$10 billion transaction. tokyo, this is new york. send your transaction. i have sent. new york says they have received. less than a second. that is what it takes to run a global banking. that processthat is one examplet we're rely on. when the framers did the constitution, the vast majority were farmers. think about how we depend on electric lights, money, the grocery store, the delivery of goods and services. if you can interfere with that, it will lead a devastating impact on the country. >> i totally agree. we had an anthrax attacks has mike pointed it out -- as my

pointed out. of space -- the ingredients of biological or chemical weapons are available on the kitchen are on the form. this is good news and bad news. good news is that we have a good way of reducing the risk on biology. will not catch everyone who fabricates but we do have countermeasures, with obvious legal types of attacks. we of stockpile this and we are in the beginning of the process of putting out a detection capability. one big problem in an attack, getting to these countermeasures into the hands of people. this is an example of how we can i get our way sometimes. the solution suggested in 2006 was, get the most common

countermeasures, put them in a kit, and we will distribute them around the country, let people buy them. if you can have them in your medicine cabinet and the school house or in the fire station. when the word goes out that people have to take this, if you can get the word out within a couple of hours. so we ran a pilot to see whether people will use them if we give them. after the year, 97% of the people had kept the medical kit. so we felt great. let's launch. but there was an objection from the fda. a routine business model, as you do not distribute things that have to require a prescription, said dr. has said there is a need. -- unless the doctor has said there is a need. that is a great example of something that we could fix and a week. and then start the process of

putting this out. and that would be telling the terrorist, if i recognize anthrax and i distributed, the united states will be able to react and many get more harm instantly. >> apart from the fda, what is the most dangerous threat to the united states? [laughter] >> and it is not jeff goldberg. >> we're worrying about one thing. >> a mumbai-type attack, which requires no technological expertise, just some people with small arms going out and shooting. it is not require a sophisticated operatives, but people willing to kill a bunch of other people. nadal hassan will supply and organize squads. all you have to do is get the people in the country, the arms are readily available, and then what you do is rely on our

culture to produce the terror. what is remarkable is that when you hear the parade of horribles, how come this has not happened yet, is so easy, the motive is totally there -- this isn't indicator of the degradation of the operational capability. they are probably going to start surmounting this to some degree because there are too many people in the world and a handful of zealots will try that attack our systems and our culture. we need a hard and our systems and hard and our culture. we need to develop a culture of resilience and resilience systems. interestingly, the department of defense is not reoriented to systemic defense. the department of homeland security could become in the coming years as important in some ways and maybe and -- more than the department of defense as the locus for defending our

critical systems. think about that. think about the value of that culture. the most useful thing ntsb has done his political and cultural. every so often, hundreds of people die in airplane accidents. an air france jetliner drops into the ground. hundreds of casualties. we know that a board will go out, it will look at what will happen, dispassionately analyzed it, and very professionally come up with clues and we will tweak the system and reduce the chances a little more and millions of people will get on to airplanes the next morning. that is a culture of resilience. >> one final thing and a quick round of questions. we have not talked on the political plane. the common perception in washington is that hassan causes

the biggest threat. that is what is going on inside of pakistan and our inability to understand how the isi and army operates in tandem with these organizations or not. what would you fix and how would you fix this problem, if you could? if you were president of united states, how would you mitigate the damage done to us by people in pakistan? a really quick ground. >> we have to maintain our relationship with the state of pakistan. it's endemic corruption is something that we have to face up to and deal with. their core concern is india. they have fought several wars and lost them. today they are worried that india that is surrounding them by going into afghanistan. with their economic problems, corruption and focus on india,

it is pretty bleak. that said, it is in the interest of the united states to sustain their relationship in the best way that we can. we have this collaborative arrangement. for the last 10 years, it has been very effective, the comments made about a grating al qaeda and its leadership in large part it was carried out as a result of a successful partnership. in the last day or so, the defense minister of pakistan has forced us out, our trainers, so on. we will have to adjust to that. that is where the threat is. >> when your dhs secretary, how many threats that you're dealing with emanated from pakistan? >> quite a majority of serious threats came out of pakistan. i agree with mike. they arrested people that might have been helping us get bin laden. if that story is true, it is

infuriating. but mike is right. we lost a decade with pakistan where we cut off dealing with them. care was that group of folks coming on officers that would have come to the u.s. and trained in formed relationships that did not come. as tempting as it is to get angry and lashed out, we have to alternate with some firmness of remain in a relationship with them. >> two things. i agree with john brennan in a speech we are all talking about that the largest threat to our homeland from afar and place is from yemen at this point. it has a failing government and has a very active al qaeda and related cells hiding in the hinterlands where there is basically no police function. they are preparing to attack our homeland. they are the place. that is where of the maqtada

abdulmutallah was trained. on pakistan, the group that just attacked a hotel in kabal is the haqqani network. it is a terror group protected by the pakistan government, off limits to their counter- terrorism attacks. it is located -- or its training area is located just at the afghan border. and very lethal operatives from the network go across the border and killed our troops. i'm pretty pessimistic about our relationship with pakistan at the moment. we have to work on it, i agree, but i know we're doing this, we have to take counter terror measures to protect our country even if they are inside the border of pakistan. as we did with osama bin laden, when we see that there are groups there that intend to attack us. that is why i thought to w. of things. reset the up afghanistan policy,

because it gives us more brain cells and resources to focus of pakistan. and the refocus by brandon yesterday that our goals have to be to protect our homeland from groups wherever they may be, al qaeda, al qaeda affiliate's. it is not a war on pteropod a war on al qaeda and its affiliates. -- is not a war on terror but a war on al qaeda and its affiliates. >> i agree with plan a. let's keep working with the pakistanis, as best as it entered a long story, complicated, you read about it all the time. that is planned a. the interesting thing is not to tweet planet. no one really knows enough to get into the tactical details of that. what is at play is planned the, you're hedging strategy. -- plan b, your hedging

strategy. if the times square attack had succeeded and killed 500 people in town squares, there's a better chance that we would have launched a major military operation into pakistan within the next week or two. certainly the president would have been under acute pressure to do so because that attacked emanated from pakistan. you really do not want us to invade your country at that scale. please try to manage this to the best you can. what is your hedging strategy? it has to be, what if pakistan becomes a failed state? we need to plan now for what we'd do if the pakistani situation is not manageable internally with respect to their nuclear stockpile, becoming a

sanctuary for mutated versions of islamic extremist groups attacking the us -- the pakistan government and india and different ways, including the propagation of and india- pakistan war. they have the capability of long strained predict long strike -- long-range strikes. an important in cooperation with the people there will still rely on, who will take an interest if pakistan goes that route. think about the hedging strategy should be it plan a fails. >> questions? >> what is the greatest threat to al qaeda at this point in time? is that they -- global threat,

not just u.s. -- is that the government of pakistan and afghanistan, and what is the greatest threat to them? >> i think that there are two a threat to al qaeda right now. first is the arab spring and what is happening in the arab world. that trend is going in the right direction. it will be a long time before it plays out, but the unifying the fact that existed some time ago, i think, it has been a portrait and second of the leadership of the united states and holding accountable leadership in a very determined way. it has taken a long time and cost a lot of money. we had to change laws and develop operating procedures that were different. but that operation -- to use the death of osama bin laden as example -- it was u.s. navy seals trained under title 10 as an element of the department of

defense, carried out under title l directed by the commander. i think the determination of the united states and the persistence to seek justice 10 years after the fact has been the greatest threat, in addition to this trend we've seen. >> if i could add to that, al qaeda has killed more muslims than non-muslims. i think the muslim world is aware of this. as mike said, the arab spring had nothing to do with al qaeda. the change that is occurring is a bottom-up change by people who actually want freedom. they did not want to go back to the seventh century caliphate. the second point -- the u.s. finally and other countries, but i do not want to give -- developing the right counter

narrative. we are not in a war against muslims. it is not that george bush did not make that clear or obama did not make clear, but the b-roll a bus bombing in five different muslim countries can be distorted to make that point. we are of war with al qaeda and its affiliates, not this more and more testing. and we are clarifying what we stand for, something very appealing to younger people who are rising up and taking huge risks in tunisia and egypt and syria and bahrain and a number of other countries. >> it is very clear that we have become more sophisticated over the last decade. how has al qaeda and its affiliate's become more sophisticated? are we fighting last year's war? >> we have mentored others in

that generation. i think you see the sophistication is in a couple of respect for the delivery -- and a couple of respects. -- in a couple of respects. recruiting americans and secondly, using the internet and providing at least a subset of the population appealing propaganda about what is going on, officials, all the modern tools of technology, and exploiting that. as the generation changes, and i think that bin laden may wind up in a way to a accelerate this, we will see a much more sophisticated and nimble organization. >> clearly global airports screenings and homeland security measures have been very successful in preventing another

major tech. could the panel speak to what seems to be an open border with mexico and the constant flow of people coming in? majority of immigration is here for work and improve quality of life, but there has to be some percentage, a fraction of a percent of the people coming through that have more nefarious intense toward this country. what are we doing to secure a terrorist activities from the southern border? >> let me give you two fax. and i always get in trouble with my friends from canada. but almost all the terror succumb over land border come from canada, mexico. there have been some groups that emigrated from canada that created recruiting tools for terrorism. it is a very difficult challenge for if you look at the southern border, it is 2,000 miles.

we doubled the border patrol and build fences. but unless we are prepared to invest huge amounts of money, it will take a period of time to continue to make it harder to get across. i still believe this to be true, one helpful thing is comprehensive immigration reform with a temporary worker program so that a lot of the pressure on the border would be funneled into a system that was regulated. that actually give us a better ability to manage the remaining physical border. no country in the world, other than a totalitarian country, has ever sealed its borders really. even totalitarian countries did not do a 100% job. >> i don't think ceiling our borders is the right answer. letting students come here to study and permitting foreign tourists come here, obviously screening them in case they are

a terrorist-affiliated makes sense, but if we close off our country, we lose the ability to create all these foreign ambassadors for the values that we stand for. i think that is a mistake for the second point, the near term threats are not from farmers coming in here. i think it is from homegrown terrorists who are here and have clean records and are either radicalized on the internet or whoever their own troubles go somewhere else and seek out training in these other countries. they are not invited to do this. they generate their own interest in this and go and learn something. >> on a follow-up, there is one flaw in something that she said. there is a general notion of mong all right think the people that we should use to give visas to students and they should learn to like us, etc., etc., and while that is true in most cases, however point out to

college shake mohammad that he spent years in north carolina -- khalid sheikh mohammad that he spent years in north carolina. we all named dozens of people who have come here and have not fallen in love, they have fallen out of love. can you talk about that as a national security problem for a minute? >> the most important ideologue for modern muslim extremism is a fellow who became radicalized by live and in rural colorado in the late 1940's and early 1950's. he was so shocked by what he saw, when he returned to his native egypt, is this is qutb, the developed a whole etiology were the west was the source of all legal.

they could see that america is a cesspool of sand and should be white from the face of the earth. fortunately, that is not the spiritual head of the university of virginia. [laughter] -- that is not the experience you will have at the university of virginia. >> alan -- i had a friend who was the budweiser distributor there and he was very busy. >> it is an inclusive community. whole notion that this is a problem of west versus islam, that is completely wrong. we're not seeing some might -- it is a war within islam, people trying to figure -- cope with islam and modernity. and there is a radical fringe which is mostly focused on local conditions that they dislike,

and then a minority of that the faults of global agenda that attaches all of these evils to the united states. that agenda and that marriage became very powerful during the 1990's as a function of history. a useful way of thinking about this as as an historical point of comparison is the last phenomenon that reminds feel lot of this was the large-scale growth of european centered anarchism, which reached its peak between 1880 and 1920. this was a source of enormous fear and terror in the world during that period. it killed six heads of state including the president of united states, william mcanally. self-radicalizing people inspired by germany, france, spain, and immigrants from those countries coming to the united states, throwing bombs in chicago and believing in the etiology -- what were these

people? they were profoundly, deeply alienated by the turmoil of modernization and urbanization and their harshly repressive societies at home, who the next fertilize this has somehow trying to bring down the system and create electric -- a utopia that could never be. there is no chance that it will be created. it is a hopelessly utopian agenda. what does this alienation represent? -- and dreams. what happened -- rage and dreams. there dissociated from their own communities and form an identity around this extremism, the guy at n.c. who feels alienated because it cannot fit into that society there and he needs another identity that welcomes them.

happens to these people is they get channeled into other forms of alienation, or in the case of anarchism, somewhat more ominously, it all morphs into much more dangerous movements that are able to tap into that rage and dreams and much more operationally powerful ways, with movements like bolshevism and fascism did in the 1920's. >> as someone sitting here for the last hour become increasingly terrified, and listening to this discussion on the policy terms, it is fascinating and very energizing, but my question is, when an individual basis, and without meaning to sound silly, it sometimes feels like the only way that me or him or her, the only way we can protect ourselves is to never leave the bathroom. if you never leave your

bathroom, you will be fine. but you have to go outside. on an individual basis, how can one address the kind of concern that we're feeling? >> by the way, the pattern is one of the more dangerous places in the world. >> if you do not turn the water on. >> and then there's the kitchen. move yourself to croce where it is safe. -- karachi where it is safe. >> it is a serious question and i include myself in it. it is very easily politically to played if your card. you should be scared of this and that. if we and not done a good job of saying that there are threats but there are -- and he just put this in perspective in a brilliant way for that is the

last complement will ever give you but it was spectacular. we have to do a better job of helping the public to understand what it can do. phil use the word resilience. you and your family are resilience. i do not know where your bathroom is and i'm sure your bathtub is big. but you could also, as michael said, even if they will not give you cipro, you can have a ticket home and your own form. we talked about this 5 per six years, a country or an e-mailed tree, how you get in touch with your family members. we do not have a national interoperable system in this country, a pathetic failure, but you can get that happened. then you can think about this stuff and put it into perspective. the israelis have a tax all the time, you're now because they've taken preventive measures, but the police come down in a matter of hours and go back to what ever they were doing. the people of israel understand

that there are a terror threats around the country, more than against ours, and the best way to defeat them is not to be terrorized. it is a state of mind. that is what terrorism is. if we are not terrified and if we have a plan to respond or a plan to prevent, and it was two street vendors to figure out the times square plot. they call law enforcement and law enforcement was spectacular in finding those guys quickly and on wrapping their plot. i am just saying to you, you are stronger and unfortunately we the government or by the former government member have not given you enough encouragement to be confident. >> i want to frame this just for a moment. this is a very good point, and

this is something we will move to a in september. this is a massive overreaction on our part. this is in response to the 9/11 attacks. >> this is part of what we talk about with these issues. almost uniformly, things have gotten considerably better. we have done quite a bit to make ourselves more secure. there is either panicked or hysteria or the hope is overgrown. those are the choices and we are in the middle. we are good about managing and dealing with them, but there will be some failure. the public is more reserved than we give them credit for. this country has experienced a tax with guns before, including

colorado. we have recovered from that. at the same time, we underserved ourselves by not doing what james has said by not spending an hour to put together a plan with it reasonable supplies in case there is a disruption of food or water. i think that the message here is that things -- there are real problems out there. we have a lot of capacity, to manage the risks, by expanding what we do in emergencies. and the capabilities in case we have to rely on ourselves for a short amount of time. >> the message i can hear

consistently from this group is that resiliency is the key. there are core of professionals out there that worry about these things, with homeland security or whatever, and some level of resources need to be dedicated to that kind of thinking and the potential reactions. as an intelligence professional, my job is to predict what may be coming. we will tend to think about that a lot, and what level of resources we will commit, and what the attack may be. we are thinking about the last war were the last problem. we can be safer and we can go on with our lives.

>> we will do one last question and then i will have a final, larger question. >> thank you for finally mentioning the intelligence, the first line of defense. each of you have had critical roles in this country with intelligence structure, with an enormous level of activity, with the departments in the new agencies. some say this time to put this in order. a lot of different stovepipes exist. i wonder if you could give us a brief talk about where intelligence needs to go. >> a great notion to piggyback onto, we're practically 10 years away and there is an excellent report that we all should read, and there are

recommendations in that report that have to do with what we spoke about. with intelligence reform and where we have come, the recommendations in that report, they have not been filled and what would you do right now to enact those recommendations. >> i will say a couple of things because i think they can dive more deeply into a couple of these things but i want to leave a couple of important issues up to them. some philosophical principles to keep in mind. the counter-terrorism adviser

to the president said the first job is to safeguard the safety of the american people. when he raised his right hand, he said that his duty is to preserve and protect the constitution of the united states. that is the highest duty. the reason that security is important is because the greatest danger to the constitution is massive panic and insecurity. this is when the constitution will be in the greatest jeopardy. the greatest victory insofar of intelligence is what director mccall talked about not too long ago, the domestic and foreign advisers. this is without significant threat to our constitutional liberties, this has this -- this has been managed. the last observation i will make is this.

there are a number of controversies, but people have preconceptions about how they should manage the intelligence community. they have always been stating their preconceptions. what they should do is analyze how well this is managed by such objective criteria. can you move large amounts of money to adapt to important priorities. admiral mcconnell did better than anyone else in maximizing the management possibilities. he is well qualified to talk about whether or not we should go further. all of these issues have been relatively easy. when we have the huge national security reforms, why is there

so much terminal? this is because the defense budget was radically cut under intense pressure. for the last 10 years, the costs have been going up. it is much easier to manage something that is constantly getting larger. the real pressure on reform begins now because this is about to start shrinking. >> first, i think the takedown of osama bin laden is a credit to the navy seals but most of the credit should go to the new intelligence system, which was massively revised in 2004. and it defines the careers -- if found the careers and the safe house, to be certain that

he would be there. and to enable the navy seals and understand in specific terms what they may have. they surrounded and landed in the compound. this was a mass of intelligence success. it would not have happened without a legislative reforms recommended by the commission. the big failure of those reforms is that the biggest reform that was not implemented is the organization of congress to revive committee structure and be able to do the right kind of oversight to protect the constitution. to protect the constitution.

i don't see any chance that that will be corrected. i was there in washington meeting with the director of intelligence, and i just was not aware of this. the house appropriations committee supports a bill that requires a specific authorization from congress every time that they try to move money. this undermines the command structure that we set up in 2004. and we will try to make certain that congress never enacts that provision. and now they're trying to micromanage the system -- >> we have to let jane go to work. >> i will not talk about intelligence because she has covered that.

this was partly implemented but not completely. the key recommendations enable people to track this and with the comprehensive reforms, we did a couple of things that were passed into law. the first was across the land board and the second strength and the robustness of the security. you would not believe the problems we had moving these recommendations forward. this was 90% done with the last 10% and i was in a constant struggle with members of congress representing districts along the canadian border of the negative economic impact.

if someone comes in from canada, and it's off a bomb in new york city, that may not be a problem for your constituents but this is a problem in new york city. not in my backyard were my term of office. if we don't get this finished, we will bitterly regret this. >> they're telling me that you should leave the room. we are in evolutionary process. >> let me use this as an example, the department of defense. we established how we would operate in 1947. the bill was passed, and this

was streamlined. this forced joined us, join judy and a lot of these things to unify this. we had a debate on this. she has her finger prints on this lot and she will defend this. my response is that if this is all it took as a leader of congress, -- this is 50% law and 50% leadership. >> and here is where we are. the community is 16 agencies, and the first prerogative of the staff -- the first focus of any debate on the executive orders -- the one recommendation is the cia.

the law says the director of the cia will report through. you can drive a train through this. we're at a place where this is working better, but are we safe, no, but are we safer, absolutely. i don't think this was the right way to set this up. aree at a place where we evolving, and this question will come up. do we want have a more streamlined intelligence community that is controlled by an authority, and jane just mentioned, there is a draft to say that they can move money from one program to another. we will have this debate until

we have another crisis, and then we will adjust. >> thank you so much for coming, and thank you for the panel. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> more reaction to the riots in england. from cameron -- from david cameron and ed miliband. and an hour, all forum on the future of social security. after that, president obama's town hall in minnesota. on "washington journal," we will discuss the housing market with paul bishop from the national association of rea john gage will take your questions about how the debt ceiling deal and the so-called super committee may affect

federal workers. d a former fbi investigator david williams will discuss the fbi's role in combating terrorism. w.j." is live on c-span every day at 7:00 a.m. eastern. >> david cameron was in his constituency today talking about the riots in london and other british cities. this is 45 minutes. >> good morning. all warm welcome. on behalf of the young people, the staff, is really good to see you. that you've glad made the time to come here, especially the young people. i'm sure you're appreciated the

calls quaking you to get here on time. it is my great pleasure and privilege to ask you to welcome the prime minister, the right honorable david cameron. >> thank you very much for that. it is great to be back here. i can see it has not got any cooler since i last met a speech in here. but very grateful of you to come. it is time for our country to take stock. last week we saw some of the most sickening acts on our streets. i'll never forget talking to maurice reeves, whose family had run the reeves furniture store in croydon for generations. this was an 80 year old man who had seen the business he had loved, that his family had built up for generations, simply destroyed. a hundred years of hard work, burned to the ground in a few hours. but last week we didn't just see the worst of the british

people. we saw the best of them too. the ones who called themselves riot wombles and headed down to the hardware stores to pick up brooms and start the clean-up. the people who linked arms together to stand and defend their homes, their businesses. the policemen and women and fire officers who worked long, hard shifts, sleeping in corridors then going out again to put their life on the line. everywhere i've been this past week, in salford, manchester, birmingham, croydon, people of every background, color and religion have shared the same moral outrage and hurt for our country. because this is britain. this is a great country of good people. those thugs we saw last week do not represent us, nor do they represent our young people -- and they will not drag us down. but now that the fires have been put out and the smoke has cleared, the question hangs in the air, "why? how could this happen on our streets and in our country?"

of course, we mustn't oversimplify. there were different things going on in different parts of the country. in tottenham some of the anger was directed at the police. in salford there was some organized crime, a calculated attack on the forces of order. but what we know for sure is that in large parts of the country this was just pure criminality. so as we begin the necessary processes of inquiry, investigation, listening and learning -- let's be clear. these riots were not about race -- the perpetrators and the victims were white, black and asian. these riots were not about government cuts -- they were directed at high street stores, not parliament. and these riots were not about poverty -- that insults the millions of people who, whatever the hardship, would never dream of making others suffer like this. no, this was about behavior -- people showing indifference to right and wrong, people with a twisted moral code, people with a complete absence of self-

restraint. now i know as soon as i use words like "behavior" and "moral," people will say, "what gives politicians the right to lecture us?" of course we're not perfect. but politicians shying away from speaking the truth about behavior, about morality -- this has actually helped to cause the social problems we see around us. we have been too unwilling for too long to talk about what is right and what is wrong. we have too often avoided saying what needs to be said -- about everything from marriage to welfare to common courtesy. sometimes the reasons for that are noble -- we don't want to insult or hurt people. sometimes they're ideological -- we don't feel it's the job of the state to try and pass judgment on people's behavior or engineer personal morality. and sometimes they're just human -- we're not perfect beings ourselves and we don't

want to look like hypocrites. so you can't say that marriage and commitment are good things -- for fear of alienating single mothers. you don't deal properly with children who repeatedly fail in school -- because you're worried about being accused of stigmatizing them. you're wary of talking about those who have never worked and never want to work -- in case you're charged with not getting it, being middle class and out of touch. in this risk-free ground of moral neutrality there are no bad choices, just different lifestyles. people aren't the architects of their own problems, they are victims of circumstance. "live and let live" becomes "do what you please." well actually, what last week has shown is that this moral neutrality, this relativism -- it's not going to cut it any more. one of the biggest lessons of these riots is that we've got to talk honestly about behavior and then act -- because bad behavior has literally arrived on people's doorsteps. and we can't shy away from the truth anymore. so this must be a wake-up call

for our country. social problems that have been festering for decades have exploded in our face. now, just as people last week wanted criminals robustly confronted on our street, so they want to see these social problems taken on and defeated. our security fightback must be matched by a social fightback. we must fight back against the attitudes and assumptions that have brought parts of our society to this shocking state. we know what's gone wrong -- the question is, do we have the determination to put it right? do we have the determination to confront the slow-motion moral collapse that has taken place in parts of our country these past few generations? irresponsibility. selfishness. behaving as if your choices have no consequences. children without fathers. schools without discipline. reward without effort. crime without punishment. rights without responsibilities. communities without control. some of the worst aspects of human nature tolerated, indulged -- sometimes even

incentivized -- by a state and its agencies that in parts have become literally demoralized. so do we have the determination to confront all this and turn it around? i have the very strong sense that the responsible majority of people in this country not only have that determination, they are crying out for their government to act upon it. and i can assure you, i will not be found wanting. in my very first act as leader of this party i signaled my personal priority -- to mend our broken society. that passion is stronger today than ever. yes, we have had an economic crisis to deal with, clearing up the terrible mess we inherited, and we are not out of those woods yet -- not by a long way. but i repeat today, as i have on many occasions these last few years, that the reason i am in politics is to build a bigger, stronger society. stronger families. stronger communities. a stronger society. this is what i came into politics to do -- and the

shocking events of last week have renewed in me that drive. so i can announce today that over the next few weeks, i and ministers from across the coalition government will review every aspect of our work to mend our broken society -- on schools, welfare, families, parenting, addiction, communities. on the cultural, legal, bureaucratic problems in our society too -- from the twisting and misrepresenting of human rights that has undermined personal responsibility to the obsession with health and safety that has eroded people's willingness to act according to common sense.

the broken society is back at the top of that my political agenda. we need to reclaim our streets from the thugs. i know there have been questions in people's minds about my thoughts about law and order. nothing in main job is more important in keeping people say. it is obvious to me that to do this we have to be tough, we have to be robust, we have that have a clear line between right and wrong to the heart of this country in every street in community. that starts with a stronger police presence, pounding the become a deterring crime bitter regrouping crackdown at the first signs of trouble. let me clear, and this government we will always have enough police officers to be able to scale of in the way we saw last week. to those who see that we need to abandon our plan to make savings, i say you are missing

the point. the point is what really matters in this fight back, the amount of time the police can spend on our streets. this will not be fixed by pumping money in and keeping things as they are. as the home secretary will explain tomorrow, it will be fixed by completely changing the way the police work. scrapping the paperwork that holds them back, getting them out on the streets where people can see them and criminals can fear them. our reforms mean that the police are going to answer directly to the people. you want more tough, no- nonsense policing? you want to make sure the police spend more time confronting the thugs in your neighborhood and less time meeting targets by stopping motorists? you want the police out patrolling your streets instead of sitting behind their desks? elected police and crime commissioners are part of the answer. they will provide that direct accountability so you can finally get what you want when it comes to policing. the point of our police reforms

is not to save money, not to change things for the sake of it -- but to fight crime. we'll looking at giving them more power to confiscate property. we will see much more. indeed a war on gangs and gang culture. this is not a side issue. it is a major criminal disease that has infected streets and states across our country. stepping out of gangs should be a new national priority. last week i set up a cross- government program to look at every aspect of this problem. we will fight back against gangs, crime and the thugs who make people's lives hell and we will fight back hard. the last front in that fight is proper punishment. on the radio last week they interviewed one of the young men who'd been looting in manchester. he said he was going to carry on

until he got caught. this will be my first arrest, he said. the prisons were already overflowing so he'd just get an asbo, and he could live with that. well, we've got to show him and everyone like him that the party's over. i know that when politicians talk about punishment and tough sentencing people roll their eyes. yes, last week we saw the criminal justice system deal with an unprecedented challenge. the courts sat through the night and dispensed swift, firm justice. we saw that the system was on the side of the law-abiding majority. but confidence in the system is still too low. and believe me -- i understand the anger with the level of crime in our country today and i am determined we sort it out and restore people's faith that if someone hurts our society, if they break the rules in our society, then society will punish them for it. and we will tackle the hard core of people who persistently reoffend and blight the lives of their communities.

the question that people last are where the parents? that wayou can have a clearer ia about why these young people were behaving so badly. i did was no one at home, they did not much care, with a loss control. families mess up. i do not doubt that many writers have no data at home. that is become from and never were standard for children to have a mom and dad that, normal for young men to grow without a male role model. so if you want to have any hope of mending our broken society, family and parenting is where we have to start. i have been saying this for years, since the ball for a was prime minister, before i was leader of the conservative party. from here on my what family test

applied to all domestic policy, if it hurts families, if it undermines and travel minds the values to keep people together or at sob's families from being together, and we should not do it, and we have to get out there and make a positive difference in the way that families work. and we have to be less sensitive to the charge that this is about interfering. i want to implement this as quickly as possible. and we need more urgent action on the families and some people call problem or trouble. the ones that everyone in their neighborhood knows and often avoids. last december i asked emma harrison to develop a plan to help get these families on track. it became clear to me earlier this year that -- as can so often happen -- those plans were being held back by bureaucracy. so even before the riots happened, i asked for an explanation. now that the riots have happened i will make sure that

we clear away the red tape and the bureaucratic wrangling, and put rocket boosters under this program, with a clear ambition that within the lifetime of this parliament we will turn around the lives of the 120,000 most troubled families in the country. the next part of the social fight-back is what happens in schools. we need an education system which reinforces the message that if you do the wrong thing you'll be disciplined, but if you work hard and play by the rules you will succeed. this isn't a distant dream. it's already happening in schools like woodside high in tottenham and mossbourne in hackney. they expect high standards from every child and make no excuses for failure to work hard. they foster pride through strict uniform and behavior policies. and they provide an alternative to street culture by showing how anyone can get up and get on if they apply themselves. kids from hammersmith and hackney are now going to top universities thanks to these schools. we need many more like them

which is why we are creating more academies, why the people behind these success stories are now opening free schools, and why we have pledged to turn round the 200 weakest secondaries and the 200 weakest primaries in the next year. but with the failures in our education system so deep, we can't just say 'these are our plans and we believe in them, let's sit back while they take effect'. i now want us to push further, faster. are we really doing enough to ensure that great new schools are set up in the poorest areas, to help the children who need them most? and why are we putting up with the complete scandal of schools being allowed to fail, year after year? if young people have left school without being able to read or write, why shouldn't that school be held more directly accountable? we want everyone to be proud of their community. we need a sense of social responsibility a part of every community. but the truth is for two long,

the big bureaucratic state has helped train the responsibility away. it usurps local leadership with its annalist dictates. it has frustrated local organizers with its rules and regulations. and it is denied local people in the real say about what goes on where they live. any wonder that many people do not feel they have a stake in their community? this is got to change. we are already taking steps to change it. we're training an army of organizers to work and almost deprived neighborhoods, because we're serious about encouraging social action and giving people a real chance to improve the community where they live. the question i want ask now -- are these changes big enough to foster the sense of belonging we want to say? that is what we're going to be looking out over the coming weeks. one of the biggest parts of the social fight back is fixing our welfare system. for years we have had a system

that encourages the worst in people, that incites laziness, that excuse is bad behavior, that erode self discipline, that discourages hardwe talk about mn our financial system -- where banks think they can act recklessly because the state will always bail them out. well, this is moral hazard in our welfare system -- people thinking they can be as irresponsible as they like because the state will always bail them out. we're already addressing this through the welfare reform bill going through parliament. but i'm not satisfied that we're doing all we can. i want us to look at toughening up the conditions for those who are out of work and receiving benefits, and speeding up our efforts to get all those who can wall a work back to work. work is at the heart of a responsible society. so getting more of our young people into jobs, or up and running in their own businesses is a critical part of how we strengthen responsibility in our society. our work program is the first step, with local authorities,

charities, social enterprises and businesses all working together to provide the best possible help to get a job. it leaves no one behind -- including those who have been on welfare for years. but there is more we need to do, to boost self-employment and enterprise, because it's only by getting our young people into work that we can build an ownership society in which everyone feels they have a stake. as we consider these questions of attitude and behavior, the signals that government sends, and the incentives it creates, we inevitably come to the question of the human rights act and the culture associated with it. let me be clear -- in this country we are proud to stand up for human rights, at home and abroad. it is part of the british tradition. but what is alien to our tradition -- and now exerting such a corrosive influence on behavior and morality -- is the twisting and misrepresenting of human rights in a way that has undermined personal responsibility. we are attacking this problem from both sides. we're working to develop a way through the morass by looking at creating our own british bill of rights.

and we will be using our current chairmanship of the council of europe to seek agreement to important operational changes to the european convention on human rights. but this is all frustratingly slow. the truth is, the interpretation of human rights legislation has exerted a chilling effect on public sector organizations, leading them to act in ways that fly in the face of common sense, offend our sense of right and wrong, and undermine responsibility. it is exactly the same with health and safety -- where regulations have often been twisted out of all recognition into a culture where the words 'health and safety' are lazily trotted out to justify all sorts of actions and regulations that damage our social fabric. so i want to make something very clear -- i get it. this stuff matters. and as we urgently review the work we're doing on the broken society, judging whether it's ambitious enough -- i want to make it clear that there will be no holds barred, and that most definitely includes the human rights and health and safety culture. many people have long thought that the answer to these questions of social behavior is to bring back national service.

in many ways i agree, and that's why we are actually introducing something similar -- national citizen service. it's a non-military program that captures the spirit of national service. it takes sixteen year-olds from different backgrounds and gets them to work together. they work in their communities, whether that's coaching children to play football, visiting old people at the hospital or offering a bike repair service to the community. it shows young people that doing good can feel good. the real thrill is from building things up, not tearing them down. team-work, discipline, duty, decency -- these might sound old-fashioned words but they are part of the solution to this very modern problem of alienated, angry young people. restoring those values is what national citizen service is all about. i passionately believe in this idea.

it's something we've been developing for years. thousands of teenagers are taking part this summer. the plan is for thirty thousand to take part next year. but in response to the riots i will say this. this should become a great national effort. let's make national citizen service available to all sixteen year olds as a rite of passage. we can do that if we work together -- businesses, charities, schools and social enterprises -- and in the months ahead i will put renewed effort into making it happen. today i've talked a lot about what the government is going to do. but let me be clear -- this social fight-back is not a job for government on its own. government doesn't run the businesses that create jobs and turn lives around. government doesn't make the video games or print the magazines or produce the music that tells young people what's important in life. government can't be on every street and in every estate, instilling the values that matter. this is a problem that has deep roots in our society, and it's a job for all of our society to help fix it.

in the highest offices, the plushest boardrooms, the most influential jobs, we need to think about the example we are setting. moral decline and bad behavior is not limited to a few of the poorest parts of our society. in the banking crisis, with mps' expenses, in the phone hacking scandal, we have seen some of the worst cases of greed, irresponsibility and entitlement. the restoration of responsibility has to cut right across our society. because whatever the arguments, we all belong to the same society, and we all have a stake in making it better. there is no "them" and "us" -- there is us. we are all in this together, and we will mend our broken society -- together. [applause]

i have time for questions. >> on the specifics of dealing with these problems, there are two specific things. knocking on their doors every day and taking benefits away from those convicted in the riots. dealers agree with those ideas put into play? and you made a big plant in the speech to turn around the lives of the 120 most troubled families before the general election. how can you achieve that? how would we know if you achieve that? >> let me take the second question first. if you look at the facts on the ground, did are 130,000 dysfunctional and troubled families in our country.

it costs a huge amount of money to intervene in different ways. special services from police and probation. they are in touch with many organizations of the state. no one is working with the families to turn around. in some countries, they have done excellent work of getting people into the homes and trying to turn those families around, by solving the underlying problem in those families. we should be doing those things around all of the families. we must not be put off by allegations about interfering. these families cause a huge trouble for the rest of society as well as themselves. we should not stand back and accept that they will have this intervention here. we need to get right back in and help turn some of them around.

one of the reasons i asked the person to sit with the secretary on this task for -- force is he spent a lot of time with the social justice commission looking at how we come to grips with gangs specifically. we bring expertise from around the country into the world on how best to deal with the game and culture. it has been getting worse and worse in our country. quite a tough police action against gangs. but we are working all organizations to try to divert people away from them. i think we will do some very good work on that.

>> prime minister, can you tell me how much of a constraint lower social spending will be in conducting this? and when looking to the united states for advice in policing, -- what about representation from minority communities? >> i think the idea of the way you solve problems of throwing a wall of money at them -- opening the taxpayers check book -- we proved that is not the case. if these riots were about money, we would have a debate today on how to spend money. they were not really about money. there were about the haight, moral breakdown. and, some of these things cost money. a lot of it is about doing

things differently. we have an excellent police force in this country. we could get more by getting more on the streets. we do not have a lot of money to spend. many of these problems are not money problems in the first place. they are moral, behavioral problems. in terms of getting advice from overseas, we should recognize different countries have done different things. some have succeeded, and some have failed. we need to see good examples and learning -- and learn from that. look at the united states. huge challenges with crime and some terrible situations with some cities in the gangs. they have been dealing with it. some of the inspiration, we have

learned to listen to them and see what they have to offer. that is what we are going to be doing. >> my question is do the young people here have any questions? i would like to know what they think. >> i was taking the people with their hands up first. >> you said about families, maybe teenagers have problems. >> the fact is that is the -- something we are trying to address and deal with the problems. every family has massive challenges of dealing with behavior. it is the first to get people to

behave better and understand that your behavior has consequence. it is an important that we have other ways of helping people, which is why it schools need to do better. if you are not getting what you need, there is another setting working with you to offer a talk about behavior. some do not have a supportive and loving family. that is why you need others in the u.k. as well. it is not good enough for politicians to say, let families get on with it. we will talk about the other things we do in parliament, foreign affairs. we have to roll of our sleeves and get involved in all of this. och >> the more that some

families feel they are troubled, the more they will field the effort to become -- >> what we are trying to do is get in there and work out what the problems are. one of the things she says is in some families, you find there is a known tradition of talking about problems. you never talk about the problems and difficulties in the family. give people a chance to live their life in a different way where they can deal with them.

you cannot make sense the hard- pressed social worker that has massive problems, children taken into care, child abuse. it is quite difficult for social workers to have the time to spend with a family. what we find is there is massive of contact with the state. no one is spending time so they can deal with their problems. but it is what old-fashioned a social workers used to do more of, they could spend more time with the families. we have got to do that.

it is important to spend time with the families. it is about finding the things and applying what works and their elsewhere. the hard work must be done if we're. to deal with these problems. >> you were talking about going to the top schools, but how can you afford them if you cannot pay for them? >> one of the things this government is changing is just because it is a poor neighborhood and community, it should not have -- and the schools. and go to some of the places in our country that do not have any good schools.

they are getting sponsors into the schools, bringing money into the schools, putin grade teachers in charge of those schools. a great idea for running a new school. you should be able to set that up. if you can attract the people, you get the money. what i say is a lot of the schools in our country are getting better results than some of the school's right here. it can be done. they need rocket boosters under it to make sure they are getting it into every part of our country. they should be able to have really good education within the state that is good in the competitive as in the private sector.

let's have one more question. >> [inaudible] part of these -- up front, one of the problem seems the police did not go about the job i had one of them to do to nip it in the bud. >> this was discussed in the house of commons. i think when it started, there was enough police on the streets and the police tactics did not work initially. that is what police officers from the top of the -- what other officers told me. i think that is right. we have to be fair to the police. they are confronting and they do not know what the mob is doing. as an apolitical or is it criminality?

it is easy for everyone else to say it is obvious what you have to do. the police are on the front line and having to adopt and change their tactics as it is happening. that is what they did and they did it successfully and did it with political support. there will be lessons to learn and i am determined we're going to learn them. we have to be careful not to be unfair. we do -- they do a good job on our behalf. i have met many in the last week. they showed extraordinary bravery. they put themselves between us and problems and to risk their lives. please understand that and --

ken i think you for coming? it is lovely to be back with you. i've tried to enter as many questions as i can. thank you. [applause] [unintelligible] >> the british opposition leader also spoke about the riots. he was in a north london. this is 20 minutes.

>> thank you and can i say what a privilege it is and a pleasure to be back? i want to pay tribute to all the young people, the fantastic young people and also fantastic teachers, some of whom taught me. it brings back great memories to be here. i am delighted. it gave me a great education. i grew up with people from all walks of life. there is no substitute for that education. i would not be standing here today as leader of the labour party. everyone here will have a

personal story about last week's riots. and the feelings we have about what happened. mine is one week ago. near the route that i walked to school for seven years. there was ranting and windows were smashed and stuff was taken. no major city seemed immune. this week i did what politicians did. i went out on the streets. people talk to me about their experiences. people told me their story. their personal, powerful stories. i want to bear witness to them today. it is only with the voices of

people that we can begin to understand to solve the problems we face. and tuesday i was in beckham -- peckham. i heard from a young woman who made it to university who feared for her safety. something has got to be done about this. i also heard from an old man who said the problem is government and politicians have deserted our young people. i saw the spirit of 1000 people who had come out because of twitter that morning to show this spirit that manchester was something else and they cleaned up after the rioting and looting. on friday i went through a whole range of emotions. that is a community that has

done so much to build its reputation. and people were saying to me our worry is the world will turn its back on us after what happened. what will happen to their reputations? i met people like alan moore and i went to see what was left of his shop. he spent 35 years building up his business and all that was left was a safety deposit box standing against the wall. at the same time i visited a center in tottenham. it was about people, volunteers coming out to say, we will help people who need to rebuild. young people who represent the vast majority of young people up and down this country. law-abiding people and politicians need to say that

because we do not say it enough. on saturday i heard from people in hackney. shopkeepers who had seen their business is attacked and people searching for answers. i have seen and heard of and you have had done. anger and grief and fear. also hope, break free, and determination. from almost all, i have heard nothing but condemnation for what happened. no excuses or justification. there is nothing to justify. i have heard and you must have heard as well something else. a deep desire to understand. a deep need to explain what happened. we need to be tough on crime and tough on the forces of crime, that is what people have been saying to me on the streets and everywhere i have been

people are discussing the same. why did this happen? what does this say? what can be done to prevent it from happening again? this is the task of politicians. it might be the more popular part. people demand it on the streets. it stops there. it says it to explain -- to explain is to excuse. if others was to tread this path is a matter for them. it is not strength. it is an abdication of responsibility. if we follow that approach, we run the risk of this happening again. you cannot arrest your way out of this problem. there is another part.

simply to blame others. blame the parents. blame the police. we have seen a lot of that in the last few days, haven't we. an unseemly attempts by governments to take credit for operations that would write, and blame the police for that that did not work out. that is wrong. the approach of blaming others -- and the approach of blaming others, so simplistic. simple judgements in response to the sort of events bring bad solutions. of course the public says we want quick action, but a new policy day, knee-jerk gimmicks, not opera, they will not solve -- not thought through, they will not solve the problems. let's be obvious -- let's be honest about the politician's instinct in this. it will not meet the public's demand for real and lasting solutions. we have heard it all in the last

few days. water cannons, super cops, a daily not at the door for banks, and today's gimmick, prime minister used to say -- now says the answer is to reform our health and safety laws. a crisis like this tells something of our political leaders. day by day, the prime minister has revealed himself to reaching for shallow and superficial and answers, not a lasting solutions the country needs, based on the wisdom and insight of our community. we have to answer the most basic questions. why are there people who think it is ok to loot and vandalized in their own neighborhoods? they perceive no loyalty to their own communities. they think that everything to gain and nothing to lose from doing things like this. the small minority who did this

or not one race, when hate group, one community. they are british people. to answer what has happened, i say this. people are responsible for their actions, but we all bear a share of responsibility for the society we create. government, labor, conservatives, powerful elites in politics, business, and the media, and all of us, me and you as well, only by starting with this truth can get the honest answers our country deserves. i am here today because the national conversation we need must start with the communities affected. every place i have been too, there is the knowledge to solve these problems and the overwhelming desire to be heard.

but i have also heard the suspicion, perhaps legitimate suspicion, that this will be another example of politicians are arriving at the scene of trouble and then melting away when the world moves on. people have seen the way my profession works before and are understandably cynical. can we be different this time? that is the challenge for political leaders. only if we give people who have been affected by this is the chance for their boys and used to be heard. after every major disturbances in our history, we have had a commission to look at the causes. we must have won this time as well. a genuine national conversation, not a group of mt's focus on policing in criminal justice, as the government proposes. not a review of government policy conducted by civil service. not a standard judicial inquiry is made up by elites, such as

what happened with the phone hacking. we need an answer that comes from the people themselves, that listens to the victims and build on their own experiences. the prime minister should come to these communities and have the humility to listen. he should have nothing to fear from the truth. the people leading this commission of inquiry must include those young people that we talked about, those with the experience of being in gangs. people from across the community. it should not happen in whitehall or westminster. what are the issues of this national conversation? let me put some issues on the table. let's start back asking the question of what value we saw from the looters and up riders. greed, selfishness, and immorality, above all,

irresponsibility. the irresponsibility is not just confined to those who took part in the riots. we know there are issues of personal responsibility, too. i was surprised to hear about the parents who did not turn up to court when their 14-year-old was charged with looting. when the riots began, i made sure my kids were at home. why were the parents not doing that? the reality is, the truth behind it, is not simple. some people say it is all about family breakdown. but there are single parents across this country and the vast majority of them are doing a brilliant job. there are some two-parent families not doing a good job. there are rich families unable to control their kids, and the vast majority of poor kids -- poor families to control their kids. we must avoid really now the old stereotypes and prejudices

in this debate that suit one party or another. we need to ask people questions about what causes this irresponsibility, about why some parents are not teaching their children the difference between right and wrong, not setting boundaries. people say to me, you cannot tell your children off anymore. who is telling parents the cannot tell of their children anymore? certainly not me. we have to ask why the gun people do not have the role models to put them on the right path in life, and we need to understand something else as well, the link between the problems in our society and the economy we have in britain. we need to ask what we can do about an economy where children do not see enough of their parents because they are working 50, 60, 70 hours a week, do not just one job but two or three jobs, and not there when their

kids get home, not there in the evening. the los -- the solutions will not be simple, either. one of the most important things government can do to back families up, proper one-to-one support to help parents do their duty. as we talk about what happened in the riots, we have to be honest with ourselves. children's ideas of right and wrong do not just come from their parents. we cannot honestly say that the selfishness and irresponsibility we saw is combined to the louvers or even to their-- c onfined to the looters or even to their parents. it is not the first time we have seen this kind of the first, take what you can culture. the bankers to took millions of

destroying people's savings, greedy, selfish, and immoral. the mt's to send their expensive expenses. reid, selfish, and immoral. people would talk about the sick behavior of those without power should stop talking about the sick behavior of those with -- start talking about this the behavior of those with power as well. it is not an bought -- confined to a minority only at the bottom. the morality of millions of hard-working people are under siege from the top as well. let's talk about what that does to our culture. too often we have sent a message from the top to the bottom of britain's society that says anything goes. you are in it for yourself, as long as you can get away with it, who cares?

we have heard a lot of talk about role models for communities, but what role model has really been provided by the elites in britain in the last few decades? the values crisis is not confined to the so-called underclass in britain. our whole country is held back by irresponsibility, wherever it is found. it can only be solved by addressing the issue writer cross our society from bonuses to benefits. so the culture of our society does matter. just as there are those on the left to dismiss arguments about culture, or those on the right to dismiss the importance of opportunity and hope. it is true that some people say that people from comfortable backgrounds to part in the riots. the lack of opportunity cannot explain all of what happened. just because it cannot explain everything does not mean it cannot explain anything. that is why a leader from the opposition needs to speak frankly. not everyone who grows up in a deprived neighborhood turned to crime, just as not everyone who grows up in a rich neighborhood stays on the straight and narrow. individuals are responsible for their actions, and every

individual has the choice between doing right and doing wrong, but there are connections between circumstances and behavior. these are not actually my words. they are the words of david cameron in a speech five years ago. five years ago, he thought of culture and deprivation matter, but what thursday he set in the house of commons, this is not about poverty, this is about culture. i have to say, i don't understand why he has changed his mind. why he has accepted a false choice between culture and opportunity. maybe his views of the world have changed, but the views of what make him popular have changed. i am clear, both cultural opportunities matter. to explain is not to excuse. if we reduced to explain what happened, we will condemn ourselves to repeat it. opportunity matters because there are far too many people in our country who do not have the hope of a better future, who don't feel that proper chances in life and in society. of course the vast majority of

young people were not writing and do the right thing, but their decision to do the right thing does not assault us of our responsibility to do the right thing by them and give them the hope of a better future. in the battle to give hope to young people, we have to be honest. we are losing to the gangs in the inner cities. we have to understand the deep nature of this towards that young people are faced with. i heard it everywhere i have been in the last week. some kids see the joists and say wrongly, the gang offers them money, protection, and status, and some people -- some young people believe it is not actually available to them from another route. just as we need tough action against gangs, we need to show young people there is another way, and that is harder when

support is being taken away. i am more interested in defending one government. i am proud of what a labor government did to advance young people's chances. rebuilding our schools, the minimum wage. these advances the cause of young people. high school standards, getting more people into universities. we did not do everything right, and we did not reach everyone we should have, but in the aftermath of what happened, how we build that better future for yana people, because it is part of the answer. issues like education and skills, youth services and jobs, are important to keep people away from gangs and choosing the wrong path. does matter if young people think there is a grave risk to what i call the promise of britain, that each generation can be better than last. that is what the prime minister used to say, too, and i hope he

will say it again. if i am wrong, and hope and opportunity are irrelevant, then let us have a commission of inquiry reach that conclusion. that's not be scared to seek an explanation and hear the answer. let's be brave enough to find the truth. it is not simply that young people find it hard to get on. it is about something else as well, something the government did not talk about enough, and that is the unequal society that we live in. it is about the gap between what young people can expect and what seems available to others. they see a society glorifying those who make millions, while they struggle to keep up. they be the cult of celebrity, replacing the at the of hard work. these are the parallel lives that we have in britain today, the parallel lives of those who have so much and those who feel they have no stake in our society. we all want the chance to get on, but what is the chance --

what if the chance to do that seems small, and the rewards for success seemed distance. if the wrong collateral so far apart that you feel you cannot possibly aspire to climb up -- if the rungs on the ladder are so far apart that you feel you cannot possibly aspire to climb up. a stake in society requires a ladder that you can climb. it demands that value be within reach. i hope a part of the national conversation that we need, we look at these issues of inequality which scar our country. what i know is this. the most important thing for now is that we do not let these seven days in august which shook our nation and then our nation forgot.

that is why a national conversation is so important. reaching across the gaps in our society between the parallel lives i talked about. i urge the prime minister to establish a commission of inquiry without delay. if he will not do it in the coming days, i will do it myself. it is right for the victims. is right for the country, and it is right to build a society we need. in recent years, we have seen three great crises in our national institutions, braque began banking, parliament, and the press. in each case, and irresponsible minority let down the minority the majority of good, responsible people. each crisis showed the country in need of deep rooted change. but this crisis showed something else. our strength as a country to come together and respond. the people who came together to sweep our streets showed how a

country can unite. the people who reclaim our streets show the true character of britain. it is that spirit, that spirit of young people, that spirit of great teaching that can help us build a future together. it is that spirit which our national conversation must build for the future, and is that spirit that gives me hope for the future. thank you very much. [applause] >> in just a few moments, president obama's town hall meeting in minnesota. in a little more than an hour, gop presidential candidate buddy roemer, the former governor of louisiana, criticizes other republicans and the president for taking contributions from political action committees. after that, a forum on national

security in the 10 years since the 9/11 attacks. later, we will we are the comments of british prime minister david cameron and opposition leader ed miliband on the london riots. secretary hillary clinton and leon panetta will discuss in a national challenges facing the u.s. next is a discussion regarding the future of social security. it is one hour.

grex several years ago, we began this form as a salute to seniors. i believe those of you watching will benefit from today's program. some of you baby boomers, and younger generations, grandchildren and great- grandchildren, i believe you are in for a treat. before i turn to the most distinguished panel we have ever assembled, allow me to make a couple of observations. i came here in 1962 as a young reporter covering congress working in this very building, the national press club. so security was 76 years old on

sunday, august 14. it was enacted by president roosevelt. we experienced few growing planes -- pains. after leaving its teen years and aging into its '40's and '50's and beyond, so security began showing some wear and tear. who among us does not at age 76, or in my case, 75. everybody agrees that some social security reform is needed. so security has a servicing years very well and kept millions out of poverty. my mom depended on her check, and her sister would have celebrated her 99th birthday

august 14. her son, my cousin, turned 76 this year. they're surviving sister celebrates her 84th. i do not want to leave out our national spokesperson, pat boone, 77. he is still singing at concerts'. seniors are still paying their dues. they are entitled to solutions, not political pot shot. they deserve better. it started as a 2% tax on $3,000 of income. it has grown since then. from $60 annually, only $5 a month. i did the calculations on a computer. i also did the math and with an

old-fashioned pencil. $5 a month back in 1935 is now as much as $13,000 annually. that is over $1,000 and change per month. lower rates of birth and fewer workers paying in. living longer. as one observer put it, and delicately, seniors no longer conveniently die at the age of 65. our honorary chairman now nearing 90, living with his wife in evansville, indiana, he states that it has been statistically dead for 25 years. that puts a pretty big financial strain on the system.

one person is an example of why the system is in financial straits. she paid in less than $25 before retiring. instead of conveniently dying at age 65, this retired schoolteacher lived until 100. for her investment of $25, she is paid nearly $23,000 from social security. that is a 92,000% return on her investment. yesterday, a cleveland -- cleveland ohio man retired a day after the system came into law. he paid into it a nickel. he got a 340% return on his investment. so security trust fund to borrow $5 trillion paid.

one of washington's dirty secret is the trust fund is broke. it is the favorite cash cow. i'd like to quote democrats and republicans. two former senators, a press conference was held a few years ago. it said if private businesses and do what we do in congress, stealing from the trust fund, they would be locked up for embezzlement. that is probably correct. there are solutions offered by many experts. the people we are privileged to have with us will offer a straightforward and practical solutions. so security solutions often run into a political buzz saw on capitol hill.

nowadays, signing pledges seem to be standard operating procedures in washington. perhaps the singers will no longer be used as political pawns on capitol hill. now to our distinguished panel. we have a senior fellow. dr. bernstein served as chief economist and economic adviser to vice president joe biden. he is also an executive director and a member of president obama's economic team. he was a senior economist at today policy institute here in washington. during the administration of president clinton, he worked with the u.s. department of labour. he has co-authored numerous books.

he has been published extensively in various venues, the financial times and others. he is a commentator for cnbc and msnbc.com. he has an economics blog as well. he holds a ph.d. from columbia university. here he is. >> a rousing applause. i'm glad to be here talking about a favorite topic. a nice introduction. i like to find myself in the company of one of my favorite economist around town. the story i could tell about him is that when he was the director of the congressional budget office, he annoyed everybody equally. that is very important in this town. i give him a lot of credit.

let me start with a set of principles. i might talk to you about 3 part thaw. principals, fax, and fiction. these are the set of principles, ideas, that that my thinking, and i hope yours as well on social security. it has to be the goal of a civilized society in an advanced economy. it must be to a guaranteed pension, which is essential to meeting the goal. private plans that depend on stock-market returns can complement the basic guarantee, but they are simply not compatible with the goal of retirement security. private employers are providing ever fewer defined benefit

plans. everything about the three legs of retirement security, pension, savings, social security, and i will argue with some of the points made in the introduction, i would argue that social security is the stronger of the three legged stool. not because it is so strong it does not need fixing, because it does. those are the principles. here are a set of a fax that died my diagnosis of the problem and the prescription to help fix and maintain the this. the average benefits as jim pointed out are not overly generous. about $1,200 a month, $14,000 a year. those benefits are very important to people. i think it is commonly

misunderstood. many do not know these facts. the importance benefits, even not at the generous levels, for more than half of elderly beneficiaries, for a quarter, it provides nearly 90% of their income. the spending down of your savings, diminish probability of working, as you get older, it's -- the dependence on so security increases with age. the majority of a family income for two-thirds of the beneficiary and nearly all of the in camera for about one- third. if you were to take so security

out of the picture, poverty rates among the elderly would jump to 45%. it is a huge poverty reduction program. let me move on to some of the budgetary points. my first is that the benefits are critically important. when i get it to fix this, i will emphasize -- i am not one of the don't put everything on the table people. i am not saying that benefits are outside of the target. when we think about achieving sustainability in social security, we need to be mindful of the importance of those benefits to the beneficiaries. let's talk about the budgetary challenge. when you hear people talk about how the entitlement spending is sustainable, you hear a lot about that these days. it is true that entitlement spending is expected to

increase from 10% gdp to 16% in 25 years. only 1 percent of that 6 percentage point increase is so security. that is not nothing. it should be split out from the pressure on entitlement spending coming. if you look at the projections over time, so security not only those 26% gdp by 2035, it stays at a 6%, while health-care entitlements continue to grow. it is more so on cost pressures for health care costs. along with this entitlement pressure, we cannot afford to

fix the social security shortfall. the 75-year shortfall amounts to about eight tenths of a percent of gdp. eight tenths of a percent of gdp. that is just about equal to the revenue that you would achieve from the exploration at the high and bush tax cut. when people argue that we cannot support social security, but we can afford those high in the tax cuts, i think that is a hypocritical and destructive argument. how is it that every advanced economy can afford this, but we cannot? what is so different about us?

if you look at the countries of europe, their democratic pressures are more challenging than ours. yet, we are an international slacker. the average for the replacement of the average median income is about 40%. it is social security going broke? i think this has been a terrible mess information campaign, some of the worst miss information i have seen. it is absolutely the case the full benefits can be paid through 2036, at which point the trust fund is exhausted. it may look like the benefits go to 0, but they do not.

they are still coming into the system and the social security could pay 75% of scheduled benefits. this is widely known to people in this room, but most people think out there that trust fund, that is all she wrote. that 75%, -- i think there should be a combination of tax increases. you can dress up those options any way you would like to. at the end of the day, that is what we are talking about.

>> growth is essential to the land of opportunity. we can do this. this can be done. i am positive on america. we can grow again. at least a half a dozen strong initiatives must be employed. we must level the playing field against those nations who compete unfairly. choosing to steal our best jobs. will they use child labor, forced labor, prison labor?

no safety or health or environmental standards. hidden barriers to the flow of trade and even currency manipulation. we've outlined a specific set of remedies that will be featured in my next major speech in new york. a president must defend american jobs from unfair foreign competition. we have waited too long, and for some, it is too late. but these unfair practices will no longer be tolerated. i will call them out one by one. we must win the battle to control federal spending. at 25% of g.d.p. is an excessive, unsustainable and confidence-destroying facet of our nation.

for six months, a detailed 1% reduction in spending. my idea. will take us. it begins with energy subsidies including ethanol and natural gas. modifying entitlements, year one. we must de regular small businesses beginning with rigs and regulations imposed since january one, 2008 and extend that de regulation period forward for five additional years. from the president, wow. two out of every three jobs in america are formed by small businesses that's the defined as 499 employees or fewer. 89,000 pages last year alone on

new regulatory in small businesses. they don't have a lobby or small checks. they just work for america. two out of every three jobs. they are the key. regulations are the new taxes. we'll deregulate them. health care costs must be lowered on the diabetic for more than 40 years. i understand the business. we must eliminate cost. we'll start with obamacare itself. we'll institute tort reform. we'll open insurance competition across state lines. so simple. so hard to do. they give big money. we'll expose pharmaceuticals to price competition and incent advise providers by allowing them to keep 25% of what they save. we should be energy independent in a decade.

we'll drill where there's oil and gas. we'll drill safely. we'll put 1 million people to work and use all forms of domestic energy and eliminate department of energy. will tariff form accept canada and mexico. we'll save $500 a billion year year will be spent on america on our uses and restore the value of the dollar and truce cost of gasoline by doing just that. we must completely revise our tax code from growth with no loopholes. we'll make the u.s. a tax haven with minimal tax investment on capital gains. simple is the keyword. for the job and not a penny more.

and thinking must be reworked by having capital ratios rise as banks grow larger, they are unsafe. we'll eliminate too fwoig fail. we'll restore a version of glassy. much needs to be done, but that's not what i'm going to talk about this evening. none of these things will happen under the current political system. special interests own this town. special interests own this capital. special interests own the tax code. special interest own the budget. they bought and paid for it. the tierney of the big check, i call it. we need to make changes to grow. we need to take bold action but special interests have never had it so good. why should they change?

corporations have never made more money than they've made the last 12 months. why should they change? our political system, our capital is institutionally corrupt. i'm not pointing my finger at some person. all you can do that. i'm pointing it at a system. special interest write the tax code. you can't read it. they can. every year the cost of elections rise $3 billion. $4 billion. $5 billion. $6 billion, and the same 1% or 2% of americans give all the money. 98% give nothing. and that's what we've got. we are owned at the top by special interest money, wall street money. by the big check, and it's getting worse. let's look at the record.

health care reform didn't include tort reform. i wonder why that was. tort reform give a lot to both parties. we did it in louisiana. they thought i was the devil itself, but i did it, and lowered our costs. health care reform under president obama didn't include the requirement that insurance companies had to compete across state lines. you can't buy a policy across state lines now. prohibited. it's in the law. big givers, those big insurance companies. those rasals. it didn't require pharmaceutical companies to compete on price. oh, no. big bucks these guys have. big bucks.

a 2300-page bill was produced. unconstitutional in its mandate to citizens, and it didn't touch three of the biggest health care costs on earth. [inaudible] pharmaceutical company as an example. special interest money in the billions. did you know washington, d.c. addresses and -- gave more money in the last presidential campaign than 32 states combined. you didn't know that, did you? i guess it's just an accident. and it's worse now than four years ago. we got the packs, the political action committees who can give twice as much as individuals. why is that?

and there's no limit of the number of packs. they are the bundlers. now there's a happy crew. they are decimated by the candidates to go around and pick up checks, because they raise money. bundlers they are call do so. they pick them up and give them to the candidates. $2 million in mitt romney's case. he had 25 designated bundlers to raise $2 million each. i read a harvard law school student paper recently. he let me do it. where he looked at the givers. the givers in presidential campaigns. the bundlers. see what happens to them. he called it checkbook diplomacy.

normally in a presidential term , about 30% of ambassador y'all appointments are political. obama's 57% political. 23% of them were bundlers. oh, i'll give you some names. roots, japan, $500,000 he gave. us isman, great britain. $500,000. rip ken, france, $800,000. >> gutman, belgium, $775,000. >> bayer, switzerland. $745,000 picks. on and on. 24 of obama's nominees bundled over $11 million. the number is hard to come out with, because there's no full disclosure. the minimum range is at $11

million, and by the way, that doesn't include money to the inaugural committee or the pack or d.n.c. both sides do it. i don't mean to just pick on the president. he's the worst. but both sides do it. his 30/70 ratio is 65% political. selling important jobs like 1/3 -- selling important jobs like a third-world nation. it's not right. it's not good. it's not healthy for america. the tierney for the big check. lobbiests who are fundraisers. you can be one or the other. i don't have a problem with either one. i know when i was a congressman, another i didn't take pack money, i did accept a

meeting with a lobbiest. information is critical. it is a valid job to be a lobbiest. but not where all you do is bring a check. i think a registered lobbyist should not be allowed to be both lobbyist and fundraiser. you know who agrees with me? the american bar association just last week. the name jack abra move comes to mind. jack abramoff comes to mind. i notice congressman, is it basara? had a fundraiser come up. he was appointed to the special committee. going to have a fundraiser. $1,500 a check for lobbyists.

a week ago i called on the members selected for the special committee to issue to not take lobbyist money, pack money for the duration of their term. this is an important committee. don't know if it's a good idea, but it's now a law. they should be free, to members of committee, to do what needs to be done. by the way, the congressman's answer, and i'll quote it. i will continue to do what i have to do as a member of congress. so yes, we're going to move forward with the fundraiser. so what is his role as a member of congress? collect fat special interest checks from lobbyists and packs so he can get re-elected? is that his job?

could it be that he should represent his district and rebuild america? we ask the leadership of the congress to have no lobbyist and pack money for the terms of these members. watch the money. i challenge the leadership. why don't we let the people decide this with their votes. not the special interests with their big checks. now there's something new. it's called the super pack. governor of texas has seven of them, it's said. they don't have to report or disclose who gives them the money, and the amount is

unlimited corporate or individual. unlimited. now these packs are supposed to be independent. independent of what? in mitt romney's case and in rick perry's case, one of these super pack sincere run by their former chief of staff. now there's independence. employees of the campaign run others. it's boeing gus. it's bow gus. it's phony. it's a a way to get around disclosure and limits. chief of staff. maximum givers. people who have maxed out individually pour over into the super pack. employees, business partner, a business partner of one of the candidates gave $1 million last week. oh, they didn't want to reveal

it. why not? if it's illegal, what are we hiding? these are hidden shadowy unlimited corporations and individuals. and the only candidates in my party who have them are romney, perry, paul, balkman and huntsman. why is this why? don't do it. i challenge them. don't do it. join with me. let's restore some honesty and faith and purpose in this system. don't do it. they are phony, and i promise that the american public will learn every detail of every one. special interest trying to buy

influence. super packs run for and by the candidate. in fact do you know under the interpretation of the law, the candidate himself or herself can go to the fundraising dinner of the super pack and speak! oh, there's no connection, is there? it's a joke. except our country is on the line. look at -- reform campaign reform which got me in this. i'm small city, bank, not quite $1 billion. built it with these hands. one loan at a time. took no penny of bailout money. not a dime. and unlike the big boys on wall street, if we don't do the right thing, if we don't hanour commitments, we fail.

read gretchen mohr 'tis on sunday in "the new york times," the best as she details the banking scams and the phony reform that we just had. we're still on the hook. too big to fail is still the law. goldman sachs is the heroinest financial giver, and no one went to jail there. how about the homeowners? oh, by the way, obamacare the first place he went was wall street. nice reform, mr. obama. jobs for sale. president's a great fundraiser. that's just what i'm hooking for in a president. how about you? in times of crisis, in times of

peril, in times of certainty, i believe that a president from whichever party, must be free to lead a resurgent nation. i ask my republican colleagues to limit contributions to the individual amount of $2500. accept no pack money, no super pack. no fundraising money at the pack level. you can do it. i ran for governor and beat a man who spent 10 times what i spent. you can do it. i got re-elected to congress every time. not a penny a pack. you can do it. let obama raise $1 billion from the special interests. we can beat him with less, because we will be free to lead, to make the tough choices

and explain to the american people what's happening and why rather than some dark, back room. i want to pledge to my fellow candidates, since they have pledged everything else. i want to pledge that you'll make reform of this corrupt system a must for your leadership skills. the debate has always been between disclosure and lending. republicans generally on the side of disclosure. democrats generally for limits. interesting, now, in the 21st century, we have neither. we have neither. we've lost them both. our political system has been corrupted. the supreme court has ruled, and i think correctly, although by a narrow margin, that money is speech. but it gives congress the

latitude to legislate. broadly based, honoring the constitution. my suggestion of six things would be full disclosure. real-time reporting of money. not quarterly. every 48 hours. that's how long you can hide it. 48 hours. no registered lobbyist can participate in fundraising. their choice. your decision. four, criminal penalties if violated. right now it's a joke. hand slap. nothing happens. five, accept no packs. individuals welcome. no packs. six, eliminate the super pack. eliminate them entirely.

i challenge my fellow republican candidates to stand with the people. against the special interests. the new tierney pulling america down, hiding in the shadows. writing the legislation. never more prosperous while america suffers. special interests. i'm the only person running who has been a congressman and governor. i've fought corruption by insisting on full disclosure and reasonable limits all my life. no exept exceptions. i'm a mean street banker turning small business around. not one penny of bailout, as i said. i know the need of the power of confidence in this uncertain world. we must have a president that we're confident in. he can't take the special interest money. i challenge the next president.

i challenge the next forth restore this confidence. the challenge is the next president he or she faces things are indescribable. i i challenge you to lead on institutional corruption. here i stand from day one. my rules. no pack money. $100 limit, maximum. every nickel disclosed. free to lead. and that campaign for me will be about developing those six points that i laid out about how to turn this country around. that's what i do. i took state with 12% unemployed. broke the lowest bond rating in america. less than guam, i apologize to guam.

we had seven upgrades. unemployment was cut in half. it was tough. i was not popular. no was my first answer. but we scrubbed the budget. we had campaign disclosure. louisiana stood on its feet again. i was only the second republican governor. we've had two since then. we have turned this around. it can be done in america. i need 1 million people to invest $100 in me, in these primaries. is million families. all you'll get is a free to lead president who will build tea partiers, and conservative democrats to cooperate in rebuilding america's future. i hope to make the next debate. i announce 3 1/2 weeks ago that

i was running. we're spending our weeks on end in new hampshire to earn the right. and when we make that debate, we will challenge the field, person by person, to stand free of the special interests and put americans back to work again. the raise is wovep. you can -- the race is wide-open. you can't pick a winner, but you can make one. [applause] >> governor, i would ask that you introduce yourself and governor you described your governance. do you think they have diverged from the interest of the nation and if so how would you propose to realign those interests? >> excellent question.

i don't have an easy answer, but it's two parts. >> have interest diverged in building a nation and building a company? yes. and that's not about normal. it's in a company's bilaws, they are -- their constitution to enhance their profit for their shareholders. and not the name g.e. or goldman sachs or anyone you want to name. they have done just that. they have never made more money, and we find that in the pursuit of money, that they sometimes take action that changes the tax code or the budget form mat that will enhance their ability to eliminate jobs in america and open them overseas, because it's cheap,er, and they make more money. that's not in america's best interest always. it's like i said. i think america needs more than

8% of its workers in manufacturing. we have to lead to make something. that's why nafta was a problem. we need fair trade. corporations won't profit. now, i think our interests can be aligned. i think if we have a tax code where g.e. cannot get off making $500 billion and paying no taxes in america. we can eliminate the farm tax credit. they pay their taxes everywhere but why should we de duct taxes for us. it could be 15%, not 35%. it could be half the rate. we could be simple. there are ways to align each other. one of the disfunctional relationships, though, is the dependence on poll stigses make on the big checks, and

corporations are only too happy to make it. g.e. was the largest contributor among corporations four years ago. they contributed $4.3 million. nice investment. they paid no taxes on $5.2 billion last year. guess who helped write the tax code? guess who goes around with the president as his economic advisor? i just hope he doesn't listen to him. we can, you know, a corporation has to make a decision. is it going to be an american head quartered corporation and enjoy the benefit of our marines, the quality of our life, the freedoms it has in america and not pay its fair share in taxes or are we going to get the rates low and converged? i think we can do this. i never said this in louisiana but i went to the harvard

business school. i went to school with a lot of these characters. they know me. i know them. we need their jobs. we don't need home the transport their jobs to other nations. they'll have to do that some times when there's a competitive disadvantage. but generally, we've let our jobs be stolen by countries that protect their jobs. it's got to be one way or another. we'll either protect ours or break down their barriers. >> question? >> politicians from both parties have talked about stopping outsourcing for years, but they have been unsuccessful. as someone who has worked with both parties, what would it take to convince congress to pass significant trade reform? >> cut off the big checks. g.e. doesn't hold trade reform.

they like the system like it is. goldman sachs doesn't want trade reform. you see they took a couple of billion from libya and invested it well, didn't they? lost every penny. they like the system just like it is. you figure it out. the guys with the money don't want change. they just want power. they are making a fortune the way country is right now. with families in south carolina, new hampshire, iowa, louisiana, nebraska. indiana and ohio without work. and no one seems to care. i listened to a debate the ore night with my colleagues, eight of them. i didn't hear a specific jobs plan. not one. i would do away with the deduction in the tax code. i think it's section 162 which allows one to make a call

center overseas, and they de duct the expense of that from their american taxes. it ought to be changed. we ought to defend our jobs. corporations are free to move and do what's in their best interest. but i think it's in their best interest for america to be strong again. that's what i believe. maybe i'm old-fashioned on that. and i'm a global guy. i've been to china more times than there are people in this room. i've seen the child labor. i've seen cities. before i got there, the smoke was so heavy, the acid was so strong. there are no standards. and i'm not putting wal-mart down. they are a distributor. they have profit prosecuted that. that's fine but we need to make something again, and we need to dare say, a level playing field.

and there are ways to do it. i've mentioned two already that the deductibility of -- i don't want the give away my speech in a few days, but we're going to outline, and it's going to be controversial. i'll admit that. but i think it's right for a president to stand up for our jobs. i think it's the right thing to do. anybody else? excuse me, patty. >> you talked a lot about campaign finance and the corruption in the campaign finance system. when a corporation was formed in march and donated dr. >> right. so how does an example like that sort of strike you as what's happening in campaign finances right now? >> last night, i stayed up last

night squibbling my speech, and i left out 100 example lings, guys. i mean, this mitt romney thing -- independent of him. they formed this super pack. this corporation that gave the money and then immediately disbanded. and they weren't going to tell anybody. and i don't mean to be picking on a candidate. they are all guilty. they have formed super packs. it ain't right. and it's an example of the corruption of non-disclosure is the way i put it. it's an example of having a partner and not telling her or him things that affect them. this sort of hidden, shadow kind of play will not serve candidates well. this will be an issue in this campaign. i don't know that i'll ever be

a major candidate. i've been out of politics for 20 years. 16 for sure. but i couldn't stand by any longer. it's not that i know everything. it's not that i'm a saint. i'm none of those things. but i've been in congress. i've been governor. i've been at the highest levels, and i've watched it work. your freedom is corrupted. it's corrupted by the big check. and it's part of a system of wink and nod. wink and nod. just check out the members of the super committee or special committee and how many fundraisers they'll have in the next 60 days. how much pack money will they collect? awesome. awesome. and not everybody who gives a check is evil. but how do you distinguish between the two? they end up in the tax code.

they end up hurting america. so it's in their best interest to have disclosure. i think. finally, i say -- let me say, you know in the age of the internet. i've gotten donations from all 50 states. i've only been to four of them. there's a feeling out there, that something's not right. people say buddy roemer is an independent. i get flooded. oh, i've changed parties once. that's enough. i struggled as a conservative democrat and voted against tip o'neal in the first congress. i loved ronald reagan. he was crewsfied by the press. but he turned out to be a pretty darn good president. a man of honor. but the system has got an lot worse since then.

i saw early, when i got to congress that packs were deliberately secretive. and the reason they form the facts was so the check would be bigger. that's why they formed them, so i decided not to accept that. and it's grown, my feeling, as i've been in private enterprise, as i depended on the honor and work of my customers that checks that get in between that honor are dishonorible. our system is institutionly corrupt. i don't know of another nation sells ambassadorship like we do. not another nation that i know of. yes, ma'am? >> you talked about de regulation of small businesses. you mentioned oil. can you talk about that?

>> yes. we're talking small companies. we're not talking about the majors. they have got lawyers and lobbyists. they can take care of themselves. i'm really focused on where the jobs come from. and it's not the oil companies. i do think that before you allow small companies to drill, there has to be certain safety standards and a reserve nund case their is damage. i'm talking about a more general approach. president obama is trying this, but in a different way. he's saying let's look at all the regulations and see what's bad. i'm saying let's throw out all the regulations and see what's good. that's a completely different approach. that answer your question? ok. thanks. >> i'm mike with cnn. you've been talking about how money is a systemic problem.

>> yes. >> what are your views on the present system of and process in [inaudible] >> you can smell it. ha ha. you know. i don't have an easy answer there. i went through redistricting when i was governor of our state. i think we did without controversy. louisiana is a unique state. french in the south and kind of german and protestants like me from the north with a wonderful mixture of african-americans. about 1/3 of our population, and in that redistricting, we tried to make sure we didn't advantage a party but that we gave everybody a fair shake. it was aproved easily by the

justice department, and i was proud of that. there are abuses in redistricting. and i have not taken the time and it's been 16 years sivepbs been involved, to know how best to proceed. but let me answer it this way. i am suspicious of the current practice. i don't think redistricting should be used as an excuse to change the nature of a state. i'll just leave it at that. yes, sir? thank you. >> governor, you talked about your concerns about the largest trade definite as part of our economic problem. why is it that no one discusses the need to balance our trade as part of rebuilding our economic strength? >> well, it's like all these candidates have taken a pledge for free trade, like it's worked so well in america. we had 12% of our g.d.p. in trade. there's only one thing wrong

with that number. we sell 12%. we buy 19%. that means we give away not quite $1 trillion a year. the exact number this year will be about $750 billion of our wealth that goes overseas. i like trade. i will have a fair trade adjustment that i'll talk about at the appropriate time in some detail on how to do this. i think trade is healthy. it's a potential growth in jobs in america. but it must be fair or we'll end up just like the trade we'ved that last 20 years where we give away our best jobs and take what's left. i mean look at japan and germany. i mean, i've discussed this. i'm an economist by trade. i've spent all my life looking at the globe and traveling and trading. do it as a banker.

but the two protectionist countries were japan, which was devastated by world war ii. eliminated about 50 industries in america, and didn't let our products go there. nice move. they are the second largest nation on eart. the biggest economic so far is germany. they pay their workers as much as ours if not more, and they have protectionist trade. think we need to not be protectionists but to be fair traders. that means protecting our workers with a level playing field. you're getting me to get into my speech. we can do better guys, and ladies. that's with what i'm saying. and we can maintain our trade relationships. it won't affect germany. it won't affect britain or

argentina or brazil. but china will be affected. trade must be fair. the people of china are great and glorious. they work hard as families. i've been there many times. i honor them. but their government does not practice fair trade. they manipulate the currency. and they use labor that would not be allowed in america. how can we compete against that? i'll tell you in just a few days. but it includes a tax revision to not reward corporations to appropriate their going overseas. and fair trade adjustment. >> why is it protectionism is a

dirty word here? >> it wasn't with george washington. it wasn't with abraham lincoln. for 160 years our country had tariffs. didn't have any income tax. didn't need it. did not need it. income tax passed in the early 1900's and really didn't have a hold on revenue until world war ii. it was after world war ii that we to want dd -- that we adopted free trade. we thought we would capture all the refridge rating manufacturing in the world. i read it. let's get free trade so we can go to these other countries, and we'll manufacture their stuff. we're the best. we were greedy. well guess what, china was mart smarter and they said plan a?

come on. and they took all the prototypes. all the plans. all the patented materials, and they built plants all over china. we're suckers! what did nafta do for mexico or the. i remember a guy running for president said that giant sucking sound is our jobs going to mexico. but he dismissed that. but i won't be dismissed. they have a vested interest in the status quo. yes. we've lost a few, 10 million, 20 million jobs. ok. they'll get over it. remember bill clinton's argument? we'll improve our education system and the workers who lose their jobs will get better jobs.

is that what happened? in my generation, 55 and older. i'm 67. the number of our population that graduated from high schooling ranked first in the world. in the age 25 to 40, we rank 11th. good job, department of education. well done. 11th. you know who is first? south korea. not even close. look, it's a global world. i'm not going to change that. we must compete. you don't protect jobs by guaranteeing them. you have got to compete. you can't have unions do wrong things. you can't have management do -- the way to compete is

corporate. that's me. i'm going to reach across the aisle. reach across the region. reach across race and religion and put a team together that would rebuild america on strong economic principles. and it's not just a simple speech. it will require a half a dozen or maybe a strong dozen actions. i would tariff foreign oil. i would drill for a year then start tariff. when president obama was elected the price of a gal often gasoline was $1.86. have you checked lately? it's because our currency has been de valued. that's the policy of the federal reserve. ridiculous. and i'll make it clear after auditing, you're getting me into my stump speech now. i apologize for that. >> we do have another question. >> yes.

>> as you well know. >> you own every newspaper in louisiana. i know. >> yes. >> as you well know the campaign reform efforts are not new. you've talked about them for years. what is it now? particularly as you're calling out your colleagues or candidates. >> two things are different. the obviousness of the evidence that you know, it used to be one woman, one vote. one man, one vofmente now it's one big check, you win. so the evidence has accumulated. number two, we are a nation at risk. in', and i don't like to dwell on this. but it's a fact that if we continue the next 10 years like we have the last 10 years, we are in serious trouble. and i'm not saying i'm not worried about tomorrow.

but i look 10 years done down the road. that is the way my d.n.a. works. i want an america where my kids and our grandkids have a choice in energy and jobs. if they want to have a small business of their own. and campaign reform to me, and i saw it about eight months ago when i fist had this thought. i went to my way. i love her. i thanked her. i said we've been happy out of politics. and i didn't think i'd get back in. and i might not have a chance, honey, but i'd like to go to new hampshire and talk about the way america should be. could we? and so that's what i've been doing. i was embarrassed for months about saying i was running for

president. i didn't feel, and i had spent all my life studying and working and getting ready to make a difference somewhere. but it's hard to say i'm running under president. -- hard to say, i'm running for president. but there were two issues that were not going to be mentioned in any debate, but that are at the heart of who we are. one is special interest money, pack money, super pack money, wall street money, insurance money, tort lawyer money. you know it. i said i bet no question in a debate will at -- will be asked -- i said this issue will not be brought up, scarlet, unless

i bring it up. number two, i didn't think the unfair trade practices of our competitors would be brought up. i thought other candidates would either be not knowledgeable about it or afraid to bring it up. because it's so out of tune with the establishment. i've never been an establishment guy. i don't even call it -- it's just who i am. i'm willing to challenge the status quo, because i believe we can do better. i believe it. but i don't believe scrubbing the budget alone is going to do it. i don't think revising the tax code alone is going to do it. we need to do it, and we need to do more. instead of rebuilding other nations, we need to rebuild our nation. and i'd like. and i'm not talking about the

marine corps now, the business people of america to be organized. to stand up for themselves. to fight for america. and that's what i'm trying to get them to do. it might not be me. there might be better people running. i just haven't heard them say a thing about these issues. what are they waiting for? america's dying. bleeding to death. and they bring a band-aid to the table. i'm not impressed. now they are not impressed with me. they laugh at me. $100 limit? you know, he can raise a couple hundred thousand. maybe a million or two. i remember running against ed win edwards, corrupt governor, just got out of jail. he had never been beaten. and he beat me four years later. he's tough. he spent $15 million. i spent $1.6.

and when he whipped him. there were other good people running too, but you've got to get right in the face of a tiger. so my remedies are clear. and they can be done by anyone who has courage. and i challenge the mitt romneys of the world and the rick perries, and michele balkmans and herman cain. i don't want to leave anybody out. gary johnson. i challenged him to accept this pledge. no pack money. no super packs formed. keep your limit at $2500. i can live with that. i'll keep mine at $1 00, and let's go get the american people.

think it would energize the campaign. no more wall street fundraisers. they might hear something. oh, didn't know that. anybody else? yes, ma'am. >> i'm with the national general. i believe you said last weekend in new hampshire rather than traveling iowa with your other colleagues, my first question would be for the foreseeable time? >> i will concentrate on new hampshire. but south carolina, it's the only place i don't have a draw. so i will sneak into south carolina. i love iowa. i mean, my first speech, three months ago. all the other candidates are there. i get up in iowa, big crowd, and say we'll eliminate the

ethanol subsidy. i thought they were going to have a heart attack. but i thought paw lenty and newt gingrich and the rest of them were going to die. oh, buddy. you can't win. well, you can't lead without eliminating the ethanol. what are you going to do? -- social security? >>ly go across america as i have a chance. but i won't spend what i don't have. a big day for us is a couple how the st. -- a couple thousand from all over america. but i will husband my resources and spend them primarily in new hampshire. i do sneak off into massachusetts and raise good

money under romney's nose. just don't tell him that. >> thank you very much for joining us at the national press club today. >> thank you. thank you-all. [applause] >> thank you, patty. >> my pleasure. thank you. >> appreciate you coming. >> my pleasure to have you here. [captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> in a few moments, the former treasury secretary, henry paulson, on the financial climate. the wall street bailouts of 2008 and the u.s. economic relationship with china. "washington journal" is live at

7:00 eastern with segments on the f.b.i.'s counterterrorism efforts. the downgrade of fannie mae and freddie mac. and how cuts in government spending will affect federal workers. several live events to tell you about this morning. newt gingrich will be at the heritage foundation to discuss cutting the federal zefment that's on espn2 at 9:00 eastern. here on c-span, secretary of state hillary clinton and leon i netta will look at international challenges facing the u.s. that's at 10:30 a.m. eastern. now former treasury secretary henry paulson on the financial climate,, the wall street bailouts of 2008, and the u.s. economic relationship with china. from dartmouth college, this is an hour. [applause] >> as is our custom in the

leading voices series, the first -- last week we welcomed secretary paulson's classmate who had the following questions. >> on the video. >> the part i've really been looking forward to. the one last question, the question you get to pose to our next speaker, and i looked at who our next question would be. it is your dartmouth classmate and former treasury secretary, hank paulson. so when he is sitting in that chair, what would you like for him to answer? >> i've got two related questions for you. why in the wall street bailout did you not condition those funds on wall street doing several things that it needed to do? particularly with regard to

mortgage litigation and also making money available to main street, small, regional banks? and also putting some constraints on lobbying by wall street firms particularly during the particular time congress was trying to reform the financial system? [applause] zb and secondly, hank, after you explain all of that. [laughter] >> i would like you to tell us whether the social benefits of wall street exceeds the social costs. thank you, hank. [applause] >> ok. some things in life never change. those souppeded like two questions rather than one. i'm going to start with the first one and it's the second one then go to the first one.

the the social benefits versus costs, i'm a capitalist. and i believe -- [applause] >> and i believe that we have a -- the most prosperous country on earth. which has been for a good while. for a lot of reasons, but one of the reasons is we have world class capital markets. or we've had them, and if we want to stay on top and remain competitive, we're going to need to -- we're going to need strong capital markets. why? jobs and growth. capital markets with the money that's going to create jobs for americans. why do we need good capital markets? to provide credit for families who need to buy homes or send their children to school or their children to school or automobiles or cars