and coming up this hour, virginia congressman gerry connolly will talk about president obama's speech to the chamber of commerce. then louisiana congressman, cassidy. he practices medicine in baton rouge and alexander young on the global economy and the u.s. stock market. this is "washington journal." . .

host: let's begin with "the hill " newspaper. what are your thoughts on this? do companies have a responsibility to the u.s. workers? independentsif you look at "thel times" headlines on this -- "obama urges executives to share perks." let's listen to what president

obama had to say on this yesterday at the chamber of commerce. take a listen. >> your responsibility goes beyond recognizing the need for certain standards of safeguards. if we're fighting to reform the tax code and increase exports to help you compete, the benefits cannot just translate into greater profits and bonuses for those of the top. they have to be shared by american workers who need to know that expanding trade and opening markets will whip their standards of living as well as your bottom line. we cannot go back to the kind of economy and culture that we salt in the years leading up to the recession were growth and gains in productivity just did not translate into rising incomes and opportunities for the middle class. and that is not something necessarily that we can legislate, but some the we ought to take responsibility for

thinking about. how we make sure that everyone has a stake in trade? everyone has a stake and increasing exports and rising productivity? because ordinary folks end up seeing their standards of living rise as well. host: douglas mcintyre post this on "the wall street journal" website --

other large companies have begun chart -- share buybacks. boards in senior management at most firms of significant size either want to retain cash for the chancellor may be another down torn or they wanted to be given to the wealthy as an incentive to keep an ad stockholders. in atlanta, georgia.

joe, what you think? what is the responsibility of businesses to the u.s. worker? caller: we are really excited because we have the mayor coming over tomorrow. we have the allegheny radio show. we are bringing a lot of business to north florida. u.s.-trained business and good high-paying jobs. that is the return that the people who work for these companies get. that is what we're doing. we're working with some of the top people in the country to come to north georgia. we have a congressman tom grey. we're really excited. host: let me ask you about the president's argument yesterday at the chamber that if you a worse corporate tax rates or if he eliminates burdensome

regulation, then the company's have a responsibility to turn around and invest profits back into america and hire more people? caller: sure. that is the whole point. that is what we're doing in north georgia. when the businesses come in they will pay wages, and as the company prospers, the workers will prosper, too. the stock market has just hit a 2.5 year high, and we are predicting it is going to double every seven years. i think the future for america has never been better. what we're doing down here is promoting free enterprise and capitalism with our congressman. i hope you will not on tom gray some time. cahost: we're going to be talking about what is going on in the stock market later on. we will look a headline last week that stocks hit a post-

crisis high. let's go to charlottesville, virginia. caller: good morning. my whole thing about the whole business thing is i think that businesses are taking their money in trying to buy other companies. just like the aol merger that happened yesterday out of nowhere. i do not think companies are bringing in more people. i think there tried to do more with less people in trying to shrink -- what i'm trying to get at is a i think it is a one size fits all system. for the president to say you guys invest these trillions of dollars into the american economy, for these people, that will not happen. and this fall -- as far as small business is concerned, i am calling from central virginia and one thing that is not being

talked about is the fact that the difference between a small business and a person that is self-employed. self-employed people do not hire that many people. when a small business hires people, they are outside but very few. you have to look at those aspects as well. and host: we are talking about this business have a responsibility to u.s. workers? president obama called on businesses to listen to him speak at the chamber of commerce yesterday to invest in america. he cited the two trillion that has been reported on companies' balance sheets. this morning we also want to hear from business owners. with a special line set aside for you. please call in. we want to hear from you as well. here is george that is a business owner in florida. and callercaller: i wholesale

semiconductors to oem's in 20 countries. and i am down to one employee from eight and it is the best thing that ever happened to me. first, the machine came -- became almost obsolete. so i do not need workers on the phone any longer. with their dysfunctional lives, it is incredible. i read once where -- host: when did you come to the realization that you did not mean as many workers as you had? caller: the recession did not push us that way. everyone around the world would rather run acrostext. that has really taken over as far as hiring workers for me.

it is a shame that their lives are so dysfunctional. i read where the average american worker produces 26 hours of actual work in a 40 hour week. there are some of things they do on company time. i-- there are so many things thy do on company time. fooi do not want to hurt the worker, but i just would rather do it this way because the bottom line is the profit margin is much higher. host: so you take issue with the premise that the president put out there yesterday that

companies owe something to the u.s. worker? caller: absolutely. it is mutual. if a person comes to be looking for a job, i contract with them and take the job. the present it is again with the pandering he is talking nonsense. it is a shame that taxes has almost to do with commerce that it can influence, so much i think president obama is just making another -- it seems like a stretch to me. it seems like he is just campaigning in talking nonsense, but that is my opinion here ye. host: did you hear the president talked yesterday about the fact of businesses are not -- they are getting advice from tax lawyers on what to invest in and not based on what makes good economic sense because of the corporate tax rate? caller: the corporate tax rate

is way too high. so many people are not paying taxes. so few people are paying taxes. with labor of course business will go overseas. there is no question about it. with a high-tech capabilities and the satellite communications, soon as shipping will be even faster continental. i do not think he has any real promise to say what he is saying, other than wishful thinking. host: let's listen to what the president had to say about the corporate tax rate. >> another barrier of government to remove, and your lot about this from many of you is a bird in some corporate tax code was one of the highest rates in the world. you know how it goes, because of various loopholes and car routes that have been built up over the years, some industries pay an average rate that is four or five times higher than others.

companies that are taxed heavily for making investments, yet the tax code pays companies to invest using leverage. in as a result, you have too many companies based on -- making decisions based on what their tax director says. that puts our entire economy at a disadvantage. host: tony on the independent line. what do companies have for responsibility to the u.s. worker? caller: apparently a do not think they have any responsibility. the guy from florida at is a great example. he is proud of the fact that he is laid off all his workers and still getting by with making more money. we're competing with the world -- third-world wages.

there is no way that businesses, if they have the opportunity, it will not outsource they to places where the labor costs is so much lower. it increases their profit and bottom line. most of these giant corporations are not united states corporations, they are international corporations. i guess the idea is we will drive the united states down to the level of the third world nation. host: what you do for a living? caller: i am unemployed. we ran a mom-and-pop business and we were knocked out by the big chains. we had a national corporation come in and eat our lunch, because they hired high-school kids and paid the minimum wage. in their profits are going out of the small town and into the corporate world. i do not know where their profits go. they do not reinvest them in the

community they are in. in the town is dried up. they're living off of social security and dealing drugs. it is a horrible situation in small-town america. until we stop localizing the work force and putting american workers in direct competition with india and china, there is no way the united states can maintain a middle-class. i have two friends that have been in a fairly high-tech jobs for over 25 years and they are losing their jobs of the end of this year to india, because the finely developed a computerized system that india can do their job at half the cost. host: your opinion. caller: the point is you will not have businesses hiring people as long as you find the government finding businesses to hire people.

and it has to stop. it cannot continue. it is so expensive for people to hire one people, -- one person, let alone 10 people. host: john boehner has commented on president obama speech. sphinriverside, california.

michael on the independent line. good morning. caller: good morning. in thank you. and bear with me for one second here yet i want to elaborate on two things. first of all, talk is cheap. he is not funny is money where his mouth is. i watched his entire campaign for two years. he said you have to take care of wall street and main street. wall street has been booming lately. we did not think we would put someone in office who would just keep these wars unended. about his cheap -- a speech to

the u.s. chamber of commerce, if you want jobs to come back here, it is very simple, tell corporations to sell products back in america. host: here is a blog posting about corporate social responsibility.

hamahost: franklin, ky.

mike is a business owner. good morning. what do you think? caller: i come at this from a different point of view. i do have an obligation to my employees. i owe my worker something, but at the same time, the federal government has created a situation with high taxes and high regulation that made it very difficult to turn a profit in today's world. i let go of 28 people this past year. i did not want to do that. each and everyone of them had families and were hard workers. but with high taxes and government spending, we cannot maintain and keep our companies up unprofitable and hire people and pay our employees as long as the government keeps wasting money like they are now. it has to come from somewhere, and it will try to take it out of our pockets. you cannot tax the rich.

the poor man that buys the products will pay the taxes. guest:host: can i ask you about the obligation of companies. when you had to let the 28 peoples go, what was the process like and what has been the impact of that in your community? caller: it was grueling. i had to look at things from a business perspective. it was making the most money into is not. and i cut people lose that had been with me for 15 years, because their job was not as profitable to me than the man standing next to him. i have no choice. as far as the impact in the community, there is a lot of unemployment here and a lot of people struggling.

and i feel bad they are unemployed. i have seen people that have worked for me for 15 or 20 years lose their home, but i am back up against the wall. we have our president again that has just -- where the money went, a good portion of the stimulus money went to the unions. the unions have busted several businesses that i am personally associated with. there is a very nice man in mobile, alabama, and they went in and shut him down. here are present is handling money over to the union. most of us are not union workers. host: what kind of business are you win? caller: i own a fabrication business. whathe average salary for my

people runs anywhere from $9 to $22 an hour depending on the job. host: what makes it a type 22? caller: that is a very skilled worker. a man i could walk away from and not worry about and he will do that job here ye. host: you heard on the democratic line. -- beauford on the independent line. host: caller: when i hear people call in and talk about the government, you are the government. you are the ones sending the congressman in.

you can take over all of those buildings that they have closed down. they close them down and make your tax dollars work for you. you talk about self-esteem. and sometimes i think he has more sense than the people in this country. you did not wait for corp. to help you out. you have all these places taken down and citizens, you can request that your tax dollars from these representatives that you got an office give you that money instead of giving it to wall street to reopen in you all make your own step back again and that will put these so- called billionaires' out of the country. who has the small business? they come from india. yet england. yet china tried to get a bank

here. host: let's go to bud, a republican in bloomington, illinois. caller: i think the president was barking at the wrong tree at the chamber of commerce. businesspeople are not economist. even if they do not have a responsibility to u.s. workers, they have a responsibility to each other and other businesses. we look at the u.s. stock market, the dow jones industrial average, which is there for global corporations, and we have forgotten the lesson of henry ford. unless workers are making money, they cannot spend money in other businesses. the solution with the problem with businesses is to even the playing field with people that are manufacturing overseas. those people do not have the environmental regulations.

they're polluting the rivers. there are poisoning the air. we do not want that over here. we need to block imports from countries that are not matching our environmental standards. host: in other news this morning. in the front page of "roll call." also on capitol hill this week, this is "the baltimore sun."

we will have coverage of that on c-span2. is starts around 4:00 eastern time. massachusetts, john, an independent calller. caller: good morning. i see both sides of the argument. what i saw and construction in 1984, i may $10.40 an hour. i do not think i would pay someone that right now, which is very depressing because you with a given that amount of time, it should probably be $30 an hour. but it seems we are moving

backwards. i had six people working for me at one time and basically i am back to self-employed. i am scared of having employees, because of the going to show up on time? are they going to cost me money? are they going to do something wrong? you pay to put it in, you pay to take it out. i do not know if you have had work done it on your home, but are you willing to pay $68 an hour? host: so you are in the home construction business? caller: another problem is i have saved a lot of money up and started condominium developments. it seems like even in my local town, this development its tax benefits. if you want to build something incrementally, the laws,

regulations, tax situation makes it nearly impossible to grow something the way it was in years past. host: let me ask you about regulation, because that is something the president talked about yesterday at the chamber of commerce and also something that the chairman of house oversight and government reform committee has been talking about. he solicited letters from businesses about what regulations stop them from hiring workers. i was curious in the home construction business, can you think of regulations? caller: one of the things that would be most beneficial is somehow employees caring their own insurance, and that would take a big worry away from me. host: you have to have insurance -- it is regulated you have to insurance for any of their

workers when it comes to construction? caller: 1 to carry the responsibility you have to get a certain amount of hours per week from the employees. this is why there is a lot of resilience that have moved into my community. certainly i am not saying they are legal, but i do not think there meeting their responsibilities i am required to meet. host: a couple of stories on regulation. here is "the usa today." fear hommeyou can find all of te

letters and you go to the government reform webb said. they have linke t to all of the letters they have received. let's go to anthony. what city are you in? caller: i think a lot of the problems might have to do with tariffs. and i own my irrigation company. i to work and irrigation. i worked in it for 10 years. -- i to work in irrigation. iwhen it comes down to it, it u.s. countries -- you just read the article about california and over half of the regulation. if we have all of these regulations and we are not putting tariffs on the chinese who have no regulations, they do not care about their streams and how polluted they get with the oil. look at how they treat their own

people. average employee makes $300 for the entire month of working. if we want to compete with that come the only way we can do on a level playing field is to create large tariffs on the nations that do not care about children and do not care about any regulation whatsoever. also, the whole health care thing that we have, that makes cost probably larger than they to be in running a business. on your question, the government's responsibility to work as we do have a responsibility. if you hire someone, the job is to keep the person for that person. we have to remember, as a small- business owner, it is my idea and investment. and it seems to me we're starting to load on the talk of let's take away -- sooner or

later it should be the worker with the means production. i would like to say i am the one that puts the rest. it is binding. -- it is my name. host: can i ask you a question about that, because some have said in order to save a job, that there is the responsibility of companies. have you ever considered reducing salary in order so that one worker or several of your workers could keep their job? caller: exactly. i have done that before. i learned the hard way that i was barely breaking even, not making a profit for myself personally to live with. my company was breaking even, so i had to tell everyone that i

have 10 employees, i will have to drop everyone 10 cents to 15 cents per hour. but you get to keep your jobs. other was i had to let two people go. not every business will agree with that. when we talk about profits, for a small-business owner, if you make it the grant for one year in profit, you probably spent 100 grand in actual cost to get that. i would say that big businesses we like to look at right now because they're making $50 billion, if they have $50 billion in reserves, there probably acquire that not over the course of one year. each year there probably spent at least 50 billion to 100 billion just to keep the business rolling to make product and pay salary. host: here is george from colorado.

omaha, nebraska. susan is a democrat. good morning. caller: i am calling because of my sister. my sister works for a dry cleaner. she has workers there with her during her eight hours, but then the business started to loot ofoop off they said, and now my sister is doing all the work. she had been telling me time after time how the bonus goes

down and down and how she cannot make a bonus. my sister worked hard for this company. it is a dry cleaner. i know they're making money at this store, i know they are, or otherwise my sister, especially during the summer when i was there, her sface would be so red. she would have to come home and lay down because she would be exhausted from working so hard for this business. this business does not seem to really appreciate her. i want to know why it is that business want to always cry to the public that they do not really think about the people that are doing the work for them so they can make all the millions. host: let's hear from jane in new york. caller: good morning. as you know our biggest problem

is jobs, and basically what i think is that just as this gentleman that just got off the line here, he has a problem of keeping people, so i think that the u.s. has been backing and subsidizing the auto industry, at the homes industry, and all these other industries. i think the u.s. should start subsidizing labor or the worker, and by doing this -- if you have someone that is on unemployment, someone should hire him and the unemployment, half of it at least, should go to the owner of the shop that hired him. then this gentleman would get a good living wage. i think this would really work,

and i can see that for every one that is unemployed, they are making what i to make in the field, 300 or $400 per week. host: from page of "the new york times."

host: arizona. mack, an independent. good morning. caller: it is very good to hear a good, robust discussion on a very important subject. i really wish president obama had started two years ago creating jobs. he is two years late and two trillion plus in debt. he should have let businesses wait to see how much of, care was going to cost. -- obama care was going to

cost. i hope we can get it out of the whole we have dug. we cannot continue to borrow. we must cut. we have to cut deeper than mr. obama has even envisioned. we have to cut and cut big. >> in "the washington journal" -- these are donald trump's field own words about connolly's arise saying that she and her colleagues seem concerned about avoiding detailed records that others might exploit. this came at the expense of enabling agencies to know precisely what had been discussed and decided at meetings. attendees from time to time left meetings of different views of what was decided in what the next steps would be.

host: phoenix, arizona. steve a business owner. we're talking about if u.s. companies have a responsibility to the u.s. worker. what do you think? caller: i think it depends on the owner of the company. my wife is part of our company and she insists that any job that can be done by fellow american that we do it. it is not at any cost, because every business has to be profitable and reasonable, but we could have sent our paperwork to india, but we hired americans. i do not know if businesses owe anything to the workers, but i would say if you are an american and live in this country and you earn a living here, we have to hang on to each other. we are fellow americans.

ben franklin had a right, hang together or hang altogether. your fellow americans are the ones that you got as there and they will be the ones to get you back there. i cannot say we should not help the rest of the world, because that is what capitalism is, but we cannot let our own people suffer. host: what does that mean for wages? how you go about calculating how much to pay a worker? -- how do you go about calculating how much to pay a worker? caller: it is all about percentage of profit. we are in the trucking business, so fuel is always a constant. most customers are ok with prices going up. they do not like it, but it is

just like you said, it is a percentage of the cost is what we pay. we like to say that we are picky looking for the people that we do. our customers are the best we've been able to find so they deserve the best help. trucking is tpretty competitive we are expected to find the best drivers with the base -- best safety record and the best attitude. part of what you're talking about is what part of the pay do they want to get to their workers and what part to the stockholders? that has been a big part of the discussion that has been missed. since more and more companies are privately held restocks that the interest is a to make sure that the stockholder gets a fair

return otherwise they will sell the stock and go buy into something else. in a weird way the american worker is anchorage to buy stocks because he will not make a lot of money at work. host: give me a regulation that impact your bottom line. caller: the one that i find the weirdest is in arizona we have inspections. i find it where they do it on the side of the road instead of doing it in the shop. they pull you over on the side of the road, and that stops the guy from making his delivery on time. that upsets customers and slows the customer down. host: let's go to carol in nashville, tennessee. what is your opinion on this question this morning? caller: 41, we seem to forget to

put our trust in god. i do not blame our barack obama or george w. bush. we should start thinking about what are we going to do for our future. host: we will leave it there. coming up next we will be talking to two members of congress. first joining us will be gerry connolly. after that we will talk to bill cassidy about medicaid reform. we will be right back. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

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in u.s. businesses to write a letter on regulations that impact their business. here is what president obama had to say about the burden of regulation. >> i have ordered a government- wide review. it there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them. already we are dramatically cutting down on the paperwork that saddles business with huge administrative costs. we are proving -- improving the way the fda approves medical devices to get treatments to the market faster. and the epa delayed the gas permiting rules for biogas. i also ordered agencies to find ways to make regulations more flexible for small business. we have turned a tangle of fuel economy regulations and pending lawsuits into a single standard that will reduce our dependence

on foreign oil, say consumers money at the pump, and a car companies the certainty they need. host: the aflcio president responded to the president's call for regulation. saying that it is a distraction and that these regulations are put in place to protect workers and protect the american consumer. inguest: i think there is common ground here. before coming to congress, i helps manage one of the largest counties in the united states. we had an extraordinary economic success story created over 600,000 jobs in fairfax county in the last 30 years because we created a strong pro-business, low regulatory environment. i think it can be done while protecting the public. i do not think it is inappropriate to be periodically examining whether some of the

regulations we have with the best of intentions may be getting in the way of job creation. i know that mr. trumka is very sincere in his commitment to protecting the public in shares the goal and wanting to create more jobs. host: you do believe there are regulations on the books that hinder american companies from hiring workers? guest: i have no doubt over the years we get incrusted with regulations piled on regulation. some guys will learn that with the best of intentions they do not always work. having said all of that, obviously i favor the government's intervention in protecting the public. drug safety, food safety, worker safety at the workplace and so forth. the past be a balance, and i think that is what the president is calling for. let's willing a look at what we have on the books to make sure it is not an impediment to economic and job growth. on the other hand, we do not

want to do anything that would compromise reached a compromise public safety and growth. -- we do not want to do anything that would compromise public safety and growth. host: what regulations could you agree to to get rid of? guest: we're jumping ahead a little bit of. what the president called for is a look at. i am happy to participate in that kind of review. you mentioned the fact that our committee or at least the committee chairmen had invited businesses to tell him about their favorite dislike. i did nothing that is the way to go about it. i think there has to be a more comprehensive approach where periodically we review what is on the books to make sure they are effective in doing the job there were made to do and they are not undo barriers. there were some regulations that we can anticipate and avoid.

there is one that i will give you. and i voted against this for businesses summit by million and smaller because i think it is too much of a regulatory burden on small businesses. if we want to foster the creation of small businesses and allow them to grow and be successful, i think we a to be much more cosmic dint of the regulatory burden we put on them. -- cosmcent cognizant of the regulatory burdens we put on them. i think president obama had a business agenda the first two years in office, and that was pretty systematically opposed with a few exceptions by the u.s. chamber of commerce where he spoke yesterday. i think he is now trying to reach out to that same business

community to see if they can find common ground. they have already identified areas and moving forward from there. and i hardly would describe president obama as being guilty of too pro-business. host: do you think he needs to be more pro-business? guest: i am happy to see that our reach right now. host: republicans expected to unveil their strategy later this week in keeping the government running. part of that will include spending cuts across the board in order to fulfil the pledge of making cuts. where could you agree to some cuts, spending cuts? guest: i think we will have to look at the specific proposals. i am not as comfortable on

blanket spending freezes and across-the-board cuts, because the big the question of what you just raised -- where would you cut? what is less of our priority than something else? when you cut 10 percent across- the-board, what you're saying is nothing is a priority or everything is a priority but i will not decide. i think none of that is a substitute for the hard work of trying to identify areas where you feel we have to retrench. i appreciate what the president is trying to do and a five-year domestic spending freeze, but i think that will create a lot of difficulty in the functioning of government, and frankly the protection of the safety of the public that we talk about earlier. host: the president's call for freezing spending for five years, are you concerned about the economic impact of that will

have on your district, -- are you concerned about the economic impact that that will have in your district? guest: it is a source of direct employment as well as indirect employment. i probably represent more federal contractors than anyone in congress. obviously could have an economic impact on a district like mine. more importantly i am concerned about making sure the public will be adequately protected. no one will thank us for a five- year spending freeze it the result is s a drug getting on te market that should not be. there was a drug that did not get adequate review and it led to terrible consequences for

hundreds of thousands of the families across this country and great britain. so making sure that that kind of thing does not happen means you have to have the right people in place our regulatory agencies protecting the public. a five-year spending freezes a long time. anhost: some have said this is an issue of pay for federal workers. you have made the argument that federal workers get paid more than private workers. what are you hearing from constituents? guest: that is more of a myth than anyone else the people who say that are taking a blanket average and comparing it to a point average in saying they're overpaid. you have to look at job to job. our computer -- are computer technicians in the private sector making less? almost never. you can look at the various job categories and compare them to their counterparts in the

private sector, and generally the private-sector is making more and is better compensated than the public sector colleagues. those kinds of things where we demonize the federal work force really do a disservice to the service and public employment, and in the long-run to the public we serve, because they count on the federal government to be there and work effectively when they need it. host: if john is a democrat in illinois. go ahead. caller: i was listening to your last session, and i could not get over how many republicans, so-called business owners were calling in and complaining about the tax rate on business and regulations that were causing them not to hire. basically i believe since obama has been an office, the tax rate on business did not go up any

from the bush administration, but before the regulations. -- not ther the regulation. i wanted to ask the congressman if the taxes have gone up or the regulations change? guest: it is a good question. with respect to the first part of your question, no, the tax rate has not gone up. there is a concern that corporate tax rates are not competitive with counterparts in europe and asia, and that we could afford to lower them to make business more competitive and to encourage business to grow and to grow here in the united states. i think that is worth looking at. i think that is a legitimate complaint that business has. the other piece of that is the ability of corporations to expatriate capital.

there is a lot of capital accumulating overseas by u.s. companies that they're concerned about bringing back because of exposure to a higher tax rate, so we may be able to have a win/win where we allow some kind of a more flexible treatment of that capital to come back to the united states to be reinvested in this economy. the president touched on not only that aspect, but the fact that business in america sitting on two trillion dollars of capital that could be reinvested in this economy to create jobs and get things moving again. we have to have confidence in the economy for business to do that. hopefully his message will resonate with business, given increasingly positive signs in economic growth today. . .

some of the big banks were and engaged in that led to the meltdown and exposure of the taxpayer, their liabilities, is not sensible. we have to address that.

i think we did it in a modest way that did not burden business. if business can come about some examples of where we did, happy to look at that. host: a look at taxes in "usa today." new york, rita. republican line. go ahead. caller: i was thinking it would be good to make a lot of jobs if the government could initiate infrastructure repairs we need. wouldn't private companies then be required to submit applications for workers to build bridges and roads, things that we need, high-speed rail? isn't that a good way of increasing business and helping the country to get people back to work? guest: yes, and i am so glad you

called on the republican line. the republican party seems to have abandoned its longstanding report for exactly that kind of investment you are talking about. remember, it was quite eisenhower who first came up with the interstate highway system. think about what the return on that investment has been for the economy of the united states. it is almost incalculable. yet today, sadly, many of his political dependence on the other side of the aisle treat all spending as the same. all spending is bad. i think that is a terrible mistake, a mine this attitude toward necessary investment. the united states, as a government, just like the private sector, has to make investments to keep things growing and humming. anyone who decides they will not reinvest in themselves is a company that is doomed to failure.

the u.s. has to take the need for additional infrastructure investment seriously. i hope that we would differentiate among different kinds of spending. host: another democrat in grand ridge, florida. caller: i have a comment about the business aspect of this. it seems to me when businesses are hiring, it would be interesting to know what they are paying employees. it seems to me business wants to cut employees salary and use them like they do employees overseas. to me, that is wrong. however, speaking on infrastructure, the history channel had one heck of a program on the crumbling of america. if anybody would look at that, they would see just how much we need to spend on infrastructure.

when the golden gate bridge, for instance, has problems, hundreds of thousands are killed, then maybe somebody will pay attention, but does it take that? guest: i certainly hope not. you are right in bringing our attention to the need for maintenance and new investment in new infrastructure. we looked at china during the olympics. the chinese government decided they needed to build a rail line. they did it in a matter of two, three years, serving that population. here in the united states, that kind of infrastructure often takes 30, 40 years of planning. here in the nation's capital, i have been involved in trying to get rail to dulles international airport. the first time there was mention

about a rail link between dulles airport and here in washington was 1962. 47 years later we signed a funding agreement between the local and federal government to build that line. that is too long to wait for major infrastructure investment. it is going to affect the ability of the u.s. to compete globally. other competitors of hours, india, china, korea, certainly in europe, are making investments night and day, and they do not have the long debates that we have about infrastructure investment. we are going to have to address that if we are going to be serious about being competitive globally for the next few years. norman. your next. caller: it is amazing that you

would want to model our government after an authoritarian government, like china. they did not ask when they want to do anything. second, it is amazing you are not calling this review of regulation for what it is, another form of deregulation. why is it that the democratic party has adopted the strategies of the republican party? you are talking about tax cuts, deregulation for business. since 1988 when the democrat party stopped advocating for the poor, minorities, and started adopting these tax cuts, this is why the democratic party is soulless. the companies in america are basically sitting on the value of the deficit. they are not going to hire anybody because of the wages.

it is because of free trade and deregulation that the democrats helped. that is keeping all the money overseas. any money that rich, wealthy people do get are the corporations that pay no taxes. why are we talking about deregulation for companies that virtually have a negative tax rate? they get our money back for doing nothing. guest: there is a lot in there. let me remind you, modern deregulation began in the carter administration. it did not begin with ronald reagan. there is a democratic tradition of being pro-business, trying to foster policy that promote growth. john kennedy did it in his tax policies that led to come at

that time, an unprecedented decade of growth. bill clinton did it, and it led to another decade of growth. i believe president obama is following in his footsteps -- in their footsteps. i think you are right to caution not to go too far and to make sure workers are protected, and in fact, policies that we create do create and grow jobs as promised. i think the president called on the business community yesterday think the president cn

the business community yesterday -- [no audio]

have based that kind of the economy -- crisis. it required a response. i will point out that the same u.s. chamber of commerce that oppose water reform, health care reform, supported the stimulus bill.

it, too, was concern the economy was sliding. we could've gone from another recession to a great depression. it is no less an institute in the u.s. chamber of commerce called for stimulus for the economy to prevent that from happening. the president and congress responded. host: here is a tweak from a viewer. richmond, virginia. right, your next. caller: with all due respect, that economic slide you talk about happened after the democrats took control of congress, with nancy pelosi. the biggest problem in the country is people continue to fan the flames of racial division and economic class warfare, like norman. if he spent half as much energy trying to make a living as he

does criticizing other people, we would all be a lot better off. as far as the president goes, he is not pro-business, he is anti- business, pro-union, and he is so much into this green agenda of his -- you call it investment, but investment in what? our future or more debt? guest: i did not hear about a question there. i heard a lot of opinions. the caller from richmond is entitled to his opinion. i do not share his view, and i am not sure about the characterization of the previous caller. host: the caller's comment about whether investing in green technology will pay off in the end. guest: i am not sure he said that. i think he asserted it was just

spending. all too often, frankly, members of the other party characterize all spending as the same. by the way, it is always bad. that is a mindless approach to the role of government in the economy. it is a dangerous economic theory because it will take away from the tools we need to be able to respond, in the event of a crisis, as we did in 2009, to prevent this economy from going off a cliff. host: jimmy in allentown, pennsylvania. caller: i agree with you on these infrastructure plans, going into cities like new york. there are water mains exploding every day. what we need to do is take a good look at germany. everyone is comparing us to china and india.

germany is booming. i just got done watching " deutche welle." they are doing great over there. if we had a single payer system, we would be doing much better, if medicare could be taken care of. continuing to cut everything is putting us down. employers do not realize they are taking more and more money out of the economy. we have one of the worst minimum wages out of the industrialized nations. this is a disgrace. we are going in the opposite direction. it is definitely a race to the bottom. guest: hopefully, it will not be a race to the bottom, but i take your point. again, to be competitive -- and

you are right. when i was the chairman in fairfax county, i visited that the ad and -- latvia and the former soviet union. i expected to see a jury, post- soviet economy -- dreary, post-soviet economy, when that needed a lot of work to get on par with the rest of europe. i was stunned by the progress that was made, largely from investment from the european union in infrastructure, the public, private sector. an explosion of economic activity and investment. what struck me was how relatively easy it was to do

that under european union rules, compared to hear. as a local official, i was envious of their ability to make such investments. it is not just china or autocratic governments that can do it with more ease, it is undemocratic governments in europe that seem to be able to make these investments and understand the importance of the much more easily than we do come here in the u.s., and that is going to pay off for them and will be a disadvantage for us if we do not catch up. host: another e-mail from gene winkler -- is that correct? guest: that is roughly right. for all of the complaining by the u.s. chamber of commerce, as a matter of fact, business had a nice rebound. you see that reflected in what street, in corporate profits,

and that is a good thing for the company. but how about now investing in that country that has been good to you to help us expand the economy, create jobs, and reposition america so we are competitive in the global economy? host: jim from fairfax, virginia. caller: good morning. i am behind somebody with your bumper sticker right now. we have been talking a lot about infrastructure, infrastructure investment, the stimulus bill. i remember people talking about bridges, roads, and investment with the stimulus. just a bit more than the new deal. at the end of the day, anywhere between 5% and 10% of that money went to infrastructure investment. often times, the money that states plan to spend is

supplanted. i looked at a couple of reports, and there was a price tag included about how much we needed to spend on infrastructure. it was about $2 trillion. given that we are spending twice as much as we did decades ago in terms of federal outlays, clearly, nobody wants bridges and roads grumbling, but where is the money going to come from? guest: good question. in the it stimulus bill, originally, we were looking for more money for infrastructure investment. if you recall, that bill was held up in the senate by three republicans who said they were willing to support it -- labor the only three to support it in the senate -- but only on

certain conditions. those conditions included and they get to bargain but was in and out of the bill. a lot of the infrastructure spending came out of the bill and was replaced with tax cuts. in fact, the stimulus bill ended up being the third largest tax cut bill in american history. they can be good things, stimulate the economy, but they do not directly create jobs in the short term like infrastructure investment can and does. i favored more investment. as someone who works with local government, i can see the benefits of such investment and the job generation potential they represent. where is the money going to come from? i favor the regular reauthorization of the service transportation act and i support bipartisan compromises to finance the bill.

the great sticking point has been how do we finance it. on the republican side, they do not want to raise any taxes for any reason. on the democratic side, they are willing to raise some fees and taxes, but i do not think there is common agreement on the top of the way to do that, so we are stuck. that bill is regular order, not an additional stimulus of any kind, but would have a profound impact on the country in the next five years. it is just what the doctor ordered. we have to find a way to finance those investments. host: a tweet from women's work usa -- richard is in florida. caller: good morning.

i believe there was nothing more than pure greed that brought the country down to its knees. agreed by big business and wall street. they were allowed to do that by sending their lobbyists to congress with billions of dollars. that is obvious. then we show partisanship and we are trying to ban them from bringing any money. that will not fix the problem. but no politician would ever do that. the second thing they should do this change the tax code. i used to be friends with a vice-president of a successful tax firm. he would make a lot of many -- money from the investments that were offshore.

he said that these companies pay little to no taxes at all. sometimes after making hundreds of thousands of dollars in profit, sometimes they even get a refund. guest: i consider myself a strong business ally. i have a strong record to prove that, but i certainly believe businesses need to be good corporate citizens. that means they need to bear their fair share of the burden. again, that is what the president called for yesterday. i agree with the caller -- if somebody wants to move capital offshore, that is their right, but i do not know if their tax code should reward them for it. host: the front page of "the wall street journal" --

the story says that this -- this goes to the heart of the problem. mou polls in washington are in i of the beholder. -- loopholes in washington are in the eye of the beholder. guest: there is a point there, but we have a long tradition of using the tax code to identify certain behavior, reward certain behavior. the idea that we may use the tax code to incentivize green investment to make us more efficient and less dependent on foreign oil, more environmentally friendly is not the sara lee a bad thing. host: tennessee. cal on the republican line. caller: i am listening to these people blaming george bush. people blaming the democratic congress. we need to do something

different. the problem rehab is we have over 3 million small business people who have gone out of business. we have been bailing out the banks, wall street but we have not done much for the small business person. you cannot get a loan today from the banks. what we need to do is have some money put up front. and forget credit ratings. a lot of the businesses cannot get along. but the money up and allow them to pay it off over a 10-year prudhoe of time, but businesses that to work. we might have a better economy than. guest: one of the reasons i voted against the extension of t.a.r.p. created under the previous administration was

because there was not enough accountability and small businesses were not benefiting from the subsistence to the big banks. the rationale for intervening with the big banks to stabilize the money so that capital credit would flow again to families and small businesses. that happened only irregularly, if at all. one of the big problems -- you are right for small business -- access to small credit. one of the consequences of the meltdown was that credit dried up. trying to restore credit has been one of the challenges we face. in the lame-duck, we passed a new $30 billion loan facility to address this. those moneys would flow from community, regional banks, provided a guarantee that money would be made available to small businesses for credit. small businesses are great

engines for job creation and the backbone of local economies throughout the united states. i could not agree more. we need to be doing more for small businesses. i think we have to, moving forward, persuade some of the big guys that it is time for them to the partner with a small business innovators throughout the country. host: chantilly, maryland. democratic line. guest: is that chantilly, maryland or virginia? caller: virginia. i do have a comment. i have been doing a lot of research on the government.

there is this idea that we have free enterprise. we do not. it is one thing to import everything from china. the problem is we owe them too much money. that is why they can do anything with us. if you were the president, what would you do for the hard- working, american-loving people? guest: perish the thought -- were a president -- that is not an ambition i have. i am glad there are those willing to step up to the plate. the burdens of challenges that i have as a member of congress, you know, this concern that china has undue influence with the united states is a fair question. on the other hand, it is like the old expression.

if i you owe you one dozen dollars, i do not sleep at night. you owe me $1 million, you do not sleep at night. the relationship works both ways. the fact that the largest communist country is also holding the largest single amount of debt in the world's largest capitalist economy means the relationship there is much more subtle than the caller suggested. i do not know if it is as simple as they get to do whatever they want. they are stakeholders in the success of our capitalist market-based economy. would it be better if the u.s. was dead-free and owed nothing to anybody -- debt-free and owed

nothing to anybody? certainly, we would be in a happier position with our international debt, debtor countries, and that holding countries. that is why we have to get our arms around the federal deficit, and for that matter, the trade deficit. so for that matter, u.s. is competitive and fiscally sound. host: gerry connolly represents the 11th district of virginia. thank you for coming in. how want to show you a tweet from a viewer. that is a question we can pose to our last guest. we will be talking about the level of the stock market we are seeing, post-crisis high, some are saying. coming up, we will talk about medicaid reform with republican

bill cassidy. >> here in washington, d.c., here are the latest headlines. egypt president is heading up a committee to recommend changes in the constitution such as relaxed eligibility rules to run for president and term limits. the latest effort from hosni mubarak to use public anger amidst a week of public protest. but demonstrators continued to insist president mubarak leave office. and monthly analysis by the associated press suggests the nation's economic stress inched up in december because of an increased number of foreclosures outweighed lower unemployment. figures showed foreclosure rates rose in 33 states for the month, especially in utah, new jersey, nevada, and arizona. bankruptcy levels remained largely unchanged from november. today, the transportation department releases the findings of a 10-month study into whether

faulty electronics played a role in to toyota's safety recalls. they have recalled more than 11 mean vehicles globally since the fall of 2009 for safety issues, including those sticking accelerator pedals and gas pedal that became trapped in floor mats. toyota reports a 30% slide in the final quarter of last year. finally, the american civil liberties union of illinois is taking chicago to task for its network of 10,000 cameras that what over the city. the aclu says there are major privacy concerns, possible first amendment issues, and the regulation. the aclu, which replaces the report today, what she got to stop expanding the network. they have the most expensive and integrated camera network in the country. those are some of the latest headlines. >> the c-span networks provide

coverage of politics, covered affairs, nonfiction books, and american history. it is all available to you on television, on-line, and social networking media sites. find our content any time on the media library. we also take our show on the road with our local content vehicle. it is washington, your way. now in more than 1 million homes. created by cable, provided as a public service. host: bill cassidy is a republican from la. and sits on energy and commerce committee. you think the system is broken. why? guest: the goal of health care reform is to provide quality access at an affordable cost. medicaid is a black hole for that. it does not provide access because it pays specialists so

poorly, but despite that, it is bankrupting state because of the high cost. studies show that providers often provide a lower quality. guest: you say the quality of care is below average. why? -- host: you say the quality of care is below average. why? guest: the reasons are not clear. those on medicaid have had worse outcomes than patients on private insurance. those on medicare -- that is a federal-state program that ensures, so to speak, lower income folks -- and is actually worse than uninsured patients. sometimes they have worse outcome than patient with no insurance whatsoever.

what is known is there is a quality of the care that patients on medicaid received. host: do you still see medicaid patients? guest: i have been working in a hospital for the uninsured. about half of my patients are on medicaid. i still teach with louisiana state university and i was seeing patients yesterday. host: the state bankruptcy issue. here is the headline in "the wall street journal" -- the new governor is transferring medicaid recipients to managed care plans.

his that a solution? -- is that a solution? guest: solutions will vary state by state. in an urban setting, managed care will work well. in a rural setting, it does not work so well. i fear what governors are calling for is more flexibility. if this is a state responsibility to implement, let's give them the flexibility to implement it in a way which is appropriate for their state. clearly, a manhattan is different from wyoming. we should allow those states to do what they know. implement a program for their people. host: the but if the federal government is picked up the tab for most of this, should there

be a standard set by the government? guest: it depends on how far the standards go. let's say you have to cover pregnancy -- of course everyone is going to agree to that standard. but the government can be very picayune-ish. secretary sebelius sent out a report that said, we arknow you are going bankrupt from medicaid. here are some solutions for you to cut your costs. it was hard to keep a straight face as i read the letter. if you are in this area, you have the scope day -- this area, this copiague. there is no way a hospital could interpret that.

you need to have a bottom-up approach, not top down. host: under this new law, medicaid will be expanded starting in 2014. the expansion of this will be fully covered by the government, the cost. in later years, the federal matching rate will decline slightly but will remain well above the regular medicaid matching rate at 94%. so the government will be picking up about 90% of the tab for medicaid. then this issue of the states having to pay for it will go away, right? guest: absolutely not. there are currently those who but not enrolled, and that will be a huge cost expansion. even if the government picks up 90%, it is still $2 billion. for the government, it is not

that much, but let's take a look at california. california has a $25 billion deficit approaching this year. there democratic gov. jerry brown says that he has to cut medicaid or they cannot deal with their crisis. under a health care expansion that takes place under obamacare, it will increase medicare coverage. it will increase cal.'s obligations by $3.5 billion. here we are spending $25 billion in debt. even if the fed is picking up most of it, it will increase their costs by $3.5 billion. in absolute numbers, it is still a huge number. in my own state of louisiana, in the first few years, if we were obligated to pick up the tab, it would be $650 million. us small states have a $1.5

billion deficit to look at. we are seeing medicaid crowd out spending for everything else. host: so what is the alternative? guest: i did not say that. we still need a safety net. your viewers may not know this, but medicaid is several programs. one is a long-term care program. clearly, it is how we provide long-term care for the elderly. at its best, it is an insurance policy that provides a backup to the critical unhealthy. these are the people i have been struggling to get health care for. it is great that we can do that. if you are going to ask me for solutions -- in no particular order -- we should honor the fact that these people running

their states are smart people. there is an incredible amount of fraud. it is estimated 10% of the cost in new york state is related to fraud. 10% of our tax dollars going to this program is because of fraud? there is a gao report that found in five states, tens of thousands of patients using medicaid to buy illegal drugs -- prescription drugs illegally that they then sell on the streets. so addressing fraud will be a huge thing. on health care, there is a group of people who are on both medicare and medicaid. the fed there are two different players means that the providers are incentivized to work across purposes. if we can consolidate this group of people, they would get better health care and we would have a lower cost. we also need to figure out how we can do more with what we have.

host: let's get to phone calls. caroline is a democrat and meridian, mississippi. caller: it is time for the republicans to give their game up. the reason i say that is, first of all, you did not want to support the healthcare bill of president obama. that is the only solution. we have a health care system designed for people to die at 65, 67. first of all, a lot of the elderly are on medicare. that is government supported. that system is supported by taxpayers. the other end is medicaid. that system is supported by taxpayers. the only one that is profiting is the insurance companies and you want to give them more

power. i know several people who have lost jobs, get sick, and they have paid insurance for years and years. the moment they get sick or they lose their job, they convert to medicaid. we are paying for all of that through our tax dollars anyway, so what better way to boost up the system than to bring people into a system that can actually pay? host: let's leave it there. guest: actually, i am all for saving both medicare and medicaid. let's look at what the health care bill did. the healthcare bill took $500 billion from medicare, the program for the elderly, and did not use those savings to shore up the program, but on to fund a new entitlement.

your state of mississippi is having to cut its medicaid budget because there are no tax dollars for it. you still want to invest in roads and higher education, so you are cutting medicaid. you are expanding by probably 50%. so you have the same number of dollars, at first supplemented by the government, but over the years, things are going to have to be spread much thinner. the third in total and avenue created by cannibalizing one -- entitlement avenue creighton by -- created by cannibalizing one is supposed to save the other two? in the not make sense. i want the patient to win in this. in my 20 years as a pressing position, in medicaid, the patients do not win. those medicaid patients, even if

they have insurance, have to go to the public hospital because they cannot be seen. there was an article published in "the new york times" right when the health care bill passed talking about michigan medicaid. there was one woman with ovarian cancer. they paid her oncologist so poorly that the oncologist was going bankrupt. she had to stop seeing medicaid patients because she could not pay her bills. the system pays so poorly it does not provide access. it is the illusion of coverage without the power of access. host: if president obama and republicans could agree on tort reform for the health care industry, would that help to bring down costs for doctors?

under that example that you just gave, would that help the doctor with his or her bottom line? guest: the cbo has suggested tort reform could save $150 billion over the next 10 years, if the california model was implemented. if health care is implemented, it goes heavily to the implementation of the california model. there is a bit of duplicity there. more to your point, indeed, if there is tort reform, you can squeeze out more dollars and reinvest them into medicare and medicaid. there is no silver bullet. it is part of what we need to be together to make the patient the

focus of the process. host: so then there is compromise to make health care law better without necessarily repealing it? guest: the basis of that suit, by the way -- for those not familiar -- a part of judge recently will be individual mandate was unconstitutional. there is another issue that states brought to bear. that issue was that medicare expansion -- basically, it ability to states to controst's control their budget. here we have a health care bill passed that by some estimates would consume 50% of state budgets by 2030. so in 19 years, 15% of their york state's budget will become

into medicaid. so part of the argument was, you are usurping our ability to control our budget. if you mandate, we are going to do this. we may not be able to pay for roads, universities. part of what the complaint is in this bill, to your point, is the lack of severability. if the judge is right, the individual mandate is so central to this, you cannot remove that without destroying the bill. similarly, if we are going to ensure 33 million more americans and putting 16 million more on medicaid, which is going to effectively bankrupt the states, then that is not something you can compromise on. that is something you have to repeal and start over with. host: joe in mobile, alabama.

caller: this bill was modeled after the mitt romney bill in massachusetts. it was a disaster. obamacare will be a disaster. i wonder if you think the supreme court will rule this unconstitutional and what can we do to improve health care in the nation, besides obamacare? guest: you know it is a southerner who calls when they call me billy. i cannot comment on what the supreme court will say with regards to commerce clause. it is an overreach. however, november 3 of last year, many americans felt like the individual mandate was intruding in their lives that they had never seen before. what can we do to reform health

care if we do not have an individual mandate? you have to start from the ground up. the healthcare bill that was passed was a top down approach. according to the cbo, they said it would be impossible to estimate the numbers of commissions and brokers as needed to implement this bill. any time it is impossible to estimate the growth of government -- that is a top-down approach. we need a bottom-up approach, where someone from washington cannot tell a patient and her physician what to do, but rather puts the patient in control and is making decisions that are good for her pocketbook and health care. host: critics of republicans who want to repeal the law say that republicans have not come up with an alternative.

guest: there was an alternative submitted last year. i guess they did not look at those. now we are told that we do not have anything at all. i would simply say, if you plan on the republican party coming out with a 2700-page bill, which we have to announce so we have to know what is in it, as speaker pelosi said, we are not going to do that. we will use that as a starting point, but when the american people will know what is in it when it is passed. host: next phone call. caller: i have a couple of questions. representative cassidy, is it not true that florida, under

republican governorship, has the highest percentage of medicaid and medicare fraud? secondly, why are so many physicians running to congress to become members? our medicaid payments that bad for you? guest: with regard to medicare fraud, i do not know if that is a huge issue. -- medicaid fraud, i do not know if that is a huge issue. medicare is. most people watching are familiar with an article where someone went to texas. it was a border town near mexico. 86% higher cost than el paso, texas with the same type of population. there was a study published recently that said they had to

give it a more expenditures than el paso, but when it came to private insurance, bluecross blueshield attacks us. it is 70% less. so medicare has 20% plunge in florida, in texas, almost 100% more expenditures than any other community. private insurers do not have these problems. when people want a government- run problem to take control of this, they just need to look at florida. by the way, the fraud in florida is not because of the republican governor. there is nobody there to administer the program. medicare is a federal program. fraud -- the problems there are the federal government's responsibility, not the states. by the way, new jersey is also a state having huge problem related to medicaid, where gov.

christie says he may have to cut medicaid, which to me means that patients will have more problems to access. that is one more state having problems even before the health care reform act. host: mount sterling, ky. good morning. caller: you republicans, anything that helps the poor people, you call it entitlement. you are not getting as good care under medicare or medicaid -- you are forgetting your hit the credit oath. we do not have the money to pay for some cadillac plan so we are pushed to the side. guest: for 20 years i worked in a hospital for the uninsured. i do not see private practice. 20% of my patients are inmates. i do not know who you are

speaking of. go back to the woman in michigan, on michigan medicaid. medicaid pays below cost in many states, and apparently pays below the cost of doing business in michigan. is it the physician's fault that she has to pay her nurse, her electrical bills, rent, other office expenses, and therefore cannot afford to take charity from a state program. i think you are being incredibly unfair. what i would say is -- if anybody is supportive of these programs and does not want reform, even though it is bankrupting states, you should volunteer to pay more taxes. we are really talking about the taxpayer.

i think that governments need to live within their means. but if your opinion is they should raise taxes so they can expand these programs more, then we just differ. host: this is a story written in "cq" -- would you agree to that? guest: we do not want to allow someone in a car wreck to die on the scene. that person will be transported to a hospital where they will be here for. -- cared for. we are a just society. so the question is, how do you come up with an alternative? some of these people buying

insurance -- the encroaching upon their personal liberty by this individual mandate. again, the federal judge had it right. host: is that not an incentive, what deazio is talking -- defazio is talking about? guest: what we really need to do is create a market for insurance products, so that people can afford it, meets their needs, but not with all these other bells and whistles to pay for that drags down the cost and therefore persuade them not to purchase after all. host: allentown, pennsylvania. still, good morning. caller: i am a retiree. social security is called an entitlement because i paid into it. i am entitled to get my money out of it.

explain to the american people -- you are on government-run care for yourself and your family. what does it cost you every year to have insurance because you are in a huge pool of people? what does it cost you? our taxpayers put you in there. what does it cost you to have government-run interest which are so much against? . .

guest: in allentown there is lots of unions. that union is partly paid for by the company. it is actually one of the miss being floated out there that employer-based health insurance is somehow government run. host: what does it cost you per month for insurance? guest: it is 15,000 divided by four. host: martha's vineyard on the line. caller: i want to make

suggestions that are little bit out of the box. the first is that c-span, who we consider that absolutely perfect order produced three consecutive weekends on this overall issue. one in the "book tv" format. one on medicare and medicaid and the health-care law that passed, because as a consumer of media taking responsibility for our national issues, the big problems with this issue is the complexity creates of security. i completely trust the american people to make all the right decisions once they have the information. this is the classic the elephant and you cannot get all the parts together. dr. cassidy is doing an excellent job in my view in getting the pieces of this across.

once you get the pieces and parts clearly in front of the american people, we will be able to come to good decisions. i am 63-years old and in excellent health and have private insurance. what i would like to do, and this is my really outside the box idea, is to create at the state level of reality game show in which we compete for being the healthiest individuals and groups and hospitals of providing health care in the most efficient ways, because we love our super bowls and we could have a super bowl of get the fraud out, get the corruption out, get the inefficiency out, because that is what our time period is about. let's take this on our shoulder at the level of the individual. guest: what is your reaction? what a great call. not everyone will agree with me, but i totally agree.

can we have a timeline of implementation? pwill this new plan need to new york at the example? i hope that is a great call -- i hope c-span harbors that suggestion. that is a great call. caller: a question i have is i listen to congressman cassidy and congressman price and congressman planning -- fleming who all seem to be doctors from a section of the country that has the highest mortality rates, the lowest life span, the lowest amount of and it death

rate. they seem like the people that are the poorest. ever since the democrats became pro-civil-rights and the republicans moved in to suck out the racist, they have taken control of the south. the poorest part of the country. and you talk about the roads in mississippi. they have the worst roads and mississippi. why should i listen to these people? guest: mississippi has great roads. if you speak to carolyn from earlier, she will probably agree with your premise that republicans are bad. as it turns out, the problems of the medicaid population are the problems of poverty. the south has more poverty. if you look at california as an example, i did my residency in

los angeles, there are areas which have similar rates of poverty in similar problems if you just look at the impoverished population of low- birth rate babies, high infant mortality it said rep. what you also point out is that there is a component of health care, which the health care system cannot reach. there is a component of health care, which is clearly related to lifestyle choices. there is a study suggesting that the entirety in difference in health care spending between united states and europe is related to the obesity epidemic. i think you mentioned in this out we have a lot of problems with the obesity problem. the southwest does also. those are costs drivers of hypertension, diabetes, renal

failure, i can go on. cigarette smoking causes cancer and is beyond the reach of the medical system, except for occasional you can use a patch to get someone off of nicotine. if you think about your argument, and if you look at the impoverished areas of california, those statistics are no different than the party elsewhere. it does not demonstrate house -- it demonstrates the importance of lifestyle decisions and the need to address the health care needs of the impoverished. i do not lose all credibility just because i am from region you look down on. host: rep cassidy talked about medicare and separate staff to reform it. the actual efforts -- the actual number was 250 billion in 2009.

estimated to go to 8 323 billion in 2015. medicaid participants in 2009, the number was 66 million. it is estimated to be 76 million in 2020. and medicaid participants, 29 million children. and 15 million adults, primarily poor working parents are medicate participants. 6 million seniors and 8.8 million with disabilities. guest: from the federal perspective, it turns out that eds pick up 50% of the costs, and the feds pick up the rest of the cost. 16% of the health-care dollar in the united states is medicaid. i read recently that right now states met -- spend more on medicaid than they do on primary and secondary education. what the health-care bill that

was passed, it is estimated 50% of budget's going to medicaid will go to 30%. in some states it will actually double. it already states are spending more money on medicaid than they are on schools, wow, that is at 22%. when it goes to 30%, they will spend more money on medicaid funds cools, roads. states like california and new york and new jersey is already exploding. caller: i want to think congress but cassidy for looking into the medicare fraud. -- i want to thank congressman cassidy for looking into the medicaid fraud. when the thing i want to point

out is i believe in the u.s. constitution there is not a constitutional mandate for the federal government to make sure that everyone has health care. i believe different states have different issues, in each state should be able to do their medicaid differently. as the congressman pointed out, new york and other states saw would do their health care differently vs texas and florida. in one of the previous callers mentioned that some of the summer and -- southern states were more poor. in the southern states there are lots of illegal immigration issues. there are people coming in illegally and getting free health care, which puts a burden on infrastructure and health care system. host: i will have to jump in at that point. we're running out of time. guest: there is a headline this past week how the federal

government is accusing new york city of a certain amount of fraud, and apparently it is big dollars because the people in new york are very upset. most americans do not want the federal government reaching in and telling them exactly what they have to do. they see the difference between having to purchase insurance because you breathe and having to purchase car insurance because you own a car. lastly, illegal immigration, clearly party is having an impact on health reform. there should be a program does on the impact of poverty. it is an incredible issue when it comes to health care. and host: here is a question from a viewer who tweets in.

we have heard this from viewers before that doctors see them for 15 minutes and they get a bill for $200. what cost so much? guest: for a private practitioner, you have an office, which is expensive. it is not just a trailer, it is a well-built office. you have personnel. you out front office personnel, someone that allows the insurance companies, and one or two nurses, depending on the size of the practice. you have supplies. my wife is a general surgeon. the supplies that would allow her to do surgery in office are expensive. there is tremendous cost. one of the misnomers is that physicians are the ones that get all the money. it turns out 20% is what they get of the dollar.

50% of the physician's income goes for overhead. the overhead is fixed. all you are doing is compressing that which he takes home. i use the example of the pediatrician. to cut the wages by 10%. she has to see that many more patients. the reason she sees them for five minutes and set up 15 is in order to make the overhead she as a crowd more patients into a compressed amount of time. host: that is next. -- brad is next. caller: i want to point out that the congressman has done a fairly great job of explaining the situation for medicaid. i wonder if he realizes he has not said one thing specifically for what he would do to handle the problem here ye.

guest: great point. there is something called to eligible. these are about 9 million americans that are on medicare and medicaid. right now medicare and medicaid, the way they pay, incentivizes providers, doctors and hospitals, to work across personals. it is incredibly expensive. if we can take those and streamline or make their payments so that it all incentivizes good health, that would be doing more for less. that would be one thing that would be low-hanging fruit. secondly, there is a program started under the bush administration call load -- called money follows the patient. they get the long-term care dollar and use it in the setting for which they're cared for.

it gives them more freedom. it is less expensive to provide it there. if the preliminary studies regarding money follows the patient works, that is a program that should be expanded more. fraud. we ever spoken about this, but 10 percent of the cost is going to fraud and that is the most expensive program in the nation. that is clearly a place of low- hanging fruit. i have lots of ideas. host: thgreg is our last call for the congressman. caller: we will start a little analogy. the chicken and pigs are rocking down the road. the chicken says to the pig, i think everyone should have bacon and eggs for breakfast. the pick sayg says do you realie comment on my part this will take? let's look at how we got to

health care. let's have office staff colin about the way insurance companies treat them on the service basis. take a look at drug companies to drop on medicaid with incomplete drugs and marketing systems that rivals armies. let's deal with medical device industries. host: i think we got your point. guest: although he did point out endemic problems, i can tell you that if you think insurance commercials -- commercial insurance these are bad, try calling medicaid and see how well their service is.

i am not advocating for insurance companies, i am advocating for patients. i would rather have a bottom-up approach. not a top-down approach. for 20 years i have been working in the bureaucratic system. i see what works. what works is not the bureaucracy, but the patient deciding what is best for her. i think we're on the same page. we want something in which the patient is put first. host: thank you for talking to our viewers. appreciate it. thank you. we have 45 minutes left. coming next, we will take a look at headlines about the stock market -- post-crisis highs and talk to our guest about why. first, another update from c- span radio. >> here are some of the headlines. some expiring provisions of the petrie act are up for a house

vote today. those provisions deal with access to business records as well as anything else related to a terror investigation, such as getting roving wiretaps and being able to keep tabs on lone wolf terrorists. house and senate versions of the extension differ and would have to be reconciled. the house is in at 2:00 eastern live on c-span television and sees band radio. california democratic representative jane harman said she will resign from congress. this came as a surprise to many in our party. it served as the latest blow to the diminished ranks of the centrist wing of the democratic caucus. in an e-mail she also said she was "in discussions" to take over the presidency of the woodrow wildrow wilson center.

a new inspector general report showed that the u.s. failed to deliver aid to pakistan. the report says the u.s. has committed nearly $4 billion to projects in pakistan since 2009 to help the country address critical infrastructure needs, provide basic services, and improved government performance, but the largest contributor, and that is the u.s. agency for international development, has not committed a way to measure the success of its programs. finally, julian assange is back in court in london for the second day of the hearing on whether he should be sent to sweden to face sexual assault allegations. his lawyer told the court yesterday he would not get a fair trial because of his notoriety and because swedish cases are customarily held without a public presence to protect the alleged victims. the lawyer representing sweden said the swedish trials are based on the principle that everyone deserves a fair and public hearing.

the hearing in london is set at 2:00 today. those are some of the headlines on c-span radio. >> your watching c-span, bring you politics and public affairs. every morning it is "washington journal." weekdays why -- watch live coverage of the u.s. house. weeknights watched supreme court oral arguments. on the weekend you can see signature interview programs. on saturday "the communicators." you can also watch the programming any time at c- span.org. c-span, washington your way. a public service created by america's cable companies. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> "washington journal"

continues. ihost: joining us is alex young at to talk about what is going on with the u.s. stock market and economy. we talked about the headline all morning about the wal"the wall t journal" headline. how did the stock market get to this position after the crisis? guest: we had a variety of factors come into play to drive this tremendous rally that began in march of 2009 when the s&p 500, which is a slightly broader gauge it 666. the s&p is currently in the 1300's zone, in some early the dow got down to 7000. the dow is now up north of 12,000. we have had several drivers.

the first thing is the global recession forced companies to get lean and mean. that really hurt me in st. as companies were laying people off. -- that really hurt main street, as companies were laying people off. companies have stayed very lean. they are relying on increase productivity. they are rely on technology to help them stay more and more productive and produce more goods without necessarily hiring more people. we have a combination of an improving global economy, improving demand, but very low cost, and that is leaving profit margins to be very healthy. that has led to a dramatic rebound in corporate profits and one of the biggest drivers of the stock market is what is going on with corporate profits. another big driver is the revenues, the sales for american multi-national companies are

increasingly global. close to half of the revenue is coming from overseas. we have seen much more economic resilience in the key, piggy emerging markets like china and india than we have here a home. that is another thing that is really helping the profit recovery for the large american companies. -- we have seen much more economic resilience in the key, big emerging markets like china and india and we have here at home. host: we have heard a measure of something like two trillion dollars in balance sheets. guest: that is a fairly accurate. there are record amounts of cash on the corporate balance sheets. we're really seeing it across sectors. in terms of profit recovery, it has been across sectors. you tend to see a little bit more momentum in terms of

earnings recoveries during economic recoveries in cyclical areas that tend to be more leverage to what is happening in the economy. areas like consumer discretionary for things like entertainment, hotels, retailers. those things get hard hit in recessions because we do not necessarily need to spend money there. when we feel more confident, we start to spend. we have also seen a big recovery in technology. that is increase in the global space and benefiting from emerging-market momentum. benefiting from companies' desires to do more with less in making key investments. really, even when we look at more defensive areas that tend to hold up better during recessions like utilities, more dependable, steadier businesses, those companies also see nice recoveries. consumer staples will be things like household products.

paper towels, shampoo, razor blades, a food -- those companies while they were not hit as hard during the recession because they tend to be more counter cyclical and durable, they have also seen their profits recover. when you see the kinds of earnings momentum that we have in the past couple of years, it tends to be fairly broadbased. he would not see this momentum if it was limited to one or two sectors. -- you would not see this momentum if it was limited to one or two sectors? host: who was buying these companies' products to produce these profits? guest: there are a couple of factors. number one, a lot of the sales our business to business. companies like cisco systems or ibm, they are selling to other

companies. the general improvement in corporate health are improving sales. secondly, we are increasingly more global. so the s&p 500, which is an american index, but if we look at the revenues of the company's whether it is at&t or j.p. morgan or procter and gamble or hewlett-packard, they are global. some companies like coca-cola, you are looking at well over half the profits coming from overseas. and even across the board at companies like american express ,3m, caterpillar. really a very global footprint. it was really just a slowdown from a very high rate and we have seen growth rebound in 2010. we have seen continued momentum, so there is a lot of increasing

consumerism in the emerging market. increasing incomes and a growing middle class. those people are starting to buy products that we have been biding our entire lives. that is another thing that has driven the situation. more domestically we have also seen a bit of a stratification. the high-and retailers are doing extremely well as the wealthy continue to spend and a low-and is doing well because we're seeing a lot of people more cost-conscious. hopefully that gives you a sense of where the spending is coming from. host: i want to read a tweet from a viewer. this gets at the question of what does an international equity strategist do? guest: i have a global mandate at s&p. i work with our team on the u.s. and international markets. a strategist will take input

from analysts' from the biggest independent research provider in the world. where the biggest in the world. -- we are the biggest in the world. they are giving us feedback on the companies they cover in the 10 economic sectors that make up the sector. it would be financial summit technology, energy, materials, industrials, consumer staples, telecom, and utilities. those are the buckets that analysts are following. they are giving us data based on their analysis of the companies and then we are factoring in macroeconomic factors. we're talking to analysts and economies -- economists around the world. we're also factoring in technical factors. this is where we have people analyzing chart patterns of sectors of stocks. we're rolling all that together

and coming up with more top-down recommendations. in an economic recovery we were to be over weedy areas that tend to have leverage the economic fundamentals. that means technology and materials. in that is an area where strategists use more of a top- down macro approach to try to add value for clients. host: alex young is our guest. we're talking about the stock market in the economy. our calller is from maine. go ahead. caller: there is a couple of things you have neglected to point out. i have been owning stock since 1969. you never bring anything up about hedge fund managers. the hedge fund managers have been manipulating stocks for years and are the reason why so many of these stocks went into a torrid.

i will give you two examples. one of the highfliers as apple. prior to the crash there were selling it $200. they dropped it down to $80 per share. now it is up to $3 -- $350. apple has never in the last 10 years missed a quarter. they have never had a time in which they have not had a good product based, but the hedge fund managers through it in the toilet. another sock as general electric. they were selling at 30- something per share. it is now down at $16 or $17. it should have been thrown in the toilet because the financial division had destroyed the stock. iguest: first of all, we need to clarify some of these off-the- cuff remarks i am getting. the u.s. stock market is worth 30 trillion dollars. hedge funds control less than

two trillion dollars. the notion that they control the u.s. stock market is inaccurate. the markets tend to be very efficient. when news come out -- when news comes out, it is very quickly price then. -- very quickly priced in. this leads to a highly-efficient market. the reason that apple and ge collapse along with the rest of the market in late 2007 and throughout 2008 and until early 2009 was because of years of the global recession. we had a major credit crunch and there was a lot of uncertainty about what it would do to even the strongest company's profit outlook. the sell-off was perfectly rational. we've seen apple continue to be a first-class company. ge has had some successes, but

also issues in terms of coming out of the recession in their profit recovery, so you have not seen quite the recovery in ge's stock price. the notion that hedge fund managers are behind the scenes manipulating global capital market i think is an exaggeration. there are certain a case by case instances that may be a factor. hedge funds have every right to be in the market buying and selling like everyone else as long as there is no inside information going on. the participation of hedge funds make its the market more for ship. when you want to buy a stock, the fact that there are institutional players in the market buying and selling the stock all day long leads to better pricing for the individual investor. host: rick and independent in connecticut. caller: when you explain the reason for the stock market increasing, i am glad that your candid and talked about a gloglobal sales.

i was in the trenches in the 1990's, fighting on the side of the majority of americans opposing the favored trading status for china. and nasa which never increase the standard of living in mexico. the fact of the matter is that this whole thing is very ironic, because more than half the households in the united states now hold stocks. corporations are allowed to go overseas and take the industry and jobs with them. othe thing is it is very ironic, the creation of the corporations may be the final blow for americans and the american standard of living.

that is the reason that we are becoming less and less relevant as more and more people around the world become consumers and we move our jobs away. when you combine that with the incredible flood of illegal cheap labor into the united states uncontrolled, we are headed for serious problems in the united states. host: that is rick, an independent in connecticut. we will go to brian in virginia. caller: i have two questions for mr. young. as you described the stock market, it has had a big run-up over the past 18 months, but it seems to me that has come about with relatively light trading volume, so it seems it has come without the broad participation of the public. i wonder if that is true. my second question is how in the world isn't that the stock

market keeps on going like gangbusters while the government is spending as into unprecedented debt, so isn't this really just setting us up for an even larger crash than the one that happened it said tupper 2008? -- than the one that happened in september 2008? guest: on the first point the calller is absolutely right. a lot of institutions are managing money for retail investors. when you buy into a 401k, that is an institutional investor. it is true that given the brutality of the 2008 bear market with the s&p 500 fell 38% in 2008 alone, investors were understandably a little gun shy about getting back into the market. we started to see that ship in

december of last year and into this year. we're sending to see money flow back into stock funds. -- we are starting to see money flow back into stock funds. individual fund flows into u.s. stock funds have lagged up until very recently, but frankly, that tends to happen in these cycles. the people that get paid to watch the market every day are usually quick to notice a potential turn so they are quicker to get back in or out. you generally do not see the public getting back in in very excited my socks and a big way until you get a lot closer to the seventh or eighth inning. that is why i think financial advisers will tell people the best thing to do when it comes to investing is to come up with a plan with your advisor that makes sense for you and your long-term goals of leave it alone and continue to add to it out of every paycheck. do not try to time the market,

because history shows it tends to not work out well for them. as for your second question about how the stock market can be doing so well when the government continues to run up huge deficits, part of that is the whole notion of keynesian economics where when the economy is very depressed, as is certainly was a couple of years ago, you really need the government in their stimulating activity, because the private sector is very gun shy, very reticent to do that. this government has to step in and kickstart the economy, and because of a penny a crisis that threw off even more financial obligation that the government had to step in and do. to their credit they were successful in keeping us out of the abyss and getting this recovery going. at this point, now that the recovery is starting to be increasingly self sustainable, we want to see a lot more process on the jobs front and housing front. we want to see the government

pulled back. we're starting to want to see an increase in capital expenditures on their part. we're starting to see that. as far as the hiring is concerned, they are starting to do that, but they want to be more confident that the demand will be there. in terms of the american demand, i think executives want to see more evidence that this recovery is for real, and we think that before too long you will start to see improving momentum in the job market. having said that, giving that we are at 9% unemployment, we're not looking for that to tumble to 5% in the next few months. it will be a slow climb out, we we are expecting the economy to add a couple hundred thousand jobs per month. hopefully we have seen the worst with jobs and housing and we're

starting to see some improvements there. host: alex young. there is a tweet that says this -- guest: at standard and poor's we have a lot of different businesses. i worked in the equity research business where we are focused on analyzing stock-market declines. the rating business is an entirely separate division. for compliance reasons they keep us completely separated, or legal reasons, and i do not comment publicly on anything going on on the ratings side. i will have to pass on that question. host: here is "the washington post" headline this morning -- is that what wall street wants to see when it comes to spending? guest: absolutely.

we need to see -- we needed to seat a paring back in the terms of credit card spending. given the fact that we do need the economy to start to pick up, executives need the confidence and a man to start hiring. consumers need to start picking up the spending a little bit. you prefer to see that out of savings and not borrowing. a modest uptick in credit card usage is probably a healthy thing, as long as the spending does not become too debt driven. most of the spending should be coming out of our pockets, not out of someone else's. caller: i am a business manager major and an obama supporter. how much of the policies influence the stock market gained, and where do need obama and his team to go in the future? guest: recently we just had a major step forward to the center

by the president where he agreed in the wake of the november elections to extend the bush tax cuts. this is something the wall street community was definitely in favor of. the recovery in the fourth quarter of last year was not strong enough to sustain a major tax increase, which effectively would have been what would have happened if we would have allowed the tax cuts to expire. we really needed the extra shot in the arm to the economy. the president recognized that and moved to the center. he made a deal with the republicans and extended that. i think wall street is a much bigger fan of all, today that if you would of last them the night before the election when there was uncertainty about what would be happening with tax policy. that is certainly a step in the right direction. no one expects president obama to be the next ronald reagan, but we would like to see him at least meeting with business leaders in hearing what their concerns are and more of a consultant, moderate views from

the president. i am pleased to say that increasingly that is what we are seeing, and that is certainly part of what the last leg of the bull market on wall street is. host: another comment from twitter -- houand jane, an independent in ohio. go ahead. caller: mr. young is sitting on one of the largest bubbles that this country has ever known, and wall street has went completely out of control because of the money they have put into wall street and kept the money off of main street. until the money gets back to main street -- when the bubble bused -- i am 82-years old. i am a retired chevrolet dealer. i know we are in desperate trouble with foreign automobiles and the housing and

the material that is coming from foreign countries. host: are you still there? do you see above all right now in our economy? caller: there is one of the biggest baubles on wall street that has ever been. host: to use the a specific bubble that is happening on wall street? guest: to answer it a question in a direct way, i will take that to mean in the stock market, absolutely not. we are trading at slightly below the long-term average. even though the interest rate inflation is very low and that tends to lead to a higher

multiple valuation in the market. on a valuation basis, there is no sign of a bubble on wall street, as opposed to in 2000 after the tech run-up when we were really trading at 30 times earnings and clearly there was some unsustainable excess going on. there is really nothing on that scale in the stock market. one thing you tend to see is to have abubble you need broadbased ownership. the public really has not increased the stock market yet. it does -- it is almost impossible to have a bubble in an asset class that the average person wants nothing to do with. host: , from burlington, iowa. -- tom from burlington, all iowa. caller: i was wondering what regulations were put forth to

stop that from happening. obviously nothing has happened. if you know of anyone can you tell everyone about them so we know what is going on. i do not believe that anything will ever change and i believe that there is a bubble, and look out people. guest: it does not sound like i will change your mind. another broad base question. i am not a regulatory expert. one thing that has put in place since the credit burst and the subsequent severe recession is an incredible amount of financial regulation put in place to make sure that there are safeguards so that something like that cannot happen. you have a mortgage origination, which is a huge consumer business where people were going out and trying to convince homeowners to switch to different mortgage products so the different mortgages can be pulled and resold to investors. that was a huge consumer

business and completely unregulated. it was unprecedented to have that big of a situation where wall street was working with wall street on a product in a regulation. clearly that was a mistake, and that has been completely addressed. i doubt we will see another credit-driven type of debacle, but generally speaking what happens is you will have a problem, the regulators will fix the problem and the next problem will have nothing to do with that. these things are very difficult to proceed. at this point, giving it with the various asset classes are trading, the only thing that looks like it offers -- term value to us are long-term treasurys. so long-term government bonds yielding 3.36% on 10-year yields not enough to get as excited to recommend those to clients. if you wanted to talk about a bubble, that might be too strong a word, i think long-term u.s.

government bonds would fit that category more so than talking about a stock market bubble or a gold bubble or real-estate bubble in the current environment. >> this is the headline in the new york times. a fear on banks raises a fear of bonds. meredith whitney find yourself in the news media and criticized by colleagues for predicting a calamity in municipal bonds. she is also dregs currency from washington where the committee will meet to determine whether the call has fed into the volatility and allowed some investors to profit unfairly. she will not be at this hearing, citing schedule -- scheduling conflicts. . i know that meredith whitney is a very well-respected analyst

because of calls she made on financial stocks before the bubble burst a couple of years ago. it tends to garner quite a bit of attention. she made some comments on 60 minutes i think given the increasing state and federal deficits and the fact that revenues, because of the recession, have been falling, clearly it is an above average time for rest and manciple -- in municipal bonds. she is basically predicting that will take up because of the financial stress. i am not of enough of an expert to really give you a very correct -- a very stringent critique of her analysis. i will take it she probably knows a lot more about it than i do. we certainly have people on the reading side that art experts on

that area. unfortunately i am not one of them. caller: what is the matter with the stock market is purchases of these companies that buys a stock and they run the stock market up, and at the end of the day they sell it off. remember, they stop that because of market buying and so forth. >> let's leave it there? is that how it works? guest: i am not sure i heard a question in there. host: he laid out how these he sees it working. is that accurate? guest: no. caller: great conversation. before i asked my question, just

a comment. this is as wanting to maintain our standard of living verses' lower profits overseas that can be the markets and create consumers for our goods. it is an intrinsic conflict. i want your guest to talk about abuses and distortions in the market. with the systematic dismantling over the years of the last legal protections you have the me municipal bond craze because countries were allowed to deduct the interest they paid. they have been the cause of the latest problem or insurance companies accounting companies being able to evaluate companies that they themselves had invested in without disclosing that. what about the need to eliminate distortions of the free market? guest: again, i am not a

regulator. i will probably leave it at that. and host host: i want to get your reaction about stocks this morning. stocks are mixed in early trading after round of disappointing earnings reports. new orders declined in new home building. products fell 6% after earnings fell 50% last quarter for av on. how or earnings reports received on wall street, and does that -- this company information have more impact on wall street numbers and pricing of stocks than what is happening in washington? guest: i think both things can be influential. certainly the macroeconomic news out of washington -- for example, to extend the bush tax cut had a favorable impact on stocks. obviously a major driver is how

companies are doing. do people want to buy the products? are they making money? the earnings season is always a busy one of wall street and is a big driver. overall today we had a few misses, but they have been the exception of the role. two-thirds of the companies in the s&p 500 beat earnings expectations. right now we're getting fourth quarter 2010 corporate earnings report results from companies. for a long time product -- it was driven by cuts. right now we're seeing revenue. a lot of that is driven by international momentum, especially in emerging markets. there is also whenever you see as in the 500 revenues up, there is certainly a domestic component. overall the earnings season has been better than expected and finally starting to be driven by revenue growth, which is always something you want to see. host: ap also reported the

obama administration is reporting short-term lease for states battled with insurance that. the administration plans to include the proposal in the budget plan next week. what will be the reaction of wall street to that? guest: i am not an economist. you are throwing a lot of questions that need that are not in my general area of expertise. and host: match on the democratic line. caller: the latest reports of earnings may be mixed but the came on the third quarter that were record-predicting profits -- a record-rate beinbreaking pr companies. why are they hesitant to hire people? guest: they are not going to hire someone in the u.s. for $50 per hour when they can hire

someone that they think can get the job done just as well in india for $20 per hour. capital will seek the highest returns. as americans, if we want the jobs remain in the u.s., we have to move up the learning curve. we have some more education. increasingly the jobs are coming from health care, legal, accounting, technology innovation. more and more high-and type of stuff as the emerging markets are starting to dominate the lower-and manufacturing. as americans, we can sit here and complain why aren't american companies hire ring? american companies are not hiring because the can get a higher return on their dollar somewhere else. when you go out to shop, where do go to buy your goods? you will go to the store where you could get the best thbang fr your buck. we need to improve our marketability. we need to improve education. that is why investing in

education is so important. i think we need to be a little bit more self-reliant. the job of a company is not to give you your dream job. the job of a company is to make money for the owners of the company. you want to make sure you can really add value to the company and give them a real business reason to hire you. when you can find that blend, that is the perfect marriage, and that is what our system really works best. host: don in new mexico. can you make it quick? caller: i suggest they go to a john cassidy article in the november article. it is headlined "what good is wall street?" two-thirds of all trade on wall street are high frequency trades. many of those high frequency

trades last a duration of 22 seconds. from the time they get into the time they get out their 22 seconds. what they are taking is a small fraction of one. . it two-thirds of these trades are high frequencies, if they're just lasted 22 seconds, tell me what that adds to this economy since all we're doing is turning? guest: what it adds is liquidity. when you as the fund investor and bused into a large cap fund in your 401k and that manager goes out to buy a large cap fund, a fact of the hedge funds are in their trading around that stock improves the liquidity and that makes it cheaper for individual investors to invest their money. the other thing to keep in mind is even though these high- frequency trades to represent a surprisingly large percentage of average daily volume, if you

look at most investors are buying and holding for the long- term and retirement accounts, so they're not featured in the daily trading volume. the daily trading volume is capturing people that are buying and selling on any given day. the larger percentage of people that have money in the markets, the larger pull is much larger than that. i do not think the hedge fund presence has served to distort valuations and the markets. host: a couple more comments. here is one from someone who treats tweets in -- let's go to patrick of the republican line. our last phone call. you really have to make it quick. go ahead. caller: what role does the fed have in the stock market rally? in 2007 - - host: we will have to leave it there. guest: they have had a big role.

right now they're really trying to stimulate the economy. they're trying to get business activity to increase to get the economy on the mend. they always have a big impact on what is going on in the economy and wall street. finally, if i could ask you real quickly, because i think we have 30 seconds left -- what are you looking for from the market today? what should be worse be looking for? guest: we tend to recommend that people not focus on the short- term basis. we have had a very good run it in the market. there are concerns about a slowdown in china. we have had a couple of profit warnings. i would not be surprised to see profit-taking in the market today. recommend investors keep their eyes on the long-term and not worry about what is happening the today on wall street. host: this is on the front page of "wall street journal."

what are you looking out for housing markets? guest: the housing market still the achilles heel for the economy. it is an area that economists do expect to live. real momentum in manufacturing. we do think it is the process of bottoming. hopefully that article today is a harbinger of things to come here y. host: alexandre young, joining us from new york. thank you for your time. >> on capitol hill there are several hearings this week. one today at a house judiciary subcommittee. live coverage today. it is about abortion funding. go to c-span.org for more information on that. it is around 4:00 eastern time. live coverage on c-span2. cg