. i opened it up and there was an ipad. those kind of jobs -- they talk about creating hundreds of thousands of jobs in china and moving up the value-added scale. the $30 million of a growing population, i will get to that. we do have a growing population and we're still creating -- the big crisis down the road is in east asia and europe, the rapidly aging population. no new work force for new source of entrepreneur ship it is fundamentally young people drive that. it is also a challenge that we have to create jobs.

if you see someone say that this is working in this european country, remember, we have a different demographic that we have to accommodate. i spent a lot of my time on demographics. we are the only large growing population. that should be a plus if we create jobs for that population. and we have tremendous energy, land, and water resources for water resources are four times more per capita than in europe. we do have a lot of great resources. as john has mentioned and others have brought up, we have enormous resources on the energy front that we are not using. i want to talk about immigration. my long-term vision for the

united states is becoming aracial. with the only country where it taken all cooperate and create a new civilization. the basic numbers -- when president kennedy was elected, we had 200 million people. we will have 400 million unless the recession goes on for another 20 years. then people will go out of the baby-making business, as enjoyable as they can be. i think that we are on track to see some very significant growth. that means that we will have an expanding labor force. one of the things i am working on is tracing labor force growth with economic growth. in europe, you see some of the first signs of weakness with the southern european countries. apparently the pope does not have the emphasis he used have

in italy and spain about having children. a 25% reduction in their work force after 2000. japan, 44%. this is unprecedented. you have to go back to the states of the black plague to see anything remotely like this. china has this problem of 30 million more boys than girls at mary jane -- at marriageable age. it is probably not a happy picture. do we have great opportunities in the world? i think that we do, in part, because as the world gets wealthier, we begin to become a great provider of all sorts of services. i think we tend to look down on agriculture and think it is something in the past. it may be our single greatest advantage over time.

as people become wealthier, they start to want better quality products. weather is north american bison or wines from california, there is an enormous pent-up demand. it is clear to me that china will not be able to feed its population at the level they want to be fed over time. china does not have the water, it does not have that terrible land. united states is in a fantastic position -- it does not have the arable land. the united states is in a fantastic position for that. natural gas will be a game changer for the united states because it can move our economy along. it will be very good for the industrial sector. it would also reduce the dependence on foreign oil. it is also much cleaner.

renewables are a good thing to invest in over time, but in the short and medium run, i think natural gas is the big play. in terms of manufacturing, u.s. output is not that bad. what has happened is that the u.s. has remarkably held onto a lot of its share. it is not like we are vastly declining as a country. but there have been big drops in europe and particularly in japan over time. that probably will accelerate quite a bit over the next few years. we're not in such terrible shape. and my greatest hope is that we have changed as a country. america is an exceptional country, they say, and that is associated with some anglo world view. what makes this an exceptional country is that we are changing. in my youngest daughter's

generation, is about 40% non- white. we have made that amazing transition with considerably less attention than you see in european countries where they have much lower numbers. in asia, such a thing cannot even be contemplated. you see where the u.s. population is going. my own problem with those projection is that think it will be more mixed. i think united states will have a much higher a mixed-raced population. when you get the kids together, stuff happens. we would come increasing this multi-racial society. does we will become this increasingly multi-racial society. you can see the growth in the minority share of our new entrepreneurs.

interesting on the age, the young are going into this, but also of the aging boomers starting companies. the last hour look at are the immigrants, the one group really consistently increasing even through the recession. before states start thinking about immigrants as a problem, you may realize that immigrants may be your salvation. anyone spending time in california knows that one of the things that keeps us going is the fact that there are immigrants starting businesses because they want to be in california. most of the sensible other people might have left. immigration may be a positive. the destiny of america is the race of races. i think we are in the early stages of that and there are reasons to be hopeful.

i will leave you with a few basic the spirit we have an enormous opportunity with our industries, agriculture, manufacturing and also in energy. people are going to be looking to disperse over time, because they're looking for new opportunities, looking for places where they are trying to develop. north dakota has just changed amazingly over the last figures. it is not like the movie "fargo ." and we will have to look get some key components demographically your immigrants, millennial, the born after 1983, boomers, seeing them as kurds that could force economic changes. and then what do each of this generation's need so that they can go forward. and what we have to do is understand that what makes the united states strong, and i like the argument of bottom-up.

at the end of the date is family, community, what is going on at the local level, not just the state level. that is what will drive our progress. is there were people are much more sensible than we are here in washington, d.c. they share a common background and destiny. that is an introduction. >> i am going to talk about the report. the enterprising state steady tessellated two to for the spirit one is policies that create jobs, and second of all, what kind of initiatives and best practices are states putting in place so that they are working and effective at creating jobs? i would like to a knowledge marked the end of the table.

he has been the architect of the data collection and putting this together. we take a look at five different areas. there's a lot of overlap, but basically five key entrepreneur ship, innovation, trade, workforce development, infrastructure, and then taxes and regulation. the results you see in the report -- there were some performance measures that we look at in those policy areas that i talked about. on the heat map, we give the top 10 and then the next top 15. the way that it is structured, it shows some regional variations which is very useful when you take a look at it. we take a look at the overall performance of the states and then for each of the policy areas. and in the bulk of the work is the case studies that we do for each of the states and territories, which highlight the

programs that are working and the big opportunities available in those states. pretty comprehensive. in terms of this year is analysis, there were 10 top performing states. you can see they organize closely in the middle of the country and then two states on the east coast. this year, that is largely the result of the energy economy, the booming agricultural economy. these are also states particularly in the middle of the country where taxes and regulation is very friendly. on the maryland and virginia side, the robust technology sector is experiencing this from the federal government. the top 10 states turned out this year. that is fairly similar to what it was last year as well. this year was a little bit

different than last year. in 2011, there were some game changes. 29 governors, a significant acreage this year states had to do without federal stimulus dollars. the initiatives were of their own making and investments. we also found that the fiscal situation in some of the states began to impact their credit rating and the cost of money. even though it might not have done that, many states were put on alert. to it's really began constrain investments and growth. -- budgets really began to constrain investments and growth. i imagine it will go back one more. as we begin to dig into this, a team that really emerge for us. governors and their legislatures were faced with some stark realities. we summarized by saying hard

choices now, hard work ahead. on the hard choices side, that came down to bring spending under control and in prioritizing their investment for business creation and expansion. on hard work ahead side, the governors and legislatures and the citizens start to begin to think about how to modernize their government, change the way we're doing things now, and then create the conditions for 21st industry -- 21st century industries and jobs. that was at the time that we did the study. let's start with the modernizing government side. a few key areas here. on the government redesign efforts, curbing spending, taxation and tax policies, and in cleaning up the durt. that acronym comes from a colleague of mine in california

who summarized all this. we think that encapsulates what is going on there. let's start with some government redesign efforts. i am not going to talk specifics, it just generalities. you can find specifics in the study. we discovered a lot of consolidation and elimination of agencies, boards, and commissions. this started in 2010 as we were doing a study. it really picked up speed. we also find it within the states and among the states, there is a regionalization effort going on to decentralize decision-making and to do borders -- and do this across borders. we found a lot of streamlining and modernizing of the bureaucratic processes. and under the public/private partners certification --

partnership, occurring in many different sectors. under the curbing spending side, we found that states with the most significant fiscal problems are laying off workers. they are imposing a hiring freezes and reducing spending for education, health care, and a number of different social services. in some states, aid to local governments has been cut. and then there have been cuts in the larger contributions to pensions and insurance for many employees. on the taxation and tax policy side, in order to make up the lost tax revenues, a lot of states have eliminated tax exemptions, broadening their tax base, taxing new things, and in some cases increasing rates and raising fees. recently appeared discovered that a lot of states are rolling back tax credits that they used to incentivize certain activities. also in tax and taxation

policy, enacting a increases and on the major taxes. they produce business taxes or expanded existing credits to encourage investment and growth in targeted industries. we heard some of that from the governors here today. in terms of cleaning up durt, they are fast-track approach is is to make it easy to for businesses to do the things that they need to do. a commission identified rules and statutes that are not business-friendly. in some states are implementing the regulatory and job impact statements for any pending -- anything that comes in, what impact it would have on job creation. they are taking a close look at that. on the posturing opportunities

side, we're looking at how states are investing in creating new initiatives. we looked at four key areas, investments and public universities and colleges, starting and expanding businesses, public/private partnerships and privatization initiatives, and then workforce training and development. the state's invest huge amounts of money in higher education, public universities and colleges. first of all, they create the talent pool for the future. a lot of the states are foster collaboration between business, government, and higher education sectors to do new technologies in unknown -- in a number of different areas. and in some of the states, they are starting to do performance- based learning for universities and colleges as well.

starting and expanding businesses, a key area for all of the states. high-growth start-ups are a key area. they create most of the jobs in the country toward a lot of the states are targeting those kinds of companies. we've also seen the establishment and expansion of seed and grow up-date investment. some states are doing state- backed venture capital funds as well. on the second leg of this, there are several states doing these economic programs which are targeted companies in their states that have great growth potential. they focus on those. we've also seen on the experts i've, programs to help companies expand their global markets, using very customized plans for the specific companies to actually to exporting propose a

been really successful programs throughout the country. to assess the vastly expand exporting. in number of these not only in terms of delivering economic development services but also a number of different social services and other programs that the states do. and then we also see some investment opportunities on the private side to invest and government-owned facilities, that focus on research. and finally on the work force, training, and development fine, more successful programs directly involved business and their design and implementation. they're working very well associated with what is happening at the local level with local companies.

so just to wrap it up, it has been a very challenging environment, the current fiscal environment third was it a budget shortfalls that tom mentioned earlier, and we also see that the retiree benefits create an additional $1.26 trillion shortfall. growth is the key and states can either cut or tax their way into prosperity. -- neither cut or tax their way into prosperity. in the broad-based economic growth, infrastructure, basic industries, and business start- ups and others are important, and the number one ingredient is business-friendly environment. and finally, there is a growing

recognition among the states that simply to proclaim that you have a business-friendly environment is not enough anymore. it is not cut it. a lot of the states are taking a very hard look at how to create a more business-friendly environment. when it comes to business, it must be backed up by actions. thank you very much. [applause] >> thank you. now comes our roundtable part of the program. let me remind you that has to speak, please do not forget to turn your microphone on and off, so that the folks in tv land can see you and hear you. a few question for the governors who did not have an opportunity to visit with us. one governor needs to leave as soon, so i will begin with you. from the conversations that you have with business owners in iowa, what do you hear most

often? is that health care, is a credits, is it taxes? then take a second and talk about what kinds of things you're doing in iowa to spur this kind of business-friendly, job-friendly state environment? >> the biggest concern i've heard from business has to do with the regulatory and tax burdens to make it difficult to start a business or to expand and grow in ottawa. -- iowa. we are blessed because we are an agricultural state. when you look at the areas of agriculture, manufacturing, and energy, we see opportunities there. one of the first things i did was to require a jobs an impact statement on all new regulation. we will do that similar to what government donald did when he was the attorney general. we will review all our rules and

regulations. we will require them to do a cost-benefit analysis. on all government regulation. our commercial property tax is a way out of whack as compared to the other class is a property. i have a commitment to get it competitive. my recommendation was over five years. it looks like the legislature is not done with its work. but this is something that has been talked about for over 30 years. we want to reduce it from 100% to 60% over a period of five to eight years, something like that. hopefully we will get that done. i think that is critically important to our competitive situation. we will also have an education summit and work with private sector businesses to focus on student achievement and how we can do a better job of reporting

that and how to transform our education system. we also inherited a big financial mess where the legislature had for many years used one time money for ongoing expenses including the federal stimulus dollars. that is all gone. they used up the senior living trust fund, and other onetime forces there now we have an honest budget that spends less than we take in each year. i also submitted on at -- insisted on a two-year budget, not a single year budget. we're still fighting that out, but i'm very optimistic we're going to see a sustainable budget which puts us in a situation of spending less than we take in each year and less than it was last year. but also focusing on those things that are really important. we also have a group that is looking at our infrastructure needs, and we do have a fund for

infrastructure. but we also need to look at transportation infrastructure, and this is something that a lot of states are looking at now. we know that the revenue from the gas tax is going down of the federal and state level. we need to come up with a new way to make sure that the users of the transportation system are the ones that are paying to upgrade and improve it for the future. i have a whole task force of citizens, some people with good background and expertise on then, reviewing that. i hope that we can put together a model that can be copied by other states in that area. >> governor mark california, what are you hearing in what you doing? -- gov. markell, what are you hearing and what are you doing? >> i've been governor now for

2.5 years. every week, i go out and make my customer calls. it is literally sitting down visiting businesses of all sizes, one or two people thought to the largest. we go in and we ask one question. we have no agenda other than one question -- what can we do to facilitate your success? in a literally hundreds of the one-on-one conversations i've had of the last 2.5 years, the number of people of talk to me about taxes, i could count on less than one hand. for the tv viewers out there, maybe they recognize they are getting a great value in delaware already. but what they really talk about, that one is to continue to focus on improving our schools, which is why we came in first place in a race to the

top, it was an important signal to all of them. they want us to invest in our transportation infrastructure because we will not have a strong economy, we have to create transportation infrastructure. very focused on work force, so continued job training. they do want is whenever we can to reduce the time it takes to issue permits. -- they do want us whenever we can to reduce the time it takes to issue permits. we did get our department of transportation and department of natural resources together. they worked hard to read to use the time it would take to issue permits and make it more predictable. but my view is that we can have all the right policies in the world, the right laws, regulations, but so much of this is culture.

my job is to make sure that everyone in my administration, or working with all levels of government, that we have a better understanding of the industries in our states and that we're more committed to the success of the businesses and our states than any other state could possibly be. that is why i have to wake up every day and do. some of the things they talk to me about a surprising. they want to protect our arts community. think about the kind of industries all of us are trying to attract these days. we're so far past the idea of having commodity industries. dupont is not a commodity chemical company. they are a science company. credit-card companies are not commodities. the use sophisticated marketing and technology to differentiate themselves from their competitors. when you think about the only way that they can succeed, it is by having the best talent for the only way they will have the best talent is if we are a place

where people want to live. having nice outdoor spaces for families to enjoy on the weekend. it means having parts outlets and the like. there is quality of life issues. i hear a lot more about those and about work-force training. about linkages between institutions of higher the less we were pleased to announce that a company from silicon valley, the make fuel cells, their customers include the likes of walmart and federal express and google and ebay and bank of america. they aren't going to build their first factory outside of california. they chose delaware. that just delaware in part because we were absolutely determined to be incredibly responsive and also because they have a partnership with the university of delaware. a couple of years ago, we

launched our -- we lost two car plants and refineries. those employers represented the best opportunities for decades that high school graduates in delaware had to enter the middle class. we now have a positive story for all three very the general motors plant has been purchased by another who will make a plug in hybrid car there. the refinery will be open within weekthe chrysler plant is being demolished as we speak. it is being demolished as we speak. the university of delaware that bought it to build a new campus. weeks but -- we expect blue energy to break ground, employing 900 people. up to 1500 people. the imagery of that old plant

being replaced within months by new factory of the future, fuel cells being used by some of the most important companies in our country, manufacturing right here at home in this country. that is very powerful. that partnership with the university of delaware is important. a long answer to your question. focus on those issues and be more responsive than any business could possibly expect not just from the government but from another business. when and automotive company bought the gm plant, they had choices where to put their factor. they were required to go to a closed u.s. car plant. we were able to get the key people to gather in delaware faster than the he can take his family out to be dinner. that is what businesses want.

they're not making money when they're waiting in line filling out forms. my standard for my administration is to be responsive. we challenge people to prove us wrong. when we are wrong, when we do not meet that standard, it means we have to get better. >> senate -- governor scott, what you doing in hearing? >> it is consistent with governor mcdonnell. taxes, regulation, and litigation. i walked in with a $3.7 million budget deficit. we have a conservative budget. it is half of what new york. we now have a budget of $1.1 billion surplus. we started causing -- cutting business tax. almost half the taxpayers will not pay next year.

we reduce property taxes. we started reviewing all the regulation in the state. we eliminated 1100 and regulations. we're going through piece by piece. we have to look at the economic impact of every regulation. with litigation, we passed reform. we have gone piece by piece and looked at our economy and where our advantages are. we had better weather than most places. we have great beaches. we have the panama canal expansion. we have some inherent advantages. already we dropped an employment every month since i came into office. last month our job creation was more than the country. what i'm hearing from business people like governor macdonell, i am calling people all over the

world. i am calling people all over the world. they have interest. they are booking at our taxes, regulation, litigation environment. we're trying to put better people to run our agencies. the individual at the environmental protection has a win-win attitude. we regulate environmental, water management, local reviews of every project. we started to eliminate some of the state things we had to do. most of the time it was a delight. -- dealy. lay. we had three companies come from canada either expanding in florida or moving from

california. especially to florida. what i think about my job, the states a competing with, texas and virginia. they have done the same things i'm trying to do. i want to make sure we are a job creator. >> governor scott. >> governor scott walker. >> onetime i was rick scott walker. sunday is i'm confused with paul ryan as well. under question of uncertainty, we are hearing under certainty. for the 18 months i spent interviewing for the job of the state government, what i heard when i did lunches with job

cratered was uncertainty. -- job creators was uncertainty. i heard from people who were waiting. they were in a position where they could add more jobs but they were uncertain about the future. 44 states have deficits. i understand why. my neighbor in illinois, we know why they waited. if you look at illinois, they tried to tackle the budget by raising taxes. 46% on business. they still have and a billion dollar budget deficit in a state that has the worst a bond rating in the country. i understand why they have uncertainty between that and the health care mandate. we tried to do was, the very first day i was elected, i put

up a sign that wisconsin is open for business. you cannot just have symbolism. you have to have some substance. for the next two months, we went around the state talking to job creators. we did not wait a year or even a month. january 3, the first day, i call the legislature into special section -- session on the jobs. we repealed the state tax to make health care more affordable. we created a job tax credit to lower the tax burden on job creators and pushed through major reform. we had one of the most expansive policies in the country. we knew that was stifling job creation. that hurt -- dirt you talked about is right.

infrastructuren investment when it comes to power, energy, and telecommunications, those were things we tackled off the bat. the other part was tackling our fiscal situation. we heard time and time again that people were wondering what is going to happen next. we got more attention than most in terms of some of our budget reforms. i remember sitting in our capital office where there was about 50,000 people outside of the capital talking about our reforms. at the time i was doing an interview with reuters. he said investor do not like some instability. how can you make a case to be investing? i said you have the question wrong. it is the opposite. this is a little bit of

political instability. in the end, we will provide long-term sustainability for the state and local governments. this is exactly the place you want to invest in. the two go hand in hand. you have to have a government that is stable and capable of handling things. this budget it has not only balanced, we will end up with a surplus for the first time in more than a decade. that is powerful. >> thank you. let's open the floor to some of the business folks. >> if i could just add, we also had the biggest deficit ever. $800 million shortfall. we also had a threat to $20

million addition that we are able to invest in some critical expenses like infrastructure. i do think there different ways of going about it. it is a healthy conversation. we had the same issue with respect to pension and health care. we took a different approach. i invited the unions to the table in december. i showed them a power point and laid out the magnitude of the challenge we face. i told them we were not sustainable. i showed them why. the significant growth, the high numbers. it was squeezing out anything we wanted to do to reduce taxes. i said i was not interested in debating the problem to be resolved. what i would like to know is

whether you would like to have a seat at the table. i set a target for how much we had to say. i was not interested in a debate. they said they wanted a seat at the table. they came with their actuaries. we work together for a couple months. at the end of that, i signed a bill where we exceeded my target by 30%. i bring it out because i think, this gets to the issue of the interaction with the business community. as i went around and talk to folks in our chambers, the state and local chambers, i was confident that if we went around the table and asked in the business people what the most important asset is to their business, i would think everyone would say the most important asset are the people report to work every day. i cannot imagine there would be many businesses would get away

with some of the volatility in terms of how some of these changes went down. i am an unusual person to be leading this conversation. when i first came into office i had to propose a pay cut to our state employees. massive protests several times. in the end, their pay was cut. they did not get everything they wanted. there are different ways of approaching these problems. particularly with business folks around the table, i would be interested in their feedback about reports and conversation generally but i think it is worthwhile to talk about different ways of getting it done. >> in the reported talks about every state having its own dna. i'm sure that is true of every business. let's hear from them. we have had some good opening comments. they hear you and are listening.

bill, leadoff. >> let me comment on governor walker's attack on illinois as an illinois business person. i think you understate it. i did get your letter. [laughter] >> i sent the letter, too. [laughter] >> our folks hiring out there? what are you seeing in your stay climate -- state climate? david. >> i am honored to be here and have the opportunity do speak with these distinguished people that have so much to do with the environment in which are businesses operate. on a state level, you do not always choose the state where your businesses. i know everybody has their p.r.

departments out. i would like to know about those bumper stickers. the things we do is manufacture promotional products. those are my livelihood. the livelihood for a few hundred people. the thing that is remarkable as i grew up in illinois. i ended up in iowa by chance. i decided i wanted to be in business there. people would give you a chance. i did not have to have $100 million. i did not have to have a state development person call me about coming to iowa. i was already there. i had $200 and a little dream. it grew and grew and now 28 years later we are a sizable company in our industry which is an industry that is smaller than

it was three years ago because of "farmageddon." and more importantly, maybe do not have an opportunity because we had to face up to the entire area. when you look it iowa, the climate was probably the same in every state. we never really talked about health costs, insurance costs. we never talked about regulatory control. we never talked about the burdens. i was profitable from day one. i did not take a paycheck. mike mccall said it was not a realistic -- my uncle said it was not realistic. when you make $18,000 a year and risk everything, it is a

different story than looking and saying what we going to do for small businesses? heardmall business, i've dirt as an acronym today. i would like to propose something like the word hurt. health-care reform incentives regular toric control of source. certainly taxes. all of those things impact a small business. small business does not have the right to say much. i have said more than most in the last 20 years. i think it is important to sit down and have a conversation about fostering the industrial revolution on a secondary tear. we are manufacturing. i went into it to get things done. i started buying things that were going out of business. we reinvested. those things have grown. we bought a plastics plant.

it was out of business. mostly money, a lack of direction, spending a lot of time running from place to place trying to save themselves from the bay. the state of iowa has been helpful in getting that under control. we say 20 family in jobs. -- saved 20 family jobs. 30 years ago i went to china. i wanted to climb the great wall. i came back and said, that country has something we do not have. they have drive and spirit. they have a patriotism that is unequaled. when they got the olympics, they were feeling such a joy inside, they would celebrate.

they celebrate the united states because we are their teachers. they have a respectable nature. when they meet someone who is successful, that is like meeting the president. because they're going to take that net debt and invest it. they're going to build something. every time i go back, twice a year, i marvel. first was shanghai. nothing but a river and guys eating red beans and rice on a stick. that is not ice cream to me. they said that is their ice cream. now i look over there in uc the tab -- you see the tower of gold. it looks nicer than new york. everything is gonew. we only went 15 miles but it went 300 miles per hour.

i was amazed. i'm concerned about high-speed rail. from iowang to build to chicago. it only takes five hours. there are no stoplights. you do not need hundreds of millions of dollars to build that train. you need a few grants and loans to save a lot of industry. i am bus that we have always been profitable. we still are. we have not given raises. we do not match 401ks. we look at the expense. $500 for a family. the people freaked out. the want that as income. there are 27 small businesses in america. those are one-person companies. some will grow.

most will not. the other 6 million are the ones that are growing. most are now entering their maturation stage. >> thank you, david. >> i know the chamber is made up of larger companies but i think it must dates 70% of jobs are small businesses. when you look back 28 years ago, the things that hurt or were impediments to getting started, what can government do differently or better at the state level? what were your problems getting started? >> just getting started was a big hurdle. just saying i'm going to wake up tomorrow into mile gig. you said i'm going to open a

business. i opened in an optical shop. the guy gave me rent for $2 a month. i started banging on doors. i met people personally begging for a dollar here and there to buy something. we were selling market research and advertising. there was no money in that periot. in the beginning, there were no regulatory problems. the government did not ask me for certificates of safety and materials used. it was simpler. the biggest problem was getting a dollar from a bank. when i said i needed $5,000 to put carpet down, i had to call my father. he wanted a payback within three weeks. [laughter] >> let's talk about others experience. >> i started out my first business at 21.

i bought a doughnut shop for seven of $500. -- $7,500. regulation is so hard to do anything to get started. even in our state, we have 11,000 regulations. we regulate hair weavers. not an issue for me. [laughter] we make it so difficult for anyone to grow a business. we all know it is in the small business. we have to look at every regulation and get rid of them and say if we are competing, in china, vietnam, india, if we make it more difficult, we cannot succeed. i know we are competing with each other for jobs. we are competing with the rest of the world.

if our taxes are higher, mitigation, we will not succeed. >> we also do not want the pollution they have in china. this whole conversation about regulation is important but it is a conversation much better had at a level of specificity. it is wanting to tell me whether to many regulations. it is another to say here the ones having a negative impact. we are competing with other countries but i also believe that we continue to be, having the kind of pollution, i was in china recently. the idea of having that kind of pollution here, that is not any one of us would want to raise our kids with. >> i want to expand on that. i think you are right. but what i hear from employers, it is not that they want to see

regulation go away. public safety, public health. tourism is no. 3. we are dependent on clean air and water. the biggest challenge i hear is that they get one answer and a different answer somewhere else. i think you are onto something. this is bipartisan. it is more about the efficiency in getting government to operate better. how quickly can you respond? i knew we're in the right direction when i had and employers want to talk to me about dnr. he said it is great. they're responding. they did not repeal anything or make it easier to police. it was consistent and timely. the got a response out front. the biggest frustration i hear,

the cost of -- it is inconsistent. they cannot tell their client it will be six weeks or six months. it should be the same every time. >> governor hickenlooper, i know you worked on that all lot. >> we were one of the three cities where boeing was moving. i think dallas offered 60 million. we offered 40 million. chicago offered 75 million. they went to chicago. i met the guy who chaired the panel from the executive at boeing. we are a $57 billion company. those incentives are to show you care. when we can to chicago, the mayor had a 200 people from

foundations, corporations, everyone had four executives they were going to talk to explain to them that they're going to help boeing the most successful company on earth. when they made the decision, i think the current mayor is in the same image of mayor daley. they had six months to renovate four floors. they had people at those table to review the plans immediately. at theve the inspectors table to make sure boeing got there as fast as possible. once they moved in, the mayor and governor sat down and had their executives get their

driver's license in that building. it is the level of customer service. cutting time off. the -- who we are all competing with the world. it demands a level of accountability and transparency. >> i wanted to talk about partnering. governor markell knows that one of the most profitable division is pioneer hybrid. pioneer is centered in china with the hybrid seed that is doing some phenomenal things. they're in the third level of this. we in the midwest have benefited from this. we have seen with the chinese demand for soybeans and corn is doing. building that relationship in that partnership has made a tremendous difference. pioneer is making a huge investment in research and development in iowa as a result of this.

our farmers who are raising the corn have a great market in international demand. it is competition but it is also partnering. this is our opportunity to partner with the other parts of the world. that is why the free trade agreements are so important to us. so we can build those relationships and help our companies compete in this world economy. >> thank you. any business folks want to weigh in on regulation? ron. >> i agree. one of the biggest burdens we have is regulation. i hear a lot about taxes. people ask me what is more important, taxes? really i think that regulation is probably the most burdensome thing we have.

court reform is also needed. our cost of compliance at ashley is over $100 million a year. we have so many rules of regulations, it is ridiculous. when you talk about expansion, the uncertainty of where the government is going, it is huge. what new rules and regulations are we going to get? if you manufacture offshore, you do not have to deal with much of the regulations that we do. also, people do not understand a positive balance of trade. it is not understood that when you manufacture something, you bring the money to an area. whether it be the united states, the state of wisconsin, the city that you are located in. you bring the money from outside to an area.

it is not understood what the dollar and economic impact of manufacturing is on an area, country, or community. i think a lot of education has to be done in that area. when i was 29 years old, when i established a company, i agree with david. if i had to deal with all the regulations that we haveit staro employees. i've phillips the company -- i built the company to 20,000 worldwide, and some people have gone out of business in the second or third generation simply cannot take the business over the toes and understanding

all of their rules and regulations you have to -- because understanding all of their rules and regulations you have to deal with these huge. a foreign company for the most part, especially the pacific rim, does not have to deal with this. it is very difficult, and our industry has all but left the united states, but we are continuing to exist and grow, but it is very difficult, and reform is absolutely crazy today. >> mark, will you say a word about? >> i would like to make a couple of observations. this is a session that sometimes seems to focus on the negative, and i would like to

say a few things on the optimistic point of view. i do not know of an entrepreneur who has become successful coming from a pessimistic point of view. we have to look at what does work, and i would like to start with one of the most difficult ones -- changing the federal government. for many years nasa has been seen as a major u.s. government enterprise, but that has to change. the space shuttle is doing its final launch in july, but many people know that. what most people do not know is the plan was to essentially fly u.s. astronauts on russian spacecraft. there are a number of us who wanted to change that, and we have been working to create a program where nasa instead of owning the space vehicles is essentially partnering with

industry, and my company is one of those companies -- to develop the next generation of human space transportation as a service. the government would buy the service from the u.s. industry, and we are splitting the cost of that. it becomes a public-private relationship, which has shown good success. instead of outsourcing to russia, we are looking at a new way of doing it. it is not easy to do, but in terms of how we want to look of the future, the government has to look at new ways to go about obtaining the same type of results its did before. turning to the educational side, in colorado, we have had the fortune of getting good support from legislators, and we have created a center for space entrepreneurship. it is a partnership between

local and state and federal government as well as educational institutions to look at not only the stem issue. many people look of the educational side, but what do those people do once they get educated? how do they create the next level of opportunity? what they look at is how to get students interested in engineering and science and math and targeting those that allowed him who work on this while going through school, and that is terrific, but the second part is opening ways and -- opening up businesses once they get out of graduate school, and there are companies already funded by people who went through that program, and we are looking at the next generation of companies, the net result of which there may be that type of corridor like you see in silicon valley where the clusters

could form around that nucleus. the key is to look not just that education but where do those people go? we do not want them going overseas. we do not want them to go to a jurisdiction where a lot of money is being spent. i believe collaboration is a big part of the future. gov. hickenlooper mentioned a new form of competition we form a collective of 35 or so business leaders, and the purpose was to bring together people to look at targeted areas of what the state of colorado could do well, and we chose three targeted areas region renewable energy, bioscience, and aerospace. many areas want to go after

things, but the idea was to target things you could get to the state really wants to focus on and come up with tangible ideas that can be executed, things that can be done in the next 12 to 24 months. we created a series of recommendations which are meant to move the state for word -- forward. >> i know he has to go and a lot of this is going to resonate with him. >> one of the exciting things i see happening is a hold bioscience area has been growing during the -- the whole bioscience area has been growing, and theorist david grow

their own products, which we do, and -- there are states said grow their own products, which we do, and we have to have research and development tax credit and has also been helpful to some innovative companies. we have candidates who do some innovative things, and they are in several states, and we think there is great opportunity, and that is one area we really targeted, where we see there is a real opportunity for growth, and also for environmental reasons, a consumer products are going to be named from -- to be made from of biosciences days as opposed to petroleum because of problems with evolution -- with

a solution. the other thing that has open this up is the human genome and the ability to engineer pharmaceuticals to meet the needs of certain genetic characteristics, so i think that opens up all whole new opportunity for pharmaceuticals. we have accompanied ed makes a product of helps the eyes, so we are excited about half, -- about that, and that is an area that could be a real growth opportunities for the future in this country. >> thank you, governor. i am going to ask you to weigh in on this, and tom donahue. >> before the governor leaves, i would like to interject that i am listening to this discussion, and i like the acronym.

everything you are hearing is we need to figure out how to streamline its. as far as methodology, i compliment him for being one of the leaders in forming public- private partnerships to get the job done. the days of being a regulatory watchdog are going to have to be behind us if we are going to compete on a global scale. we have said we are in a global economy, but i will give you a metaphor. 30 years ago the head of the marketing department said we all need to be learning for the purpose of competing in the pending global economy. 30 years forward, i am here to tell you this is no longer of upending the economy. it is alive and well. which operates 25 facilities in the united states and around the

world. i guarantees or sing, selling -- i guarantee our decisions our global, so the only way this country is going to be able to compete is if we realize that is the stage we are on. i am happy to see that the competitive spirit is alive and well today, but i do encourage governors to do some global vision in a collaborative fashion, because that is going to have to be the leadership position with which we are successful in the future. >> great comments, and i think we are seeing that kind of attitude from the governors today. ernie, you are caught -- up. >> as an employer of over 750

i.t. professionals in delaware, one of the things we are looking at all the time is software engineers, and it is one thing -- system program is very important, but to set it up and say we are going to start producing students, i think one thing that is just as important is to really hit the underlying issues that are important in an environment where the graduate programs can be successful, so there have been three major public-private partnerships i will mention. there are others that are laying a foundation, and one isn't when gov. ned to reach is -- is whe governor markell serv office, they took a look and found

significant areas across the entire government and then moved many of those items and move them forward with executives and support along with a great cabinet he had put together, so that is a key piece, to get the savings to invest in the things that are important. two things that are important in my view arhat the system with the students and the second is if they do have a great education, they need a great place to work, so the other initiatives we look that is another public/private academic partnership called 2015 established several years ago as the governor took office and put in place a phenomenal education secretary. lowry work very closely with us, with a roundtable, and

played a key role in delaware and winning the race to the top, so now you get the stem, and the most critical piece to this is a very close partnership between businesses working with the education sector and all the apartments, and i would like to throw an extra letter in. you have heard this before. the governor alluded to it earlier that the arts is a critical piece. i am in the technology sector. the arts piece plays an incredibly important role in design and technology, so one thing we are looking at is that component and making sure that has a seat at the table, so the third phase is once the students

have a great education, we want them to stay. we do not want them to move anywhere in the world or even across the country. we want them to stay in delaware, so another innovation is really the combination, but it is very focused on angel investing, venture capital, promoting the new sector technology areas. the things the graduates are going to go to when they graduate, so these partnerships and it is laying the foundation and a place for them to go when they graduate that we have been focusing on. >> thank you. >> just a couple of reflections, having listened to the exchange.

first, the chamber, we have 300,000 direct members. 99% of them are small companies, and we represent 3 million companies, and we think about the small business thing all the charm. probably 25% of an expenditure of a large company is engaged with buying from smaller companies. there is an interdependence, and we need to keep focused on that. government likes sometimes to separate large companies from small companies, but the most interesting thing but struck me this morning is the absolute understanding of the governors of what new regulation is doing to create this uncertainty and to impede the expansion of job creation, and i would say clearly that is on one side of the corn. on the other side, and -- when

side of the coin. on the other side, we are driving explosive expansion i have not seen in 35 years, and it is something i believe people are beginning to focus on, because the continual discussion is holding up the job creation issue. just to mention one, the issues on the dodd-frank deal are going to strangle small-business possibility -- small business 's ability. one of the issues of productivity which is phenomenal who -- what we have done in this country over the last 20 years of productivity, use of technology, etc., have taken away jobs that are never coming back. why would we bring them back? we have figured out ways we do not need them, so what we need

is innovation, new businesses, expanded opportunities, and i am very concerned about the labor rules that are being discussed right now, about the questions and debates between states that do not want to have free labor circumstances verses the four -- are we going to have 24 right to work states, which could be a lot of senators. i think these could be the issue is the governor's not only have to work out at home but here in town, and we look forward to working with you. i pause about letter that basically says to the president, an -- i passed out that letter that basically says to the president, you have been talking

about the right thing with energy, but everyone else's on the opposite side, and if you think of all the jobs we create, all the taxes that would be paid, all the royalties but would be paid, and what it would do for deficits and debts are very significant, but i must confess we not only brought you here for all the things we could learn and as a way of pointing out the extraordinary things governors are doing in this country, but we need your help. we need you to push back on a regulatory system that would unintentionally -- these are not bad people, but it will smother you, and we need to work together to make this happen, because it is all coming down hill. it does not matter if you are a democrat or a republican. this issue is going to be decided in the senate and the house in a lot of ways on a bipartisan basis because they

have figured out what the voters are going to be doing. i look for your help. i am impressed by what you are doing. i thought the number and the slide on where the united states still is in manufacturing tells a different story from what the press tells, but we do not have the jobs. we need innovation and new industry, so here is my point. anything we can do to help you be successful and to help you be influential and is down, if you ask us, we will help you. >> and you can start right away. anybody want to react to that? bucks one thing you said earlier. one p a n -- >> one thing you said earlier. since the beginning of the year we have seen 25,000 years.

11th and a half thousand was manufacturing. gin the first months of the transition, and we did not spend time talking about how bad things were. we talked about what we were going to fix. we are not done yet, but we started acting on things, and the reason we had those 24,000 jobs is because we have a turnaround. a statewide chamber dozen economic survey. a year ago the executives, 10% said we are heading in the right direction. this survey said 88%. better news is the majority of them said the next months were going to add jobs. the other one was more of a national one, but it ties into our ranking of the c.e.o. survey, which is done every year. we did not talk about wisconsin because we were between 30 and

50. this year a month and a half ago, we went up to no. 24, and i told bob he is number two. he said as long as he is adding jobs and i am getting close, it is all right, but that optimism is a reflection of making changes and responding to uncertainty. that is something we did in wisconsin, because it is not a republican job or a democrat job. it is just a job. >> governor macdonell, i want all of you to know, the point about being specific, about what you are talking about, those of us of the u.s. chamber as well as the state level take the assignment and stand ready to provide specific information. >> we have talked about energy, but it is absolutely critical.

we need a comprehensive american energy use policy. we have gotten ourselves into many predicaments regarding energy. if you look down the road, it is going to be a reliable, sustained, low-cost form of energy. it is going to be a geometric increase in energy consumption. i am concerned about federal policies, that every time there is a natural disaster we write it off. you start taking offshore drilling and nuclear power off the table, you start fighting natural gas expansion because you are concerned.

natural gas is clearly a huge part of america's future. hundreds of years. we have got to do a better job collectively as governors, and you are working with several leaders to be sure we have a policy. if you look of the last couple hundred years at the fuel sources, we have gone from an woodchips to where we are now. the technology has done in in the news in fuels, but right now it is nuclear common and and and natural gas, and coal and -- it is nuclear, natural gas, and coal. we need to do it cleaner, better, more cost-effective. we can do that. the same time we met with secretary salazar on offshore wind. we have tremendous opportunities in biomass and biodiesel.

we are looking to turn tobacco and other things into biodiesel to drop the cost of gasoline, at least in the short run. i think it is going to take a tremendous effort to get regulations and laws out of d.c. what is happening in washington and its impact on coal producing states has been terrible. it has been all the regulatory process these, so we have asked for help with all of these policies, comprehensive, but we have to have some policy with traditional fuels. >> one of my biggest concerns is what they are doing with regards to boeing. one of the of vintages we have in florida is we are a right to work with -- one of the advantages we have had in

florida is we are right to work state, but if they allow companies to move to right to work states and not worry about individual's writes who are not a member of the union, it is going to have a devastating affect on those moving offshore, so there are a lot of issues the federal government is dealing with that are making it difficult for our states to do business. the action with regard to boeing is going to have a major impact. >> this morning the man from boeing was on television before me, and he made that point. i suspect the congressional leaders, and the court of public opinion is going to move in a strong way to correct this matter. can it be done in weeks or

months, or is it going to take a year? it is going to be done, and jim is building airplanes in the factory, so keep the heat on. >> are wanted to comment on the comments on energy. we are in agreement that what we all want is energy that is home grown, affordable, but i did want to comment on the over reaction. that is our drinking water. there are millions of people who are going to be drinking that water, and i am sure it can be done safely, but i do not think it is an over reaction when we say we want to be sure it is done right. with respect to japan, let's take the time to figure out what went wrong, because we all

thought that could never happen, and the same thing with the deep water drilling. natural gas -- it is incredible how much natural gas we have, apparently 110 years worth of supply, so there is a lot here, by including nonrenewable, some solar. we are really exciting -- excited about the technology, but i think there is a tension here, and when you are talking about these absolute natural disasters, let's remember how nobody had any idea how they were going to have thought well. nobody had any idea how bad the nuclear plant was going to get in japan, so i think with respect to the natural gas, we are right on the delaware river, and we think this is a great day d.o. -- great opportunity for economic

development. i think it is great to have natural gas. it is a terrific source of energy. that is drinking water. we are talking about tens of millions of people who can drink of water. it is not an over reaction to make sure we are focused on doing all of this the right way. what i mean is look what happened in the gulf of mexico. we have been trickling out there for 40 or 45 years. it is 20 -- we have been drilling out there for 40 or 45 years. what happened with this is administration is they have taken off drilling for the foreseeable future. we were said to have one of the virginia coast in 2012. we have som, and what this administration has done said it

is going to be after 2017. that is an over reaction. if we had done but i in the late 1980's, we would have been the by every nation in the space race. we innovate. and we agreed-regulate, and we do things the smarts -- we reregulate, and we do things the smart way. if we take natural gas off the table, i think we have no empirical data to say that is ok. i am talking about the political overreaction. some environmental groups have put pressure to governments to do things that do not make sense to reagan that is not going to help our country. that -- do not make sense. that is not going to help our country. >> i want to hear from some

people from the business community. >> i would like to reemphasize what governor walker said a minute ago. attitude is so critical, the attitude of the public sector to the private sector. just as ron said a few minutes ago, investing in wisconsin was a pretty tough decision, and it had a lot to do with attitude. it had to do with regulations and taxation of more than anything it had to do with attitude, but what that has done and what this report shows, a wisconsin was right there in the bottom with you. there are 32 categories in which the states are rated, and

wisconsin, michigan, illinois are dead last. that makes where i live solo performance states -- low- performance state, and we have a professional football team that is not a low-performance institution. we do not like a low-performance anything, but in order to do that, it is a major point to simply proclaim a friendly environment is no longer adequate. a story must be backed up by actions, and that has happened recently, and it happened in the change of administration and the change in the legislature and the state house and the governor's office in the state of wisconsin, and that is an attitudinal change that is going to take wisconsin of of the low-

performing category. it is all about to happen, and it is the leadership that gives them the opportunity, because it is clear to me that the future for wisconsin has now become right. i know there is anxiety of there, and i have many private sector friends who worry, but the reason the numbers shane's from 10% -- change from 10% to 88, i was one who voted with the 90% who thought the state was going in the wrong direction, and i was one of 88 this year to change my vote. it is about attitude, and it is about legislature and a courageous stance gov. scott walker has taken in wisconsin, so we are moving ahead.

>> i object to the craft commercials during good -- commercial. >> i was going to invite governor walker to talk about his success of the third annual who governors meeting. >> thanks for putting this together. you planted a seed i think we need to work on more than once a year. i wanted to make a comment to the governors who are here. i want to encourage you to understand free enterprise is not free, and we have worked of the florida chamber very closely to move to florida in the right direction, and we have looked at what you have done, and we have looked at the leadership each of you have done. i want to put a word in the please do not think you are only a working for your state. the rest of us are watching.

when you break down a barrier, the rest of us see what you are doing, so keep that up, and that leads me to the second question, which is i am sitting in my place looking at a printed report in my iphone, and i am thinking about how fast things need to go these days. we were talking about speed and entrepreneurship, and i am thinking about zero once a year summit where we get a report. it is a good report, but is talking about the past. the wondering withi partnership if there might not be away instead of showing up next year and talking about who did what, maybe we can start this afternoon talking about maybe competition between the

states is a great strategy, but we will need to communicate in some way other than a poke. i want to encourage you to keep going -- other than a book. i want to encourage you to keep going, so keep it up. i hope you will find a way to turn this into action and results by tomorrow, as opposed to letting the years go by. >> other comments? i do not want to miss the focus on this side of the table. >> in iowa what we have learned is we have a governor who understands business and the economy, and we began to look to cut and what was surprising to us was how shallow the understanding has become, so we

are going to be a excepting the challenges, broadening the message region acc -- to be accepting those challenges to meet the needs in our states to support the governor we have, and violent death of a banner behind us, and it is taking that message behind -- and i look at the vendor behind us, and it takes that message home, because i looked at wrangling, and some you think would get it in our legislature are not getting it, so we are at a excepting -- are accepting the challenge to support things we have talked about this morning, so that is our goal in our state.

>> since we are coming to the conclusion, i wanted to mention one of the things that excited me about coming to this summit is the discussion about creating jobs. creating jobs is the mantra and you hear in the campaign, and i want to get back to the industrial revolution times two. there are a lot of companies that are the backbone of this country. i did not care if it is the plastic bag co. making wrappings for cheese. it makes us more innovative and competitive. the reality of the situation is a lot of those innovative jobs do not create a lot of employment. they create employment on a global scale and new products, but if you look at the iphone, they created, but a lot of

people involved are selling the product on every kind of channel you can imagine, and that has been probably the vegas convention and you can imagine -- the biggest convention you can imagine. when you look at small business, a lot of those small businesses employ a real people, and they do manual activity that are the things displays when those companies fail, and there is no place to put those people except one of those college programs we are funding, and those are good, but it is hard to teach an old dog new trip. they do not like it. my taxi driver was a 20-year engineer. his skills are still valuable somewhere else in this country. we need to find a place to plug those people in until the next

generation in gilts. one plus one equals two, but if you do not lose one along the way, you get a for you are in the next equation instead of three. -- you get four for the next inflation and set of three. good -- equation instead of three. >> you will find this on our web site, and i am going to ask the cochairs to have the last word before we open the door to the press conference at 11:30. >> we appreciate this forum. we have learned a lot. thanks for doing this. >> thanks to everyone who has

come all over the country to put this together. in thank you for having the vision and pulling it together. i went to visit a steel plant in colorado, and they have less than half the employees they had 12 years ago. we are in a transformation every bit as intense as the industrial revolution, and having this opportunity to bring the governor's back together, i cannot wait to kick around these ideas and try to do them better. and you are planting the ideas that are going to take this forward. the governors are now

available. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> next ahead of the federal communications announces to crack down on unauthorized phone charges. and a suit against wal-mart for treatment of female employees. and we will hear from one of the plaintiffs. the former utah governor and ambassador to china will officially announce he is running for president tomorrow. he will make the announcement in new jersey and use the statue of liberty as a backdrop. president ronald reagan used that in 1980 when he was running for president. several of president obama's ambassador nominees will testify seventh foreign

relations committee. they include and patterson, who has been asked to serve in egypt. we will also hear from qatar, the united arab emirates, and kuwait. earlier, the federal communications sherman said they will be laying out new rules to prevent deceptive charges on telephone bills. they are placed on the those are the phone carrier as well as by third parties. this is half an hour. >> of very warm welcome to our audience. we are delighted to have the chairman of the federal

communications commission. this morning's discussion is about empowering consumers, and it is an important one, as families are struggling to buy groceries and even just to make ends meet. last year the border -- the statistics reported that wages fell 1.6% from last year, while consumer prices continue to rise. the cpi rose again over half a percent. although the economic recovery is slowly making its attraction, and rising wages diminish the purchasing power, making it more important to american families the they have the tools. its chairman will discuss why they are doing about cramming her superior -- about cramming. i can tell you in our family we

have very little time to spend double checking every charge and even less time to try to get a call -- a charge remedied if it does not belong there. imagine what it is like for people with fewer resources. they give consumers the information they need to make smart story foods. they will provide consumers with easy to understand tools to prevent her phone bill shocked. that is when you have a dramatic increase in payments because of mobile phones. today he is going to talk about

steps they will be taking to protect themselves on their phone bills. we are pleased to welcome the chairman, and while in many cases i thing he needs no introduction, we will give him one. he served as the former -- under the former fcc chairman. he was an executive working to invest in technology in other companies. he was a senior executive at iac. he was a member of the founding group of specializes in serving the needs of korean entrepreneurs, and he served on the advisory board.

as an adviser and during the presidential campaign, the chairman urgent and then senator obama to harvest the power of the inter not -- of internet. since his appointment in 2009, he has focused on protecting and ensuring the technology systems work for a real american families. they are helping consumers provide themselves with tools against unfair practices. they are helping americans keep their hard-working money. the chairman deserves things for efforts to make an impact, and i look forward to talking about the steps they are now taking.

tohappy father's day everyone here. i was here last october to announce the launch of a major new effort to crack down on bill shocking and. but this one mobile subscribers see their bills jumped unexpectedly by lots of money. i said that our efforts were part of our consumer empowerment agenda, which is focused on harnessing transparency to empower consumers with the information they need to make the market work. after the announcement, the commission voted to work on an

automatic alarm system which allows consumers to avoid charges. i expect we will have a practical solution in place and the not so distant future. later the commission took strong action to deter mystery fees. these can appear on the phone bill and are usually on authorized by the customer. a report verizon wireless charged 15 million customers. verizon agreed to repay the consumers more than $50 million in overcharges and to make it $25 million payment to the u.s. treasury, the largest settlement in fcc history. now we are taking important steps in efforts to crack down on cramming charges a. we have proposed higher fines

for companies but have taken millions of dollars from consumers through unauthorized fees. we are taking new steps to educate consumers, and tomorrow i will circulate a night and that will empower consumers to better protect themselves from cramming. these are important steps to protect consumers from hidden fees that can cost money, that can take time to resolve, and that can undermine confidence in communication services. the cramming party can be the phone provider or an unaffiliated third party. the improper charges can be for voicemail or long distance

service. they can also be for completely unauthorized s charges. we have seen them for yoga class those, by its products, and psychic -- yoga classes, psychic readings. these range from $1.99 to $19.99 a month. it can add up to real money when so many americans are trying to get by and struggling in this tough economy. they're often buried in 20 pages, and they are often labeled with hard to decipher descriptions. we looked out an unauthorized

long-distance charge. what appeared on the bill was usbi. these can go undetected for months or maybe more. sometimes they are never detected. according to the federal trade commission, only one in 20 victims ever notice of charges. as a result, consumers often been filled out of hundreds of dollars or more, and we must do what we can to protect consumers from these are unfair practices. anyone can be a victim of these mysterious, unauthorized charges. we estimate this problem may affect up to 20 million americans are here, people like a st. louis woman who was charged for 25 months of long

distance service she never authorized or used. when she protested, the company sent her a copy of the form she supposedly used to authorize the service. the form had a different name, a different address, a different e-mail address and different birthday. even so, the long-distance company offered to cut by only a fraction of the cost. cramming is not only illegal. intergrowths consumer trust in communications. that this -- that is unfair to consumers who are getting ripped off and unfair to most communications companies who are doing the right thing every day. the fcc will not tolerate unauthorized charges on phone bills, and we are turning up the

heat on companies the grip of -- said rip off customers. acting on our enforcement bureau recommendations, we proposed $11.7 million in fines against companies that appeared to engage in widespread cramming. we from each of these companies was charging thousands for long distance services they never used. this resulted in the apparent overcharging of about $8 million. good this community action was bipartisan. it was unanimous. we want to send a clear message. if you charge on unauthorized fees, you will be discovered and punished. we want to say that you will be

vigilant in protecting yourself three only one out of 20 consumers notice. this tells us it is wrong. consumers should review their bills every month, and we do not have the time, but it is worth the money. review your bills, and if you see discrepancies, report back to your phone company. it can be hard to spot phony charges on your bill. that is why we are laying out a series of questions but will help you spot improper charges on your bill, questions like you are recognize the name of every company listed on?

are there and now charges i do not recognize. are the rates consistent with what i signed up for? we encourage consumers to think there is something wrong on their bill to contact the companies that are killing them or the third parties and request adjustments to their bills. if you need help now resolving charges, contact us. consumer complaints served as the foundation for last week across enforcement actions. they play an important role in protecting consumers, as do a van slyke is said to get the word out that if you rip-off and -- as you a vengeance -- as do

events like this. i am also working to explore new ways to empower consumers and protect against crown main three j -- against cramming. we are united in thinking that companies of " unauthorized charges on bills must be punished, and the steps we will propose will increase transparency and smart disclosure. i believe that technology- driven transparency, smart transparency is critical to empowering consumers to making informed decisions. i am pleased other parties are

looking into this issue, including the federal trade commission and a number of states in particular. i welcome the call for a hearing on this issue. i look foreign to working with these parties to crack down on the illegal process. issues like this are part of our larger consumer empowerment agenda, which focuses on empowerment, education, and enforcement. good consumer empowerment and protection are among the highest priorities, along with promoting competition, innovation, and job creation. a strong staff has done great work. on behalf of all consumers, i thank the enforcement bureau.

we have with us michelle alison, the chief of our enforcement bureau, the deputy chief, and the chief of irs -- of our government affairs bureau. today we are saying loud and clear to consumers trying to navigate the constantly changing landscape, the fcc is on your side. we are focused on helping all americans see the tremendous opportunities of technology. i am happy to take some questions. but i will formally invite joe and sarah. >> thank you for a much. i think a colleagues are going to join you. these are questions that have come from a member of audience.

i am going to go through these, and let me start with now is there a way i can block companies from putting charges on my phone bill? >> that is a good question. if you do not sign up for something, there should not be anything on your phone bill, so the question is is there an often mechanism so nothing ever appears on your phone bill without prior consent? >> i can tell you what we hear from consumers is very often , thethey call a company' landline provider will offer third-party charges if they want it, so i think this is something you can explore with your carrier, but most carriers to have the technical ability to

block third-party charges at your request. >> have you filed a complaint and what happens to the complaint? >> i advise people to look at their bills every month. we are busy, we have kids. we care about consumer protection. there is no substitute for looking at your bills and seeing if there is something that is suspicious. if you find something suspicious or that you were sure was a top prize, start by calling the company. you can call the third party. the phone number should be on the bill. or call your phone company. in many cases that will resolve that. just like when you call your credit card company. if that does not work, call the fcc. we have a complaint center set

up a. we will take a corp. -- appropriate action. either something we will look into. the fines restarted last week started with consumer complaints coming into the fcc. if it is not in our jurisdiction, we will refer to another agency. >> the one thing i would add is one of the things the sec does -- fcc does is that we will act and listen. we have dozens of people who handle calls and our skilled at keeping a dialogue going between you and your phone carrier if you're having trouble getting satisfaction.

we urge people to take advantage of the service. >> i want to add a word of thanks for the employees who do this. we have a terrific staff of people who operate our call centers. we have a mixture of people who have been doing it for a long time. they have seen patterns. it can help them act efficiently. we also have the new people coming through. we are proud of the team. they do good work. >> you mentioned fees for people who sign up and never go. there are charges that say you have bought a service when you have not purchased it. i was confused if you could explain some are placed by the phone company, others by other vendors. how does that work? if i get a charge on my bill, i know it is unauthorized. that is an easy example.

you set up the answering your question. some charges that are improper are charges that your phone carrier might put on. if it is unauthorized, call us. some of the charges can come from third parties. there can be a couple different types. they might be long distance companies, voice not companies, companies within the fcc's jurisdiction. companies we issued notices on last week are in that company. some of the companies like gay -- like a yoga company, we would

refer that to the federal trade commission. between us and the federal trade commission, we look at making sure we have the landscape covered. we have a joint task forces on consumer issues to make sure that we are protecting and empowering consumers. dual cord makes it to make sure we are seeing issues. then nothing is falling through the cracks. and when their new issues that arise, we work with the senate and house committees to suggest ways that the statues can be updated. >> i know if i get a charge on my credit card that i do not think i imposed, typically they do not make me pay a. it can be held in dispute. other similar procedures for

phone companies? >> there is nothing formal. there is nothing like that in this space. we have seen a variety of practices. there are in some cases that the interest mbira did where people have had charges month after month that added up to more than four hundred dollars. they would have to come to us or go to the state public utility commission to get satisfaction. there is a wide variety of practices. we think consumers to a been subject to the son of >> charges should be able to get redressed. >> you said your circulating and empower -- sometime --

>> this would be a way to look at disclosure and transparencies to help consumers do what we are asking them to do, see if there are any unauthorized charges. one of the complaints we hear is that even when they look through a bill the unauthorized charge can be hidden. we will look at that together so that we can empower consumers and make it difficult for unscrupulous companies to get away with what they tried to do. >> i have a couple more that are little bit longer. i'm trying to read them. is cramming also happening on internet and cable billing? >> the record we have so far shows a significant problem

around telephone service. that is what we are focusing on. we want to focus where there is a problem and where we no government action is appropriate to tackle it. we are monitoring the other areas. we encourage consumers to let us know if there are complaints. anyone who is the thinking of cramming should be aware that if we see evidence of a problem, we will attack it. >> are listed services a type of cramming? like to put your spouse's name. by charges from 2006 range from $1.30 $15 cents. >> i do not remember this, crossed that type of cramming.

if you see a charge that you do not think you authorized and you do not understand, if there is a fun number for the third party, call them. if neither one works, call us. >> this is another question about the capacity to anticipate, butcher might -- put yourself in the mindset of the grammar. -- crammer. is there a practice to target this to particular consumers? >> we are not of any that -- we are not aware of any targeted charges. all they need is your telephone number. one of the cases that are fearsome bureau found, she asked to see a reform. it had a different date of birth

and e-mail. that is not a unique situation at all. the companies are supposed to get your authorization. we have another case where a company told the woman she had authorized the charge on line. that cannot be, i do not own a computer. they technically can do this simply by having your phone number. that is an important thing to realize. it shows just how open consumers aren't just -- are to this kind of activity. >> when is a fine justified? companies need to understand that we're trying to catch them. if we catch them, they're going to pay large fines, millions of dollars. going to be aing

good business to rip off consumers. >> a couple of questions that are related. there are multiple agencies that have jurisdiction over consumer practices. the new one was only on financial practices. you have some authority. what is being done to create a seamless web of regulation and enforcement? >> working together in appropriate ways. so the the task force be set up with the fed's of trade commission is important to us. with the justice department, we have practices where if something is a criminal violation, we will refer it to the justice department. in the last couple of years there has not been criminal enforcement action the came out of our referral.

there are historical reasons why improper conduct are handled by different agencies. congress may or may not look at it. the point for us today is that we have an obligation to coordinate and cooperate and to make sure that it is seamless for consumers. >> i think that is the last of the questions. i wanted to give you a chance to say some closing remarks. >> other than thank you very much. it is important. empowering in protecting consumers is at the heart of our mission. we see the tremendous benefits that communications can bring to consumers. there is no sector the king contribute more to economic growth and job creation.

a lot of that turns on consumers having confidence in communications services. it is one of the biggest barriers to adoption of communication services. it is one of the reasons we make this a priority. both because the protection is a priority but because we see a straight line between getting this right and the job creation and economic growth. >> thank you, everyone. [applause] "washington journ"washington j l [captioning performed by national captioning institute] [captions copyright national

cable satellite corp. 2011] >> on washington journal, ron johnson will give an update on medicare spending and the federal debt ceiling negotiation. and we will talk to gretchen enson. se later, a look at the rulings in favor of wal-mart. david savage of the los angeles times joins us. you'rehington journal" on c-span. >> the supreme court ruled that a lawsuit against wal-mart cannot proceed as one large class-action. the plaintiffs wanted to sue on behalf of more than 1 million women.

the justices agreed it could not be a class action in its current form. in a separate vote, the court said the plaintiffs did not have enough because -- in common to pull their claims into a single case. here is the oral argument from mars. -- march. >> they felt to satisfy the rule for certification of a mandatory and not opt out class.

regarding rule 23 a, because the claim on individual managers struck the country, they cannot meet the requirements that were reflect -- reflected in the role of delegation from claims that are common to everyone in the class. the common policies are either neutral and not discriminatory or they are not discriminatory. the company has a strong policy against discrimination. >> i suppose that a corporate headquarters had learned the decision making or the delegation was resulting in several discriminatory practices or a pattern of discrimination,

-- ppose the company's >> if there was a pattern at a particular store. >> they have thousands of stores. every week they get a report from another store saying, this is an allegation of gender discrimination. can they conclude that is their policy that is permitting the discrimination? >> that would be an inquiry. i do not think there is a pattern of practice or a common policy that affects everyone in the same way. companies do look at the situation and seek to root out discrimination. it would take more than some reports, especially in a large company. here it the plaintiffs' claims are not typical.

representpposed to 500,000 or 1 million people. and stand in judgment. that is the words used to represent all those other people. the claim is that the individual decision makers in those other cases exercised their discretion in a way that was biased. >> the question reminds me about our rule in 1983. --ut city's not be liable cities not being liable. is that an analog to determine if there is a common question here? >> i think the catalog is of the company had a general policy of discrimination where it is a policy here against discrimination, and if it sought patterns throughout the company because of sex, --

>> supposed there is a showing of deliberate indifference to the violation. would that be a policy? >> delivered to differences a different question. were they doing it because of gender? they wanted their to be discrimination. there is no evidence of that. >> the numbers are what have been left out so far. the company gets reports. they must show that women are disproportionately passed over for promotion. there is a pay gap between men

and women paying the same job. isn't there some responsibility on the company to say there is a gender discrimination at work? if so, isn't there navigation to stop it? >> yes, there is an obligation to insure there are now wage gaps and discrimination. cera if one looks at the -- is poised to a completely different issue. it does not show there were gender gaps at the stores and among comparable people. that is the fundamental flaw in their case. their argument is that decision makers were making stereotype decision. that had a common defect. they added everything together. they have not shown a pattern. they put of the data together. -- all of the data together.

>> he did a reasonably, not store by store as your expert did. it was affirmed by the circuit court. any number of controlled variable comparisons, including job history, a job rating, and other things. they found that the disparity could not be explained on any of the normal variables that one would expect. the disparity was much higher than the 10 competitors of wal- mart. and what they were paying their labour force. what is speculative about that? two, why is the kind of analysis inadequate to show the policy exist?

>> they estimated the regional results. he did not do a regional regression. even if he had, the statistics go into the merits. we think we have strong arguments responding to those arguments. >> that is the legal question which is, you may win improved that this analysis is fatally flawed. but what the district court concluded was that in the basis of your expert whom he discounted because your expert was basing analysis on hypotheticals, what is the standard the court should use in upsetting that conclusion? >> but did not discount wal-

mart's expert. did did not make a determination. the standard would be that the second circuit adopted. there needs to be a choice. when you're talking about decision makers, there has to be some demonstration that there is a common effect throughout the system. our experts showed that 90% of the stores had no pay disparity. the plaintiffs needed to come forward with something that showed there was this miraculous occurrence at every decision across every store of stereotyping. the evidence does not show that. the other problem on the cohesion analysis is that the to fatality, each of the plaintiffs have different stories. one of them was promoted. one was terminated for disciplinary violations. one was promoted and then had a

disciplinary problem and was demoted. if this was an individual case, they would have to show that they were treated differently than people who were situated just like them. the same supervisor, the same department, the same situation. >> what is the difference between the standard of that and the certification of this. whether there was a company-wide policy? >> the plaintiffs did not have to prove there was an actual policy of discrimination. they at least needed to point to a policy that was common to all of these individuals, a locations. their argument is that it is giving people discretion to do

whatever they want. >> i do not think that is there. i think their argument is the common policy was one of subjectivity. was one of using factors that allowed tendered discrimination to come into all deployed -- employment decisions. using subjective factors only one making employment decisions. that is the policy that is alleged here. >> they cannot argue it was a subjective process. they argue that it was excessive subjectivity in that there were general company standards that exerted control. on page 13 of the briefing, it says it was an unindicted. later, they say was guided by nondiscriminatory policies. it is an incoherent theory.

>> i am confused as to why it subjectivity is not a policy that can be alleged in a title 7 suit. >> in watson, the court stated decision making could be challenged. but justice o'connor's opinion went on to say there needs to be the identification of a specific practice. title 7 does not govern policy. it governs practices. subjectivity is not a practice. wal-mart has a combination of the objective and subjective standards. people with a great personality. we're going to push them up. >> there was a case in the

1970's. it was against at&t for a promotion into middle management. what was at issue was -- the final step was a total person test. women disproportionately flunked at that total person. the idea of was that people prefer themselves. all things being equal, they prefer someone who looks like him. that was found to be a violation of title 7. this sounds quite similar.

you have an expert saying that gender bias can creep into a system simply because of the natural phenomenon that people tend to feel comfortable to people like themselves. >> this is not like the total person case. but it is something that could be a practice or policy. if you had a case where a particular decision making unit had a disparate results, that group of people could and have a stronger case for a class action. as you point out, the sociologists here who is the glue that is supposed to hold this class together said he could not tell if stereotyping was happening. this is a class-action.

the question here is whether every decision maker acted in the same manner in a way that had the same injury to the plaintiffs. the answer is no. >> that suggests that the plaintiffs would have to demonstrate discrimination in every individual case. that has never been a lot. they have -- the law. they have a practice of sensitivity that results in discrimination against women. not that each one of these women was discriminated against.

>> we are not arguing that a plaintiff would have to show that every class member was discriminated against. there must be proof of a standard operating procedure of discrimination. here it is undisputed that wal- mart's policy was implemented and enforced rigorously that was anti discrimination. you are correct that each person does not have to have phase one. the other big problem is that the district judge said that in phase 2, wal-mart would not be entitled to put on its individual the fences. women who thought they had a claim would not it would come forward -- not be able to come forward. the plaintiffs are trying to cut off half of the framework about

due process because title 7 states very clearly that only victims of discrimination. >> what happens to the claim of damages in individuals who are part of this class, if the class prevails? >> the claim would be resolved in this manner. >> would she be eligible for only back pay? >> she would only be eligible for back pay. this way explodes for the class members in order to get a class certified which is a crucial -- >> with the woman with a claim for compensatory damages be able to sue? >> she would not be because that

would of been part to the case. >> even though she would have not received notice to opt out? >> that goes to the problem with the certification. this case needed to be looked at under rule 23b3. it was created for this kind of circumstance. individualized monetary claims are at stake. the language of rule 23 speeds of declaratory stuff. >> our view is that the plaintiffs my bill to satisfy that provision. -- might be able to satisfy that provision. >> if their claim is that they

are seeking a declaratory relief against discriminatory impacts, within that have value? would now value be standing alone without the damages component? is there a presumption that discrimination affected them in the burden shifts to wal-mart? >> there could be a benefit from an injunction as the plaintiff's mental the standards. the problem is that the -- >> why couldn't you separate out the b2 issue from b3 if monetary damages have enough common facts

to war to certification? >> some courts have looked at the claims under the b-2 standard. that can raise other complications. here the plaintiffs are seeking punitive damage. that is a possibility. it would be better than this. shoehorn in these monetary things. >> would you address the -- address them separately. tell me why a be it to class could not exist -- b2 class could not exist. the monetary component of this, the back pay, another is to speed on that, why then would not be separated out?

>> our view is that the complaint has problems concerning cohesion and topicality. on the adequacy point, this includes 544 store managers who are alleged to be discriminatory. if that is not a conflict, i do not know what is. the women who are compelled to be in the class cannot opt out. they are current employees. the cut across every position in the country. there is no demonstration they are being affected in a common way. there would still be those commonalities because of the nature of the case. >> i thought the district judge said that the absence class

members would get notice and have an opportunity to opt out. a member of the class who wants to go for compensation instead of back bay could opt out. >> a limited that ruling to punitive damages. the ninth circuit said it was during that under its ruling. that would simplify things because then there would not be a notice to opt out. back pay is monetary relief to bind people based on a balancing test under b2. this court talked-about a fundamental rule than an individual is not bound by a judgment to which they are not a party. were such a fundamental right is at stake. that is why we think in these to be role 23b2.

>> that begs my question. are you talking about any monetary relief? you're claiming that monetary relief includes equitable relief. >> yes, your honor. there is a test where does not use the predominant question. it uses the incidental test. >> that test is much better than the test applied below. the plaintiffs of walked away from the tests that were applied in the lower court. they never contended they could meet the incidental damages test. in the alison case, only automatic back pay goes to the group as a whole would qualify for that. here this is individual. >> would you accept the test as appropriate as to when damages predominate or don't?

it talks about injunction relief. the only ambiguity that is created is from the advisory committee. as this court said three weeks ago, we do not look to legislative history to create ambiguities. the drafters were concerned about the historical antecedents to desegregate. i think the drafters would have been shocked if they had learned that this case involved a millions of claims for individualized monetary relief. the incidental damage test is far superior because it is clear. it would be closer to a sharper line which is what is required in this context. i would like to go back to the point i made earlier about individual relief and taking

away the rights of wal-mart and the absence class members. here, thedures used to hea plaintiffs do not allow that. it would allow a prediction about two might have been hurt, how many, and dividing money based on that. the teamsters allowed it pattern of practice, that would allow the defendant to show that it did not discriminate on an individual basis. individuals could have their day in court. that violates title 7. we think it shows some of the core flaws in this case. >> what if the class does not prevail? does that bar an individual

woman from bringing these same claims? >> yes, your honor. there is a presumption -- one is that they are always good. the bigger the class-action, the better. none of those presumptions can be counted on if the plaintiffs lose. if they tried to bring the case as pattern or practice, there would be significant questions. it is not fair to anyone to put this into one big class. >> you're not suggesting they would be precluded on individual claims? >> claims that were separate from the nucleus might pose a different question. >> what a for the same theory that the reason this person discriminated was because he had subjected discretion. >> then there would be a real problem of collateral.

>> i would like to reserve my remaining time for rebuttal. >> may it please the court, this case follows from the teamsters and what some models of discrimination. as a consequence, there is no requirement to have a formal policy of discrimination. >> what would the injunction look like? >> it would look like a series of remedial measures that would direct wal-mart to provide a detailed criteria by which to make pay and promotion decisions. in a way that has not been true up until now. it would provide for managers to be held accountable for the

decisions they make. it would insure oversight of these pay and promotion decisions in a way that the company -- they did have, by the way, information about these decisions. it took no action. it did not monitor these problems. it allowed them to faster. >> is it your position that a subjective decision making process these are the legal -- illegal? >> no. >> how many examples of the subject of discrimination needs to be shown before you can say it flows from the policy rather than from bad actors? you will have some bad apples a among the thousands of stores. >> we have examples.

>> how many do you need to have? be if thereld not is only one letter. that cannot be enough to support your theory. >> that is correct. there is no minimum number that this court has set. teamsters as an example, the court had about 40 examples. they were not required. in order to establish a pattern of liability, we have more than that. in order to establish a pattern of liability, teamsters holds that what you need to do is show there were substantial disparities to create a discrimination. >> is it true that wal-mart pay was less than the national average?

>> i do not know that that is a fair comparison. the position wal-mart has advanced to make, it is not with people in retell. their obligation under title 7 is to ensure its managers do not make decisions because of the sacks. -- of sex. it is not the general population includes people in retail and railroad workers, all kinds of other people. that is not an appropriate comparison. >> what is the unlawful policy that wal-mart has adopted under your theory of the case? >> our theory is that wal-mart provided unchecked discretion in the way the watson decision address. they pay women less than men for

doing the same work at the same time. even though those women had more seniority and higher performance. it provided fewer opportunities for promotion because of sex. >> it is hard for me to see. you said that this is a culture where the headquarters knows everything is going on. but then you say the supervisors have too much discretion. there is an inconsistency there. >> there is no inconsistency any more than it is inconsistent with than their own personnel procedures. the company provides this discretion which is a very discreet. it is not brought. we are not attacking every facet of the dipane promotion.

-- pay and promotion feature. with respect to the discretion, every store the district court found is provided with the same level of discretion. the company also has a very strong corporate culture that ensures that managers, in all respects, the wal-mart way. the purpose is to ensure that in these various stores, contrary to what wal-mart argues, that the decisions the managers will be informed by the values the company provides. >> is that for treatment? >> it is disparate treatment. they're making these decisions because of sex. we have evidence of stereotyping as well as statistical results.

>> on the one hand you say the problem is they were subjected. then you say there is a strong corporate culture that guides of this. which is it? it is either the individual supervisors are left on their own or else there is a strong corporate culture. >> justice scalia, there is this broad discretion given the managers. they do not make these decisions in a vacuum. they make them within a company. >> so there is no discretion. >> i am suggesting they are given discretion that informed by the company about how to exercise that discretion. >> if someone tells you-how to exercise discretion, that is not discretion. >> the bottom line is they did not. the results show it. there was disparity in ary -- every one of the regions.

>> what do you say about the unchallenged fact that the central company had a policy against sex discrimination? it was not totally subjective. you do not make hiring decisions on the basis of sex. that was the central policy. >> that was a written policy. that was not the one communicated to the managers. >> how was that established? >> we have evidence of, for instance, at the sam walton institute where every managers trained, they provide an answer, why are women under represented? the response given was because men seek advancement more aggressively.

that is a stereotypical statement provided to every person going through the management training program that forms their decisions when they have these promotions. >> that causes them to discriminate on the basis of sex? how could that possibly cause them to intensely discriminate? >> they have an intent to take sex into account in making their decisions. they apply a stereotype that women are less aggressive when it comes to assessing suitability for promotion. >> that is an assessment of why the percentage difference. they differ not only at wal- mart but throughout the industry. to say that is the explanation

is not to tell your people, do not promote women. if you have an aggressive woman, a promoter. >> i understand that. there have been women promoted. the questions you are raising our ones that wal-mart can raise at trial. the question at this juncture is whether there are questions common to the class. we have identified what has been recognized as a common policy that there is no dispute. it disrupts the company. the fact that we, we have shown that there are disparities adverse to women. we have the means to show through the testimony of a doctor and other evidence that we can provide -- >> despite the fact of an explicit written policy of no

discrimination against women, do you think yet shown that policy is a fraud? and what is really going on is there is a central policy that promotes discrimination against women? >> we have testimony from the vice president of the company that that policy was lip service. we have testimony from an expert. >> isn't this something that would be, getting your foot in the door. you may lose on every one of these points but the 23a standards are not supposed to be difficult to overcome. it is a question of fact.

it seems to be a serious problem, how do you work out the back pay? we get to the 23a threshold. we got the class certified. the judge says there is no way i could possibly try each of these individuals. we're going to do it, how? how they calculate back pay? >> the approach that the district court endorsed and the one we recommended, in circumstances like this year which are the exception to the rule, or a company had no standards by which to make promotion and pay decisions, they have no records of the reasons why people were promoted or paid certain amounts.

as a consequence, the teamsters decision made clear that the obligation in district court is to attempt to reconstruct a decision that would have been made in the absence of discrimination. the district court found that the more reliable method for doing so is to use the formula relying on wal-mart's robust database in which it captures performance, seniority, and a host of other job-related variables that they are on pay and promotion decisions. in a way that having individual hearings relying on post hoc rationalizations does not. >> what a u.s. company with a clear policy in favor of equal

treatment of men and women? the answer to your hypothetical. women do not have as many positions because managers discriminate. yet you still have the same subjective delegation system. could you have a class of women who were harmed by this subjective policy even though it was clear that the policy favored equal employment opportunity? >> the company had a policy of the sort, it would be appropriate to seek judgment. >> you say it is not enough to be a subjective decision. this company has a thousand stores. you will be a will to find a good number who are not following the company's policies. in a way that violates the equal

what -- right to treatment. >> you could bring a class case on behalf of women who were subjected to discrimination as a consequence of that discretion. we should not this side of the fact that we have evidence of results from this that are extraordinary. >> here is the common question of law or fact. whether given the training, and given thes, \ \ s, results which a central management knew or should have known, should central management have withdrawn some of the subject of discretion in order

to stop these results? >> that is a fair way to put it. >> is that a question every one of the women shares in common? >> i believe so. they have all been the subjects in every one of the stores to this very broad discretion. >> didn't the district judges say that some would get a windfall and others would be under compensated? >> justice ginsburg, i think the judge did not find that. he found that the formula is a regression analysis that would permit the comparison between each woman and the amount she was paid and other men. taking into account performance than seniority. you will find that there are women who were not underpaid. the formula so they should get no back they.

>> i thought this point was not simply from being underpaid but if you had an individual case, that this person had been fired or disciplined, and was not owe any back pay. but that she would not have gotten any pay at all. >> the kind of factors that enter into this economic model should capture whether somebody should have been fired. that is a very important part of the model here that permits people to -- we found that women had higher performance than men and were still under paid.

rex dozen your class include both those women who were underpaid and that those women who were not underpaid? is that commonality? >> as every class does. every class has some portion of its members who were not harmed by discrimination. what is common about them is they were all subject to the same discretionary decision making even if some of them were not harmed. that is still a question, and to the class. >> i thought the teamsters case was an action by the government. it was not a class-action case. >> that is correct. it is the paradigm we used for establishing a pattern of discrimination. >> help me with this, suppose that experts testify and

establish that in a retail and industry, women still are discriminated against by a mathematical factor. you have a company that has a policy against discrimination. do you look at the way the employees are treated and you find a disparity by that same mathematical factor. does that give you cause of action? >> if the disparity -- >> the disparity women are subjected to are the same in the company as they are society wide. but the company has a policy against discrimination. >> the company's responsibility is to insure its managers do not make promotions because of sex. if the comparison between the pay women receive who are

similar is situated to man is such that they are underpaid, then the company would have legal responsibility under title 7 regardless of what happens in the rest of the industry. >> is that true if you could not show the liberals in difference? -- deliberate indifference? suppose there is no specific policy prop. kenny's to proceed? >> a policy of not discriminating -- imagine every company publishing that policy and having free license to discriminate as much as it wanted. >> i understand your question to >> i understand your question to be