces on the

battlefield, particularly the army, then i suspect you will see taliban tactics increasingly shift to try to destroy that army. the army is the real game changer. if you begin to see and afghan army of which even if it does not win looks like it is not going to lose, then the whole taliban timeline comes apart. then the negotiating platform looks different. it does not mean that russia often say -- capable afghan forces are game changer in this situation. they cannot be produced overnight. if they begin to emerge, and then you will see a variety of adaptations to deal with them. >> thank you for your presentations. ambassador neumann made a very valid point. [unintelligible]

>> turn the microphone around. >> thank you. [unintelligible] it depends importantly on what you have in mind that you would like have happened after 2014. we're 9,000 miles away, the united states. my question is -- countries contiguous often have at least a great and possibly greater interest -- recalling history the great game china and north korea, what they have all ruled the play -- they ought to have a role to play in our diplomacy between now and 2014, and beyond

that? given the stakes, these nuclear powers the center of terrorism you think that each of them would. china is showing evidence of wanting to build a pipeline from iran. there are a lot of reasons one can imagine these great powers should have a great interest in a role to play. and i welcome your thoughts on whether we ought to be talking to them and toward what great game how come here -- if tom pickering has time, it would be great to hear from him to. >> yes we should be talking to them. yes, then partially had a role. their greatest ability has been when the neighbors have been taking a hands-off. yes, we should be talking about that. that said, two points.

one, all to believe what you neighbors to do is have a stance of neutrality. i think you can only have a functioning neutrality when you have a government of some strength inside kabul, inside afghanistan. you cannot get a working agreement to neutralize in a political vacuum. everyone striving for power will seek support from outside and if any of them find it, it produces -- reduces the rest of them coming in to support their plans. what is happening now is that all the outside powers are driven as much by their peers as by their desires. pakistan fears and afghan government dominated by ended. ndf pairs strategic development for the development of terrorist groups in pakistan. the iranians have a variety of years. getting them to agreement is likely to be a long-term proposition. we should be definitely working

on it. recognize that it is related to what happens inside, but do not expected to be a silver bullet to solve our problems, although it might be part of the long- term solution that is out. >> mr. embassador, could it not be argued that karzai taking the contrary position that he has been taking over the last couple of years and especially months, it is in effect creating a self-image as a strong national afghan leader and i am the guy you have to talk to? >> i think he is unquestionably seeking to create that image. i doubt he believes any of his much larger and more powerful neighbors have yet come to believe it. >> raymond a former member of the nsc staff and now in georgetown. i am glad the word iran came up. the country around. i am wondering whether or not

there's this idea that iran played a politically stabilizing role in helping to form the u.s.-led government in afghanistan, with the idea that iran's playing a constructive role now? i think they are planning a stabilizing role with the development of explosive devices context does matter. iran may have done something positive in the past, but it is- now and i suspect it will continue to be negative. the obama administration is more likely to take a harder stance with respect to troop levels in afghanistan if it is the test that iran continues to play a destructive role in afghanistan. >> plays both roles. simultaneously.

that is a matter of some political art. it has contributed rather significantly in that it is building a rail line which is very helpful. it is but a fair amount of money into it. particular the period before this going before general barno was there, but what we've seen more recently in the shipment of arms -- it's interesting to me. there certainly arms that come from for rent and after certain point, some one must believe that come in with iranian acquiescence. but it is far less than what they shipped into iraq, because i spent 16 months in baghdad before went off to kabul, so i had personal experience with this. why do they didn't not do a great deal more, and part of what you are seeing is their

suspicions of us. i think there is a reciprocal there. i cannot prove it, but what i think they are doing is keeping ties warm with people they may need if they come to blows with us. i think it was a mistake when we cut off ties and talks when i first went to afghanistan. i was authorized as was my predecessor to talk with the iranians there. i had one meeting and was told to close it down. all pressure was on the nuclear subject. i think it was a mistake because they raise their suspicions of us. you have one of these places where you have a lot of signaling going back and forth. i think that frankly one does not understand what the other is signaling. more discussion. i think you have very different kinds of issues, is all but i would say. >> it raises an important. as you said, iraq was helpful at

the start and made some noises that they wanted to be even more helpful, which the bush administration was not quite sure how to handle. it got caught between two conflicting priorities within the administration. today is to say, there are arms going and, ied's going in, but they played important strategic role for the iranians. if the pressure from the united states on the nuclear issue turns out either with more economic sanctions or more covert actions or ultimately with some kind of military action a remote possibility as i think that is, having the american troops in afghanistan there is a useful form of deterrents to the iranians. it is one place -- one less place that they could strike back in an asymmetrical ways.

it used to be our troops in iraq. now as our troops in afghanistan. >> thanks, martin, very much. i wanted to pick up on the point that but raise. i agree very much with what ron has said. i think the absence of diplomatic activity has in fact continue to drive us in the direction of military activity. and almost everyone sees military activity as absolutely so -- essential but not a solution. to some extent, i am of the view that any solution you have a purely military or otherwise is when they have enormous political implications. so why not have diplomatic activities and see if you can help shape those? otherwise they will be shipped for you by someone else. i am working on a study the results of yet -- of which are

not yet clear, but in the region, the people closest to the problem, if the taliban karzai pakistanis told us that they would like to engage in a diplomatic effort of some time. they have positions which are in no way congruent. perhaps they could be made congruent around a simple theory that all insurrection movements one way or another often settle in conditions of statement, which is where the military is so important, for political role in a government-funded one some way or another. some turn out to be bad and some reasonably acceptable. there is no guarantee. my question is to go to a higher level of strategy. we are engaged in pakistan very much because we are in afghanistan. general barno, i do not mean to stretch this too far, but i think you said just basically the most important reason we are

in afghanistan is because of pakistan. i think that is entirely right. it makes a lot of sense. the real question is, do we have a strategy in pakistan of any kind, and should we if we do not? >> i think we have bilateral strategies with each country. there is a follow-on report this spring working on it as to what a u.s. regional strategy should be for this extremely important part of the world that is not going to go back into the corners of the broom closet. i do not think there is a feature outcome in which the u.s. does not have a role like the 1990's. this time the fires around the peripheries of afghanistan are rather nuclear armed or the high price of about -- the high probability of a proxy war breaking out in the absence of u.s. influence there. the u.s. has to look at this as a regional strategy.

i grinned with david, talking with the neighbors and iran is an important part of that. my personal experience out there is that the neighbors can be helpful and prevent the worst outcomes, but they cannot solve the problem. there is not a solution that puts everyone in the table and comes up with a document that solves this. i think we continue the dialogue could be extremely realistic the u.s. is going to remaining days there for a long time because we have vital interests at stake and most of them are in pakistan. in john glenn. thank you very much. a follow-up on what seems to be no solely military solution in the region. i like to come back to mr. newman's observation. it took a long time for the debate to go. what is it that we need on that

side of the equation to succeed in afghanistan and had we made that case to date to a sedate, where scores a margin mr. ambassador, given a shot. >> i think that we need two things. one is to keep a certain flow of money. the other is to be realistic starting with ourselves about how fast you can do social and economic change. we have a considerable problem of excessive expectations, and we had a first of all in afghanistan where people believed as the taliban died, that everything was going to be great in the country. we also have that here, doing a lot of discussion on this panel and in the review, is the strategy working. as though we were completely oblivious to the time was the texas from decision to funding

to moving money to the field and start in the project -- we think it is realistic for the springfield interchange to take tenures are more and we do not understand why we haven't modernized one of the most primitive countries and the world. we have some bas are lapses and our thinking. -- bizarre lapses in our thinking. you store the recognition of time being needed. and then we need to look hard at what we're doing. we're plowing a lot of money in. i don't think we need quite as much money as we are plowing in. in some cases we are paying afghanistan did things that afghans would do themselves -- afghans to do things that afghans would do themselves. what we're doing may reinforce the growth of our response of -- we need to make sure that what we're doing reinforces the growth of responsible government. we have attention.

we want to go really fast and we want to be really careful. you like to do both at the same time. some expectation of this, and at the same time, it would help if the money was not constrained by our calendar. i'm going into great detail for your question, but it is not one that you answer successfully on the simple, broad strategic policy-level. you have to answer on a level of a lot of people impatient with execution. >> is absolutely right. we can have unrealistic expectations on how long it takes to change things in afghanistan. there is also a political part to why we're here. united states has been at war and a gun at -- in afghanistan for nine years and a couple of months now. when you go back and as the military or people involved in counterinsurgency strategy about that they say yes, but you cannot count the first eight. because we were not going at the

right way. [laughter] we thought nine years one year the time. how many times have we heard that? the american public it's about as tolerant of that as you get with hearing of the springfield interchange having to be rebuilt now, because it has been under way so long that it is old even before it is open. we are now on the situation where if you took the 2014 deadline seriously you are describing a 14 year long war for the american people. or at 13-year-old with no reception that events. and no assumption that you can show a truly significant change in the strategic position on the ground other than the fact that afghanistan is no longer safe haven for a tax to be launched on the united states. then you have to back off and

say, at new safe havens come up? yemen, . . have 100,000 troops in a place that we're trying to prevent from becoming a safe haven where pakistan where we cannot the troops, or yemen and somalia, where we are very limited in the forces we can put an end we do not have those kind of numbers? finland and the situation which you try to rationalize something that is essentially historic in nature. >> you sort of answer that question. we will have bobolink and from the nixon center. it seems to me that most americans are not aware that the goal posts are in the process of being moved in 2014. i am asking this to david sanger. what kind of reaction will there be when this bonds on people, or

when this becomes explicit in the hill, in the white house itself what do you see this -- are we going have a political fight about this? jerry and i suspect we will have a political fight about it. to some degree it has what has made this easier for president obama. the announcement at nato was muted and a little bit confused. that is not necessarily mean that it was all over the place. it was not. it was deliberately not made for tv. he did not see the president's standing up and say i am moving 2011 to 2014. that was quite deliver. on top of that coming head the economic crisis has really dominated both newsprint in airwaves -- and airwaves. the result is that people are much more likely to have heard

the minutia about the tax debate right now than the question how the timeline has changed. that will alter as you get closer to the presidential election. >> public to move the politics from washington to kabul and to the neighbors. despite the recent embarrassment, there are continuing reports of ongoing contacts between karzai and various taliban or other representatives. potential reintegration comer reconciliation efforts. at the same time, among the neighbors themselves, there are various bilateral trilateral, multi lateral gatherings or conversations going on about a regional approach to afghanistan.

including possibly, in listing their support -- in listing their support for those reconciliation efforts that are afghan-led. maybe it is a question best for ambassador neumann but they proceed all the panelists -- i would appreciate all the panelists' thoughts. >> we will start with the ambassador. >> on this combination of negotiations cover regional engagement we should be talking now. we should understand and nothing is going to be fast. one of the worst things we can do is to approach these two issues a regional solution and a negotiation, as though they offer an alternative. we understand the reality -- we need to understand the reality that the israeli prime minister rabin said, by as though there

were no negotiations, and negotiate as if there were no war. the negotiations and such words as algeria and france, the united states with britain that and along a low -- in a long ago insurgency it numbers in years. three years is a minimum expectation of when you dig going on negotiations and get a solution to most of these wars. yes, talked -- but understand in both the regional question and the issue of negotiations that the u.s. is a central player. people take positions on how they understand we are acting. so if we act as though we are desperate, like walking into the carpet bazaar and wanting it today and what is your best price? this will be a very expensive carpet.

we approach the negotiations that would. if you want to negotiate how would surrender quickly you can do that. if you want to negotiate anything more substantively then you have to radiate the sense that you're going to stay, that you're going to fight, and then you have to fight and talk. >> just to add to that, i absolutely agree. successful negotiations on our side is about leverage. leverage requires you to be able to be clear that you are staying and fighting. my co-author here, andrew, actually wrote in an earlier piece that the taliban viewed this as, why should they buy a loaf of bread from us today when the condoned the bakery tomorrow? we're no longer part of the landscape for years down the road, they will hold up that long a holdout -- and own the entire bay agree. -- the entire bakery. that is our overarching interest.

>> marvin, if you're taking a sense of direction tonight that texas about some of the short- term tactics but you did not follow through and i do not want to pick up on that. -- and i do want to pick up on a. we're talking about the capacity of the american political system to sustain a position in support of its own national security interests. there is a big question mark about that. for four decades we had a conception that involved over some years of containment deterrence that enabled us to sustain a position against an existential threat. today we do not have the domestic consensus, and so for a reaction i viewed this as likely to be an in and out and back again problem over an extended period of time.

i think it is certain that our political pressures will have us would draw too soon to deal with the underlying threat. what is the underlying driver that makes this such an extended problem? we see ourselves as a threat, but the turmoil within the muslim world, the desire of the al qaeda-types and others -- yes, they want to hit us but to get us out of the way. their big prizes pakistan and the nuclear weapons saudi arabia and its energy, and you can take it from there, and that is the underlying driver, it seems to me, in this fight. over time, we will see whether it is tactically directed at us or some of these other states seeing a heightened threat whether it is pakistan losing control of the nuclear weapons or some of the other issues.

we are likely to get hit again. it seems to me that is the context with which we will withdraw too soon, we will get hit again, and we will have to go back in. this may be 10 to 20 years' time horizon which does not do good in terms of the immediate political decision making. all alike. their reaction to the perspective over time. >> thank you very much. >> dick, as always you have gone right to the heart of two of the really critical issues here. the first is, if there was another major terrorist attack in the in addis states and it did not come from afghanistan as presume for a moment that it came from the tribal regions of pakistan or it came from yemen or somalia or one of those other news havens -- new safe havens.

there is no one word that covers so many different groups now. one of the first questions that would probably be asked -- do we have 100,000 troops in the right place? it came out of pakistan, where almost all -- not everyone -- of the terror incidents that have happened since 9/11 emerged from it would raise the question what is it that we would do the day after the attacks in those troubled areas of pakistan? both the bush administration and the obama administration at various points has sent convoys quietly to make this point to the pakistanis -- imagine what united states might have to do in the tribal areas if an attack like the times square bombing attacks was significantly more successful. think about doing that now for that moment came up. i think that is one very big

question. the second question which no one really wants to take on in the midst of this mid-course review of pakistan strategy, is, of which country is strategically more important united states, afghanistan or pakistan? i think the question answers itself. it is clearly pakistan. that is a very difficult issue to take up. even the mere discussion of it makes it more difficult to work with the pakistanis. >> can i have one thing more? what david just said is extremely important but also important that it not be leading to a misperception. pakistan may be the most important country but what pakistan will do, " we can do with pakistan, depends a great deal on their perception and believe that we're corps to stay in afghanistan. if we're going to stay in afghanistan, then they have

options about government reform and taking on the insurgents. they would not perceive themselves to have those if we are going to leave. i think the pakistani analysis as mine is the same. they're realistic choices are between backing a potential taliban victory, which might be somewhat more friendly to them, or risking a taliban defeat by the northern alliance victory. they may see other choices. that is not a view of the one -- we want them to be deeply engaged in. pakistan may be the more important questions -- country but it does not mean that you have an alternative. you need to handle the two together. >> of french philosophers said once during the days of the sailing ships that shipped as i

have a port, no wind will get there. i listened as carefully as i could. the day after we defeat al qaeda, that is no longer our goal then i hear it that we're going to weaken the taliban to get better terms to negotiate then i hear, hear what legitimate and effective government to which the ambassador already said it. then i hear it's very important that we're there to avoid a fight between the pakistan -- we need them to balance china. it is really about china. and then i hear that we're there to ensure we have a constitution to be observed by the taliban.

i am clear that we have to stay in order to get something. i am not clear plot that is. -- let that is. >> anyone prepared to answer that question. >> i want to talk about that we have to rethink how we conceptualize what work there. like in the year 2010, it is not like the korean war or be in on. we are a different trend. in terms of what we're doing vital interest that often driver decision making there. one is to prevent al qaeda from being able to get enough traction in this part of the world to regenerate another attack on the analysis. yes, al qaeda is now metastasized to other parts of the world but their leadership and core functionality is still in this part of the world.

if we're not in this part of the world, their strength in their reach from the part of the world is going to increase. and as we talked about pakistan maintaining a us stable control of their territory and its nuclear weapons. that is when they get better or worse. we wanted to be better. if we're not there our influence on that drops of the floor. it changes in terribly negative way toward our longer-term interest. i think that is what we're trying to achieve. how we do that and what level of troops, how we transition from the very expensive footprint we have now and use the next two or three years to build more capable afghan forces to help us with the anti taliban insurgency then maintain and during preference, that as part of our road map. and reducing wars, we have to be careful we don't put the template of the toy is a tree on top of this fight and say it will look like korea or vietnam war world war ii.

either we face off the taliban are we exited and we come out of this area altogether and it goes back to something else. those are probably not in any of those three cases viable outcomes. they do not reflect the nature of al qaeda and the next 10-15 years of fighting al qaeda and islamist extremists around the world is going to look like. this is a wicked problem around the world, and how we transition in afghanistan will have a huge influence on whether we're successful or not. >> one follow-up question. >> i suppose reasonably, you have all avoided the question here. the one that we have opposed. i think that might be a useful conclusion on c-span today our

circumstance. does russia not hope that there is not going to be renewed hotbed center of support troops coming out of afghanistan and four or five years? doesn't india hoped this will not be the same festering sore, or mentally kashmir will not remain in nagging problem? in short is there not enough self-interest with neighboring powers with even three years of determined diplomacy with a grand vision in mind, what is it that all four of us, iran, double patio -- we cannot say that the goal must be to find

zero way to wind down our military presence, which really sounds like it is given more political expediency. the circumstances on the ground. can you speculate what you like to say? >> i would like to get a shot at this. >> this will be the roundup of our discussion. >> yes the first point is, what we want in afghanistan is essentially a stable situation. most of our goals are driven by what we do not nine -- do not want -- i 10 year civil war, the destruction that comes from such relation to pakistan if all the players are drawn and. the encouragement of radical islam, if that has the defeat of the second superpower. those are big things that may last for many years. they are worth fighting over,

even that they are-goals -- even if they are-g -negative goals. i started in the u.s. army as you did and i remember my early instructor told me that hope is not a plan. i think there is a hope for bringing regional states together on the basis you described. i think we should begin to talk about that. i think we must recognize in doing so that right now they are all driven much more by their fears then there are by their hopes. and unless we can alter the balance of what they see as possible then the fears are going to be the driver much more than the hopes. we have to do two things they

one time. we have to be able to start the discussion of a regional solution perhaps including a u.s. withdrawal and neutralization, because some of the things the states fear is our presence. we have to start talking about that. but at the same time, we talk about that, we have to make clear that we are prepared to fight and stay for considerable periods of time. the one reinforces the other. they are not contradictory. they are essentially. elements of a common strategy. the annual -- if you do not pair them, then you will run out of time. >> the only point i would make that we have not yet is that the results of these midterm elections is that president obama probably now has a republican mark hardy in the

house but depending on what we learn about the farm policy of the nations of some of the newly elected members, it may give him a little more time that he would have had had he held on to the house and to the kind of majority he had in the senate. that said, one of the biggest problem see is going to face is that he has to demonstrate between now and 2012 that there is an end. in mind. i think that many voters understand that the goals have shifted from those first days after 9/11. it was only six or seven years ago that president bush would give speeches in which he had picked resigns behind them were put together by white house image makers to make it clear that we were going to win clear victors in both iraq and afghanistan. i think americans of all political stripes have moved

beyond that. they are looking as ambassador neumann said so well for what they want to avoid happening as opposed to what will happen. at some point bank, and probably by next summer, the president is going to have to match up his troop presence with the specific goals that he laid out, the narrow goals he laid out on december 1 of 2009. i suspect that when he does that you could see affair -- a further narrowing of those goals. >> general. >> how it back -- i would endorse ambassador neumann's points. i hope it does not dress down the wrong side of the street. i have two sons that are both u.s. army captains. i know exactly what the costs are that the american people, a small number of them are bearing with regard to troop levels in this conflict. is never far from my mind, i can

assure you. if the the cost of doing this wrong will be far greater for the united states if we get it wrong over the next three years after all the sacrifice that is already gone into afghanistan. it is about looking of what we're trying to achieve on the road ahead. i very much of -- believe that that regional neighbors have to play a role, but they cannot play effective role some was the lead in that is states is one to stay engaged in this part of the war. -- they cannot play effective rolls if they believe the united states is not going to stay in this part of the world. we paid a high price for that. i don't think there is an option that has 100,000 americans there for years. i recognize the cost we're paying in terms of our national expenditures in our debt and our deficit. but we have to be careful on how we manage this. it will have a huge impact on our small contribution to a afghanistan over time. i agree with everything i've just heard except for one thing.

my sense that whether you're dealing with a diplomatic end of the military end of this, the political part with karzai, all of them are not yet together with the reality of american life today that we're not where we were 20 or 30 years ago. and i pick up point that he made. we may be pulling in and that is a certain point hit, and then we will have to strike out once again. but the idea that we can do everything in the kind of careful cover responsible transition -- careful responsible transition? possibly. when you contrast this, i come up with a simplistic explanation that the white house simply wanted to kick the can down the road and not have to face the real problem of what do you do

when it is not clear when it is absolutely not clear that your policy is working, and if it is not clear what you do? continue with it? this president had certain things in his mind when he came sen. reality seems to deny him that opportunity to implement the dreams that he had. i think we have had a terrific conversation that thank you very much for coming. thanks, c-span. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010]

>> later in the day also on c-span 3 a conversation on the future of afghanistan and sending more troops next summer. >> this sunday on c-span in her first televised interview, elena kagan. an unprecedented conversation.

coming up on c-span. >> form r cia director michael heyeden talks about terrorist threats around the world. these remarks are about 40 minutes. -- why don't we go ahead? thanks everyone for staying till the final word of the date given by general michael hayden. he really deserves no it tradition. is the former director of the central intelligence agency, responsible for the plans and capabilities of america's adversaries to produce timely analysis for decision makers and conducting covert operations to thwart terrorist such as a birds we've talked about today. i am going to turn the floor

over to him and he needs no further introduction. and we've always his final concluding remarks and observations about today's events. it is a great pleasure to have general haig in here today. thank you, sir. -- general hayden here today. >> thank you for letting me be part of an impressive gathering of a highly regarded institution. i regret i have not been able to be here all day. i have had access to some of the slides that presenters have shown you. and from those, part of the presentation i have a reasonably good idea of the general flow of the conversation but i regret i have not been here to hear all the details. knowing what i know, about what has been discussed here today if i could step back and look at

it through the lens i bring to it and try to characterize the massive debt to which you have been exposed and put a template on it, it is more comfortable for me coming from my own background -- i have the two templates public to share with you. one comes from my army brothers and career. they talk about the close battle and the deep battle. the close battle fought a the small unit level. you have troops in contact and in essence you have fighting going on. the deep battle according to american military thought, by far is the most important battle. that the battle that you want to shape. success in the deep battle create circumstances under which the close battle is fought tomorrow or the day after or next week. in terms of what it is you have discussed today a close battle

is what we and our allies and friends are doing to prevent people who have -- who are committed to telling us from killing us and our citizens. the deep battle is about the production rate of those people who might intend to kill us and our citizens. some might criticize too much too much at the expense of the deep fight. the challenge with the deep fight, the production rate of those might do us harm, is our levels to influence it are far less powerful than our levers influence the close fight. it is one thing for those three letter agencies around town to

affect that immediate defense. it is quite another to effect philosophical or theological developments in other parts of the world. the second template i would share with you is one that i picked up from a good friend. hank ended his government career. he was a cia case officer and one of our first officers into of afghanistan after 9/11. he talked about putting another template on things he discussed today, another way of organizing the data. he talked about the three things that you need to deal with in order to deal with our current challenge. that is leadership, safe havens and conditions. echoing my comments from the first template, i think we are

doing well against leadership. some progress in regards to safe havens but again, the other element, the conditions much more difficult for us to handle. i thought a lot about what you have discussed over the past six hours. what could possibly be in terms of value added through my limbs, here. i have been asked to talk for about 15 minutes and then to respond to questions for an equal amount of time and i will do that. i would like to import one message that i think is important to you. it is through my limbs and my life experience. it is arguably less scholarly

than the things you have been discussing, probably more operational. this probably more present tense than some of the things that you have been discussing. my last job in government as director of the cia was the most intense job i have had in my life. your focus on the here and now. prominence that is so strong in the intelligence community is kind of a recalibration of how we are currently proceeding the threat .

because of the surprising continuity during the 43rd and 44 presidency of the united states when it comes to fighting this war on terror, we actually think we have been successful. if you bear with me, if i had a white board, i would be projecting things up here, but you will have to help me make hand puppets as i describe this. if this is the level of american and allied effort in defense most of the spectacular attacks of which we are all familiar, 9/11, world trade center 1 the attempted plot against airliners about a decade ago east africa in the bombings, the attempted plot from great britain in the summer of 2006.

we actually have some level confidence that we can be successful appear. in an intelligence officer and one thing we got one word we never use this "never." i am not saying that these kinds of attacks are not possible. these are complex. there are relatively slow moving. they have multiple threads. they have a planning fred, and operational fred, a training fred a finance fred, a forgery thread. we discover one of those threads and then we have a fur ball and we have a pretty good idea of what the plot is. i came into the cia the last few days of may in 2006.

the last thing i was on was the airliner plot that was being born in great britain. false bravado of an intelligence officer is a very bad thing. we were all over that plot. we have a great knowledge about that plot. from what i can recall about the summer of 2006 is when they were going to arrest the people. americans wanted to have been relatively soon, but the british one of the plot to spin out so that they could build up the strongest possible case for ultimate appearance before a court. fairly -- feeling fairly confident about what has been the preferred akaka attack, the large, complex attack against an iconic target designed to create

mass casualties. look what has happened in the last 12 to 18 months. let's take christmas of last year. we were mounted against this from yemen. when i was director of cia, i would actually say to the large audience and small every known threat to the american homeland has threads that take it back to the tribal region of pakistan. this attack did not. this attack was hatched by a franchise. that is different than what we saw appear. think back for some of you may have been two years ago on thanksgiving eve.

i was in my new house and i was chopping celery for the thanksgiving stuffing and i have the television on and i saw television's -- i saw hotels ablaze and by -- ablaze in mind by -- beyond that, i had a deep concern in my professional persona. this was a very high impact attack. it was conducted against a major metropolitan, a commercial area. they were a dozen folks with automatic weapons and cell phones. immediately after the attack, we began talking about al qaeda going to a school in mumbai. i think that they have. if you look at the press coverage weeks ago when we

thought something would happen in europe. they describe it as mumba stylei attacks. -- mumbai style attacks. now, walk with me into times square last april. we have a naturalized american citizen, self radicalized setting himself up an improvised explosive device in a metropolitan area. self radicalized. you can throw major hassan of fort hood into that same mix. we have franchises now. and self radicalize individuals. i think in capturing what was trying to be said.

in the future, it is far more likely that al qaeda attacks against america and other countries as well will be less complex less well organized, less likely to succeed and will be far less lethal if they do succeed. they will just be more numerous. now, let me finish up by saying a few words as to what i have told you that and what i think it is important and what its implications are. the first implication is operational. i am speaking as an american. i think this transfers to other security services. it will require this new level of threat.

it will require a shift in how we are dealing with this threat away from a heavier -- the emphasis on intelligence to an increase in law enforcement did it will be a balance between foreign and domestic and it will likely shift in the direction of domestic. the balance that we now have between prevention and being forced to defend at the point of attack, it will probably shift to being forced to defend in the event of an attack. the open question is, how well we do it? there are policy implications. you have a tax up here.

what you need to do with my left arm? i can push it down. how much more of your commerce, how much more of your convenience, how much more of your privacy are you willing to have pressed to gain a better probability of success against the new flavor. put another way for most americans, this is not a metaphor, how much will it or you -- how much are you willing to take at dulles international? that whole pack down kerflop that we had was the breaking down of this dynamic. the new threats are down here. this is where the current threat is.

cook there is one more implication and that is at the strategic level. what is our definition of success? since 9/11, our definition of success in the united states, politically, is that there are no successful attacks. this current circumstance is penalty kicks. i do not care how good the goalie is. this ball, sooner or later, is going into the back of the net. the important policy question is how to respond to it. do we punish ourselves, but it is one that came to my mind. do we [inaudible]

politically? frankly, we have been pretty successful defending us. that in response to a successful attack. those folks that i left behind i think they are asking for an american conversation on my left arm. do we go out to our public and say that we can do this but we need to agree that we all think that is a good idea. if we do not think that it is a good idea and we keep the are relatively close to where it is now, we all shake hands and recognize that we are accepting some degree of risk down here that we might otherwise reduce. but by balancing values, we have

chosen not to do so. i think it was suggested by bruce, earlier that al qaeda tactic may be too exotic -- to exhaustless with security measures did we will do that in the american political context after the ball is in the back of the net. in the present tense kind of guy. all of the pots are deeply important and will be in the balance of success and failure the fight is the most important one. the close fight is an important question. it is one that will require some political maturity on the part of my nation and our political leaders to deal with it and an -- with it in an appropriate way.

i thank you for your attention and i would be happy to take any questions that you might have. [applause] >> we will open the floor to questions. do not be bashful. no questions? here is one right here. and the second one. >> i am a full-time contractor for the program evaluation. one of the things that struck a chord with me was when you discussed the difference between the close and the people fight. are we going to have to maintain our readiness and vigilance with respect to the deep stuff for a simple reason that if something should happen

in the close battle, particularly in the homeland, then the american people are likely to demand a deep response if you will. >> this plays out over several turns of a wheel. if you look at the thinking of close battle and the battle, -- deep battle, it is more of a -- the battle -- in the deep battle, i would ask -- i believe to the core of my being that our success in the close fight has been largely derived out of not just playing defense but out of offense and keeping al qaeda of

maine on the defensive -- main on the defense. do not take it to mean that close battle is all about goal line defense. in the immediate battle, is taking the fight to the enemy. but the deeper battle the one that i am referring to is about ideas. it is about what people think. it is about what people are motivated to do. i want to choose my words carefully. i wish i had a prepared text to make sure that i was precise. we had this kind of thing in the cold or. we talked about canning containment. that is kind of the close battle. over time, the deep battle was the battle of freedom. america and western europe had a very prominent role to play in

that it logical fight. communism is a western philosophy. therefore europeans and americans have some legitimacy in that debate. marks evolved out of other thinkers. it is far more difficult for a nation of the united states to engage in the dispute about ideas in a religion that is by and large historical traditions of judeo-christian. it is so hard for us to be engaged in it that when we do would probably make things worse. this is a question about authentic and voices within islam working of the future.

-- working out the future. sorry, the was a very long answer, but an important distinction. >> a question down front. >> i am a journalist from pakistan. in the last few years we have been speaking to american offices. we have not broken our link. the americans have been responding by giving more and more aid to pakistan.

his feeling was that the americans have no plan b to meet this challenge. i tend to agree with him. why did the americans and western europe -- how long will we continue giving more aid to pakistan military? >> i have already heard about my good friend and his lunchtime conversation and i hope that we are able to discuss it. we are getting together later. i am going to give you an incomplete and not suffer -- not

totally a satisfying answer. this is particularly for someone who has been where i have been to discuss in great detail. when we talk about a visit that i made to pakistan after the assassination. with tinted to do this under the radar. it was not supersecret. we did not want journalists like yourself reporting on immediately. we have what i would call the trip from hell. we saw the president. we were sent by president bush. the message that i had four presidents sharra -- musharaf was a we have had great success in pakistan. in fact, we had captured more al qaeda senior leadership

incorporation with the i assigned and we had with any other service in the world. that is fact. i then pointed out that we have not seen that some kind of corporation in the tribal region. after the peace agreement that the governor signed in september of 2006 in the tribal region, it changed the dynamic and set the conditions for it to be a safe haven for al qaeda and both the pakistan and afghanistan tell them. i said to president musharaf that we oppose that agreement. but at least i think that i understood the thinking behind it. his view that those kind of folks were not just a threat to america, they were a threat to him. what i was trying to drive home to him it was that his metric

should change. now, those folks in the tribal region were not just a danger to the united states or just a danger to afghanistan, he should now perceive them as being a threat to him and his government. i pointed out that after he sent his special forces into the red mosque that previous summer osama bin laden had issued it a fatwa against him and we saw a merger pashtun to the extremism. this now represented a serious threat to him as it did to us. you know this better than i. he was distracted. we made the same argument to others. to the degree that we win that argument and to the degree that

we address that point some of the things that you are suggesting get much reduced. to the degree that we are unable to make that argument, some of the things you're suggesting, i think, continue. back to that fundamental premise, do you agree or not agree with that? >> on this side of the room? we will come back to you after that. >> mark all read from the department of defense. -- mark all realred from the department of defense. you mentioned that we increase restrictions. i am curious of your opinion on how we approach that.

you argue that our greatest success would be highlighting our liberties. how you think we should best approach this new threat that we see right now. >> it is very hard to say that this is in the left-hand column and this is in the right hand column. the pat down thing i work very closely with the deputy director of the fbi. obviously, i am putting that in the that is ok column. in terms of the current threat i am someone who is quite comfortable with working on authorization from the president.

i tilt in the direction of using the full extent of a law to ensure security. i understand the great danger. if this is what the law allows i do not want to go to that political the grinder. let's play inside this box. just a few yards back from what is legally permissible. i have trouble with that as an individual. if i am playing in a box that is not as big as the policy box allows me i am protecting the united states citizen. you may want to describe that in a security mindset for people that have a more libertarian

view. if i am playing on the inside box, even though i put it in a larger box, i hope that has meaning for you. if something bad happens, let me show you the new box. i know the american political process. i am not giving it a clear answer. one needs to be very careful about not using all the tools available because if you do not use all the tools available and horrendous things happen, in one sense it is katie bar the door for convenience, and liberty to read it is not that simple an argument as security and liberty. it could really hurt liberty over the long term. all that said, me, personally, i

am not interested in pushing it down much further. >> a question over here in the back. >> i am with the university of maryland college park. i found your discussion very interesting, particularly the distinction between the close fight and the defiant and you said that the fight is very important and then you said that you're born to talk about the close fight because that is what we do all the time and that is what i understand. it raised a concern. we read about how al qaeda has a strategy of death by a thousand cuts. one of our most critical resources is the attention and focus of our leadership. i'm getting the very strong sense that we're spending so much time in the close fight

that we are not doing the thing and we are not preparing for the next battlefield. >> great point. you are right. frankly, that is a message-that is the message of was intending to send your my job was incredibly present tense. this is probably not the agency what in the deep fight for ideologies and ideas and all those things. i think that is one-third this is very important. -- i think that is one -- this thing is very important. now, they do not spit on them at the airport. soldiers are highly regarded.

1% of the country is defending the other 99%. there is a very good argument to be made at the issues in afghanistan are not the product of inattention by the department of defense or the cia, but the product of attention by the rest of the american government which did not strap that on as something the need to be concerned with. let me go deeper. i suspect we have a lot of people that's been a lot of time on college campuses. let me give you an analogy. let me go back to the late 1940's. you had to the canon article followed up by the c-68 that set the framework for soviet expansionism. think in your mind 10 years

after we came down from the mountaintop. go back in history and think of how many colleges are now offering soviet studies. how many colleges are now offering studies in marxism. take your machine and fast forward. we are melting years beyond 9/11. where are you? people in the room are playing this game, but in talking more generally around american society. how many studies to we have out there? how many rigorous academic studies of islam to we have going on in universities across the united states? the whole question of radicalism. we do not have the comparable heavy lifting for the current conflict.

you are absolutely right. i think that my message was successful. for security establishments are doing much to ask for them to do fighting the close fight. this is an all-america response and there are a lot of folks that are not yet on the field. >> one more. >> i am with the investigator project on terrorism. i have a question. you predicted that future terror attacks will be less complex less organized and of less likely to be successful. but how do you explain something like the mubai attacks. there is a tendency to replicate attacks in the developed world.

in 1993, it was replicated in london and madrid. how do you explain that? >> i agree. in an intelligence officer by profession for it we never say anything that is absolute. we always hedge. do not take any of those judgments as being obsolete -- being absolute. the ones that succeeded were before 911. -- before 9/11. you go with someone like this one terrorist who was not well trained and probably not even well vetted. why? because we probably would have wanted to fight him even with

the limited help that he got. i am trying to suggest that the style of attack to which they have been forced bruce went to the death of a thousand cuts and said that al qaeda had a national security council meeting and said that they needed to change our strategy. i do not think that is true. i think this is more a product of success, that they are unable to conduct the kinds of attacks that they would really is still like to do. if the attacks -- that it would really still like to do. if the attacks -- i think collectively, it reduces the probability of success. all that said i say that the ball's going into the goal.

>> thank you, very much. we would like to thank everyone for participating in this conference today. [applause] we will see you here next year. we still have some books for sale. that is a way to support jamestown. look for the dvd is that are coming out soon. have a safe trip home.

>> there are many organizations and individuals interested in the case so they will submit friend-of-the-court briefs.

in some of these cases, there'll be 40, 50 briefs. there is a lot of reading. that is a big part of the job. if the kindle or ipad can make it easier, that is terrific. >> you can see the entire c-span interview with the newest supreme court justice, elena kagan, sunday evening at 6:30, 9:30 and 12:00 eastern here on c-span. up next on c-span house leader is steny hoyer and his party's agenda in congress. topics on "washington journal" include the federal ruling on health care and the tax cut package. later this morning, a report on a teenage drug use. southern sudan will vote on january 9 whether to remain united with northern sudan or form an independent country.

today, a panel will preview that referendum. live coverage from the u.s. institute of peace begins at 10:00 a.m. eastern on cspan 3. later in the day also on c-span 3, a conversation on the future of afghanistan as the u.s. plans to begin withdrawing troops next summer. that is live at the center for a new american security at 1:00 eastern. house majority leader steny hoyer said earlier he expects the tax cut package to pass the house later this week. the senate moved forward on the measure earlier. congressman hoyer spoke at the national press club. this is one hour. >> the house of representatives shall be composed of members chose ever second year by the people of the states. so says the constitution. at a time when some americans were pushing