gulf of mexico, we have coverage that covers 250,000 square miles with the precise ability to track. aircraft, particularly the helicopters that work out there i was surprised to learn that every day in the gulf of mexico, we move 10,000 people on and off oil rigs. 10,000 people today navigating safely. those helicopters are saving about 100 pounds of fuel per flight and obviously hundreds of those flights daily. and they're saving between five and 10 minutes per flight by the ability of going direct today as opposed to an old grid navigation we were forced to use in the past. we're we are equipping some aircraft with adsb. that allows them to equip airbus 820s, which allows them to fly down to florida.

this partnership will allow them to use the equipment and they will provide us the data that tells us how much and when and where those savings will incur -- occur. i hope will lead jetblue to continue their expansion and equip the rest of their fleet. it is a trial period, but will have success and some -- enjoy getting the data. we value these public-private partnerships because of several things. they bring immediate benefits but demonstrate the benefits, the real dollar and fuel saving benefits. civil aviation is enormous and most of you understand it

accounts for 11 million jobs and $396 billion in wages in the aviation industry. these are good jobs. jobs that americans nationwide can achieve and are prone to perform. it is an important step. we have been living under a number of short term extensions. 18 for those of you who have been counting. it is difficult to run an agency when your -- your budgeting for weeks and not years. we are pleased that both of our houses have moved forward. i think it is critical to our agency and critical to the mission and the safety of the travelling public of the u.s. by having reauthorization, we

will move forward and improve our transportation infrastructure. that leads us to create and generate new jobs and spur economic growth. the authorizing funding levels in the house bill are well below what the president had proposed in the budget. i am being candid when i tell you i am concerned that funding at these levels would degrade the safe and efficient movement of air traffic as we know it today. i recognize and acknowledge we're in a tight budget environment and we will have to do our homework. but will have to prioritize carefully and choose carefully what we can deliver and we will do that diligently. we already run an efficient faa and it will be even more efficient tomorrow. we have literally over the last four or five years save hundreds of millions of dollars in our acquisition costs, our operating

structure, and by reviewing and restructuring projects that are under way when we need it. at a certain point, i want to make this point. the lack of funding will have a dramatic impact. i am afraid that it will cost us more not to implement some of the programs we talk about going forward. and proceed with modernization. dealing with infrastructure means the long term cost to the nation, to our passengers, and our environment will exceed the costs of going forward with the technology we have today. we are at a pivotal time in the history of aviation. we are creating a template for a new system. i look forward to working with you so we can continue to operate the safest and most efficient air transportation in the world.

i want to thank you very much. we have some time and we will chat a little bit. thank you for your attention and we will continue this dialogue. [applause] there have been -- has been a lot written and a lot said,

whether it is airplane or controller fatigue. we would be remiss in not touching on that. can you bring us up to speed on the steps that have been taken? >> there have been a few things are written, i i have noticed. i started one set of comments and the press has focused a great deal on this. i expressed disappointment. i saw in the sunday paper, i was recognized for having the worst week in washington. i was disappointed. i had had the worst three weeks in washington. [laughter] we're fully aware of the situation. it is unfortunate that we had the initial incident and that certainly made me furious and i expressed my concern. we have started a top to bottom review. interestingly by our own diligence in going in and

looking. we discovered we have had other cases and we have been transparent with those and with air-laborative wly traffic controllers. we have ordered a year ago, we had agreed to sponsor of the take study. we have gotten results of that. we will continue with that and we put in some short-term initiatives. one of the things that was pointed out that we could do quickly was to add one hour to the break between shifts for controllers, we have done that. they have concurred. they have been good partners. this is the the assyria's professional embarrassment and to all of us. we're going to take a non and we have a number of initiatives.

we have observations here. do you recognize fatigue? what do you do to combat it? we're looking at a number of things to make sure they have the tools. what to make sure we are teaching. they have a curriculum that is meaningful to them and defining what a professional is and gives them the tools so they can be more and have a safer organization. >> when you have an event, you want to handle it promptly. you want to handle it thoroughly and well. are you comfortable that as much as being done as a could be. you feel like you have had a good balance between the urgency

to address the situation and time to do it fairly and well? >> this is a want to emphasize. if there was an easy, push button solution, i would have pushed the button. we have done a number of things that we knew in terms of priorities that will bring immediate stabilization. we have started an additional series of steps that will take time. we have to look at our scheduling system and we want to incorporate science into that. science tells us when you overlap schedules, what happens to our teams, including professionals. the ntsb provides insights and we will look at all that. it does not happen overnight. we have to have negotiations and

so forth. some of these things have been agreed to. we need to work our way through those components. i want to emphasize, i will not handle the final document and say we're done. we're not. we're looking candidly with acknowledgement from the controllers and professionals that there are some culture changes that need to come about. those do not happen overnight. we're not going to fix them in two more weeks. we will work together but it will take time. the good news is we're getting a lot of cooperation and -- with all the working groups. we have people other than air traffic controllers who work around the clock. the radar does not repair itself. nor all the electronics. we have 12,000 pieces of electronic gear.

the people who monitor them and make sure they're working. there are up all night. we have lots of people and we want to migrate our knowledge of fatigue across those lines. >> we have confidence you will continue to stay on top of the situation. i would like to transition to nextgen. i want to go back to a comment you made earlier. the economic environment in which we're dealing. i think for a lot of policy people, if you look at our system today, our air traffic control system is the largest, the safest, the most diverse and the most efficient system in the world. it might be to look at this environment and say, ok, we will rest on what we have got. i have no new for a long time

and we have had a lot of conversations. it seems to be a personal urgency. i wanted to touch on that a little bit. >> it is. one of the things when i accepted, you want to make the progress that you see is in front of you. there is so much to be gained, so much potential when we shifted to the next generation. it goes from the highest to the lowest end of aviation. there is an enormous amount to be gained here. i said it in a speech and i will repeat it here. when someone says, how much will this cost, this is something where you say, what is it going to cost not to do this? can we afford not to redesign the airspace in the metroplex areas?

i do not think we can. not if we expect to see growth and we did see the traffic set back a little bit. traffic is growing again. the economy is improving. this system, we will agree collectively that is -- it is ok to be delayed or we agree we can have a system that will mitigate that and the savings will pay for. i firmly believe that this was a board of directors and i've brought you a proposal and said i would like the board to approve an $8 billion acquisition and i will show you that the first year we have it up and operational, we will save $4 billion a year. there is -- you could return your capital investment in two years. henry ford got out of his grave. of course he would do that.

people look at 6-and seven-year recapture. this is a two-year or three-year recapture. >> let me ask you. a lot of skeptics have said the faa cannot pull off nextgen. the faa has not historically done transformation well. a lot has changed over the past decade in terms of the structure of the faa and the training. are you comfortable at this point that the faa has the right people with the right training and expertise and the right organizational structure to make nextgen a reality? >> we have two programs under foot. i will answer yes, we can do this.

the structure we're taking a look at. a lot of the structures have been passed along and go back to the roots of the faa back in the 1950's. we have a program called destination 2025 which we made transparent and a lot of people were offered input to this. i do not think it needs repeating. i welcome, we put out a program and we welcome your input. we have taken those and tried to follow them. i can see a point to restructure and we have gone along ways to do that. that is how i do not think anyone is silly enough to think we have had a strategic plan

that we can sit here and tell you what is -- we're doing in 2025. we need to be flexible so as technology changes and to move forward, you can adapt and bring those technologies in. that is where our focus is. we will make our waterfalls and we're on track and we have a number of key programs that are progressing. a lot of programs have setbacks. sometimes the bumps in the road occur. i'm comfortable we're on the water fall schedule and i am comfortable that given the funding and the support of the industry, we will be on track. >> one of the problems the faa has had historically is sometimes the stakeholder involvement has been too little or may be too late. are you comfortable that you

have enough participation from the stakeholders that there will be community by in and we are on the same page? >> i believe so. to me, the balance point is what internally people complain -- complaining there is too much stakeholder involvement and the stakeholders think there is not enough, we have struck a balance. we have been transparent and we have a number of groups and an advisory board. we have people who use the system and the equipment and the feedback is helpful. none of this equipment should be designed in a vacuum. i applaud the work they have done for us. they have taped -- taken the plan and there were more than 300 people in every walk of this

industry. they said to us, these are great -- the great ideas. you need to do it fifth or seventh or 50th. these need to move about. we redesigned our implementation and i applaud the rtca and people who give us the road map. we are on track with that. but you are saying, things like chicago o'hare. when you can the conflict airports, chicago o'hare was one mass of air space that included midway. when you have 20 flights coming in, the 21st flight overload the system. everyone was delayed further. midway in depend -- is independent. midway can run its own schedule. we're looking to do that more

places. you get four big airports and one of them gets overloaded, you overlook the system. weekend the conflict those with more accurate arrival and departure patterns and the proper profiles. >> one of the questions we have from the audience brings up the question of unmanned vehicles. get your thoughts on how nextgen can and corporate and merchant -- and corporate an emerging technology. >> the go by -- they go by remotely piloted aircraft, unmanned vehicles, they are the wave of the future. they can perform missions that for a variety of reasons are suited to and they can stay up for long periods of time whether it is for surveillance, they can do, the forest service uses them to look for warmer areas and

spot forest fires. they're used in tokyo to fly low over high levels of radiation without putting humans at risk. a lot of things they can do. we work cooperatively and we have most of our northern border allow surveillance with these types of vehicles. nextgen will move us and not trade one of the components that is the big step for us is a basic tenet of safety is to separation. that is a fundamental tenet. in addition, when you see and you are taking the proper action, your own and put, that

is the pace that you continue to develop. there is control of a remote vehicle. it does not allow you to put it into general operation. we can make unique exceptions. there is a great potential and i see a great future for those airplanes. >> i have to ask one last question. we talk a lot about nextgen technology. a question? -- a question asks about the role of the ipad. you have done work in that area. >> they proved in certain situations, i would have to get into the details, we are using electronic flight bags and the ipad itself has approvals, a couple of commercial firms are

making plays and things the pilots can news. the wave of the future. one of the interesting pieces that comes from that is having carried a fly back in my professional career, you are carrying around 10 parts -- 10 pounds of charts and information. that is reduced to 14 ounces. not only an economic, there is an environmental aspect. you do not have to burn the fuel to carry a lot of charts. >> this has been fabulous. thank you for the sponsorship by nbaa. . couple of comments abou there is a phomenal simulator in the room that you have an

opportunity to say. in the first break that we have after the next panel. is being led by craig ford. they have the aopa simulator. i cannot thank you enough. great to see you and thank you for your efforts on behalf of aviation and the same to you, at. let's give them both the big hand. -- a big hand. we will have our lunch and keynote speaker next. he has agreed to speak over your clatter. i hope that as her mother taught you and as tom donahue says, use your silverware silently. we will be able to enjoy this next presentation. we want to thank boeing for

being the key sponsors for this entire event. it is a big undertaking and we are most grateful to boeing and jim. we appreciate your presence here today. i do not want to take any time away from what he is going to have to say other than jim has been with the boeing company for 36 years. he has had the most incredible background. it is an amazing career for any one person. he has been president and ceo of so many different divisions and businesses at boeing that it would be hard to remember them all. he started out as part of the rocket division and he was president and ceo of boeing space transportation and then he

became president and ceo of boeing integrated defense systems. he was also president and ceo of the boeing space and communications division. i believe he was president of a couple others i have missed. of every one of these positions, it was because of his leadership and capabilities that he was moved to the next presidency to take over once again and make that a stronger program. when he speaks to you today, i know you will see why. he is a great speaker but he is also a great leader. needless to say, you have been the right man at the right time for so many different jobs at the boeing company. now you are the right man at the right time to be our lunch and keynote speaker. please come for. -- forward. [laughter]

[applause] >> thank you for that introduction. i have not had a good time holding on to jobs, i keep moving around. i will touch on commercial aviation but on defense and space. it is good to look out at this crowd. i see a lot of good friends and customers and a few competitors. i see that allen mccarter is talking after me. it is good for the industry. i will talk about the importance of aerospace and the state of aerospace today and some of the challenges i think we have. i do believe that our industry is at a crossroads. nobody is hat -- a head of the united states in aerospace, not yet. we are the undisputed leader.

you look at the programs that we have coming out of the department and their unparalleled. the commercial and military satellites we have can do things that are phenomenal. our space program is really second to none. we're going to park the shuttle sometime soon. a leadership position we're in is threatened and there are other countries that would like to come after the dominance we enjoy right now. we're in the business of reclaiming our lead. the question is, are we going to take the steps necessary to maintain that leadership position, or are we going to allow aerospace to join that list of industries we used to lead. i will be talking about that today. to understand why it is important to see what aerospace's done for our country -- was fortunate to join in the

last quarter of the 20th- century. aerospace defined the 2h-ial ais and how it has brought people together. you think about during world war ii, the planes that were built to help us win the conflict. you think about commercial satellites and how they changed the way we communicate. when we walked on the moon, it really changed forever how we look at the world around us. i am convinced that aerospace will define the 21st century. the question we have is, will be u.s. aerospace that does that? -- will it be u.s. airspace that does that? aerospace keeps america strong. there is no industry that has a bigger impact on our economy. if you look at exports, you have a $53 billion surplus in

president obama has called for doubling of our exports over the next five years and aerospace will be in a leadership role in doing that. if you look at the impact of civil aviation has, it is breathtaking and responsible for 12 million jobs and generates 6% of the u.s. gdp. what does the market look like? it is vibrant and growing and challenging but it is changing as well. those of you in the room who operate airlines know what has happened. the market has come roaring back and i think 2010 was the year everyone enjoyed. it has been subdued this year. it is in a positive position. at boeing, we have a seven year backlog. $263 billion.

with air-traffic increasing at 1.5 times the world gdp, the future is pretty good. our estimate is gdp will go up over the next five years to 3.5% to 4%. you do that multiplication and we believe there is a market for 3.6 trillion dollars. that is a marketplace that a lot of countries and companies are eyeing. a number of factors that will ship that market, let me talk about some of those first as globalization. there are shifting demographics. let's talk about globalization. the world as interconnected but that has made the world more complicated. we saw the earthquake in japan.

it had an impact on us. certainly tom friedman was correct when he said the world was flat. globalization means that many of the partners we deal with and you deal with are outside the u.s. and globalization does drive air traffic. we took a look at air traffic in -- 20 years ago. 72% was in the u.s. and it was in europe. that number will be a 25%. we have seen increased competition and it has been a duopoly between airbus and boeing. that duopoly is rapidly ending.

in other countries and companies that are attracted by the $3.60 trillion market i talked about, china with komack, and russia with the [unintelligible] all the entrants will not be successful and the marketplace will be different than it is today. let me give you an example. the chinese have made commercial aviation a top priority. they spent $5 billion on regional jet. market likede the very much. they are building a competitor to the 737 and the a 320. that will compete very well in china. they will build an airplane that competes around the world with boeing and airbus. they are investing $30 billion in this industry over 10 years. one of three countries that put

a man into space which is something i know a little bit about. it is a hard thing to do. going from 0 to 22,000 feet in eight minutes, that is hard to do. i have no doubt there will build a very good airplane. china is the largest market we have and they have gone from being a supplier and customer to a supplier and a competitor and they have done that in 40 years. they have decided to make airplanes and manufacturing a national priority. i am sure there will be successful. that presents another issue. it is a huge marketplace and the marketplace where you have to pay to play. like any country, we have to worry we are not giving away technology that could help the competitor compete with us. it is interesting. china, you go there and it is

amazing. the improvements and the changes that have been made and they will do that in their industry. meanwhile, military threats have evolved as well. during the cold war, we knew our enemy was and we trusted them not to use weapons of mass destruction. oftentimes, we do not know who that is but if given the chance, the will use those weapons. as a result, we see a lot of shifting dynamics and a lot of focus on the asymmetrical threats and certainly a change in some platforms and priorities in the department of defense. the demographics are big bill to aerospace companies. half of our engineers that worked for the boeing co. could retire if they chose to do so. that is this day -- that is the same story at the aerospace contractors in the united states. we're not producing enough

engineers to support the need as people choose to retire in the years to come. but that will contribute to is what i call the intellectual disarmament of this country. that puts this country at risk. if we continue along this path, we could lose our lead in aerospace and we risk breaking that longstanding continue, of capability in our industry and we will leave -- lose an important engine of growth and we could become more vulnerable and less secure. that is a tough picture to paint. companies like boeing will survive and we will go to where the engineers are if we're not producing them in the united states. our industry right now faces five different threats. the industrial base, a weakening industrial base and lack of innovation and technology, the

environment, a level playing field, and education. i believe our industry -- we have to decide how we're going to respond to those threats. today, we take our industrial base for granted but we do so at our own peril. think about what a strong industrial base has meant for this country over the last 60 or 70 years. it was the arsenal of democracy as i mentioned. they put a man on the moon and it made america the world leader in space, commercial aviation, and defense. a strong base is not a given. it is a product of the right policies and investments and priorities but it takes a lot of time to put in place. we do not have to look very far to see what can happen and how quickly a base could be diminished. you do not have to look any further than the u.k. the used to have a great

tradition and now they're buying after 35 -- f35's and boeing airplanes. u.k. leaders realized they needed an industrial policy. it will not be easy for them to rebuild the capabilities. it will take decades. when we do not invest, we risk losing talent and expertise that it has taken decades to build up. if they do not have work to do in the aerospace iraq, they will go to other industries or retire. reconstituting that capability will be difficult. believe it or not with the f 35 , there are no airplane programs

in development. my view is we risk following the u.k. in dismantling our industrial base if we do not do something about that. we are building airplanes for the military. that is not a problem from an industrial base standpoint. to be a viable contractor, to be an integrator of complex systems, you have to understand how to to r&d and you have to transition into production and run your systems and have a healthy supply chain. what we're seeing now with no new starts in the department of defense is we're losing our capability to do detailed design and we're losing our capability to transition design into manufacturing. once that is gone, it will take a long time to reconstitute. this is an issue.

this is one of the problems we have on the 787 program. we have not done a new program since the triple seven and we pay the price. from this bayside, tens of thousands of engineers are going to be going out the door soon. once we parked the shuttle, you will see thousands of people who have taken 50 years to build the capability of the door. you may have seen united space alliance who operates the shuttle for nasa, they announced they are laying off 2500 engineers last week. once the shuttle is parked this summer, i would submit to you and the article today notwithstanding, the chinese will walk on the moon before we once again put an american into low earth orbit in a u.s. launch vehicle. that is unacceptable and unconscionable that we would do

that. there are steps we can take. most every other country is serious about sustaining and strengthening its industry. they have an industrial base. the one we have is one of market forces that -- and that is not a clear or comprehensive enough policy for the u.s. and i am not saying we need to define output and production or build things people do not want, but we need to start a dialogue to ensure the long-term viability of our defense and industrial base. it is pivotal to the long-term economic and national security of our country. we cannot wake up a decade from now and decide what the capability and find we do not have any contractors that have that capability or have the ability to do development programs, and i fear that is the direction we might be going. this is an area where we can engage in dialogue. to some people, the base might

not seem essential but to think about what commercial aviation has gone from the defense side, things like radar and gps, satellite communications, all things important to what we do. i could go on with that list. when you realize that the industrial base affects everyone, we can see the value of everyone speaking out in supporting that need. i find it curious that the industrial base was not considered during the tanker competition. it was not apparent to me it was. the government was willing to put a lot of work offshore and that did not happen. i do not think anybody should think that just one program is going to be enough to sustain the industrial base in this country. it is not. the second threat to america's leadership concerns innovation

in technology. we're seeing much more competition on the commercial and defense sites from around the world in commercial aviation. i talked about the new entrants. we are seeing other people enter the defense market as well. many saw the new j-20, the new chinese stealth fighter as a threat. i saw it as a new competitor in the global defense marketplace, and it will be. to win in the face of competition and subsidized competition, the only way we can do that is through better innovation in technology. what we say we want to do is to make sure we're building today's airplane -- tomorrow's airplane when the competitor is building today's airplane. the 787 dreamliner is a grid example. it is the first new airplane of

the 21st century. airbus delivered the a380 in the 21st century. i would submit that they 787 is the first to use 21st century technologies in the manufacture and development of their plan. some build an airplane and try to sell it. we build it -- salih and then try to build it. sometimes the present some issues -- we sell it and then tried to build a. sometimes that presents some issues for us. there is certain ingredients to innovation that you cannot be successful without. first, you have to have a desire to be the best. you have to compete on the world stage and make sure that you are always building the best you can in the market to serve. you have to have a commitment to invest in technology and also

the human resources necessary for innovation. you also have to have a culture of openness where people are comfortable talking about radical ideas and pushing the envelope and changing the way things have been understood to be built or to be designed. you have to have a skilled, capable workforce and leadership culture that encourages innovation. you also have to have an awareness that the best ideas do not necessarily come from your company but can come from other companies and other countries around the world. innovation is important to my company. it is important to the companies you represent. it also represents america's future. studies have shown that technology innovation has been accountable for half of our gdp over the last couple decades. looking ahead, innovation will be just as important as we go forward. just imagine in aerospace some of the innovations we could see.

you could see a smart composites that morph in flight based on the arrow dynamic lodes lacey. we wil-- loads they see. you could have hypersoninc wave riders that skim across the top of the atmosphere. the question is, will we do them or will someone else do them? there are number of policies that are important that encourage innovation in america and the rd cash credit is one -- are in the cash credit is one of them. the tax credit will expire at the end of this year and i think we subscribe to the fact that we need a permanent, stable, and predictable incentive for research. when you think about the tax credit, last year, it supported 18,000 different companies.

president obama wants to spend 3% of gdp on r&d and a permanent tax credit will help us do that. the third major threat comes from the environment. it will be something that will limit our growth if we cannot figure out how to reduce the carbon footprint we have. everybody knows that 2% of the carbon footprint in this world comes from commercial airplanes. it is not only in co2 that we will be asked to reduce trade we will be asked to reduce noise and traffic density will be an issue. we will be limited by air infrastructure. when we take a look at the environmental issues we face, there are five areas we are focusing on. aerodynamics, lightweight materials, working with companies on more efficient engines, will looking at by a fuel and there is great promise in atm and that is a subject that will be talked about later

today. at boeing, 75% of r&d has direct applicability to the environment. it is amazing when you think about what we have achieved over 50 years. there is a 70% reduction in fuel consumption on commercial airplanes and their resulting co2 reduction. progress continues today if one looks at the 70 -- 747-8. it will burn six% less fuel -- 6% less fuel. if you look at the dreamliner, it will have a 20% reduced fuel burn from the airplane replaces and the 737 and the troubles of and we are delivering, much more efficient than the ones we delivered years ago. in terms of noise, another incredible story. over 50 years, we have reduced the noise footprint by 90%. infrastructure is going to be a

limiting factor in the u.s.. it could take up to 20 years to get the permits in place and build a runway. you compare that to what is going on in places like china. to the best of my knowledge, there are no plans to build airports during that time. there is potential to reduce the carbon footprint. you look at the money we're spending on the 787 and the money airbuses spending on the a350. we will reduce the karpin footprint dramatically from the airplanes they replace. a similar investment for next- generation air traffic management systems will reduce the carbon footprint from 10% to 20% on every airplane flying

today. it is an investment we need to make. let me talk about the policies. we need a sound approach to the environment that achieves results but does not disadvantage u.s. industries relative to international competitors. i am pleased there is a body that is working to make sure we have consistency in those policies around the world. the fourth threat is a marketplace where competitors play by the same rules. we need a level playing field where everyone operates within the rules based trading system. we were pleased to see that the recent wto decision, we think that will be a message to everyone we are competing with. will need to play the same way. vigorous enforcement of the rulings we hope will send a message and i think it will. another big issue for us is the export-import bank and it is not

popular to talk about banks in this environment. if i look at the export-import bacbay, it has done a great job. and has done $34 billion worth of loans which helped to sustain over 200,000 jobs. 85% of the loans supported small business. it is a bank that did not need to be bailed out. it is a bank that returned monday to the united states government. since 1992, they put $5 billion back into the treasury as a result of the loan guarantees they put out there. if one thinks about what it takes to reauthorize the bank, we think it will be a step in the right direction. we can get all those things

right that i talked about. unless we address the issues we have with education, i do not think it will matter. the future of aerospace is depended on it to -- the educational system we have in this country. they used to be the best and brightest came and they studied and they stayed. now they study and go home and compete with us. we have half of our engineers that can retire, half of 86,000 engineers. we know we will have a difficult time replacing them. not nearly enough are graduating from college. 60,000 or 70,000 year. if you go to a country like poland, it is one-fifth the size of the u.s. and they are graduating just as many engineers as we are. you have to wonder why american students are not embracing engineering as enthusiastically as they are in other parts of the world. part of it is the fact that engineers are not celebrated in

this country the way they should be. i was in moscow in september, i went to this cemetery outside of red square and i was walking around and they have the graves of many important historical figures. they had artists and playwrights and government officials. they had people from the military. there were many of the engineers and physicists from the soviet union during the 20th-century. names like tupelov, all famous in airplane designers and had places of stature along with the rest of the famous russians. it made me wonder, when was the last time we saw a picture of an engineer on the cover of "time" magazine or some journal in the

u.s.? in china, their leader today is an engineer and the heir apparent is an engineer as well. another reason why too few students today pursue careers in math and science and technology as we have not inspired them with exciting goals. i think we can recapture some of the imagination. in my generation and i know many of you were drawn to aerospace because of president kennedy's mission to go to the moon, but we have many important things to do in this country as well. the real goal of engineers over the next 50 or 60 years is to help save the spaceship we're on together and that is the planet earth. there will have a chance to work on things like energy dependence

and global warming and health care. there will do tremendous things to rebuild the infrastructure. if we're going to inspire people, we have to have a great k-12 educational system. we are not having the results. many states are struggling with budget. there is one thing that we need to put a wall around relative to reduce spending. all of us have a role. every company is doing something to support s.t.e.m. education is a public responsibility. one country should guarantee to every child growing up, a good quality public education. maybe i've painted a challenging picture of the future and is

challenging. i have no doubt we will be able to take the right steps and continue to keep the lead that we have today. when the wright brothers flew, they flew 120 feet in 12 seconds. you could put that flight in the inside of a 747. it is amazing how far we have come. neil armstrong went and walked on the moon. during the 1960's, all the astronauts were given a personal pac they could put personal belongings into. what neil armstrong asked for was a piece of wood from the propeller of the wright flyer and a piece of fabric from its wing. what started with the wright

brothers and continued through apollo will continue. the lead we have today is ours to keep or lose. the advantage is that aviation gives is ours to keep for it is ours to squander. i think that aviation helps answer the toughest questions about america's future. the future that will continue the we have the power to shape. thank you. other questions? >> we're going to take about five minutes of questions, but let's give jim a big round of applause. [applause] >> we can start out with questions from the floor. i cannot imagine there would not be some who would not like to

ask a question. we have the first one here. don philips, who is waiting for a microphone. >> you mentioned in passing but did not get back to it, the question of what of the country and what it is doing now, the problem with spending and what ever. infrastructure is a real problem now. less is being spent on it under the banner of no new taxes. is no new taxes a good thing or bad thing? >> i am an engineer, i am not an economist. i read just like you do. if i have the right answer, i would be at the end of

pennsylvania avenue talking to people. i really do not. there are a lot of good proposals out there. there are 550 people on capitol hill who i hope will sort that out. i see a lack of an infrastructure as a huge threat. it did not have to go far to see that other countries have surpassed us. talking about high-speed rail and roads and airports. i hope we do not fall behind on that as well. >> tom donahue talk not only about supporting boeing in your effort to stay in south carolina, he talked about the importance of infrastructure and the chamber has a huge infrastructure effort underway where the public/private partnerships big potential.

the public/private partnerships are popular in other parts of the world and we see this as an important role for business to enter into with us in what we're doing. we hope that you and they boeing co. and airbus and others will take the lead in helping us, with new ways where we can do the necessary financing beside taxes for the infrastructure of the future. that is not just airways and waterways and highways. it is broadband and the electric energy grid and other aspects. >> that is something we agree on. a lot of limiting factors to the airlines. i mentioned some of them. atm, airports, environmental questions. you look at the threats we have in europe. they are building a high-speed rail and plugging in nuclear

reactors. >> to we have any questions? right over here. -- do we have any questions? rudder bourhill. -- right over here. here we go. down here. >> you talked about moving towards engineering areas offshore where engineers might be more available. in 2001, 2003, a lot of the engineering resources were being allocated offshore. would you say that is a symptom of the demographic changes or the cause?

>> clearly we are a u.s. company. we have a design center in moscow and we have some 1200 engineers there. we have some 400 that code software for us. we will take advantage of skilled workers wherever they might be. we're not talking about moving up the value chain and asking our suppliers that don't have the skills to do that. hawker >> you are fabulous to be here today. we appreciate it. congratulations for the great work. thank you again. [applause]

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> ben bernanke was asked about economic growth and inflation. his news conference is next. president obama and the white house released the birth certificate. we will hear from the president and then get reaction from donald trump who is calling on the president to provide the long form of his birth certificate. tomorrow morning, the joint chiefs chairman admiral mike mullen will discuss military leadership. he is expected to give an update on the wars in iraq and afghanistan. live coverage at 7:15 eastern on c-span to. later, rick santorum will discuss foreign policy. the pennsylvania republican

formed a presidential exploratory committee this month. >> this weekend, panels on science, american history, climate change, and the constitution. call-in shows with larry flint and walter mosley. get the entire schedule online and get our schedules sent directly to your in box. sign up for alerts. >> ben bernanke held the first news conference in the federal reserve's 97 year history after a meeting of the central bank's monetary policy committee. the fed has decided not to extend the treasury bond program past june as planned. chairman bernanke talk about rising gas prices, inflation,

and the federal budget debate. this is an hour. >> good afternoon, welcome. i will first discuss the economic remarks. then i will place the policy decisions in the context of the statutory mandate to foster maximal employment and price stability. throughout today's briefing, michael will be to reflect the consensus of the committee welt -- michael will be to reflect the consensus of the committee. -- my goal will be to reflect the consensus of the committee. the committee is maintaining its existing policy and

reinvesting principal payments from its holdings. it will complete its planned purchases of $600 billion of long returns treasury securities by the end of the current quarter. the committee will review the size and composition of the securities holdings in light of incoming information and is prepared to adjust those holdings as needed to meet the federal reserve's mandate. the committee made no change in the federal funds rate. remains 02 1/4%. the committee continues to anticipate that resource utilization, subdued inflation trends and stable inflation expectations are likely to warrant exceptionally low levels for the federal funds rate for an extended period. in conjunction with today's meetings, fomc but japan's submitted projections for economic growth, the unemployment rate for 2011 to

2013 and over the longer run. these projections are conditional on each participant 's individual assessment of the appropriate path of monetary policy needed to best promote the committee subject -- committee's objectives. a table showing the projections has been destroyed. i will focus on the central tendency projections, which exclude the three highest and lowest projections for each variable in each year. i call your attention first to the committee's longer run projections, which represent participant's assessments of the rate of economic growth, unemployment, and inflation will converge over time under appropriate monetary policy and assuming no further shocks to the economy. as the table shows, the longer run projections for outward growth have a central tendency of 2.5 to 2.8%, the same as in the january survey. the longer run projections for the unemployment rate have a central tendency of 5.2 to 5.6%,

somewhat narrower than in january. these figures may be interpreted as participants current estimates of the economy's normal or trend rate of growth, and it's normal unemployment rate over the longer run respectively. the economy's longer-term rate of growth and unemployment are determined largely by non- monetary factors such as the late did -- the late -- the rate of growth of the labor force in the speed of technological change. aestimates of these rates are uncertain and subject to change over time. the central tendencies as measured by the price index is 1.7% to 2%. in contrast, the longer run outlook for inflation is determined almost entirely by monetary policy. consequently, given that these projections are based on the assumption that monetary policy is appropriate, these longer

projections can be interpreted as indicating the inflation rate that pparticipants judge to the most consistent with the federal reserve mandate to foster maximum employment and stable prices. at 1.7% to 2%, the man the consistory of inflation is greater than zero for a number of reasons. most important is a hint -- making a rate of zero -- could lead employment to fall below its maximum sustainable level for a protracted period. hence the goal of the zero inflation is not consistent with the federal reserve mandate. most central banks around the world aimed to set inflation above zero, usually at about 2%. i turn to the committee passed economic outlook. as indicated in today's policy

statement, the economic recovery is proceeding at a moderate pace. household spending and investment in equipment and software continued to expand, supporting the recovery, but not residential investment, still weak, and the housing sector is depressed. in the labor market, overall conditions continue to improve gradually. for example, the unemployment rate will move down further and payroll employment increased in march. new claims for unemployment insurance to indicators of hiring plans are also consistent with continued improvement. looking ahead, committee participants expect a moderate recovery to continue through 2011 with some acceleration of growth projected for 2012 and 2013. specifically, as the table shows, participants' projections for output growth have a central tennessee of 3.1% to 3.3% for this year, -- have a central tendency of 3.1% to 2.3% for this year.

these projections are a little below those made by the committee in january. the markdown of growth in 2011 in particular reflects the somewhat slower than anticipated pace of growth in the first quarter. the outlook for above-trend growth is associated with the projected reduction in the unemployment rate, seen as edging down to 8.4% to 8.7% in the fourth quarter of this year, declining gradually to 6.8% to 6.2% in the fourth quarter of 2013, well above the central tendency of the long run projections of unemployment of 5.2% to 5.6%. the projected decline in the unemployment rate is relatively slow largely because economic growth is projected to be only modestly above the trend growth rate of the economy. on the inflation front, prices have risen significantly recently reflecting

geopolitical developments and robust global demand among other factors. increases in commodity prices are in turn boosting overall consumer inflation. however, measures of underlying inflation, though having increased modestly in recent months, remains subdued, and longer-term inflation expectations have remained stable. consequently, the committee expects the effects on inflation and higher commodity prices to be transitory. as the increases in commodity prices moderate, inflation should decline to its underlying level. specifically, a participant projections of inflation havene a tendency of -- that is noticeably higher than january projections, before declining to 1.2% to 2.0% in 2012, both about the same as in january. the committee economic projections provide important

context for understanding today's policy action as well as the committee's general policy strategy. monetary policy affect output and inflation with a lag, so current policy actions must be taken with an eye to the likely future course of the economy. the committee's projections of the economy, not just current conditions alone, must guide its policy decisions. the lag with which monetary policy affects the economy provide that the economy focus on meeting its objectives over the medium term, which can be as short as a year or to but could be longer depending on how far the economy is from the conditions of maximum employment and price stability. to foster maximum employment, the committee sets policy to achieve sufficient economic growth to return the unemployment rate over time to its long-term normal level. at 8.8%, the current unemployment rate is elevated

relative to that level, and progress toward more no -- more normal levels of unemployment seems likely to be slow. the substantial ongoing slack in the labor market and the relatively slow pace of improvement remain important reasons that the committee continues to maintain a highly accommodative monetary policy. in the medium term, the committee also seeks to achieve a mandate consistent inflation rate which participants longer- term projections for inflation suggest is 2% or a bit less. although the recent surge in commodity prices have led inflation to pick up somewhat in the near term, the committee continues to project inflation to return to a mandate of consistent levels in the medium term as i have discussed. consequently, the short-term increase in inflation has not prompted the committee to tighten policy at this juncture. importantly, the committee outlook for inflation is predicated on long-term inflation expectations remaining stable. if households and firms continue

to expect inflation to return to a man they consistent level in the medium term, increased -- to a mandate consistent level in the medium term, inflation -- not commodity prices and in nominal wages. thus besides monitoring inflation itself, the committee will pay attention to inflation expectations and possible second round effect. in the aftermath of the crisis, the committee has not only reduced its target for federal funds rate to a very low level, but has also expanded the federal reserve's balance sheet substantially. the committee at this meeting continues its ongoing discussion of the available tools for removing policy accommodation. at such time has actually become appropriate. the committee remains confident that it has the tools that it needs to tighten monetary policy when it is determined that economic conditions warrant

such a step. in choosing the time to begin policy normalization, as well as the pace of that normalization, we will carefully consider both parts of our dual mandate. thank you again, and i would be glad to take your questions. >> mr. chairman, tomorrow we will get a premium first quarter gdp number. your own projections for the year have been downgraded at this meeting. what do you see as the cause of the weak growth, even with the monitor of the payroll tax cuts? >> you are correct. we have not seen the gdp number yet, but we like the private sector forecasters that are -- most private sector forecasters are expecting a relatively weak number, something under 2%. most of the factors that account for the slower growth in the first quarter appear to us to be

transitory. they include things like lower defense spending than was anticipated, which will presumably be made out in the -- be made up in the fourth quarter. other factors like the weather and so on. there are some factors that may have a long term implications. for example, construction, both residential and non-residential, was weak in the first quarter. i would say that roughly most of the slowdown in the first quarter is viewed by the committee as being transitory. that being said, we have taken our forecast down just a bit, taking into account factors like weaker construction, possibly a bit less momentum in the economy. >> mr. chairman, given what you know about the pace of the

economy now, what is your best guess for how soon the fed needs to begin to withdraw for normal stimulus to the economy, and can you say what is your definition of what "expanded -- "extended period" means? >> we are in a moderate recovery and we will look carefully first to see if the recovery is in need sustainable as we believe it is, and we will also look closely at the labor market. we have seen improvement in the labor market in the first quarter relative to the latter part of last year, but we would like to see continued improvements and more job creation going forward. we are also looking carefully at inflation, the other part of our mandate. as i have noted, headline inflation is at least temporarily higher, being driven by gas prices and other commodity prices. our expectation is that inflation will come down towards

a more normal level, but we will be watching that carefully and also watching inflation expectations, which are important that they remain well anchored if we see inflation remained under good control. to answer your question, i do not know exactly how long it will be before the process begins. it will begin on the outlook and on those criteria which i suggested. the extended period language, the condition on exactly the same points, extended period, conditioned on resource slack, on subdued inflation, and on stable inflation expectations. once those conditions are violated or we are moving away from them, that will be the time that we need to begin to tighten. extended period suggests that it will be a couple of meetings probably before action but unfortunately the reason we use the vague terminology is

that we do not know, certainty, how quickly a response will be required. therefore, we will do our best to communicate changes in our view, but that will depend entirely on how the economy evolves. >> mr. chairman, thank you for doing this. this is a tremendous development. there are critics who say that fed policy has driven down the value of the dollar in the lower value of the dollar reduces the american standard of living. how do you respond to the criticism that fed policy has reduced the american standard of living? >> thanks. i should start by saying that the secretary of the treasury of course is the spokesperson for u.s. policy on the dollar, and secretary geithner had some words yesterday. let me just add to what he said first by saying that the federal reserve believes that a strong and stable dollar is both in american interest and the interest to the global economy.

there are many factors causing the dollar to move up and down in short periods of time, but in the medium term, where the policy is aimed, we're doing two things. we are trying to maintain low and stable inflation by our definition of price stability, by maintaining purchasing value of the dollar, keeping inflation low. that is good for the dollar. the second thing we're trying to accomplish is get a stronger recovery and achieve maximum employment. again, a strong economy, growing, attracting foreign capital, will be good for the dollar. if we do what is needed to pursue our dual mandate, it will also generate fundamentals that help the dollar in the median term. >> i cannot help but noticing it has been unsuccessful so far.

>> well, the dollar fluctuate. one factor that has caught fluctuation has been quite extreme, the safe haven effect. for example, during the height of the crisis in the fall of 2008, money flowed into the treasury department. a lot of what you have seen over the last couple of years is the unwinding of that as the economy has strengthened and as uncertainty has been reduced. that is indicative of the high standing dollar still retaining in the world. the best thing we can do to create strong fundamentals to the dollar in the median term is to keep inflation low, maintaining the power of the dollar, and second, to maintain a strong economy. >> many americans are upset that

gasoline prices are rising so fast and that food prices are also going up. can you talk about whether there is anything that the fed can or should do about that, and can you also comment, elaborate on the increase we have seen in the inflation forecast that the fed put out today? >> sure. thanks, john. first of all, gasoline prices obviously have risen quite significantly. we of course are watching that carefully, but higher gas prices are absolutely creating a great deal of financial hardship for a lot of people. gas of course is a necessity. people need to drive to get to work, so it is obviously a bad development to see gas prices rise so much. higher gas prices, higher oil prices also make economic

developments less favorable. on the one hand, higher gas prices add to inflation. on the other hand, by draining purchasing power from households, higher gas prices are also bad for the recovery. they cause growth to decline as well, so it is a double win a coming from higher gasoline prices. ammy -- it is a double when t coming from higher gasoline prices. on the one hand we have a rapidly growing local economy, emerging market economies growing very quickly. their demand for economies including oil is very strong. indeed, essentially all of the increase in the demand for oil in the last couple of years, the last decade, has come from emerging market economies. in the united states, our demand for oil, imports, have been going down over time. the demand is coming from a

growing economy. on the supply side, as everybody knows who watches television, we have seen disruptions in the middle east and north africa and libya and other places that have constraints, supply has not been made up, and that has driven gas prices up quite significantly. this is a very adverse development. it accounts in the short run for the increase in our inflation forecast in the near term. there is not much that the federal reserve can do about cast prices per se -- about gas prices per saye. after all, the fed cannot create more oil. we do not control the growth rates of emerging market economies, but what we can do is basically tried to keep higher gas prices from passing into other prices and wages

throughout the economy and creating a broader inflation which will be more difficult to extinguish. again, our view is that most likely -- we do not know for sure but we will be watching carefully -- that gas prices will not continue to rise at the recent pace, and as they stabilize or even come down, as the situation stabilizes in the middle east, we will have to watch it very carefully. >> thank you. mr. chairman, you stated several times this year that the recovery will not be fully established until we see a sustained period of stronger job creation. first, has it become truly established yet? if not, what is your definition of a sustained. -- a sustained period and stronger job creation? >> we made a lot of progress

last august when we began to talk about another round of securities purchases. growth was very moderate, and we were quite concerned that growth was not sufficient to continue to bring the unemployment rate down. since then we have seen a reasonable amount of payroll creation, job creation, and that picked up in the most recent few months. together with the decline in the unemployment rate, from 10% down to the current rate of 8.8%. the labor market is improving gradually, as we said in our statement. we would like to make sure that that is sustainable. the longer it goes on, the more confident we are giving it is encouraging to see the improvement we have seen in recent months. that being said, the pace of improvement is still quite slow and we are digging ourselves out of a very deep hole. we are still something like 7 million-plus jobs below where we were before the crisis, and so

clearly the fact that we are moving in the right direction, even though encouraging, does not mean that the labor market is in good shape. obviously it is not, and we have to continue to watch and hope we will get stronger and increasingly stronger job creation going forward. >> robin harding from "the financial times." you say in your statement that maugre expectations -- that major inflation expectations remain stable, and you expect that it to run to core inflation at some period. is there anything the federal reserve can do to prevent the public from may be in direand indirectly -- >> again, the inflation expectations that we are concerned about our median term inflation expectations, so we have seen, for example, in the

financial markets, in the indexed bond market, or in surveys like the michigan survey, we have seen near-term inflation expectations rise significantly, which is reasonable, given the higher commodity prices, higher gas prices. for the most part, although there has been some movement here and there, i think it's fair to say that the medium-term inflation expectations have not moved very much. they still indicate confidence that the fed will ensure that inflation in the medium term will be at the mandated consistent level. what can we do? we can communicate and try to make sure the public understand what our policy is attempting to do. to be clear what our objectives are and what steps we are willing to take to meet those objectives. ultimately, if inflation persists or if inflation expectations begin to move, there is no substitute for

action and we would have to respond. while it is very important for us to try to help the economy create jobs and support the recovery, every central banker understands that keeping inflation low and stable is absolutely essential to a successful economy. we will do what is necessary to ensure that happens. >> mr. chairman, what will be the impact on the economic recovery, job creation, and rates on mortgages and others when the fed ends its $600 billion buying program? a quick follow-up is -- will the fed -- how long will the fed to fed -- how long will the fed to continue to allow for as i have noted, as you are all aware, we will complete the

program at the end of the second quarter, $600 billion. we are going to do that pretty much without tapering. we are going to let the purchases and. our view is that based on past experiences, based on our analysis, the end of the program is unlikely to have significant effects on financial markets or on the economy. the reason being that, first, just a simple point that we hope that we have telegraphed and communicated what we are planning to do, and the markets have well anticipated this step. you would expect that policy steps which are well anticipated by the market would have relatively small effect because whatever effects they would have had have already been capitalized in the financial markets. secondly, we subscribe generally to what we call here the stock view of the effect of securities

purchases, by which i mean that what matters primarily for interest rates, stock prices, and so on, is not the pace of ongoing purchase but rather the size of the portfolio that the federal reserve holds. so when we complete the program, as you noted, we will continue to reinvest maturing securities, both treasurys and and b.s., and so the -- we should not expect any major effect of that. put another way, the amount of these, monetary policy easing should essentially remained constant going forward from june. at some point, presumably early in our exit process, we will -- i suspect, based on conversations we have been

having around the fomc table -- it is very likely that an early step would be to stop reinvesting all or part of the securities which are maturing, but take note that that step, although a relatively modest step, does constitute policy tightening, because it would be low in lowering the size of our balance sheet. that being said, we therefore have to make the decision based on the outlook, based on our view of how sustainable the recovery is and what the condition of the situation is with respect to inflation. we will base that decision on the evolving outlook. it depends on the outlook. the committee will have to make a judgment. >> [inaudible] >> is it in the fed's power to

reduce the rate of unemployment more quickly? how would you do that, and why are you not doing it? >> i should say, first of all, that in terms of trying to help this economy stabilize and then recover, the federal reserve has undertaken extraordinary measures. those include obviously all the steps we took to stabilize the financial system during the crisis. many of which were extraordinary measures taken under extreme circumstances. even beyond the steps we took to stabilize the system, we have created new ways to ease monetary policy. we have brought the federal funds rate target close to zero. we have used for word guidance in our language to affect expectations of policy changes. as everyone knows, we have been through two rounds of purchases

of longer term securities, which seem to have been effective in easing financial conditions and providing support for recovery and employment. going forward we will continue to make judgments about whether additional steps are warranted. but as we do so, we have to keep in mind that we have a dual mandate, that we have to worry about both the rate of growth to but also the inflation rate. as i was indicating earlier, i think even purely from an employment perspective, if inflation were to become unmoored and inflation were to rise significantly, the cost in terms of unemployment loss in the future as we had to respond to that would be quite significant. so we have to make sure that we are paying adequate attention to both sides of our mandate. we have done extraordinary things to try to help this economy recover. >> mr. chairman, it is the view of the lot of economists that

the second round of quantitative easing has not done much to help the economy. what positive effects can you point to directly, and if there are positive effects, can you really afford to in the program in june with the unemployment rate still around 9%? >> thank you. first, i do believe that the second round of securities purchases was effective. we saw that first in the financial markets. the way monetary policy always works is by easing financial conditions, and we saw increases in stock prices, we saw it reduce spreads in credit markets. we saw reduced volatility. we saw all the changes in financial markets, and quite significant changes that one would expect if one was doing an ordinary easing of policy via a reduced federal funds rate. we saw the same types of financial market responses in

the first round, which began in march, 2009. we were able to get the financial easing that we were trying to get. we did get very significant easing from this program. you would expect, based on decades of experience, that easing financial conditions would lead to better economic conditions, and i think that the evidence is consistent with that as well. as i discussed in more detail in my humphrey-hawkins testimony in the beginning of march, between late august when i first indicated that the federal reserve was seriously considering this an additional step, and earlier this year, not only the federal reserve but many outside forecasters, upgraded their forecasts. we saw strengthening labor market conditions, higher rates of payroll, job creation, etc.

now, the conclusion therefore is that the second round of securities purchases could only be validated if one thought that this step was a panacea, that it was going to solve all the problems and return us to full employment overnight. we were clear from the beginning that while we thought this was an important step, at an important time when we were worried about a double dip, worried about deflation, we were very clear that this was not going to be a panacea, that it was only going to turn the economy in the right direction. we published some analytics which gave job creation numbers which were significant but not enough to completely solve the enormous jobs problem that we have. again, relative to what we expected and anticipated, i think the program was

successful. why not do more? this is similar to the question i received earlier. the tradeoffs are getting less attractive at this point. inflation has gotten higher, inflation expectations are a bit higher. it is not clear that we can get substantial improvements in payrolls without some additional inflation risk, and in my view, if we are going to have success in creating a long run sustainable recovery with lots of job growth, we have to keep inflation under control. so we have got to look at both parts of the mandate as we choose policy. >> mr. chairman, what is the right response is high oil prices persist? on the one hand they push inflation higher. on the other, they could hurt the economy by hitting spending. in the current environment, what

is the best strategy? >> we are going to continue to see what happens. our anticipation is that oil prices will stabilize or tend to come down. if that happens, or if at least oil prices do not increase significantly further, then inflation will come down and we will have -- we will be close to our medium-term objectives. as we look at oil prices, as you point out, we have to look at both sides of the situation. i do think that one of the key things we will be looking at will be inflation expectations, because if the medium-term inflation expectations remain well anchored and stable so that firms are not passing on at least on an ongoing sustained basis these higher costs into broader prices, creating a broader inflation in the economy, as long as inflation

expectations are well stabilized, that will not happen, then we will feel more comfortable just watching and waiting and seeing how things evolve. if we fear that inflation expectations look like they are becoming less anchored, we would have to respond to that. >> you have talked a lot in the past about the problem of long- term unemployment. can the fed effectively reduce long-term unemployment? >> first, you are absolutely right. long-term unemployment in the current economy is the worst, really the worst it has been in the post-war. . -- in the postwar period. we know the consequences of that can be very distressing, because people who are out of work for a long time, or their stskills

can atrophy, they lose contact with the labor market, with other people working, the networks they have built up. we saw it in the european experience in the 1980's and the 1990's, that a high period of unemployment with long-term unemployment spells, can lead to launder unemployment for a more protracted period. that is one of the reasons the federal reserve has been so aggressive. by getting unemployment down, we hope to bring back to work some of the people who have been out of work as long as they have. in that respect, try to avoid the long-term consequences of people being out of work for months at a time. that is part of the reason we have been as aggressive as we have. as the situation drags on and as the long-term unemployed lose skills and contact with the labor market or perhaps just

become discouraged and stop looking for work, then it becomes really out of the scope of monetary policy. at that point, job training, education, and other types of interventions would probably be more effective than monetary policy. >> do you think that is out of the scope of what the fed can do? >> indirectly, if we expect that we can help the economy recover, and help job creation proceed, some of the people who get jobs will be those who have been out of work for a long time. that being said, we do not have any tools for targeting long- term unemployment specifically. we can try to make the labor market work better, quality speaking. >> peter barnes of fox business network. last week standard and poor's put the united states debt on a negative watch for the very first time ever.

what is your reaction to that, and are you concerned, are you worried that the united states will lose its aaa credit rating? >> in one sense, s&p's action did not really tell us anything because anybody who reads the newspaper knows that the united states has a very serious long- term fiscal problems. that being said, i am hopeful that this event will provide at least one more incentive for congress and the administration to address this problem. i think it is the most important economic problem, at least in the long term, that the united states faces. we currently have a fiscal deficit, which is simply not sustainable over the longer term. if it is not addressed, it will have significant consequences for financial stability, economic growth, for our standard of living. it is encouraging that we are

seeing efforts on both sides of the aisle to think about this issue from a long run perspective. it is not a problem that can be solved by making changes only for the next six months. it is really a long run issue. we are still a long way from a solution, obviously, i think it is of the highest importance that our political leaders to address this very difficult problem as quickly and as effectively as they can, and to the extent that the s&p action gets a response, that is constructive. >> mr. chairman, john barry. in the past there have been times when fiscal policy has tightened and the federal reserve has chosen to ease its policy and response partly to the extent of the economy at the

time. congress appears intent at this point in cutting spending significantly, might restrain the economy as it appears to be doing in britain where they are following a similar path. is there anything the fed can or should do if indeed there are large budget cuts sometime in the next 18 months? >> first, let me say that addressing the fiscal deficit, particularly the long run unsustainable deficit, is a top priority, and nothing i would want to say would be construed as saying that anything other than a temporary. it is very important that our leaders address this issue. i would say that the cuts that have been made so far don't seem to have had very significant consequences for short-term economic activity. my preference in terms of addressing the long-term deficit

is to take a long-term perspective. it's a long-term problem. if congress and the administration are able to make credible commitments to cutting programs or in the way changing the fiscal profile going forward over a long period of time, that is the most constructive way to address what is in fact a long- term problem. if the changes are focused entirely on the short run, they might have some consequences for growth, and in that case the federal reserve, which is as always going to set monetary policy to meet our mandate, we will take those into account properly. but so far i have not seen any fiscal changes that have really changed our near-term outlook. >> thank you, mr. chairman. i would like to ask about the

uncertainties in the global economy. in the meetings, the committee noted that the development increased uncertainties. what is the assessment of those risks for uncertainty such as the tragedy in japan or the crisis in europe, and the crisis in the middle east? what would be the potential effect on the u.s. and the world economy? >> one of the things that our projections includes, we are only producing the forecast today with our -- within three weeks, we will include the detailed projections as we normally do. one thing we included the views of the participants on the amount of uncertainty in the forecast going forward. i think i can say without too much fear of giving away the secret that fomc participants see quite a bit of uncertainty

in the world going forward, and a lot of that uncertainty is coming from global factors. i have talked about middle east, north africa developments, which affect oil prices. conditions in emerging markets which affect commodity prices and other things. european situation continues. we are watching that very carefully. obviously you asked about japan. let me first say that i have had a lot of contact with my japanese counterparts, the central bank governor and other people in the japanese government. we collaborate with them on the foreign exchange intervention, as you know. we are very admiring of the courage of the japanese people in responding to these situations, and of the central bank of japan, which has done a good job in providing liquidity

and helping to stabilize financial markets in what are very significant disturbances to the economy. the implications for japan have been discussed at some length, and i think the governor recently talked about them. in the near term there will probably be a decline in japanese public reflecting the destruction, reflecting electricity problems, etc. we believe that will be relatively temporary and that the economy will start to come back, but this is a major blow and it will take a lot of effort on the part of the japanese people to restore the economy and to recovery for the united states we are looking at this very carefully. thus far, the main impact of the japanese situation on the u.s. economy has been through supply chains. we've noted some automobile companies, for example, that

have had difficulty getting certain components which are manufactured mostly or entirely in japan. and that has led a number of companies to announce that they would restrain production for a time. there may be some moderate effect on the u.s. economy but we expect it to be moderate and to be temporary. again, the most important issue here is the recovery of japan and our good wishes go out to the japanese people and their efforts to overcome the adversity that they're facing. >> mr. chairman, you have often stressed, as you indeed did again today, the importance of keeping inflation expectations low and stable, to keep inflation itself under control. but irrespective of inflationary expectations or psychology, isn't it possible

that the fed's policy providing monetary tender, is that -- >> well, we view our monetary policies as being not that different from ordinary monetary policy. it's true we have used some different tools but those tools are being used through different financial conditions and we have a lot of experience understanding how financial conditions, changes in interest rates, changes in stock prices and so on, how they affect the economy. so we're monitoring the state of the economy, watching the evolving outlook, and our intention, as is always the case, is to tighten policy at the appropriate time, to ensure that inflation remains well controlled, that we meet that part of our mandate while doing the best we can to ensure also that we have a stable economy

and a sustainable recovery in the labor market. so the problem is the same one that central banks always face which is choosing the appropriate path of tightening at the appropriate stage of the recovery. it's difficult to get it exactly right but we have a lot of experience in terms of what are the considerations and the economics that underlie those decisions. so we anticipate that we will tighten it at the right time and that we will thereby allow the recovery to continue and allow the economy to return to a more normal configuration at the same time keeping inflation low and stable. >> many of the commercial partners of the united states are very concerned about the evolution of your foreign exchange rate. if in one particular case the

dollar would sink to a terrible level which would hurt the u.s. economy and in good prospect for the world economy because it effects so many people, would you consider changing your monetary policing according to that threat? >> as i said earlier, we do believe that a strong and stable dollar is in the interest of the united states and is in the interest of the global economy. our view is that the best thing we can do for the dollar is, first, to keep the purchasing power of the dollar strong by keeping inflation low, and by creating a stronger economy through policies which support the recovery, and therefore cause more capital inflows to the united states. so those are the kinds of policies i think in the medium term will create the conditions for an appropriate and healthy level of the dollar so i don't

think i really want to address a hypothetical, which i really don't anticipate, because i think the policies that we are undertaking, notwithstanding short-term fluctuations, will lead to a strong and stable dollar in the medium term. >> mr. chairman, anthony mason shes cbs. this is that rare news conference that actually makes news before it happens. can you talk a little bit about your decision to take this historic step of holding a news conference after a fed meeting? what choices did you make? and facing the media comparing facing congress? >> thanks, mom. well, the federal reserve has been looking for ways to increase its transparency now for many years and we made a lot of progress. it used to be that the mystique

of central banking was all about not letting anybody know what you were doing. as recently as 1994, the federal reserve didn't even tell the public when it changed the target for the federal funds rate. since then we have taken a number of steps, a statement with -- includes a vote. we have -- we produce very detailed minutes which are released only three weeks after the meeting which is essentially a production lag. we now provide quarterly projections including long-run objectives as well as near-term outlook. we have substantial means of communicating through speeches, testimony and the like, and so we have become i think a very -- a very transparent central bank. that being said, we had a subcommittee headed by the vice chair of the board looking for different steps to take to provide additional transparency

and accountability. and the press conference was -- came right to the top because this is an area first of all where global central bank practice includes now many central banks do use press conferences and we have some experience with them. and secondly, it does provide a chance for the chairman, in this case, to provide some additional color and context for both in this case both the meeting and the projections that are being made by the committee. so we thought it was a natural next step. we're not done. we're continuing to look for additional things we can do to be more transparent and more accountable, but we think this is the right way to go. i have always been a big believer in providing as much information as you can to help the public understand what you're doing, to help the markets understand what you're doing and to be accountable to the public for what you're doing. now, of course, the fed didn't do this for a long time and i

think the counterargument has always been that if there is a risk that the chairman speaking might create unnecessary volatility in financial markets or may not be necessary given all the other sources of information to come out of the federal reserve, it was our judgment after thinking about this for sometime that at this point the stay digsal benefits for more information, meeting the press directly outweighed some of these risks and i think over time, you know, we'll experiment to try to make sure that this is an effective venue as possible. >> last question. >> mr. chairman. i wrote a book looking at 800 years of financial history. . i discovered when you have a

financial crisis it takes a lot longer for them to recover. are people expecting toosm from the federal reserve in terms of helping the economy recover and has that hurt -- >> ken rogoff was a graduate schoolmate of mine. i played chess against him which was a big mistake. i enjoyed that book very much. i thought it was very informative. as you say, it makes the point that as an historical matter recoveries following financial crises tend to be relatively slow. now, what the book didn't really do, though, is give a full explanation of why that's the case. certainly part of it has to do with the problems in credit markets and my own research when i was in academia focused a great deal on the effects of problems in credit markets on recoveries. other aspects would include the effects of credit problems on areas like housing and so on,

and we're seeing all that, of course, in our economy. with that said, another possible explanation for the slow recovery from financial crises might be that policy responses were not adequate. that they -- that the recapitalization of the banking system, the restoration of credit flows and monetary and fiscal policies were not sufficient to get -- to get as quick a recovery that might otherwise have been possible. and so, you know, we haven't allowed that historical fact to disswayed us from doing all we can to support a strong recovery. that being said, it is a relatively slow recovery. you can identify reasons for that. credit factors are one. another very important factor is that, you know, this was triggered by a bubble in the housing market and the housing market remains very weak, and

under normal circumstances, construction would be a big part of the recovery process. there are a number of factors and now we're seeing high oil prices and a number of things, there are things which are holding the recovery back. so there are good reasons for why the recovery is slower than we would like. at the same time, it's very hard to blame the american public for being impatient. conditions are far from where we would like them to be. the combination of high unemployment, high gas prices and high foreclosure rates is a terrible combination. a lot of people are having a very tough time. so i can certainly understand why people are impatient. i guess the only thing i can say is while the recovery process looks likely to continue to be a relatively moderate one compared to the depth of the recession, i do think that the pace will pick up over time and i am very confident that in the long run

that the u.s. will return to being the most productive -- one of the fastest growing and dynamic economies in the world. and it hasn't lost any of the basic characteristics that made it the preeminent economy in the world before the crisis, and i think we will return to that status as we recover. thank you very much, and thank

>> we're joined on the phone by michael darby. at first, how did this field, the first federal news conference? >> the risk he took in doing this was, you know, it was an experience. he faced questions and he had the chance to make mistakes. it was really a question, could he handle this without making mistakes, and the way it looks to me, the way financial markets interpreted it is he did this very well. he did not seem to make any mistakes. he seemed to enter things pretty well, good questions from reporters in the room, and he navigated that pretty handily. >> what did you hear that really stands out in terms of the news? >> i think the press conference,

and this is probably what the fed wanted, was something to amplify the official federal open market committee state that cannot today, which was a status quo statement which said the economy is continuing to grow, showed concern about commodity prices leading to inflation, and it did not really do too much in terms of changing monetary policy outlook. that basically affirmed that we will continue through the end of the summer with the $600 billion bond buying program. bernanke use the press conference to amplify that, and he talked a little about he does not know when the federal reserve will begin to tighten, but he did give criteria that would help markets understand when they will, although four people in my business, he said sort of familiar things. he said we would be watching what happens with inflation,

with employment, when to tighten. i looked at it as an amplification. the newer stuff, the fed does not like to talk about the dollar much. that is something that is usually left to the treasury. in parts, bernanke almost sound like the treasury secretary, talking about the strong dollar is in the interest of the united states, and a lot of critics have accused the fed of making the dollar less. bernanke hit back against that in the press conference. >> did you hear anything in his first press conference, and the heightened concern over the rising gas prices? is that an area that you'll be watching in terms of how the fed reacts to rising gases? >> bernanke was able to clarify out how he thinks about it. rising gas prices are not a settled issue. some people think gas prices

rising is inflationary, for other people a bigger impact is it cuts consumer spending power. every extra dollar you spend on the pump is a dollar that you cannot spend on a consumer good. depending on how you view that situation, it's sort of art use your policy outlook. bernanke, when he spoke about gasoline prices, one, there is not much the fed can do about it. that is a supply and demand issue, out of the fed control, but beyond that he sort of shaded more in terms of it cut into consumer spending power, but he said inflation expectations or everything for the federal reserve. if you believe inflation will go up in the future, inflation will go lot now. he is monitoring how much gasoline price increases

feedthrough and underlined inflation. he clarified how to look at the situation, how he looks at it, and if you understand how he looks at it, that can help you understand what is coming next for monetary policy. >> michael darby, it in the news conference today with ben bernanke. it you could read his work online at wsj.com. thank you for that update. >> thank you for having me. >> we will talk about today's first ever news conference by its chairman of the federal reserve. then a former cia official will discuss the upcoming leadership changes at the pentagon and cia. after that, and update on the defense of marriage act, which congress passed in 1996. this year, the department of justice said it no longer defend the law. a conversation about that. "washington journal," live at

7:00 a.m. eastern on c-span. the government of syria continues to crack down on protesters. we will look at the political unrest in that country. live coverage at the hutson institute begins at 12:00 p.m. eastern >> president obama says he decided to release the long form of his birth certificate and response to repeated questions about where he was born. the obama campaign released a standard short form in 2008, but this week the president's lawyers requested copies of the original birth certificate from coli and officials. the president spoke at the white house for about five minutes.

>> i would not have the networks breaking and if i was not talking about national security. >> as many of you have been briefed, we provided additional information today about the sight of my birth. now this issue has been going on for two and a half years now. it started during the campaign. i have to say that over the last two and a half years, i have watched with amusement. i have been puzzled as to the degree to which this thing kept on going. we have every official in hawaii, a democrat and republican, every news outlet that has investigated this,

confirmed that yes indeed i've was born in hawaii, august 4, whatever 1961. we posted the certification that is given by the state of hawaii on the internet for everybody to see. people have provided affidavits that they have seen this birth certificate, and get this thing keeps on going. now, normally i would not comment on something like this because obviously there is a lot of stuff swirling in the press at any given day. i have other things to do. two weeks ago when the republican house had put forward a budget that will have huge consequences potentially to the country, when i gave a speech about my budget and how i felt we needed to invest in

education, infrastructure, making sure we have a strong safety net for our seniors even as we were closing the deficit -- during that entire week to the dominant news story was not about these huge monumental choices we are going to have to make as a nation. it was about my birth certificate. and so i just want to make a larger point here. we have got some enormous challenges out there. there are a lot of folks out there, everybody is still suffering from high gas prices. we are going to have to make a series of very difficult decisions about how we invest in our future but also get a hold of our deficit and our debt. how do we do that in a balanced way?

this is going to generate huge and serious debates. important debates. there is going to be sincere said disagreements. that is good. that is how democracy is supposed to work. i am confident that the american people and america opposing political leaders can come together in a bipartisan way and saw these matters. we always have. but we are not going to be able to do it if we are distracted. we are not going to be able to do with if we spend that time vilifying each other. we are not going to be able to do with if we just make stuff up and pretend that facts are not facts. we are not going to be able to solve our problems if we get distracted by sideshows and carnivals. we live in serious times are

now, and we have to deal with things that will make our grandkids proud. i have every confidence that america in the 21st century is going to be able to come out on top i always have. we are going to have to get serious to do it. i know that there is going to be a segment of people for no which what we put out, this issue will not be put to rest. but i am speaking to the vast majority of the american people as well as to the press. we do not have time for this kind of silliness. we have better stuff to do. i have better stuff to do. we have big problems to solve, and i am confident we can solve them but we have to focus on them, not on this. thank you very much.

[captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> now reaction from donald trump. he spoke in new hampshire for about half an hour. >> today, i am very proud of myself. i was able to accomplish that nobody else has been able to accomplish -->> something that no one else has been able to accomplish. i was just informed while on the helicopter that our president has finally released a birth certificate. i want to look at it, but i hope it's true. that way we can get on too much more important matters. so the press can stop asking me questions. he should have done a long lead time ago.

why he did not do it when the clintons asked for it, and why he did not do it when everybody else was asking for it, i do not know. but i am really honored, frankly, to have played such a big role in hopefully -- hopefully getting rid of this issue. we have to look at it. we have to see if it is real. is it proper? what is on that. i hope it checks out beautifully. i am really proud, i am really honor. now we can talk about oil. we can talk about gasoline prices. we can talk about china ripping off this country. we can talk about opec doing numbers on us like nobody has ever done before. we can get on to issues and hopefully when i sit down with interviews, people do not start talking about birth certificates like they have been doing. so i feel i have accomplished

something really, really important. i am honored by it. >> a lot of people said what you cost is a distraction? >> i in taking great credit. you have to ask the president why did you not do this a long time ago? when hillary clinton was asking, when everybody was asking, why did he not do with? it is shocking. shocking. >> why is that relevant? >> it is very relevant. people ask me for my gut certificate -- people ask me for my birth certificate and i gave it two days later. >> before that you said you would not believe what my a ground team is seeing the people need to got the information you were giving? were you making this up? where did this come from? >> i think what you are going to see -- first we have to look at whetherbut i am really happy

this is finally taking place. we have some issues that are unbelievably important. >> you did not answer my question. >> i think you did. >> what do you mean you have to look at it, you have to decide. what gives you the authority? >> i am going to take a look at it and many other people will take a look at it. we will have many people looking at it and we will have to make the decision. it is rather amazing that all of a sudden it materializes. i hope it is the right deal. we have to look at it. a lot of people have to look at it. experts will look at it. i am really happy, and honestly i am very proud that i was able to bring this to a point. nobody else was. the clintons during their campaign word. all of the other people that talk about it. for years they were not. i am really honored by this. next question. >> if it is not true for

example, is that what you're saying? >> well, let's hope it is true. i do not want to answer that question because it is negative. honestly it is so negative. at this point i do not want to answer the question because you are asking a negative question. if it is not true, if it is not really his birth certificate. i hope it is not true. we have very big problems in this country. this country is suffering right now. we have people that cannot keep gasoline in their tank. they are topping out the tanks because they cannot afford to do it properly. they have never had this before. the look at resorts around the country, they are not doing any business because people do not drive. and then you look at saudi arabia and what they did, it is unbelievable. three days ago they announced essentially that they are going to raise the price of oil by cutting back on production. we have nobody to speak to these people. we have nobody that calls for talks and says you are not going to do it, we are

protecting you. he would not be there if not for us. we have nobody. mr. they are president said he -- yesterday, the president said he has very little impact over the price of gasoline. i think he is 100% wrong. opec is setting the price of fuel. we have oil all over the place, all over the place, every ship at sea is loaded up with oil and they do not know where to dump it. yet every day we are setting records and pretty soon we will be at $150 a barrel. the all-time record. when the president says he has no power over that, it is pretty sad. >> is it possible that the country is being led and not by an illegitimate president, is that possible? >> i hope it is not possible. i hope we have accomplished a lot of what i have been doing the past couple of months. i hope we can talk about china and opec taking our jobs. i hope we could start doing that.

what i would do differently is come down really hard on opec. if you look at these nations, they would not even be there if not for us. the ticket look at kuwait, we handed kuwait back to the people. they essentially on kuwait. it is really ownership more than anything else. you look at these nations, saudi arabia, we protect them. then they want to raise the price of fuel, it is not high enough? so it would be very easy and it very quick to get gasoline prices down. gasoline prices are $4, $5 that are going to $6.70 dollars as sure as you are standing there. >> in terms of credibility, you were running as a democrat in 1988. what makes you -- >> let me just sort of tell you. this sort of interesting because

new hampshire is a special place. i came up in 1988 or 1989, long time ago, as a favor to a friend of mine. i made a speech. but it is a place i have always liked. i have been there many times, new hampshire. in making the speech, everybody thought i was running for president. as you know, i was not running for president. i never said i was running for president. i made a speech on success for a friend of mine around 1988. the buzz was unbelievable because it happen to be new hampshire. it was sometimes prior to primary season. anyway, new hampshire should sort of got me started. i did come up in 1988, i made a speech, it was a speech on success more than politics. in fact, i do not know if politics may role in the speech. it was great. it really got me started. it really did. but i did the speech actually for a friend. i did not do it because i was

running. >> why should people think you are a republican? >> i am a republican. i am a very strong republican and i have been a republican for a long while i think i am quite work conservative as a republican. if you look at the polls, i just thought two more polls today were i in leading the polls. i think the fact that i was able to finally get him and issue a birth certificate can only help. i will say this, one other thing. one of the big posters who came out with a very strong poll were i am leading yesterday said that if you actually announced your poll numbers would go substantially up. a lot of people think i am having a good time. i am not having a good time. >> you are an intelligent question. are you intelligent? have you been listening? i just do not know. are you intelligent? here is the problem. i hate saying it because it sounds trivial. i have a very, very successful

show on television. the number one show on nbc. a show that even the new york times yesterday said is a very successful show. i have a show called "celebrity apprentice." i cannot announce until the show is over. when the show is over -- let me explain. when the show is over and the finale will be may 22, when the show is over i will then be free to announce. i think he will be surprised at a number of things. i think you will be surprised at what my announcement is. >> you also raised these questions about his education credentials. are you prepared to say that all these issues are to be put to the side and you accept that mr. obama says he is who he is or you think there are legitimate issues flooded u.s. me questions that nobody gets angry.

the press does not get angry. the press is very protective of president obama. very protective. they are not protective of me, but they are protective of president obama. they are not protective of most other people either in most fairness. the word is according to what i have read that he was a terrible student when he went to occidental. he then gets to columbia. he then gets to columbia. i heard at columbia he was not a very good student. heating is to harvard. how'd you get to harvard if you are not a good student? maybe that is right or maybe it is wrong, but i do not know why he does not release his record. what is he not release his records? i will tell you why who cares. everybody says he is a great student. if he was great, if he was not a great. >> what you continue to -- >> i will tell you what. education has meant a lot to me. i think education is good. if he wants to release the,

thatif he does not, that is fine too. but the word is -- i think he would want to release actually. the word is he was not a good student and he ended up getting into columbia and harvard. i've latino -- this is what i read a written by some of the people in this room. i've latino how he gets into harvard and columbia if he is -- i would like to know how he gets into harvard and columbia if he is not a good student. i am just reporting what i read. i read things that you people like. what people say about me. what is worse innuendo than what people say about me? i have the ultimate innuendo. i will promise you one thing, nobody will protect me like they protect our president. just then finishing, i am really honored and i am really proud that i was able to do something that nobody else could do.

i am really happy about it. now experts will check it and everybody will go over it. i hope everything will be perfect. if you remember, from day one, i said i hoped he'd give his certificate because i do not want this issue clouding a campaign. ok. >> that is not up to me, that is up to experts. >> i have had a lot of friends are democrats and a lot of friends that are republicans. over the years, as you know, new york is a largely democratic place. it is very rare that you see nyc as an example for a republican to get elected. the numbers are staggering were

a democrat will get 94% of the votes, that is if the republican is doing a good job. it is a very interesting fact that it happens to be almost all democratic. over the years i have supported many republicans and democrats, i think there is something nice about that. when i watch washington and see washington, and i see the way the fight like cats and dogs and i liked nobody has ever fought before, people that have been in the senate who are friends of mine that have been friends of mine for a long time, they say they have never seen hatred -- the use to argue and then go out to dinner together, the democrats and republicans, they would get things done. and now we are at a stalemate. i think it would be great if somebody got in there that could get along with both sides. i know many people that are on the democratic side. in some cases they are friends and i get a lot with them great. i think it is time for people to sit down and get together and get this mess that we are in right now solved. i view that as it asset not a liability. >> [unintelligible]

>> might use change, and i do a lot of speaking about success. the world changes. you have to remain flexible. the world will always change. you cannot just have an idea and then this idea let go through a wall. sometimes you have to be able to go under the wall, over the wall. i always said, have a goal, work hard, but you have to have a certain flexibility. if you look at virtually every candidate that runs for office or currently running for office, they have had used that are much different 10 years ago than they have now. my views changed, and virtually all of the candidates use change. i do not think that is an uncommon thing. >> are you playing with us or are we playing with you? >> i think your playing with me. i accept that. >> are you going to play with us a little more willing and would you make your announcement?

>> i think you are going to be very surprised. >> ann coulter said last night you were not running for president. she compared you to charlie sheen. >> ann coulter? you will have to see. we have three weeks. not a big deal. in three weeks you will see. i think you will be very surprised. i think if i do wrong, i will do very well. i am already leading the polls and i am not running. am i leading the polls? thank you. >> [unintelligible] >> cnn did a poll recently where obama and i are statistically tied. if you would like i can send it to you, to call up cnn. i think i would be obama. if i look at the so-called --

economy and how bad it has been. it has done so poorly, i think largely it will be about that. if you look at what he has done and libya which is a total disaster. nobody knows what is going on in libya. you look at gas prices were he says he has no control over gas prices, which he does if he gets off the phone or the basketball court or what ever he is doing at the time. he should be focused on opec and getting the prices down. that is what he should be focused on. i am going to handle libya much differently. i have said it many times, the rebels i hear are controlled by iran and al qaeda. "they make it "gone with the wind", isn't it romantic. you could end up with worse than gaddafi. i have a great problem with our military people losing their lives and libya and we do not

know what we are getting into. i have always said i go for libya, but i want the oil. nowadays when you when you win a war, you lose lives, you spend billions of dollars, and when we come out come out and we go back home. we have all of our wanted to take care of. we have all of the dead soldiers and a dead military, and what do we get? nothing. this is interesting, libya, because the arab league which a saudi arabia and many of the wealthiest nations in the world told us to go in and take out gaddafi. if they would have said that to me, i would have said five billions dollars right now. just for the question they would have given you all of that money rock and paid in two seconds. the other question i ask is this, we get no oil from libya. we get no oil. china which is taking over the world economically because they are smart, meaning their leaders are much smarter, china taking over the world it's a big portion of its oil from libya. they are libya's biggest customers.

why isn't china involved? why are we involved with libya and china is not involved? the imf came out two days ago. they said by 2016, china is bigger than we are. the you know why? because they are making our products. if they were not making our products, they would not be bigger. china is taking unfair advantage of the united states and other countries by a total manipulation of the currency. if they continue to manipulate their currency -- if i am in office and i decide to run and win, within one day they are going to be told, you keep manipulating your currency, we are going to tax to 25%. that will do two things. first of all they will stop manipulating at the mere thought of it. when the president of china

comes to the united states, we hold a state dinner for him in the white house. here is a guy that has been screwing our country for years. there are going to make $300 billion profit this year, 300 billion more than that, and we hold a state dinner. the reason is because they manipulate their currency brilliantly. i have no anger at china. if you can get away with it, if i was from china i would be proud of my leaders. i am from this country, i am proud of this country, but not by leaders. they are allowing the world to take advantage of us. they are allowing the world to rip us off like never before. by the way, would you talk about budget deficits, how can our economy ever get good? how can our economy ever be strong, however, when we have other countries making our products? it cannot happen. i watched ben bernanke not long ago say unemployment is going

to be bad for a long time. do you know why? because india is taken so many jobs there outsourcing. china is making our products so we do not have -- i look at places like iowa where maytag moved out and they moved into mexico. if you put a tax on chinese products unless they change their way, you are going to start bringing back to this country and bring them back fast. were, and i think this is more likely, it would change its policies so we can now compete. it is real easy. remember this, we have all the cards. they do not. if we pull back on china, in 2016 they will not be bigger than us. they will be bigger than us because they make our products. they make products for others, but they make products for us,

big league hit. if we ever pulled back on that, china is not bigger than us. china has a big problem. just remember what i said, we have all the cards. they do not have the cards. they have one trillion dollars in debt. it is a lot of money, but it is peanuts compared to the overall big ball of the world. we have all of the cards. the reason they loan us money is because they taken so much money from us. it takes some mothers, but mostly from us. remember the numbers. over $300 billion this year and they are taking our jobs, very sad. the president could solve that so easily. instead of having steak dinners, he could solve that so easily. >> what do you hope to learn here today from the people of new hampshire? >> i was very honored because i just saw paul and -- a poll in new debt -- new hampshire and i am doing very well. you have to understand, i am running against some people

that i like. it is always hard to run against people you like. the fact is, when you live in new hampshire and you are a few points up on top, that is not saying much. you have been campaigning for six years and have not campaigned at all, because i really have not, i have not announced. that is a really bad statement when you are almost even in a poll and here i empyrean -- here i am. >> what kind of news are you looking for? what will help you -- >> there is one example that i saw the other day. there is one example i saw the other day that is amazing. $276 billion prison built in new hampshire. the latest and the greatest and

the town is devastated because the federal government does not have the money to open it. very pathetic. it is very unfair to new hampshire. it is very unfair to that part of new hampshire. but they spent $276 billion to build a prison and the town is all for it. they have great employment prospects, and the federal government now does not have the money to open the prison. i am going to see some of that, and i know will see different things. one more question? >> [unintelligible] >> i do not know what my campaign in new hampshire will look like. i would just tell it like it is. i know how to make money. i have always known how to make money. this country is broke. the united states is broke. we are a debt nation. you go to places like saudi

arabia, you go to catarrh, you go to china, you leave airports that are the most incredible places in the world, you land at claudia, it is old and broken -- you land at laguardia, it is old and broken and fallen apart. even the people that run it say you were right in making that statement. same thing with lax. when was the last time -- if you go to china as an example. when is the last time we built a bridge in this country other than -- i know that you are in a obama fan. the president does not know what he is doing. when was the last time that you saw a bridge, a big bridge being built. you do not see it. when was the last time you saw a big beautiful new airport? you leave places like that and you come home and it is very, very sad. i will make the decision

sometime prior to june. people say you can make it in june. you do not understand. i have been telling people for three months that i will make it in june. there are people who want to represent me. you do not understand. that is a politician. that is what gets us into trouble. i said i would make the decision some time prior to june. that is when i will do it. i will engage in a lot of politics in new hampshire. i have a lot of friends in new hampshire. i have a great relationship with new hampshire. this whole thing started in 1988 in new hampshire when i came up to make it totally unrelated speech. people do that -- i think i made a good speech, frankly,

because people viewed it as the likely running. but it started in new hampshire with that speech. >> [unintelligible] >> i think i have the temperament. i really do. i think what i would do is make this country rich again. if i decide to run -- that is a big decision for me, including the fact, frankly, that i would have to give up one of the most successful shows on television, which is a lot of money and prestige and power. it is very cool being a television star. it is very cool and i would have to give that up and a lot of other things. but if i ran and i won, i would make this country rich again. i would make this country powerful again. and i would make this country respected again. and maybe that last point is the most important. the united states would be

respected again. thank you all very much. i will take a tour. >> the circus is in town, the media circus. the real estate mogul landed by helicopter, just before 9:30 a.m. the tone of his visit changed in just before he touchdown with the surprise announcement from the white house. >> the donald trump whirlwind visit to new hampshire ended 10 minutes ago.

he a quick way to the cameras and exited new hampshire as dramatically as he entered it. there are some developments involving donald trump out of washington, d.c. he has become the mouthpiece of the movement raising questions about president obama being born in this country. today, the white house adviser -- surprised everyone by releasing his long form certificate. the short version is the official version in hawaii. this has details, including the hospital where he was born. it does not say anything controversial or contradict anything that we already knew. >> today, i am very proud of myself because i have accomplished something that

nobody else has been able to accomplish. >> we will not able to solve our problems if we get distracted by side shows and carnival barkers. >> we will see if that is the end of the issue. donald trump made several visits along the seacoast today. just about everywhere he went, there were plenty of crowds there to greet him. >> it is definitely something different to follow donald trump around for the day. people like to be around him. he likes to be around the camera. a unique intersection of celebrity and politics in downtown portsmouth on wednesday afternoon as business mogul and possible presidential candidate donald trump made his presence known in the state. >> controversial, a charismatic, and always different. there are so many boring people in this world. he is not boring progress he drew big crowds and lots of attention, throwing a steady stream of debt at president obama. >> this country is in trouble. >> some wonder if trump is a

serious candidate. >> he loves the attention he's getting. i do not know. >> he certainly looked the part, speaking to employees, saying, "i am a worker." camera could we ask him if he would -- news 9's camera. some say, after listening to jump, they will give him another look to see if he is presidential material. >> we need things stirred up and not worry about what people think in the press. >> but it remains unclear how this excitement can translate into votes. as one person witnessing the spectacle said, "this is not a campaign. this is a parade." we talked with a number of veteran political tacticians

today. they are not impressed with the chances, but by the amount of buzz and the size of the crowds that he generated today. today sound that taught -- today felt at times like a couple of days before the primary. >> thank you very much. obviously, he took a lot of rapid-fire questions from reporters. we were lucky enough to have a one-on-one interview with him. he talked about china, libya, and along those lines. what i took from this interview was that it is clear that donald trump is no longer just thinking that he is running for president. do you know in your mind whether you are running for president? >> i know in my mind, yes. >> you have already decided? >> i know what i will do. i am giving up a lot if i run. if i run, i give up a lot. i have a great business, a

powerful business, a rich business. >> the buzz is certainly growing very loud. but some think this is simply a big publicity stunt. why should new hampshire voters take you seriously as a candidate? >> i said that i will announce, one way or the other, some time prior to june. i have been around and i have been a known commodity for a long time. i have been very successful. if i run, if i decide to run, which i will announce sometime prior to june, they know that i know what i am doing. and i would be fighting for this country like nobody ever fought before. and i think that is why i am at the head of the polls. but polls are one thing, but, eventually, you have to connect on a personal level. people know donald trump from the airplanes and the towers in new york city and the casinos. how can you relate to the

working family here in new hampshire? do you need to? >> i do not know if i need to. but i will do everything i can to do it. the people of new hampshire are very smart. they're hard-working people. they're great people. and a couple plants. it is amazing. they are just great people. i do not know that i have to go down and sit down and have breakfast with two people and have lunch with two more people. because the people of new hampshire are smart. >> you heard him say it. donald trump has made up his mind. he will let us know what that decision is in a few weeks. let's look at some analysis on this. you were in the room during the interview. what is your interpretation? will he run for president? >> first, anyone who talked with him in private, not just in this interview, every single person said they believed he was running for president. second, all my gosh, donald trump may be running for president.

>> he said he has made up his mind. he will be back here. >> that is right. >> we also heard him say that -- >> in the interview, he said that new hampshire voters are too smart for him to just have breakfast with two people and to people for lunch. that is something we quite experience here in new hampshire. >> there you have it. donald trump just wrapped up his visit in new hampshire. we will send it back to you. >> today, a top military officer talked about u.s. strategy for >> tomorrow morning, admiral mullen will discuss military leadership and give an update on the wars in iraq and afghanistan.

he will address the executive government media group. that is at 7:15 eastern on c- span2. later, former senator. santorum will discuss foreign policy. live coverage begins at 1:30 eastern, also on c-span2. >> if they send me the bill in its present form, i will sign it. any questions? >> almost every year, the president and journalists meet at the white house correspondents' dinner to make fun of themselves at their own expense. president obama will head their again watched live, search, and share, on line at the c-span video library.

at every program since 1987. watch what you want, when you want. >> your gone to meet the grand prize winner of the studentcam competition. here is his documentary. >> we cannot continue down this road. >> the senate is an institution built on a compromise. >> the nature of a democracy rests on the art of compromise. this is exactly >> is what our founding fathers did, they compromised. >> we need a wake-up call. >> september 19, 2010. on this day my family and i departed on a trip to washington, d.c. on this trip i hope to learn more about the history of our nation and our nation's capital.

today washington, d.c., is the center of one of the largest metropolitan areas in the country, housing all three bridges of government. they are also home to 174 foreign embassies as well as the nation's monuments and museums. apart from politics, they also have a strong local economy, housing four fortune 500 companies. on november 22, 2010 i interviewed kenneth born. for more information on the history of the capital city. >> can you imagine that the united states congress met in the capitol building of a state? >> this all changed in june of 1973. the soldiers demonstration was

aimed at the state and knocked at congress. congress. at >> paul alexander hamilton was the founding father and wartime hero. >> alexander hamilton believed that the state of pennsylvania was the federal debt. >> hamilton said you have to call an emergency session of congress and get them into the pennsylvania state house before the soldiers get their or we will lose all kinds of jurisdiction in power. >> the emergency session was called and the congressman entered the building. >> they could argue the demonstration was against congress in the federal government's dignitaries had been insolvent. >> they agreed it pennsylvania

did not call up the state militia, -- they agreed it pennsylvania did not collect state militia, congress would leave. he said i am not going to call up the pennsylvania militia. do you think the men of pennsylvania will take up arms against the very army that won us independence? >> congress was forced to convene in new jersey. it was very controversial. . some wanted it in new york. others wanted it in philadelphia. >> figuring it would not be able to survive without a compromise. -- the union would not be able to survive without a compromise. the location was not the only

decision that had to be made. a committee was created to see how large the city should be and how much jurisdiction congress needed over it. like alexander hamilton, who did not want what happened in philadelphia to ever happen again. >> this dates laughed at the committee report that offered exclusive jurisdiction. -- the states left at the committee report that offered exclusive jurisdiction. in a speech to the general assembly, tom davis spoke about what happened next. >> the political parties could not come to an agreement. imagine that. with the jefferson and his republicans preparing to take control of the presidency in

congress, a pervasive action in congress propelled them into action. >> there is no evidence the founding fathers who had just put their lives on the line to forge a representative government and decided to only way to represent that was to die representation to fellow citizens. -- was to deny representation to fellow citizens. >> we live in the exact same position as the american colonists lived. here we have the famous taxation without representation. >> despite these issues, washington, d.c., has become a ofgle u symbol of the strength

the federal government. >> the national archives hold some of the nation's most important articles. william randolph spoke about the virginia plan. >> under the virginia plan both houses of congress would be a portion of population. >> the smaller states felt threatened by this plan. william paterson countered with the new jersey plan. >> on july 1, the convention split 5-5. the delegates appointed a special committee to solve the dispute. >> a compromise that gave state

equality in the senate. >> the successful compromise would be known as the great compromise. >> it is one of the more momentous events in our nation's history. >> today we have a political climate equally as challenging as that of the founding fathers with many opposing viewpoints, but we can all agree -- ->> it is imperative that work together to find a compromise. >> legislation is the art of compromise. >> compromise is not always the best solution. imagine what would have happened if abraham lincoln had compromised the south instead of the civil war.

we oftentimes creates unforeseen consequences. compromise is needed in legislature, and oftentimes it will create the best solutions. perhaps it is time for another great compromise. host: over the past two days we have introduced you to this year's top prize winners in this cam competitions. t congratulations. you have one grand prize. you and your family have driven to washington, d.c., and now you are on television. what you think about this? guest: it is pretty awesome. host: i saw that you have your camera here with you today. guest: i do have it with me. this is the one i for the documentary.

host: how did you come about the idea of coming up for your documentary? my family had beenbe planning to go to washington, d.c., even before the topic was announced. when i went on line and saw that it was the topic, i thought it would be perfect to get great footage or whatever else i needed for the documentary. it was after going to washington i decided to look into more on what i could use the history of washington, d.c. host: why is that? what did you learn that sparked your interest? guest: about washington, d.c., this city? i learned a there are a lot of different circumstances that helped create the city. first of all, when congress was in philadelphia there was a

mutiny and they were forced to leave philadelphia and find a new capital. i found that the location was not something i never really thought about how they decided the location. i learned it was created by a compromise between the north and the south. i learned a lot about how the sea was created. -- how d.c. was created. i was really surprised to see how little has changed in the political climate from the days of the founding fathers all the way to today. there was a lot of political maneuvering with once i tried to pass things as quickly as they could without the other side. there was a lot of using certain situations to their advantage. it was very interesting to see how little has changed in politics since then. host: do you like ti