businesses, not necessarily about small business. >> i'm just -- i don't want to overtalk here, but angel networks have disappeared. a large venture capital business no longer does early-stage rounds. they've gotten to be multi-billion dollar funds, and there's certain things we've done around tax policy in terms of no capital gains and firms under $250,000. but thinking more aggressively about early-stage capital formation is an area that i'd love the panel and anybody in the audience to give us some idea. >> the number one venture funder is visa. >> that's a credit card. >> and master card on new start-up businesses. >> credit lines were pulled and we lost about $2.3 trillion and half of that was credit cards, and hopefully some of that will start coming back. but the small start-ups typically use credit cards to get things started, and that source of credit has been really contracted as well. but hopefully -- we started the

conversation with an improving economy that will self-correct. >> chairman bernanke, can you square this circle for me? .

i think that 2011 will be a better year for small business lending. supervisors and monetary lending advisers will do what we can to help that. >> do you see something going on in the market? crush in terms of small business -- >> in terms of small business lending, there is no more tightening at this point. we have surveys from the nfib which has shown some improvement. we have a lot of anecdotes and examiner information that suggest an improvement. and we follow the data on

smaller loans. they give us some sense. overall, it is still a very tough situation. things have stopped getting worse and are looking a little better. again, as the economy improves, you expect to see better lending going forward. >> we think it is turning. loan balances remain stable for the first time after quarter-to- quarter declines. most banks are profitable again. the credit quality -- they're going to their troubled loans. those are all things that improve the bank's ability to lend. if things continue as they are, it is still getting better. >> it seems like everything finally came together.

congress got a few things done that people were waiting to get done. are you hearing about the $30 billion program and what happens to the 100% appreciation? >> i have not heard as much in terms of the small business lending that comes back to $30 billion. the money has been taken up by real questions, whether banks will pick it up in the first place. i think $12 billion in small- business and this little access program, which will leverage $15 billion in lending, will be incrementally helpful. i do not want to discount what sheila has done with this helpline. as tom rightly pointed out, with the pendulum going too much, as a regulator, no one wants to say that we're done.

it is a mixed message of land, but be healthy. there's not much -- lend, but be healthy. if they are told by their banker that the regulators causing this problem, pick up and call the helpline, that might make that regulators think twice about it. >> this will be important information for this. we contract this information the way we do consumer inquiries. if we see a greater frequency

problems, we can take a deeper look at that. >> it definitely improves the lending environment. our numbers are getting better. the activities of december will have a very positive effect, i think, on the overall economic environment, particularly with regards to small business and confirming the tax rates, even though it is only two years. it still gives you two years. that is about all the small business can see anyway. and then depreciation and other things that have been done over the last several months by both legislatively and administratively, i think it has the fully improve the environment. i expect that landing will improve substantially through 2011 given the demand. the big issue is still the man. if we can get them and wrapped up, do not think that landing will be the problem. -- that lending will be the

problem. >> i think we will try to improve that front. improve the legislative process and the rule-making process. some say that there are probably 500 rolls of have to be made. this will be really something. i think that the rule-making process and some adjustments legislatively, we can come up with a solution that works for everybody and it will be further addressed by the business community. we do not like what we have right now. >> to have two people in the group bernau palin who do you want to do a memo? two people in the

group right here. do you want to do a memo? >> this was a very close call. some courageous people did some things that were not universally supported. we got a lot of criticism from our membership supporting tarp and some of the other legislative initiatives. but it was the right thing to do. now we just have to come back. >> chairman bernanke, we have a lot of questions. is it in your opinion that is the regulators, because of thite mistakes in the past, they are over doing it now? >> again, we're trying to keep the psychological feature in mind. we make the rules. first of all, we have to follow the intent of congress. that is number one. we're not legislators. we are rule-makers. we're trying to implement the laws that congress enacted.

we want to make the rules as sensible as possible. the financial system is really important. that is why we do not want to strangle it. we want to make sure that it is safe. we want to make sure that it does its job. so we're trying to strike the right balance. there is a set of complicated rules aimed at the largest institutions. they are very complementary. when you put it together + the rules on resolution and on activities and so on, together, i think they do quite a lot. but we understand the burden. we need to write the rules and away that is workable and not contract activity. secondly, we need to move as quickly as we can and insist on getting it right. we do not want this to be

hanging out there for a long time. we talked with the bankers and said, look, we can live with all kinds of stuff, but tell us what the rules are so that we can get back into the game. >> how many deadlines you have coming up? will you make them? >> we have an elaborate project management system at the federal reserve. try to keep track of reports, consultations, and everything, it is a big job. even regulators have been spirited >> senate -- gains -- have gained. >> would you comment on the subject of overdoing it? >> we all want transparency

initiatives. we have enough policy people that want to meet with us. we have a timetable on the roll- making. there is -- on rule-making. someone can set outside the rule-making process. we want people to come and ending it with us. we want the right to know who we are talking to. we have also scheduled round tables with various interest parties to talk about our rules. i think we have good input from the public and it is impacted by these rules. i think we're trying to be balanced and fair. i would agree with them that we need to get on with it. they just need to know the rules are so it can take action.

>> i have to smile a bit because i have had leaders of some of our major financial institutions coming to me in the last few months since dodd-frank was passed. they say, frank, you have to move along. but you need a two-year study. i spent 20 years in the financial sector before i got involved in politics. it has moved so far beyond my knowledge level. and i think it is beyond most legislators level. it is opaque, complex, and i hope more transparency. it would be great if we had more real engineers as opposed to financial engineers in this country. we have set up a system that

allowed financial engineering to create paper value rather than value where we create intellectual capital and make things. i would like to get back to more of that. part of this transparency underlies the need to level the playing field with these large institutions. >> did the market create these financial engineers or did the government create them? >> the market. the government had a role to play, a permissive role, i would say. when you have astrophysicists designing financial products to be sold by bankers, that is probably a bad recipe for sustainability. [laughter] you talk about overreaction. there has been overreaction. but i would have to say, what would you expect?

the overabundance or however you want to describe it, on the other side, which created the problem in the first place, was at least as far, say, to the right as this is to the left. we just have to come back to the middle. i have not heard anything here today that suggests that we are not moving back towards the middle. that is good news. >> you are optimistic about the government. i am. temporarily optimistic. [laughter] >> that is a news fast -- a news flash. since you guys lost qe2, rates have gone up and the stock market has gone up. we did a poll and they say that qeii is responsible for higher stock markets and higher commodity prices.

>> , you have to enter this question. >> as much time as you need. >> first of all, policies have contributed to a stronger market. in 2009, we did the last iteration of this. the s&p 500 was up about 25% +. small-cap stocks were up 30% +. i think a stronger economy helps small business more than it helps even larger businesses. yes, it is contributing to the stock rep. interest rates are higher, but mostly because the news is better. it has responded to a stronger economy and better expectations. i think that the policies help and small business, which we started off by saying, response to increased demand and opportunity and it is the beneficiary of that. one of the best things we can do is try to send it into the

overall economy. >> have you gotten a little bit more about -- more optimistic about the economy? >> i am. we started taking action in august, really. even though we made these announcements in november, the policies began in august. we begin to reinvest securities and i began to talk about this at jackson hole, where you can always come and join us. since that time, -- at that time, the economy was looking somewhat shaky, frankly. we were quite concerned about its ability for recovery and inflation and those types of risks. something needed to be done. i think we're seeing some improvement. we're looking for a stronger recovery this year. i think deflation risks have receded significantly. we're moving in the right direction. >> you think the banks are more

bounce now than they have been? >> yes. in august, it was deftly to the downside. now some of them are more balanced. there are many uncertainties in the world. we have to keep a close eye on them. >> we have been over this, but i let you put it. this is a person from the fdic. i will not give you their name. bankers say that we're open for business. small businesses say that we cannot get credit please comment on this. [laughter] >> i think the truth lies somewhere in the middle. we need to caution against overreaction and strike the right balance. i think some banks became more risk-averse than they should have. credit has been down. the truth is somewhere in the middle. we are encouraging banks. we want them to lend.

but getting the economy going will strengthen the ability of small business to make them more credit worthy and give them more confidence. >> senator warner, could you walk us through this next several months. it seemed like there will be relatively dramatic across the river here. >> i'm glad we are in virginia right now. [laughter] >> things are relatively quiet. but as far as the debt ceiling or the deficit reduction, they are not primary issues, but they are important to small bonuses and what is going to happen there. >> one of the messages we heard from the regulators, chairman bernanke is -- he would not say this in politely, but he is basically saying to the congress that we need to walk and chew gum at the same time. we need to show that we can do short-term stimulus, which we just did $900 billion worth in

december and what will be critical to keep this economy going is the government using its tools. we have to get part of the two dollars trillion that is sitting on corporate balance sheets of the sidelines and reinvested. as for some of the policies -- in december, they will help move that. i think if this -- i think we also have to, longer term, implement a meaningful deficit reduction plan. we are working on basically taking the president's commission, the some symbols commission -- the simpson- bowles commission. we will introduce that as legislation and is put up or shut up time. there are democrats and republicans alike to say that a single -- the single largest

long-term threat to our national economy is not simply the short- term town as we face right now or the financial crisis, but getting our nation's balance sheet in order. that will take both sides with dramatic cutbacks on spending. it will take meaningful tax reform. and a tax reform similar to what simpson-bowles did. by lowering their rates, it broadens the base. in some cases, it creates the revenue stream need. it does not take a rocket scientist to say that spending 24% of gdp and only 18% growth is sustainable. -- 18% revenue is not sustainable. >> not to get too deep, but is it linked to the debt increase? >> time will prove that out.

i trust you like a brother, but i will not share all of the strategy right here. [laughter] i think we will see broad bipartisan interest in not letting deficit-reduction -- at the end of the day, it is easy for politicians to give tax breaks. it is hard to make the hard choices, but we have to make them to put our nation back on track. states are arguing it. i had that opportunity when i was the governor of virginia. >> would you tell us what the business community wants when it comes to deficit reduction? >> first of all, it is the number one issue. it is not way out there in the future. it is present. i think the last election cycle demonstrated very clearly that there is a lot people in this country -- the majority of them

think that we have to much government, more than we can afford and more than we want and that we can do something about. i have seen the issue raised up in the top three issues in most of the opinion surveys. i think with the business community would like to see is a significant restructuring of the tax system and the time of programs. the problem we have at the chamber with any issue like this is that many of our members have their own specific tax accouterments of the beloved and they want to hang on to them. [laughter] whereas they all agree that we have to do something, just do not do anything that affects me. i think this is the first time that the chamber is taking the position as an organization and our members are generally receptive of -- ok, we get it. we have to look at the longer term. we have to look at a significant restructuring of how we derive

the revenues we derive and we need to get our spending down to below 20%. that is about all you will get out of tax revenues, 20% of gdp. so there has to be a balancing there somewhere. >> that is one of the most interesting issues out there. as i look at -- lowering the corporate tax revenue, you have to raise taxes on half of the corporations. it is not a republican or democrat issue. it is a bipartisan issue if you're going to resolve the corporate tax issue. >> we need to bring it down to 25. effective rate for a lot of large corporations is a low- 20's. so there will be some winners and losers. the way you get that is with a bit of shared sacrifice from everybody. everybody has to feel like they're doing their part. while deficit-reduction is in the top three right now, you got and say -- i think simpson

decibels was not strong enough of social security. some of this is just math. these things have to be going on the table. overwhelmingly, the public does not want to touch that. we have to have a little more truffe. -- more truth. we will not have anything done unless the business community says, we are in for our hard choices as well. >> german bernanke, one issue was real estate as collateral. in the environment of uncertainty surrounding real- estate values -- i want to leave

here with a sense that there is something we can have done here going forward. is there a role for the fed or other government agencies to come in and resolve that issue so that the small businesses that are viable can get loans? >> on the margin, you can do some things. first, besides the stuff you try to do to get the economy going again, you can work with appraisals. one of the issues in real estate is that, in a stressed environment, sometimes the appraisal comes in very low. but will affect the collateral value. the basic message is that you want to look at the whole context, how the property will be used and what is the cash flow and that sort of thing. one microcode of thing like that can be done. until the real estate -- one micro kind of thing like that

can be done. until the real estate market comes back, you cannot rely on collateral for repayment. what other prospects are there in the business? what is the cash flow. the guidance should be there. you should not be making loans or rejecting loans because of the industry. you need to look at every individual business and think about its actual prospects and learn the business and make that decision. collateral is a way to make a loan without doing much work. collateral is a problem now. >> are the bankers too lazy to do that? [laughter] >> i think someone forgot how to do it. i think -- there are more high- tech wonders.

they have more knowledge of their borrowers. larger institutions have more relationship with their borrowers sometimes. that will give us better loan quality. all the exposure we will take, we will get better asset quality. >> we are in the last two minutes. >> one of the things we have been urging regulators is that, if a loan is performing, even if the value is down, particularly on commercial loans, it puts folks between a rock and a hard place, especially when they have been performing for a long time. with a massive consolidation along some of the larger banks, you have management teams that have been wiped out in

communities. the connection between the borrower and the baker have been so destroyed. i am not sure, long term, that we will be able to completely fund the community. the whole business community is out of the banking system. >> realized and unaddressed loan-loss imbedded in the banking community from real estate has not been addressed. disclaimer -- i ran a real estate trust for many years. it has not been addressed. we want to get the stuff out of the system, get it into secondary hands. you have to create a secondary market. there is a lot of money invested in the secondary market. they want to make money. some of them will make bets have lose money, but others will make bets and win money. this administration has to address the fact that, look, if you agree the structure, some

people will get rich. a lot people will lose money, but it will solve the problem. >> we could go for another half- hour. that was the regional design. it has not been used and the issue festers. hours we could leave on a more optimistic note. please join me in thanking your panelists. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> and about 40 minutes, a forum on america's future. after that, i discussion of mental health programs in the u.s.. later, we will hear again the four months of business and the economy. >> on "washington journal

tomorrow," we will see how the democratic base sees president obama's priorities. we will also be joined by the founder and president of the media research center. then we will look at the state of the auto industry with david welch. "washington journal" is live on c-span every day at 7:00 a.m. eastern. >> tomorrow, the rnc alexa their new chair. five candidates are vying for the position. watch the process and the vote light 8:00 a.m. eastern. this weekend on c-span 3 american issue tv, historians discuss the importance of their work on pop culture at the american historical conference in boston. an oral history with the

washington d.c. first delegate to congress. experience american history tv all week and every weekend on c- span 3. see the complete weekend schedule online at c-span.org /history. >> the head of the transportation security administration, efforts to balance privacy rights with protecting airports and railways. we spoke with the american bar association for 40 minutes. >> we are actually honored to have john come who, as you know, is the fifth administrator and was confirmed in 2010 for the transportation security administration.

it is a rather large task that he has. there is a strong work force for which he and ministers. he has control of the air marshal service and highways, railroads, pipelines, and more. john comes to us from the tsa. he began his career as a special agent with the bureau in 1983. he was the supervisor of organized crime section. in his career, he has won a number of prestigious awards with those of us were familiar with the recommendations to the department of justice.

he is a graduate of indiana university school of law. i think he has become quite well known to the american public. [laughter] file was sent to him that there are not a lot of people in washington vying for this seat. i think it is a testimony to commitment to public service. there are very few people who we think that can do the job as well as john is doing. it is not easy and i think i know this woman had a lot of appreciation and thank you. with that, and john will speak and then he is gracious enough to stave to take a few questions. with that, john, it is my pleasure to have you. [applause] >> thank you, harvey. i appreciate that kind introduction.

it is a pleasure to be here. i just want to talk about four precarious of a national security as it relates to transit security. we will go over those and then see what questions you may have. what are we dealing with, what is the context of what we do well and things that we do not. the next point is how do we deal -- this is part of a continuum of national security. how does that fit in the overall contract. a third point is how do we balance the security issues that became so fast. the fourth will deal with participation. it will be either now or later on. what is the vision for transportation security in the years ahead? we talked about that in terms of

a 20/20 vision. what those transportation as a tree look like and which should it look like as we tried to balance. we recognize the key aspect of how to protect people who are traveling, particularly by aviation. those are the four points of will touch on. we know that there have been a number of attempts obviously overseas. some have been successful and some have not. we passed the one-year anniversary of the 125 northwest airlines flight coming to detroit. it came out of yemen. we saw another attempt here on 10/29, from yemen to carter plots. the two words that come to mind are persistent and evolving. we have seen the determination

of fans. we have seen no dock and -- they are innovative and creative. they are bold. all they have to do is look at inspire magazine. i am not used to promote people to look at g hottest literature, but, in this -- to look at the hottest -- and to look at jihadist literature, but, in this case, the credit that huap takes and how they construct those devices, the fact that there would be in the printers, no one would have detected that would be a bomb in there. somebody took the explosive detection or they had a dog.

that would not alert. the fact that they actually took photographs, including a book in the container, in the box. it only cost of 40 two hundred dollars and several months preparation. -- 40 two hundred dollars and several laws to do this. -- $4,200 and several laws to do this. there have been a number of discussions and meetings. we just posted a meeting this week on steps that we can take as part of the international community and recognizing the critical interdependence that we have with our four partners. both in the government and the private sector. we see a persistent and evolving

threat. there is a number of other issues going on. we have seen a number of arrests here in the u.s.. some people refer to them as lone wolves, individuals who will do things that are perhaps aspirational in nature, but, and forcefully for us, they're doing it as undercover agents and officers rather than true terrorists. once again, the individual in portland oregon wanted to blow the christmas tree lighting ceremony and the one in washington where they wanted to attack the subway system -- we have seen individuals who have wanted to do something and, of fort lee for us, they encountered on line -- unfortunately for us, they rscountered undercover office on line. they're not completely operational. didn't have the means to carry

out the attack. but the concern that we share is will that the alert worked? what if that person had connected with a true terrorists? again, we see a persistent and evolving threats from a number of groups. whether is a al qaeda in iraq or al qaeda elsewhere for its is the pakistani taliban those are just some of the threats that we're currently working with. that is the context that we are working in. the second point is that the

security apparatus that we have tries to ensure our transportation, obviously, those means of transportation, but particularly folks on aviation. i like to describe it as part of a continuum that is part of this national security apparatus. we have the foreign efforts, whether it is the foreign intelligence collection or from foreign intelligence services, sources we saw with the saudis, their security service is back on the cargo plot. they were able to obtain not only strategic intelligence that there was a plot, but a tactical intelligence that said look for these two packages that contain bombs. that is a rare occasion where we have credible, timely, and accurate intelligence that we can take action on. but that is the best case scenario. that is so rare. that is the best situation.

what we usually have is intelligence that something is happening and it may be plot to do something on an airplane. on december 23, we received a new intelligence that al qaeda in the arabian peninsula would try to put the same type of material that was used on christmas day and on a 2029 cargo plot. the same bomb maker made those three bombs. he used his brother to carry out the suicide bomb. so this plot was that they would use tnt be around the cylinder of the thermos, put it on a passenger or a cargo plane. that is general intelligence. what we do about that. we make sure that all of our

security officers are alert to it and do additional physical screenings, in addition to the x-rays and whenever the thing. to see whether there may be of a viable plot. if you happen to traveling in the near future and you want to take a thermos with you, just be expecting to suffer more screening. whether it is the military doing something over seas, trying to eliminate the effect of race of having training camps overseas, in pakistan,s ba afghanistan -- just to make sure there are not enough opportunities. that is one end of the continuum. then we move more toward the shores of the u.s.. as we look at what we have going on here. -- going on here, the fbi has

thousands of investigations of individuals here in the u.s. then we have the state and local police. hopefully, they will likely be the next seven people who will detective plot. there are i meters out on the street. there are those who have contact with the community. we have those as opportunities to identify and respond. maybe a state trooper pulled somebody over for speeding. we have those opportunities. we also have concerned citizens. some wanted to about their neighbors. the neighbor said there was something going on.

it developed more quickly than the accord israel to disrupt. but it turns out that concerned citizens were alert and it could be grateful all suppliers for us as we try to protect our citizens. those of the opportunities we have to identify the plot. would it comes down to is the men and women at tsa, which tried to identify that person and we have someone in the u.s. who is perhaps a long wall for a summit was low on the radar. he acquires the knowledge and the skills and the ability and the materials to construct it. it is a non-metallic device, what we saw on december 25.

we have to recognize the their places where we just have to walk through metal detectors. it is on the men and women of tsa to try to detect something or if there's something in the documents to indicate something or secure flights that is running now. you have the name and give birth of everybody planning to end through the u.s.. all those opportunities -- let's say it is regular dulles -- that person may get through. obviously, alert flight crews and passengers might able to do some things, but that is not what we want to rely on.

that is the context for why we are doing the things we do, which brings me to the third point. we do the things that we do in terms of security screening based on rates themselves. as we saw before thanksgiving, we went to more thorough patdown. the reason was that we do not want underwear bombers to get on a plane and a blow them a superior that is -- and blow them up. that is the bottom line. it is well known, but we actually started advancing the new technology machines back in the fall of 2007. some people say, "why are you always reacted to yesterday's threat?" we need to make sure that we're addressing yesterday's threat in case something happened.

that is one point during the other is have we best -- that is one point. the other is how we best go about doing that. we are taking steps to address those security concerns. we do close -- we deployed the device. we then accelerate the acquisition of those. that is what caught the public attention. those two things coupled with the enhanced patdown. those are simply steps we're taking to make sure that you and everybody else arrive alive. that is the bottom line. where do we do in terms of trying to balance? we try to make sure that we use means of detection that we are

sensitive to and attuned to the privacy issues into france. one is on the technology. try to use the best technology. bernau, with our technology, and hopefully, you are aware that the person that the security officers have seen, the person seen the images in a separate room and never sees the person. we would never make that connection for those concerned about modesty and privacy. we do that. the others to try looking at refining technology so that we are very much interested in the automated target technology.

it completely addresses the privacy, the modesty issue, that many people have concerns about by simply presenting a generic image technology. it is an anomaly from what what is normal. i know there are variations of what is normal. if there is an anomaly, it would show up as a box. for example, yesterday, one of the individuals kept his blackberry on to see what would happen. so the passenger walks through and actually sees the image right there because it is a generic image. so the passenger and the studio officer -- there is a yellow box

here on the west tip. we have to try to resolve that. i think it addresses the privacy issues and modesty issues in a very good fashion. we were hoping to have some refining in the technology that we could deploy that sometime this year. we are just waiting on the technology on that. on the patdown, we're working still look for other ways to do the patdown that would be less intrusive, but to achieve the same results in trying to be able to detect really well hidden secreted items. we are always trying to refine what we do to address privacy and safety insurance, recognizing that there is a

high-level conference for ready traveling, not that natalie reveals on that their plan has been screen, but that you have been thoroughly screened, too. everybody wants a higher level of confidence. where do we find that balance between privacy and security? as i mentioned a couple times. i think reasonable people can disagree where that balances for themselves. four other people, you can say, yes, it is good. but when it comes to me, what is my comfort level? we want to be sensitive to and hear concerns and make sure that we're providing the best security possible. that brings me to my last point in terms of what is the way forward? what is the future of transportation security? i'm very much interested in

looking at a best risc-based control possible. i came in six months ago and i have been talking for a few minutes. how do you the latest intelligence, the tactics and technology, to make sure that we are using it in a certain approach? it means that we will look at you even more for behavior detection opportunities. some people talk about the israeli model. for those who have traveled out there, depending on what your status was, you were afforded some very thorough security or some fairly light security. it is a pretty paled approach. we have dozens of airports, individual airports, here in the u.s..

we have about $628 million -- six and a 20 million passengers in the u.s. the $628 million versus the 11 million 61,000 employees with 450 airports, that is considering surface safety issues. those are other opportunities angeles we have. we're just focusing on aviation. how do we use the information we already know about passengers in and informed and intelligent manner so we know there date of birth, their name, and their gender.

there's not much to go on. one of the opportunities we have is the traveler programs. those individuals willing to provide more information about themselves in exchange for a different level of screening, more and identity-based screening than a physical screening. we will still do the physical screening. we had over 110,000 pilots in the u.s., yet we have them working the same security. it did not make sense from my perspective. we're work with the airlines and associations to refine the technology that we have in three airports to allow for pilots to do these identity-based

screenings so they would not go through the traditional physical screen. there are groups of people out there, the very frequent travelers, who are willing to provide information and have had programs in the past. we're also looking at, guess what we can do. you probably do not want to stand in mind, so here is what we can do. you're the people we really look at in that respect, also. those are the things that we're looking at in terms of the tsa of the future. we are also looking at the perspective from the curbside calling somebody is dropped off, to the cockpit.

where are you going, where have you been, were you live, all of those things, through that, you can learn a lot more about a person who's traveling. obviously, we have a number of canines and can handlers. we're hoping to expand that. generally, people are glad to see canines in airports and other places. it is something besides a snarling german shepherd. what we do is have cannon handlers walkthrough airports with a the plain clothes -- what we do is have the canine himmler's walkthrough airports. protection officers watch and see how people react to that canine. last december 24, if there had

been a canine handle walking through the airport and have a behavior corrections officer steady people reacting to the canine to see how metropolitan they responded, how would you rate it, knowing that this bomb was year. the dow was in his underwear. these are the things that we need to talk about. expanding the programs, doing things from an intelligence -- from a assessment. there is a pretty good spam culture on my e-mail. [laughter] i am serious about this. there are a lot of smart people in this room with a lot of nasa

experience and perspective on how things work and a lot of frequent travelers. if you have ids, i would love to know about that. send me an e-mail or call me. >> great. [applause] >> we have a few questions with two minutes left. >> there have been a number of cases where american citizens are able to depart the country whe. however, when they are in another country, and no fly status is in place and they cannot return to the united states. how does that play out in the courts? >> the question is that their designated as a no-fly.

in terms of the united states, by plane, they can return. the question becomes is there an interest by the u.s. government to have that person returned in the interest of equities or what have you? there may be charges pending against them. each of those instances are treated as a situation. last year, we saw a number of waivers for those individuals to come back, either so the fbi could interview them in more detail or because they are pending charges, perhaps sealed. each situation is reviewed. >> is there a constitutional issue here, the right to return to the united states? >> i would defer to our lawyers on that.

there has been some discussion about that. to my knowledge, there has not been any successful challenges to that. >> i thought your idea of stewart baker -- focusing on the traveler more than just on the materials, obviously, where will we have to go and said that there are travelers who can an instant -- i mentioned they hold information about many people. there is some distinction there.

we are reviewing the holdings about people. what can we use to recognize privacy? we are keying that up again. is there more intelligence based screening we can use? that is on the horizon for 2011. >> i traveled in november and december. trip.'t delayed on any

thank you. the question is, does tec hnology envetually get us to that point? what is stopping us from taking it to the floor? >> two points on that. we are looking at all t ypes of screening technology. there is a policy there. the eu does not require shoes to

come off. that is part of the risk base. one of my goals is to have it coupled with the development where people will no longer need to take their shoes off. laptops are a different issue. thank you. i think the professionalism helped carry the da y on that. in terms of where we go, patdowms are a secondary technique. the first screening is not a

patdowm. someone is refusing to go throu gh ait. the goal is to use more information which will limit the number of individuals. things have been concealed on individuals whether from knifes of drug pair fernand ho -- paraphernalia. >> you talked about this. how do we get other countries to come to the same standards?

one was for them to come together. part of the un passed a resolution for 190 countries agreeing to minimal standards. the meeting we hosted included yhe eu and other ke partners. it works together. we will see more initiatives coming together.

year a oncve every three meeting. they spent 20 minutes on security. >> america is in close to the end. for >> i felt for you on thanksgiving. a few questions. have you built into th eprocess some visible group? secondly, part of grates on people is surprise.

it was the first dayof the liquids i lost a $150 bottle of champagne. that stresses people. >> i am pickin gup on the last poin. you have been wonderfully open and candid. thank you. you shared more about specifics. i assumed that is a conscious decision on your part. >> with the passengers travelling every day, meant to be successful, we need to have

the bite in -- buy in of the public. what are we willing to do? we made sure we were taking this.

>> thank you per th. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> president obama speaks tomorrow at a memorial service for the late richard holbrooke. >> in meeting with tallis smiley -- tavis smiley. >> a couple of live and then steered tell you about we will

bring you live coverage of the republican national committee of winter meeting. we provide coverage of nonfiction books and american history. it is of available to you and the social media and networking site. from it is washington your way.

>> a forum on america's future hosted by a tavis smiley. this is three hours. welcome. tonight we have a wide-ranging conversation about the current and future state of this country. this is a 3 hour conversation about where this country is in the first decade of the 21st

century. in the first decade of the new century. let frank c-span for covering this. he is the chief political correspondent for cbs news, please welcome david brody. [applause] she is the co-founder of voto latino, maria teresa kumar. [applause] political columnist for the "washington post" please welcome dana milbank. [applause] she is the creator of one of the best sites on the web, huffington post, please welcome arianna huffington. [applause] the anchor of "at the closing

bell" maria bartiromo. [applause] he is the best-selling author, please welcome dr. cornel west. [applause] he is a best selling author and former speech writer for george w. bush, please welcome david frum. [applause] the ceo of sybase and a committee of 100, our friend, john chen. [applause] i think want to start our conversation with dr. west. i do that because i was reading clips of some of your immediate appearances, one in particular, you were asked about this conversation. i thought we were friends.

until i read this conversation -- we talked about how america can return to its greatness. i want to talk about -- we have three hours to drill down on this, but you took exception in the piece i read on a particular media outlet on the notion of america returning to its greatness. i want to let you unpack we have to say about that, but talk to me philosophically, politically, socially, culturally, how you see this notion of america's grade is and whether it ever existed and whether we can never return to it if it ever existed. >> thank you for bringing us together. we need to have this conversation at this moment at this history of this experiment called the united states of america. what i meant is that the very notion of a great nation is

ironic because i come out of a christian tradition as is the greatest among you will be the servant to the port. i don't know a nation that's treating its poor with the level of dignity and ought to. alexander the great was not great to me. he dominated in concord a lot of people. napoleon was not great, he dominated unconquered a lot of people. the legacy of martin luther king, how are you doing with the prisoners, the orphans, widows, the fatherless, the motherless, the working-class -- military might, america is unbelievable, technological innovation, america is unbelievable. rights and liberties, america is unbelievable. but greatness has to do with how you're poor and working people are doing. that is the vantage point to me.

the legacy to me -- the future of america rests on how we respond to the legacy of martin king. when i look at our poor people are doing, not very well. downward mobility, the newport, chronic poor, locked into a prison industrial complex, militarism, not just iraq and afghanistan, but the pentagon, the military budget being 50% of the u.s. budget which means there's no wiggle room to deal with the situation of working people and poor people in our debate about the budget. then there are the spiritual issues, the spiritualism, but narcissism, the spiritual malnutrition and moral constipation we see in the nation. the emptiness of the soul and the right and good being stuck in you can get out. that is morally constipated. the right and the good want flow. i'm not just talking about are wall street brothers and sisters.

they are human beings like anyone else with two much greed. a military industrial complex of private contractors, too much monopoly. our debate about education, privatizing taking place and to teachers and teachers' unions being cast as welfare queens. teachers need to do the job, no doubt about that, but $4 billion a month in afghanistan and -- for me, coming out of the legacy of martin, curtis mayfield, and other great freedom fighters, we are in very deep trouble. not returning to america's greatness, it is trying to make america greater with great courage, great love, great commitment to public interest and the common good. for me in the end, no nation is going to be great because every nation i know is going to be shot through with greed and domination, oppression, and the

best we can do is try to gain some accountability for the poor and working people as the elites, oligarchs and others continue to dominate the government and economy. [applause] >> if dr. west is right if sedation is trying to become greater, and trying to juxtapose that notion with your recent best-selling books, "third world america." you argue if we do not change a lot about the way we do business in this country, we may end up a third world america one day. get me from west talking about we need to become greater to your notion that we are slipping toward becoming a third world america. >> first of all, i want to say i would like to spend the next three hours listening to dr. west. [laughter] i was just completely spellbound

and that at some point, i said he's going to come to me. i would so much rather sit here listening. one of the reasons we are all so starved of poetry in our public discourse. everything is so prosaic. just listening to cornell riot -- reminds me of how not malnourished we are would become to that. i don't think there's any contradiction in between wet he said and what i wrote. we can never return to anything, even if there was such a thing as american absolute greatness, including toward the poor and working people. my greek compatriots, the philosopher herodotus said you can never enter into the same river twice. everything flows, everything moves on and everything changes. having made the philosophical

point, practically, as an immigrant to this country, this accent is for real. i am acutely aware of how we are losing the american dream because i lived it. as we are looking now at the possibility of upward mobility, the possibility of working hard and playing by the rules, doing well and your children doing even better becoming impossible for millions of americans, we see that since the middle class is at the heart of any first world country, if we lose our middle class as we are in danger of doing right now, we do become third world america. the statistics, i hate to cite statistics after dr. west, but we have 100 million people who are worse off than their parents were. when it comes to upward mobility, we are 10th, after france, after spain, after the

scandinavian countries. to be behind france in upward mobility is -- i think france was behind us in [unintelligible] that is my concern and we have a lot of time to discuss that ultimately i am optimistic. i know you wanted to start with the darkness and it's good to dwell in the darkness for a while, but ultimately, i believe and this incredible american character and compassion we see express dollar and the country in our small communities. lead to scale it, accelerated, and make it part of our everyday life. >> i want to pick up on something you said -- i'm trying to juxtapose docked suggesting what we are missing a focus on

the poor. i hear you saying we have to save the middle-class. how do we focus on the middle- class if that is your suggestion, when doc says what we are missing is a focus on the poor? >> i don't think there's a contradiction at all. the middle-class are the new poor. [applause] they are adding to the chronic poor. if you look at what is happening in our homeless shelters now, at the food banks around the country, there are more and more middle-class people who lost their jobs and lost their homes. about 2 million people, 2 million families have lost their homes in the last two years to foreclosures. stop and imagine that. last night, at the president eulogized in incredibly eloquent and moving terms, the nine year- old who died. our hearts were broken by the

death, but what about all the 9- year-old around the country who have no hope for the future, with talent and gets but cannot actualize them? the greatest way to honor christina is to focus on a 9- year-old from the country and all the other kids who are homeless, who cannot get a decent education and who cannot live the american dream. and they are still alive, so we can do something about them. [applause] >> not so long ago, dana milbank, a report released called the rasmussen report and it find that almost half the american people think our best days as a nation are behind us. wrestle with that for a second. almost half of us think the best days of this nation are behind

us. whether you believe numbers like that or not, it's clear to me that -- i've been around the country and we all do, this feeling of tanks, helplessness, hopelessness and concern about the future and whether or not their kids and grandkids are going to do as well as they have done, how do you move a country forward? how do you put a country on the right track of half its citizen rethinks its best days are a behind it? >> it is a grim statistic. to the extent there is any good news here, a lot of the reason we're all feeling so bad is because of a short-term problem in the economy. we have two problems -- one is that we have just fallen off this economic cliff which has made all the statistics worse and has made the american public extraordinarily dour.

75% to 80% of the people think we are on the wrong track now. that gets at the statistic you are bringing out because that's overlaid with the sense that our problems are greater than the economic cycle. we probably have reached a point where improving living standards are going to slow down for demographic reasons. we have reached a point where the rest of the world has caught up and america will no longer dominate the way it once did economically, militarily, but that does not mean we necessarily will suffer lower living standards. we have these two things coming together now and our problems are large but not insurmountable. what's happening right now is they seem insurmountable because 15 million people are out of work, because so many people believe we can't come to

grips with the short-term problems. >> john chen, dana says we have to recognize the fact that we as the united states can no longer dominate. if the 20th-century belonged to the united states, does the 21st century belong to china? do we need to accept the fact that we won the 20th century, but it belongs to china in 21st century? we all know the leader of china is headed to this city in a matter of days to spend a few days with president obama at a summit. does the 21st century belong to china? >> i have a few comments before i enter your comments. i did not understand half of

what dr. west said -- i run a around the world and unfortunate -- and i'm fortunate enough to do a lot of business around the world. we beat ourselves up pretty bad. there are a lot of countries out there that would love to be america. they love americans. the fact of the matter we are all sitting here talking about this, very openly, a very diverse background, that's a good sign. there are a lot of cultural- political-factional power is out there that these kinds of discussions would have ever happened, nor would any thing happen as a result. [applause] we have to not be ourselves up. but now i will answer your question about china.

it is the rate of growth. it's like companies. mature companies grow slower, met -- china, we have been telling them how to do things, do it this way, and eventually they do, when they did it, it worked and the rate of growth is much faster. their attitude is very different. they are a lot hungrier than us. but they also have issues that attempted the to grow peacefully, and i'm sure we will talk about security somehow, if they don't continue to grow peacefully cut the political and social stability will be called into question. as such, right now, if you ask the chinese people, the majority of the 300 million in the middle-class -- a total of

1.3 billion, they still have a lot of challenges. but the middle-class and the other who aspire to be middle- class would rather have the current growth structure than some of the stuff we would like to impose on them. given that, they have big internal demands. everyone wants to put money there, including us, to grow their market, and they are hungry. the next decade, we will see a lot of development over there. >> i want to come to the other side, david brody, you work for a network most people would think of as conservative in its beliefs and values, political that is, and when i listen to what john chen had to say, in the midterm elections, there was a lot of anti-china rhetoric in

the campaign we heard from a lot of folks on the right. it is easy to beat up on china because china cannot respond in your specific district, and not suggesting there are not issues in china that don't need to be discussed, but there was a lot of anti-china rhetoric in this last election. it's one issue where there is a big divide in this town. i was saying somebody -- alice saying to somebody this week that there's a lot of stability -- i was saying to some be this week that there is a lot of civility because congress is not in session. we are about to enter this age of a divided government in this town. whether the issue is china or a litany of other things i could rollout, what say you about what is or is not going to happen courtesy of this new divided government in washington?

>> if we had nine hours or longer we could talk about it. it's a complicated issue. i think it starts with a moral factor in this country as it relates to god. as i travel around the country and talk to people like jim wallace on the left and ralph reed on the right, here is one thing they agree with -- there's a moral crisis in this country as relates to everything from wall street to the housing market to what has happened across this nation, especially economically. i would suggest there is a lot of common ground that could be found in this area of economic catastrophe. i think that is an important part of it. as it relates to stability in government, what we need to see here, and this is pie in the sky, potentially, but as it relates to the tucson shooting and the divided government we are seeing, we need the elected leaders in this country and we

need the influential commentators in this country, bill o'reilly and teeth -- andkeith olbermann, these guys need to come together -- >> did you say you think that they are going to do a psa together? >> i don't think i was holding my breath what i said that, but the point is if you are going to get through the clutter and really make a difference, there needs to be sent shock valley. if you are going to have shock value, you need to have people who would normally be in their own entrenched warfare's ounce to come out and start the dialogue. >> is that the problem, david frum? is this about a moral crisis? >> i would not say so. i think the people in the audience, the people at home,

they know well what the problems are. i think about all the time that inside each of these problems, imbedded into the problem is the answer. we had a demonstration of this just this week with the terrible atrocity in tucson. that is the horror of america -- a week mental health system, easy access to deadly weapons, a breakdown in community structure. we know that. let's look at this -- this maniac did a terrible crime and the whole political system of the country snapped together. every loudmouth who had been pumping anger and rage into the country's bloodstream suddenly recoiled and look around at people blaming because the political stability of the united states is like a 100 inch living-room sofa. you cannot budget. we had this tense debate in 2010 over the american health-care

system and its extraordinary wastefulness and we spend more than anyone else and don't get good results. within that waste, if the u.s. spends as much as switzerland, there is four points of gdp will of wasted money line on the table. if we could get a henry ford- type personality and squeeze the waste out, there are four points of national wealth. we have terrible unemployment, but that means we have able unskilled people ready to do the jobs the country needs doing. we have global security challenges, a hungry rival nipping at the country's heals, but that forces the country to be more competitive. it competes in a world of states that are adverse and the country has to be disciplined and focused with its resources. is also a reminder that more countries look to be knighted states as a provider of security and most countries -- look to

the united states as a provider of securities and other countries as providers of insecurity. i hope can talk about how we display -- how we deployed be institutions of the country in a way that makes the solutions effective. >> you said a lot and i want to come back to some of that quickly. but let me bring in late maria into the conversation. what david just described sound too much like right. anything he can lay out that simple, that simply, if the answer to these challenges can be found in the problems themselves, housetop on stupak are we? we can't figure -- how stuck on the stupid are we? i'm not certain it's necessarily that simple. but we are obviously missing something here. what are we missing? >> i agree with much that has been said. what i have to push back on is

my friend dr. west here because i think america is the greatest country in the world. i think we were great and we are falling a bit now, for sure, but we will get back to greatness again. let's not underestimate the power of freedom. we talk about the challenges and the rise of the east and a decline or bumping along the bottom of the west, but this is a free country. the aspirational power is also amazing. the fact that you can come from nothing and work hard and get all lot and achieve success, that's not to say we are taking care of all of our people properly. we are not. we need to better care for all income levels, all areas of the country, and we have work to do there. i think the problem is clearly the jobs picture, the

unemployment story is persisting. i suspect it will continue to persist. we have challenges overseas with china with a billion 0.3 people, india with 1.5 billion people. of course, china will at some point be the largest economy in the world. america has to sell to those people. a billion people outside of america. american companies have to sell to those people. i think that's part of the story. >> i think it is clear that camera 3 ought to stay trained here the rest of the night. going to come back to you. camera 3, just get ready to stay trained right here.

maria teresa kumar, i ran to her yesterday here in town -- >> where? >> none of your business. >> i thought i might make some news. >> it was at npr if you must know. we were talking at npr yesterday and i heard maria make a point i agree with -- when you look at the numbers, the negative numbers are hitting the hispanic community pretty hard. i'm part of the african american community in the picture here is in pretty to be sure, but the numbers are really hitting the hispanic community really hard. she closed by saying and yet with all that, the hispanic community may be the most hopeful community in the country about their future. i added to that, i have mad love

for the hispanic community right now because no community in this country last year flexed politically more than the hispanic community. they flexed last year. [applause] if you don't like things the way they're going, you have to flex and raise up. politics is not a spectator sport. you have to get off the sidelines and get involved in the process. the hispanic community did that last year and yet there were a lot of victories. immigration went nowhere, the dream that did not go through, so before we start mixing this up, i don't want to leave your committee at this. what happens in 2011 for all of the energy and activism you generated as this campaign for the white house is about to kick up in the next couple of weeks. >> i think it started in december. how want to talk about where we see our country going.

i don't think america was great. i think what we see is a realignment that we saw during the great depression. we are seeing it now to the great recession where we have a completely new industry, a new type of immigrant american in this country and competing on a global scale once again. what happened and the lessons we learned during the great depression is america learned to take care of our own, our poor, women, and children. now, it is the great recession, we have legislation that has asked us to step up to the plate through health care, financial reform, had asked the question are you going to take care of your poor and your children? i have to tell you we've done ok. part of it is because we do see increasing change within our country, a lot of folks in the middle class have forgotten how to be poor and the rich have forgotten how the middle class.

that's a conversation we need to have. as we move forward as a country, one of the reasons the american latino community is so optimistic despite the fact we have the highest foreclosure rates and highest dropout rates is because -- this is where i will bring it personally. i remember my mother getting up every single morning going to clean houses and working 15 and 16 our jobs and still telling me that america was the greatest country in the world. when you have that in your household, immigrant parents telling their kids i don't care if you are from asia or latin america, america is where we are going to make our dream, that's our identity. that is our challenge, how do we inc.? to trot to you're saying that china, india and -- to draw it to what you're saying about

china and india, in the u.s., we have the third largest latin american population in the world. the third largest. when you start talking about a billion people, we have that, but how do we educate our american countryman, our brothers and sisters, so we celebrate our opportunities at the doorstep? fundamentally what this country needs is not only to talk about resources for jobless this, but we need to make sure that the nine year-old is getting the best possible education. that is our challenge as a country. do we care? [applause] >> my first responsibility was to make sure everyone got a chance to say something and initially. now we can loosen up a little bit.

i'm going right back over here first. i want to let dr. west respond, but the backdrop is what maria teresa kumar just said. when i listen to you and maria, a difference on the notion of whether or not america is for somebody people around the world, a beacon of light and hope, but this notion of american exceptional as an is what i hear the two of you having a disagreement about. talk to me about american exceptional as an. >> we have to draw the distinction between making the claim america is great and the america is the gray -- is america the place you want to live? a lot of other nations don't look so good either. i choose to live in america primarily because my mom is here and my grandma is here and my granddaddy. wheat we have helped to make the nation democrat. but the question of want to

raise to my dear system is how many poor people, unemployed people, how many poor children, how the uneducated people do there have to be before you call into question the greatness of the nation? what is the line in the sand? that line has been drawn for me. when i look at the killing fields in these goods, when i look at the war zones, sister christine taylor green, god bless her soul, and barack obama, he is a magnificent father, he talked about the magnificent american family and we talked about his two children -- that you have a 13 people in prince george's county that were just shot. you have folks buying all the time of all colors, all classis, disproportionately poor. i'm not sure what -- a measure we are fundamentally disagree, but my stresses on the underside. i know brother john chen, i'm

speaking clearly for you. >> i've got it. [laughter] >> he is a distinguished graduate of hong kong university. i want to be listed. this is not beating american down 3 -- alan to be lucid. when martin luther king gave his abilities, he is not anti- american, he was anti injustice in america. that is what we are talking about. [applause] for my canadian-born brother says he can see the answers in the problems, i'm not sure about that. i'm not sure about that. the reason is because i did not hear in your analysis and the talk about corporate power or wall street power, i did not hear any talk about mastering the political will from below and the ways in which it is suffocated, sometimes crushed by

the powers that be. when we hear cry for her and help among poor people, we don't get a response. when we hear from investment bankers, we get corporate welfare. that's a big difference. [applause] >> i think it is about education. when you look at the differences of education in this country as opposed to the rest of the world, we are failing. i don't think any of us would disagree. china, -- in the u.s., our kids let's talk a simple things. our kids go to school five days a week seven hours a day. in china, they go to school six days a week, 10 hours a day. of course this is going to be an increasingly competitive situation. we need to give people the opportunity to get educated, or card and the of up the ladder -- worked hard and move up the ladder.

>> dr. west has is different formulation -- but the thing you said that caught my attention, your example of the answers being found in the problems with this issue of the shooting in tucson and this conversation the country is engaged in about stability. help me understand how is it that is the way forward if it requires a heinous act like that to get us to even have a conversation about civility? i have heard members of congress for the last week patting themselves on the back and sticking out their chest -- this tragedy has reminded us there are no republicans or democrats, we are all americans. everyone is saying that same line. we were americans in two weeks ago before that happened. we'll all be americans two weeks from our are not talking about it anymore. it can't take a heinous act like this for us to realize we're in this together.

>> i don't mean to look at this black hole of suffering and say here is some sunlight comes out of it. i don't believe it is true. what i mean to say is this -- the reaction to this terrible crime much has been a rediscovery of some things that were true all along. we have been through a two-year economic crisis on top of the 11 years of a series of failures of our political system from the .com bubble that left people feeling swindled, the stagnation of in come through the last decade culminating with this crisis, the inability of the government to please borders effectively, to act on the

information, failure after failure after failure of governmental policy. but what we have discovered is these institutions really work. we have seen a lot of voices in the media and politics for their own selfish reasons hacking at the basic stability of the united states, the inability of the system to solve problems. these terrible events have cast a spotlight that has reminded lot of people to talk very loud that if the country wants institutions work, the country watched the assault -- a country wants results, if you are talking to niche markets who play this game, this country is politically stable, and when people worry about competition from china, i think that is very

real. i had a chance to spend a fair amount of time and china and everyone in a position of leadership i bet is worried about the country exploding. they are worried about revolution for a lot of excellent reasons. that's not something we need to worry about. those who tamper with the stability do so at their peril. >> i have a lot to say now. i think the point about education is right on. forget about the definition of greatness for a second. everybody wants to compete and the barrier of competing has been lowered. everybody knows that.

mariette talked about the numbers and the mathematics of the people, but i shall think because we spend so much money person per child in this country educating them, but we are not getting the results. we need to go with that part first. [applause] the only thing i think is it's in our attitude. people always tell me about in the garden through 12th grade and then they talk about universities. we have the best university system in the world, bar none. but we don't have a good kindergarten through 12th. the question is why? the why is simple. our attitude is we will not fail our child when they are from k through 12. but when they get to university, we will find them. -- we will flunk them. [laughter]

think about this. the parents in this country will complain about the teachers when their child gets flunked or failed. [applause] they don't take a lot of responsibility in my mind. but in university, everyone is in your grown up and can deal with that. in this culture -- i grew up in hong kong and went to school in hong kong. failures option. [applause] -- failure is not an option. because there was british rule at that time and there are more kids than schools, we all had to fight into moving up. we studied 10 hours a day, six days a week. in addition we go to tutoring class is and tried to do math on our own and see how many math you could do per hour. the attitude in this country is

very different. [applause] i asked my children sometimes, thanksgiving is coming, if you do your homework the first couple of days, you can really enjoy the rest of the weekend. and he says what homework? [laughter] my teacher says we ought to relax. i'm not making that up. i'm not going to tell you the school district either. but it is an attitude we ought to focus on if we want to compete, we have to tell our kids you have to learn and you have to excel because it's not about china, of south korea, it's not about singapore, taiwan, japan, it is sweden, its france, it is germany, is everybody. it's not just china. [applause] >> i agree with david that every

problem has a solution in sight. we can sit here and talk exactly about how we can fix education. we can go to harlem and look at what geoffrey canada has done and know how to fix things. we can go to a school in washington know how to fix education. the problem is we have a completely dysfunctional political system. the way a bipartisan system fixes education is the leave no child behind act that has everyone behind it from george bush to ted kennedy. it did not fix the education. on the contrary, it's one of the reasons people are turning on government. so many efforts like the effort to fix education, like the bailout of wall street, has ended betraying the american middle-class and the working poor.

look at the deal warren buffett made with goldman sachs and look at the deal the american government on behalf of the american taxpayer made with goldman sachs. you'll be angry it whether you are left ring or white -- what you are left wing or right wing. i'm not saying they should not have bailed out wall street, they should have bailed out wall street with strings attached. [applause] i have many friends of mine who are good capitalist to sleep with a copy of "fountainhead" under their pillows. that's not how the capitalist system is supposed to operate. you take extensive risk, you may the wrong -- to make the wrong decision, and you go bankrupt. if you are too big to fail and you will be salvaged by the hardworking american taxpayer, what are you giving back? [applause] point,ack to david's

this is fundamentally a moral issue. the founder of capitalism, when i studied economics at cambridge, we studied adams smith. the first book he wrote before he wrote "the wealth of nations -- the wealth of nations" was the theory of moral sentiment. you cannot have a thriving capitalist system without a moral foundation. that is what is missing right now and what needs to be recreated. >> there are a number of issues and jumping off here and it is getting fund. i want to put to issues out, dana, but i want to combine what john chen and arianna huffington said -- we are in need of an attitude adjustment as far as education. we need an attitude adjustment.

i wonder if you think he is right that we need an attitude adjustment? and the suggestion that there are a lot of people turning on government. a lot of people turning on government is the attitude of turning on government these days a justifiable attitude to have? does that make sense? >> it does. and i want to amplify that point. let's start by saying i think there is more agreement here that people realize. i don't think there is anyone on this stage who quarrels with the notion of american exceptional lissome, that this is the greatest country on earth, or in dr. west's case, the least terrible country on earth. [laughter] thing, right? [applause] at the same time, we have a crisis of confidence. where is this coming from. we have some of the worst

schools, worst education systems in the world. we also have some of the best, even at the k through 12 levels. we know how to do those things. we have the potential witness, but we are stuck, morally or otherwise constipated. why is that? i think that's the point that was just hit -- there is a sense, correctly, that our government is broken. it is not worthy of the people it is serving right now. that's not a criticism of the 535 of them on capitol hill, but they deserve some of it. there is almost a panic that the system that was set up more than 200 years ago is no longer working. we cannot address the real problems. we, don't get that because

given our american exceptional some, patriotism and nationalism for some of us, our arrogance and hubris, we are the ones talking about exporting democracy around a world. if our system is fundamentally broken, why do we keep suggesting everybody ought to be a democracy like us? [applause] >> because there is nothing better than that. >> that are broken system? >> we have the best darn broken system in the entire world. >> part of the issue is the short-term mentality. we are so focused on i want to yesterday, i wanted tomorrow. we're focused on getting reelected. this is combining what is wrong with the political system. decisions are being made on will i get elected in two years, will i get reelected in four years. [applause] the chinese are thinking about the next 100 years, not the next two years. that is the crux of the issue.

>> what we are seeing right now is a vehement discussion in this country as it relates to free- market principles as opposed to big government intrusions. this is the birth of the tea party, put on not just by the obama administration, but bush before him. if you are going to win the argument of ideas, you have to ingate with people who don't agree with you. therefore, i go back to 2007 when you had your debate at morgan state university where john mccain was a no show, but rudy guiliani was a no show, mitt romney was a no show. if you're going to say free- market principles are the answer, you have to go in front of audiences that may not agree with that. that is part of the problem. [applause] >> this is where i disagree. one of the reasons we are where

we are is because of the massive deregulation that happened since the 1980's. when government wasn't watching, we worked at our worst instincts, which is we got greedy. people who had no business getting one or two homes signed the dotted line not completely understanding that they weren't paying their mortgage, they're just paying their interest. they're paying $2,000 a month, they had a nice little house and five years later, the a p r came up and they're paying $5,000 a month. how they reconcile that? that has to do with regulation. when we talk about democracy and democracy building, what we forget is american democracy is evolving. we evolved with women's suffrage, we continued to climb what we did the civil-rights movement, and now our biggest challenge is how do we continue

moving it forward? there is a place for government and it bothers me because the sea does not do it well, but when someone ploughs this no, public transportation, that they government function. but also why the lights turn on. there is a place for government and it is important to make sure we recognize that and embrace it. >> there is a difference between the state government and the federal government and that is part of we're talking about. that debate has to go forward. this is why the tea party was so successful, because a was a cauldron of everything they believe, a constitution, that wasn't being lived up to as far as the constitution. >> one thing about the two-party movement that is very important is at the heart of their anger is if you look at any survey, it was anger at the bailout.

before the was a grad health- care, anchor anything else, anchor that in this country, we went from a country that makes things to a country that makes things up. [applause] credit defaults swaps, tax derivatives, when the house of cards collapses, the taxpayer, the government bails them out. that is still at the heart of what was wrong. the fact that every day we get great news from wall street and bad days from maine street is feeling that very legitimate anchor. we cannot really go forward if we don't address with a sense of urgency that has been missing. when wall street was in danger, there was an unbelievable sense of urgency. everyone came together over that famous weekend, the financial establishment, the political establishment, and they said we

don't know how we're going to prevent this from happening, but we cannot afford to let the financial system collapse. so we will throw everything against the wall and they save it and rightly so. we never had that sense of urgency about jobs. we never had that sense of urgency and that is what is missing. >> you have mentioned this twice, david, and i know you have covered this group and these people as much as anybody else over the last year, the whole key party movement. from your perspective, i'm curious whether or not, whether we like or lows or disagree with the tea party, they made some noise and got people elected and got a lot of media time across the country. is there something to learn? is there any takeaway to wrestle with from the key party relative to writing the next chapter in america?

>> absolutely. what you saw politically in 2010 was act one. act two is coming in 2012. these folks are serious and they have good hearts, no doubt about, but they were starting to work the day after day the election of 2012. this is the beginning of the process as relates to the tea party. one of the reasons marco rubio did so well in 2010 is because he articulate the message very well. christine o'donnell did not. both the party candidates, both with the same message, but marco was able to explain some common- sense items. for example, read the bill. read the congressional bill, cite the constitutional authority in the bill, term limits, balanced budget amendment, line 10 people up on the street, these are common-

sense principles. the point is this -- the tea party message is one that can resonate, but it needs the bite messenger. we saw a couple of messengers -- needs the right messenger. we saw couple people to my people to convince independence to come on to their side. >> we will come back to that. i want to comment on another point -- i have heard two or three references and nobody has said it and we're going to wrestle with that, i heard two or three references to policies or lack thereof we have been subjected to in the first two years of president obama's first term. one of the things that makes this conversation prescience tonight is we are days away from the anniversary of the first --

of the halfway point of the first term of the president. there'll be a lot of analysis about how he has done at the halfway point and what these next two years are going to bring, how he's going to deal with this divided government, and i expect a lot of this will be laid out in his state of the in a few days from now. we have not said expressly, but let's talk about the fact we are at the halfway point of the president's first term. broadly speaking, you say what about that? >> i would say when we look at the major priorities of the president's first two years, we do not see a priority for working people.

tim geithner, the regulator, larry summers, the regulator -- deregulator. they are recycled from the bush and clinton administrations. but this is not change again believe and. we cannot -- this is about poor and working people. it meant then that it became very clear, you can get bailout, a trillion dollars, we could eliminate poverty with billions. pro-business, big business, not small business or of entrepreneurs who out there struggling, big business. the tea party comes along and they have a populist message. i think populism can be a good thing when it focuses on poor and working people.

they have populist gestures, there is corruption in the government, they are right about that. the u.s. government is corrupt. there's no doubt about that. the lobbyists, the corporate influences are there. the private contractors for the military-industrial complex is there. the corruption is there. but they respond to government by being anti-government. we say no, you have to clean it up to a degree to which poor people and working people have passes to governmental positions of power as the same way as the bankers or insurance companies do. it is a pseudo populist movement, but there's also an element of white backlash because of barack obama, his wife and children. it's more like the national hockey league and the nba in terms of the racial composition. that doesn't mean it is all races, but there are racist elements there.

most right-wing populist movements in america tend to be xenophobic. anti-semitic. we may have seen that with our sister sarah palin the other day. was that in ignorance or a subtle anti-semitic gesture? we don't need that. my jewish brothers and sisters. we had a moment with barack obama's presidency. if he could bring in economists to focus on homeowners rather than just the bankers, that focus on working people rather than the elite, we would have had a very different, and maybe that tea party movement would have been nipped in the bud. [applause] >> i would like to disagree with my brother here. [laughter] i don't see racism in the tea party movement any more than there is -- hold on a second.

there is racism. racism in every part of american society. vestiges of racism everywhere. what fuels the tea party movement is not racism. many of you believe that your wrong. what fuels the >> if you are a member of the leads, you can do no wrong. if you are a poor or middle class person, you make one mistake. even if that means you are going to get rates on your credit card of 30%. there will be hidden stuff in your mortgage contract. the game is rigged against you if you are a member of the middle class or the working class or the working poor.

it is important to have the correct diagnosis if we are going to proceed correctly and focus on what the racist elements are doing. that is not the heart of the problem. the anger is widespread across america. it is significant that you address it. otherwise, it gets out of control. when it gets out of control, the stable system david is celebrating can stabilize. >> it is not fueled solely by racism. there is a racism element. >> i also feel that part of the boost -- >> i don't see a president obama coming out of the tea party movement and other movements. [applause]

>> part of the fuel for the tea party is the idea that there is a movement that people want their freedom and do not want to feel like things are being forced upon them. with the health care passage. when you look at the polls and look at the feeling of america, there was a majority that did not necessarily want that particular plan hatched. they said this is not health care, but health insurance. we are not necessarily dealing with the issues of obesity. michelle certainly is, but we are not dealing with the crux of health care. there is this division. i think it is important to remember the business of wall street. wall street and main street, no matter how much we say wall street versus main street and they are connected, when you want a bridge built in your

neighborhood, the financing comes from wall street. it is not just a bunch of guys. i am not saying there were greeted situations where there were guys walking home with hundreds of millions of dollars -- greedy situations where there were guys walking home with hundreds of millions of dollars. wall street and main street are connected. >> wall street and main street may be connected, but one always gets the priority. why do the elite to get the priority over the others? >> it is a fair question. i think that there are all businesses. the story of entrepreneur islam is the story of america. -- entrepreneurialism is the

story of america. getting a loan from a lender -- not all of the banks are the big five banks. there are banks and lenders who are catering to small business and entrepreneurs. that is what we need to protect. >> that is not we are talking about when we talk about wall street. >> which should be talking about it. >> when launched a movement called move your money. we encourage people to move their money from the five big banks. credit unions and small banks are much more likely to reinvest in small businesses. i agree with you. the problem is there has been a decoupling between the financial sector and wall street -- financial sector and the main street. instead of enabling got creation, they have been running a casino.

they have been running a casino where if you lose, the taxpayers will bail you out. ben bernanke says you can go to the window at the fed and get 0% financing. instead of investing in small businesses, they are continuing to invest in buying derivatives and doing all the stuff that was happening before. it is still going on. we still have to beg big to fail. we have not ended it -- to big to fail. >> politicians tend to do this. it is easy to give lip service to the power and the necessity of small business in this country. that is not the picture we have seen painted for the last couple of years. the big businesses got bailed out. the small ones did not. talk to me about this

abandonment of small business by this country as we try to write this next chapter. >> you are talking about a large bank. some of the customers at the large bank are the state and the sovereigns. it is not just big customers or the customers at big banks. >> first of all, we are a business that did not need to be bailed out. >> make that clear. >> i could see the passion on both ends while you were talking. i was thinking, we talk about giving the time. clearly, our system, only after

200 years, has some imperfection to it. this is the least imperfect system and therefore the greatest system. we all agree with that. i am not joking. it is true. it is at least the most free. there have been some consequences. it is a lot of greed. the short-term nature of wall street, the short-term memory of the investors and the leveraging of everything that created the structural issues. because of that, big does matter. size does matter and it has an advantage. we tend to not pay enough attention to the small and protect the small. we always preached free market principles. we always preach that the

market choose the winner. in a global environment like this, there needs to be some governing protection of the small business and nurturing of small business. we do not have that. it is inside our basic market principles. otherwise, we would be in there trying to dictate who wins and who loses. if we want to do that, and we probably should, we need some policy changes from the government. >> but arianna huffington's point was if a bank is too big to fail, it is not subject to market discipline because government comes in. in 1996, bill clinton was playing the saxophone. he signed a scandalous welfare bill that ronald reagan would

not sign. he did it for political purposes. it was opportunistic. two years later, we bail out a hedge fund. poor folks having nothing were calling for help. hedge fund loss, fail, get welfare. there is a hypocrisy here. too big to fail means robbery. it means so much political influence that they can get what they want. that is what that means. [applause] was i too harsh? [laughter] >> i do have to respectfully disagree. when i look at too big to fail

today, it is because if we make them failed -- i am not suggesting who is right -- the structural damage is to our system hurts the little guy. i think the government here in this town may not be the most effective, but they are not stupid, i hope. >> you can downsize. >> i get that. you can be regulate it. or you could split it apart and make it smaller. who is to say that will not happen in the next couple of years? i am not in government? that may encourage smaller entrepreneurs. i am not advocating it or suggesting i know anything. i got killed by other people when i walked out last time. [laughter]

>> let me ask one more question. our time is going faster than i thought. let me ask you while you were talking. hu jintao is on his way. what should the american people expect our government to get out of those conversations? what should they be bringing back to us when this summit is over? >> open the markets over there. let us play evenly, fairly, and transparently. [applause] by the way, it goes both ways. you are a foreign entity and you want to invest in any company in the united states, if you are the chinese today, you feel unwelcome. is to our process.

it ties to some level of -- i would not say discrimination -- fear, mistrust on our part and it goes into the core of the immigration and everything else surrounding that. our country needs to rethink how to create jobs here. china is investing about $100 billion per year in the direct foreign investments. we are getting about 3% of that. this is totally not acceptable. >> he said quickly without hesitation, open the markets. maria bartiromo whispered in my ear, and possible. >> i said it sounds impossible. >> what he is saying is where

the rubber meets the road. let's talk specific examples. recently, we had tires coming from thai -- coming from china. they were being sold cheaper than american companies were selling their tires. there was an outcry from workers. why were americans buying those tires and not the tires we are making in this country? that are cheaper. so we put a higher tariffs on the tires coming onto this -- coming into this country. we are making money on it. the chinese say, if you are going to put tariffs on that, we will not have you selling products to our people. 1.3 billion people, 300 million people. our companies need to sell to those emerging middle-class. we need to come to an agreement here in order to prosper all of

us. by the way, on the too big to fail, i do not think it is necessarily too big to fail, but too connected to fail. these companies are not necessarily evil. if you are connected all over the world, you knew that aig was insuring everything. when the lights went out, the financial system would try out. another conversation. i am sorry. >> let's be blunt about it. you have made this 0.3 times. how afraid, given the numbers, how skier should we be of china -- a freight should we be of china or india or japan? >> i do not think we should be afraid. we have to sell to those people. we need to manufacture products in this country and sell it all over the world. [applause] that is where policy comes in. we need a policy in place that

keeps many factory and good jobs here. if a company can do something cheaper in india, it is going to do it and should do it to stay competitive. >> why should we be hopeful given this difficult proposition? why should the american people be hopeful that we can find a level playing field with china? >> let me first answer -- this point has been bounced back and forth a couple of times. maria likes to use 1.3 billion and 300 billion. -- and 300 million. i am unfortunate i came from silicon valley. i could overwhelm that 300 million if we innovate.

innovation get you the margin dollars. that ties to my earlier thing. we have to have an education system. we have to have an immigration system to grab the best. [applause] >> can i jump in briefly? >> one of the things we are missing is that it is the american culture. what do we export that people want to emulate? hollywood and music. that is one of our strengths that nobody is talking about when we say are we going to get competitive with china? at the end of the day, our cultural differences and our strength is what we have used as soft power to change the hearts and minds. >> you are not suggesting we are going to act and then our way out of this, are you? [laughter] >> i do not dance so well.

it is an industry that we have actually been able to sell as what it means to be rich. does that make sense? we have to play by the rules. >> if the good people at nationwide give you a grant to do a show on the next chapter and it that were allowed on chinese tv and the people who participated were not trapped by to discuss the truth, the answers would terrify the audience. we should be much more afraid for china that afraid of them. compared to their problems, our problems are molehills. we should not lose sight. from there unfree press and their propagandistic media and their neglect of their countryside and the skyscrapers and high-speed trains, we should

not forget there are 500 million people living in the chinese countryside who are poor. the problem is they are increasingly impatient. when you look at the history of this country and the great migration of black farmers from the united states -- i forget how many people that was who moved. there are 500 million people in the chinese countryside. think of the social upheaval that migration created in the united states and how difficult it was to work out and how we are still not working it out and how cities collapsed underneath that transformation. imagine doing it times 100 or 150. that is their problem. we do not have their problems. we have our problems. i agree with those who said it is -- our problems are a

dysfunctional political system that prevents a powerful economy and society from responding. i am personally haunted by something tip o'neill said when he left congress. at the end of his career he was asked how congress had change in his time. he said the people are better and the results are worse. that is true again and again for so much of the federal government. as compared to 50 years ago, they are more honest, more hard working, more sober. [laughter] ask around. they do not have their wives and girlfriends on the payroll anymore. but as i talk to them about this subjective experience about being a member of congress, they are constantly frustrated. they cannot get things done. they say let's give more power

to the members. there are people who can prevent things from being done and the result is frustration. >> the problem is, and i have been trying to keep track of the things we have said on this panel. we're not done to this multiracial compensation, which we probably will not get to -- we have not got into the multi racial conversation, which we probably will not get to. our system of government is broken. we have a broken creek that somehow needs to be fixed. if that is the problem, how do we fix it? >> the problem with the current elected officials is that there are 26 lobbyists for each member of congress. that means, on top of everything else, while we should be celebrating the passage of

financial reform, they are undermining it. by the time financial reform is enacted, it will bear little relation to what we celebrate it. we saw it again and again. we saw in every disaster this year. we saw in the bp and mining disasters. it is impossible to have regulator capture. we can have regulations up the wazoo, and they will not work. america has traditionally been amazing at using soft power. china is getting better at it. but at afghanistan. we are spending $100 bening -- $100 billion pursuing an unwinnable war. [applause] china is spending billions of

dollars buying raw material for its industries. when have this kind of perverted priority across our system. this is completely beyond left and right. that is one of the most promising things. there were people coming out against the afghanistan war. you have more and more republican members asking for oversight as to how this money is being spent take the important thing that came out of wikileaks was a clear chronicling of the collapse that is going on. taxpayer money is being wasted while we are lacking vital social services here at home. >> he has a lot to say and he has been thinking a lot. you can take your time.

this point about our system being broken. you are the one person on this panel who lives here. the people in this audience read your stuff on "the washington post" every week. how do you remain hopeful about a system that is broken? at one to ask a question of about arianna huffington's point. answer the question first. >> i am a counter indicator. if this government were working well, i might be out of a job. [laughter] i point out what is wrong with our government. i would take the deal. i would find another line of work. maybe i could get something on wall street. i would take that deal. my job is to point out what is

wrong and why things are going as badly as they are. i think we identified that fairly quickly here. there was a question to maria earlier. why does wall street get help before main street? the same thing that is expiring day tea party -- our government has been sold to the highest bidder. this was a problem before the financial crisis. the tea party was so upset with the way the elites were governing the country that they forced a change. they have been had. 13 of the new republican freshmen in the house have hired lobbyists as their chiefs of staff. they have been having fund- raisers all over town raking in money from lobbyists.

a lobbyist is john boehner's new policy director. a lobbyist is running health care on the commerce committee. they do not run for election every two years. they run for reelection perpetually. this is not a democratic thing. that gets at why the system is broken. this is great business for me. i can watch all of this bad behavior and people breaking their principles to raise a dollar. that is the source of my enjoyment and the source of the problem. >> given the corruption and the politician's perennial fund raiser, and the financial influence on big government,

greed, but concentrated agreed with consequences for them, who pays the cost? and visible. history is important. we can talk about america all we want. the u.s. constitution was in place for over 89 years. but slavery was still in place. [applause] it was a pro-slavery document. there is no reference to slavery in the constitution. this is important for immigrants who just got here. you are not going to come into america with all of this robust opportunity and mobility without understanding the history and the degree to which this marvelous constitution, which was marvelous precisely because americans had the courage to make it more free and democratic by abolishing slavery and then jim crow.

it was invisible. what is invisible today? have we seen the prison industrial complex? have you seen the children locked into school, but the quality of their souls? who is paying the cost when we talk about all this corruption at the top. that is why i am has a dent -- i am has a tent in terms of the excessive celebration -- hesitant in terms of the excessive celebration. the will of the people is suppressed. [applause] >> i did not forget the second

question i wanted to ask you. dr. west gave me a great jumping off point. u.s. set up was nice. i am go right back to dana. the second question i wanted to ask you, what is the price or cost that we ultimately pay been tied to this war in afghanistan , being tied to this war in iraq? this is the longest military excursion this country has ever endure in iraq -- in afghanistan rather. what is the price we pay relative to write this next chapter if we cannot tear ourselves away from either of these wars long term? >> beyond the immediate cost is the problem that the spending on the wars have created a this me, too situation.

people say, you can pay for this tax cut because we are able to afford so many hundreds of billions of dollars for wars in iraq and afghanistan. the problem is compounded. since we can run these wars without paying for them, we can do all kinds of other things without paying for them. the corrosion has gone beyond the money in this case. one of the real problems with the wars is that we were not asked to sacrifice for them. a small sliver of america has anything to do with these wars. one of my pet projects has been some sense of national service, some sense of sacrifice, some sense that we are in this all together. you will not hear a thing about

it in the congress right now or anywhere in town. there is a sense that that war is attached and there is no sense that there was during world war ii that we are all in this together. >> two quick point, ideological, there is a lot of common ground on this issue. you have liberals and conservatives agree on what to do in afghanistan. i think that is an interesting dynamic in all of this. you can put liberals and conservatives together and they will say, we need to get out. or you can get liberals and the service of saddam and they will say, we need to stay. -- liberals and conservatives together and they will say, we need to stay. the simple answer -- and i know

it is simple -- if you going -- if you are going to drink the potomac water, drink it quickly. you have got to get in and get out. i think that is a big part of what is going on here. in terms of fixing the problem, this is what the tea party is about, getting the citizen legislators. there is a mission called, get out of our house. it is a bunch of community forums across this country. the affected 535 people to the house of representatives. it is going back to the grass roots. they want to put citizen legislators in their instead of politicians who have been drinking from the potomac too much.

>> i want to ask this last question. just so i understand this, but tea party says we are going to take our country back. from whom? [applause] [laughter] seriously. we are going to take our country back from whom? what does that mean? >> it means we are going to take our country back to first principles and to constitutionally --a constitutional view of what they believe the constitution requires in this country. it is not take our country back in terms of attack and let's go. that is not what this is about. getting back to the point dr. west made earlier, i think there is a danger of using race as a

word. you were saying there is an element of racism to the tea party. i can tell you inherent in that is the this is the attitude toward the tea party. it is basically trying to not justify its existence and power in this country. >> i am concerned about the truth. i am in love with everybody. >> i can tell you this, on the truth factor the media has gone out and try to tell this story. i have been to dozens of the party rallies across the country. the first thing i do when i go there, i listened. we record the audio. what i am looking for is i am looking around the corner.

i am looking around the crowd. i have to tell you, it is not there. >> black folks are intelligent. we get a sense of what is going on. [applause] >> there are people i talk to paid there is a -- there are people i talk to. >> the black die from south carolina. >> i attended one of a --tea party event --i attended one of his tea party events in south carolina. he was beloved there.

>> i thought you said something else. >> my point is that if you actually go look at the story from an in-depth perspectives, a lot of these charges are unfounded. >> can i jump in? part of it is --you mentioned scott. he is incredibly anti a letter read an entire latino. >> you have a new black -- he is incredibly anti-immigrant and anti latino. marco rubio was a tea party candidate. he was english only paper he realized his polls were going soft.

he started moving away from the tea party. all of the sudden, he started placing spanish-language ads. you cannot have it both ways. when you crack the surface, you can use sharron angle. she was a tea party candidate in nevada. every time she wanted to demonstrate that she was pro american borders, she showed working-class immigrants basically been the next scary space --scary face in america. words do have consequences. a result has become the radicalized right. they have made it okay to become mainstream. i know when someone comes in and shows a picture of obama looking like the joker. we all know what they are saying this is not ok.

i am not dismissing the tea party. the majority of the tea party we upper -- were upper-middle- class white males. my father is a white male. the middle-class white male felt disenfranchised. they had not marched during civil rights because they were old time veterans and they were fighting. they realize this was a movement for them to take their country back. america is changing. they won the america they grew up with [applause] . >> i would say this, i think we have come to the crux of the issue, one of the main ones, which is labels. i think there is a lot of

validity in what you just have to say. when you said that, you said anti-immigrants. a lot of times, we put people in a box. that is extremely dangerous and is not part of the solution. >> you will can see that there is a distinct difference between labels and facts. the facts are what they are. that is not labeling. >> there is a bigger picture. there are people like myself who have been across these -- across this country and have spoken to these people. we have a much better sense -- have a bigger picture than just anti-immigrant. those are strong words. i am not suggesting it wouldn't be a case just on your side. there is a case on the other

side. the crux of the problem is putting people in a box. that is dangerous because it does not lead to a bitter conversation. >> you said there is a point on the anti-immigrants side. that point would be what? >> all i am saying is that when you say you are anti-immigrant, there is an inherent philosophy that comes with that. in other words, you are basically saying you are racist paid then you are painting people a certain way and you have not talked to them. >> maria, this is informative

and instructive. i hear the point loud and clear. a part of what is wrong with america is there is too much labeling. you can clap on this. i know i am write about it. [applause] there is too much labeling. he may disagree with him on this point, but there is too much labeling in this country. when you label someone on national tv and call them out by name and say anti-immigrant. , what do you mean by that? >> as a country, we are suffering from racial to take. we are afraid to talk about race. when we get too close, we do not want to bear that burden. when i say anti-immigrant, the young man in arizona who saved

representative giffords' line , undersb-1070, he would have -- under sb-1070, he would have been asked for his papers. it was a sad day in american a wind -- when sb-1070 past and there was not an outbreak -- an outcry from america. there are 22 other states introducing similar legislation where just by the fact that you may look like an undocumented individual where someone can ask for your papers, shame on us. [applause]

>> at some risk to my safety, i want to partially defend david on this tea party point. i think there are two tea partiers. you mentioned allen west and the woman he tried to hire to be his chief of staff. she said she thinks if an immigrant is caught committing a crime, they should be strung up from a telephone pole and the body should be sent back to wherever they came from. the defense is coming. >> before the defense, that does sound anti-immigrants. >> i think you can put anything you want on that and it would not be a bad enough label. is not comingshe

to washington. he wishes he could have had her. there is that element. there are two tea partiers were 25% of the population and the small minority that comes to the rallies. i think they are entirely separate groups. the ones who come to the rallies are a tiny minority of a significant part of the population. there is a minority of those who are overtly racist. i have seen them there on the capitol grounds with the joker faces. >> it is coming. i am waiting. >> there is that element. that is what we in the media -- i go to a rally and i look around. if i see a photograph of the

holocaust, i am going to focus on that and not on the 99% people who work, and reasonable. -- who were calm and reasonable. the vast majority of people in the tea party movement are angry about the economy and decent people. there is no way around it. >> all of this conversation leads me to you,arianna specifically. we have been top about two african american republicans. republicans now control the house. tell me why i should not believe that the strategy that president obama is going to employ is going to be clintonian to the core, which means more

triangulation and more pages still lend out of their playbook, which means more compromise and -- pages torn out of their playbook, which means more compromise and more capitulation. >> before i disabuse you of that, i would like to respond to this fascinating discussion. that is when we need dr. west. what we are talking about is something fundamental about human nature. we have seen it in every period of history. when there is an economic crisis that affects people's survival, the worst comes out in people. we have seen it again and again. we need to go to the source rather than assuming these are the racist people. these are the engines and scared people. these are the people who think they are a -- these are thean -- the anxious and scared people.

when you have 27 million people unemployed or underemployed, multiplied by three or four, i did their immediate family or extended family who are worried that they are going to be affected. that creates something that we are ignoring at our peril. in the 18 eighties, we were actually expelling chinese workers from the country. we were expelling hispanic people who are american citizens under hoover. this is not the first time people have been anti-immigrant. i have a foreign accent. i hear it. people say, hey, you speak english? i did not say, better than you.

xenophobia is going to thrive when people are anxious, worried, out of work, or feeling better -- or feeling bad about themselves. but we have a mainstream media whose fundamental aim seems to be to make money. packs a sensationalize the issue. there is a ->> they sensationalize the issue. there are people who are thoroughly and visible in the media. [applause] what comes at people is a narrow and truncated discussion that reinforces the worse in them and does not