health of u.s. cities. chris hoene is our guest. co-authors tom friedman and michael mandelbaum. then a look at competition in the u.s. freight rail industry. mina kimes ♪ host: can this government be fixed? that is the front page of "the new york times." "americans are increasingly frustrated by what they say they want in their government and what they see happening in washington. they want economic and other

problems as dressed, they see gridlock." we turn to all of you this morning to get your take. can this government be fixed? if your democrat, for democrats, 202-624-1111. for republicans, 202-737-0001. for independents, 202-624-0760. here are three strategies that could be helped and the paralyzing strategy. they offer three different solutions in "usa today."

host: the second proposal is changing the rules in the senate. "usa today" says this --

host: in the third proposal that they put out there today, it is "meeting with the other side." first we will hear from linda, a democrat in pennsylvania. caller: good morning. my feeling is that there is no way that there can be compromise made between the two parties. because of the lobbyists, which represent corporations and special interest groups. i have been observing politics for a long time. never in my life have i seen the control of corporations and special interest groups over our politicians as they are today. it is ridiculous. they do not listen to the people. when we were on summer vacation, we noticed that people there are protesting because their

politicians seem to be in the pockets of corporations. thank you. host: norm, republican, north carolina. you are on the air. caller: how are you doing? you look like you are doing fine. host: just fine. how can the government be fixed? caller: democrats had total control for two years. republicans had the congress for seven months, here we are blaming them again. we have to quit playing the blame game and democrats have to start helping to fix the thing. we do not have total power, like they do. they have presidency and senate. we have just got to wait until we get a little more help. host: yesterday's gallup poll

shows that those surveyed, of national adults, 51% would like to see more compromise in the congress. when you break it down by republicans, independents, and democrats, 36% more republicans said compromise. 27% of independence echoed sticking to believes, while 52% of independents said that it was more important to compromise. democrats, 62% said that it was more important to compromise. your reaction to that? looks like more democrats than republicans want to compromise? caller: that is very slippery of you. trying to tell us it is all the republicans. we have all got to get together.

not just the congress. they are voted in, they are there. thank you. host: thank you. monilia, texas. independent caller. caller: it will be fixed when there is no more labor unions. when everyone is making $5 an hour. you ever hear the expression about how bad it is? any of you watch ball games on saturday and sunday? i noticed every one of those stadiums were packed. did you know what it cost those ball games? all kinds of money. we are not in any kind of depression. i am not saying that i agree, but you have got the power. corporations have got one over, and that is what is going on.

host: back to "usa today." groups pushing congress to be more responsive. if you are interested in what they have to say, they have been on our program, so you can go to c-span.org. let me read from this --

host: vince, a republican, haymarket, virginia. good morning. caller: basically everything we have been hearing over the last few years is just noise. democrats and republicans have sponsored the nation's wealthy and they are simply going to continue to do so. host: henry, said marcus, texas.

caller: one of the problems is that we do not stick to the facts very carefully. recently there was a poll indicating that more than half of this country does not believe that if there is global warming, that it is contributed to by mankind. recently a poll was conducted by the american academy of scientists of scientists that specialize in the weather. all but 2% did believe that mankind was a major factor in global warming. there is a distinct reason for that. the media, on the one hand. on the other hand, it is party policy to say otherwise. on the part of the republican party, of course. caller: -- host: how do you see

democrats compromising? or should they? caller: they have tried all summer, with respect to the budget. it just did not work. host: what should they do, then? caller: i think that the president should stick to his guns. if they want to shut down the government, it should be shown to be their entire responsibility. host: frank, germantown, maryland. independent voters are shown in the -- overwhelmingly to want compromise. caller: i have switched to being a reboot -- libertarian, i used to be a republican back in the 1990's. these politicians are very self- serving. i do not believe anything that they say. i associate myself with being a libertarian. for the first time in i don't

know how many years, i have been moved by a politician, and that was listening to governor christie from new jersey. i am not interested in compromise. i think that he shows leadership. that is what he has. host: you listened to the speech last night? caller: you just played a few minutes ago and he moved me. i might have to reconsider the election, if he runs. host: we will share a little bit with you from his speech last night about whether or not he will jump in to the 2012 presidential race. first, comments from our facebook page. c-span.org/c-span -- facebook.com/c-span, if you want to reach us there.

you can also send us a tweet, if you want to reach us there, twitter.com/c-spanwj. david, mississippi. caller: it is so screwed up. the lessons of senator palin and john mccain, they really wanted to change those election laws. so that no votes go to obama. social security has got the most money. i just wish that those republicans and democrats would work together and quit doing all of that bickering and do what is right for the people. host: there is a lot in the paper about this dysfunctional government. there is a piece from "the baltimore sun."

host: look for our house floor coverage on thursday to see what happens there. many of you probably heard that the washington monument here in washington, d.c., is going to be closed indefinitely according to the national parks service. that is because of the earthquake damage that was done on august 23. yesterday, you can see it on your screen, they had a worker looking piece by piece to see

what sort of damage has been done. that examination was delayed due to a thunderstorm threat. they will continue to do that today. this is from open quote the wall street journal." "tall order in the capital." "damage to the washington monument, visitors see a metaphor for fractured politics." in the memo section of "the new york times," it says that the agreement that lawmakers came to earlier this week over a continued resolution to fund the government, that these short- term fixes have become the norm.

host: that is "the new york times," this morning. sen louis, missouri. what do you think? caller: there was a time when we had a media and it was possible that we could have been fixed. since the media are bigger coward's than anyone, since 9/11, we need to start from the ground up. it is finished. host: chris, republican, spring hill, florida. caller: the only way that it can be fixed is by cutting entitlements. by getting this budget crisis under control.

spending no more than we take in. they will have to completely overhaul their entitlement programs. in the 1980's, 80% of what they spent was the entitlement programs and the military. the military was about half. host: you are breaking out, there. you trailed off there, a little bit. caller: the military is about half, entitlements were about half. now it is only 20% for defense. it is obvious that it is growing out of control. anyone who looks at a map, they will see that there is no way that they can sustain it. increasing taxes, even the president has been coming up with programs to put money into

the private sector to prop it up. increasing taxes would take money out of the private sector. i do not know if he actually believes that the government knows better how to create jobs and make the private sector run than the private sector itself does. that is what he is implying. that he will take taxes out and that the government will invest money in different places and fix everything. the private sector runs much better by itself and the government could ever do. host: here is a twitter message from jonny depp. host: speaking of 2012 politics, here is the front page of "the washington post," referencing

chris christie's speech last night in california. here is a little bit from the question and answer period from the speech last night. >> i hear exactly what you are saying. i feel the passion with which you say it. it touches me. i can tell you, i am just a kid from jersey that feels like i am a luckiest guy in the world to have this opportunity to be the governor of my state. so, people say to me all the time, when folks like you say those kinds of things, for as many months as it is being said, governor, leave me alone. everyone else who was a nice enough to applaud what she said.

it is not a burden. the fact of the matter is, anyone with an ego large enough to say -- please, please stop asking me to be leader of the free world -- [laughter] it is such a burden. [laughter] if you could please, just stop. [laughter] what kind of crazy, egomaniac would you have to be to say please, just stop. it is extremely flattering. by the same token, that a heartfelt message is not a reason for me to do it. that reason has to reside inside of me. host: they write this this morning in "the washington post."

host: then they have this from the governor's brother -- i would be stunned if he was lying, and he told me he is not going to run. sarah palin, running out of time if she wants to run. starting in mid-october, several primary deadlines will begin to pass, including the critical state of florida. more on 2012 politics in the paper this morning. here is a piece about governor rick perry and his decision on that h-p the vaccination, saying that she is a proponent of it. this is from "the washington post." moving effectively, rick perry.

host: sharon, independent, north carolina. can government be fixed? caller: it is such a mess. i wanted to comment on that one caller, the republican that called in and said that the democrats have been in charge for two years and have done nothing. he seems to forget that from the day that obama took office, they have been obstructionists with more filibusters -- they had control of the house and the senate, but they did not really. because of all of the filibusters, nothing could get

done. host: as an independent, do you want to see compromise? caller: yes. i do not want to see my way or the highway. that is what republicans have been doing. it has to be their way or no way at all. it is destroying the company -- the country. host: on what issue would you like to see compromise? caller: in middle-class. i will need social security. i am a small business owner, but i am a middle-class. they want to cut anything and everything that made this country great, they want to get rid of it. also, they have gotten greedy. it just needs to stop. host: let me get your reaction

to this. this piece is from the editorial page of "the new york times." this is untitled "we will not back down." he says this -- host: republican from illinois. caller: anyone the signs any kind of a pledge from government, i would never vote for. if you sign this pledge, which most of them have done, the

emergency comes up and you cannot do anything because you have signed this pledge -- there is no way i would vote for anyone to sign the pledge. host: what is your concern with democrats. and caller: they have tried to compromise. i think they really have. when you think about the cuts that have been made and democrats have gone along with it. you have to have a middle ground. burn everything when there is nothing left? we are turning a lot of people away. they all have their money. they just do not seem to realize that there are people out here that need help. there are a lot of people out of work and are just struggling to pay their bills. they just do not seem to realize that. i will tell you what they ran on, that they will create jobs.

where are these jobs that they were supposedly going to create. all that i see them doing is cutting, which translates into people losing jobs. host: this story made the front page of many newspapers. "health costs shift to workers at." host: antonio, the electronic -- democratic caller. usa today, a front-page story this morning. can this government be fixed? what do you think? caller: i believe that lady 100%.

i do not want another dictatorship in this country. like we have in cuba. i do not want a dictatorship telling the people what to do. it happens that most of the people that become officials, they are lawyers. they go to college and be a lawyer to get to know the loopholes of the country. host: let's hear from a republican. athens, alabama. charles, good morning. caller: yes, yes, how are you doing? host: we have heard from a couple of democratic callers that republicans are saying my way or the highway. caller: we are listening.

-- host: we are listening. caller: washington, d.c., is throwing money away for things like how to find out about a bird in montana and how to get on the internet to search this out. all of these people in congress are making big money and all of this. our nation is crumbling before us. if we do not stand firm in christian areas, but the coming of the lord is -- host: you are breaking up and it is very hard to hear you. harry, michigan. caller: we have a president, a strong president that has been fighting hard to do these things. the first time that our

president, barack obama, stepped into office, mitch mcconnell and john von declared war on him. we have a president that is working hard. republicans keep bringing down the country, because they want the country to fail, because we have a strong president that was doing the right thing. the tea party really wanted to do something that was the american. and american jobs plan, putting a million people back to work in six months. that is all that they have to do. they have to stop following mitch mcconnell. these guys have been in the house for over 50 years. host: here is an e-mail from a viewer that questions the premise of our question, or the

."estion from "usa today "who said the government is broken. broken and how? stephanie, good morning. caller: first, the government is supposed to be of the people, by the people, and for the people. we are supposed to recognize that the government is for the people. [unintelligible] can anyone tell me that? host: there is a story in "the new york times," about the story

-- about the protests happening around the world. host: front page of "the new york times." a lengthy piece, if you want to read that, about the protests from individuals who say that they do not think that voting -- one " from one young woman says "we are the first generation to say that voting is worthless."

texas, what do you think? caller: i think that we elected a president that has no legislative experience. has never had no job. just a community organizer. in the senate for a relatively short period of time. i would rather have a president with a record. and was elected after serving less than a full term. so, neither he nor any of his advisers have held real jobs that i know of. and do none know how to create

one. they shut down the oil wells in the gulf after the disaster that we had in 2010. and they have not come back yet. that is a lot of jobs right there. host: back to 2012 politics. this is from "newsweek close will -- newsweek," magazine. ."s on according to this, republicans have developed a new rule. delegates must be awarded a portion of the votes that the candidate receives. these winner-take-all rules will have to wait until april. that is an update on the nominating process for "the

republican party." we will be covering the michele bachmann speech at liberty university today. live coverage at 10:00 a.m. on c-span.org. you can follow all of our campaign coverage if you go to our campaign 2012 web site, c- span.org, you will find it there. let's hear from nick, next. arlington, virginia. how can this government be fixed? caller: good morning. i would like to address sharon and tony and their rhetoric over dictatorships. there are no filibusters in the house. republicans only took control of the house in january of this year. for two years, the democrats had total control. you cannot say that president obama did not have legislation

put through. that is how we got obama-care. the senate has been under democratic control. there have been no filibusters, per say. there have been holds on judicial appointments by republicans, but overall the best thing to do, it is that saying, lead, follow, or get out of the way. obama cannot leave. the democrats will not follow. the best thing to do to get the economy going is for the democrats and president obama to get out of the way. host: more on the situation in europe. the head -- this is from "the financial times."

host: the business section of "the new york times," says that the greek parliament voted for a popular property-tax -- despised property-tax. host: that is the situation in europe. we will be talking about that on friday, when the u.n. ambassador to the united states joins us on this program. pennsylvania, we are talking about the government. some are calling it dysfunctional. how do you think it can be fixed? caller: i was going to start with what the previous gentleman said about correcting errors and then proceed into what i wanted to say. if you go back further into when

things were shut off by tom daschle, he was a previous majority leader in the senate. putting all of that aside, one thing that we hear a lot that we rarely take action on, some time ago, back in the 1940's, we decided, in the 1940's, that a man could run as president continually and continually until his power became a threat to our government. we passed an amendment that limited the terms of the government -- president. from time to time, we bring up the limited terms of members of congress. a good idea. democrat or republican, they are in for many years, in the senate and house. they amass power. they amassed large financial political war chests. they become the old horses.

eventually what becomes a real thing to them is what [unintelligible] used to say in an old, rigid, extract. "foggy bottom fault." we have to go back to the ideas of our founding fathers. when a person goes into public office, he stays there. we should say that he or she stays there for a short while, then returning to the public life. the private life, again. i do not want to hear this stuff about term limits every two years or every four years. that is a bunch of bull poppycock. the person with the money, democrat or republican, will probably win, nine times out of 10. a person who has been in there for three terms will continue early win again.

that person becomes the washingtonite. not a pennsylvanian. not a person from wisconsin. not a coloradoian. we have to limit the terms in the house and senate. host: dom, south carolina. caller: i agree with -- kind of disagree with the last two callers. things are really complicated now. a person that just gets into government, there is a learning curve. host: you disagree with term limits? there is a learning curve, you gain expertise in seniority, and that is how the system should work? caller: yes. things are so complicated, you need experts to evaluate finances and technology, stuff like that. i believe that the republicans,

primarily the tea party, they need to reevaluate their decision making paradigm. often we hear people saying -- i did this myself, i amassed a fortune myself. companies build on themselves. no man is an island. everyone leans on these social contracts, to some degree. caterpillar opens a plant. it was a public school system that provided the education for the workers. a city that provided the electricity. fire protection. police protection. all of that is part of the social contract. to say that you made it all by yourself is incorrect. the tea party needs to remember that. therefore, that gives government the responsibility to provide

the social services. and no one, no one has made it alone in this country. host: we have got your point, don. let me show you the front page of "the wall street journal." they say this --

host: the front page story of "the washington post," says this. "some say that the admiral overstated pakistani ties to the militant network." good morning. how could the government be fixed, caller? caller: the people with the religious viewpoints need to understand that without our independence from king george -- we have separation of church and state. do not mix religion with our politics. it is not how the country was founded. no. 2, the problem with jobs? if you do not all get it, they are using all of the money to go overseas to set up dictatorships

to get natural resources for our economy. iraq, afghanistan, all of our money is going over there. the people that want the jobs but do not have the jobs, your jobs are subsidized. there are issues with those people in that group. whether they are still oriented, trade oriented, education oriented, mental or physical. the next thing is, for republicans or democrats, there is no difference between them. host: in consumer news this morning, here is "the baltimore sun." apple confirmed that they will hold a press conference on october 4.

host: there is a picture there of an ipad being used to store and access volumes of maps nearing -- needed during combat flight operations. the question on the cover this morning about the government being fixed? michael, new york. caller: i am an african american two-party conservative. first of all, this new jobs bill that the president announced

yesterday from harry reid, he says he does not want to bring. with respect to china, he said it was very important. in "the new york times," he was on a couple of networks advertising his new jobs bill to create jobs at a rate of $200,000 per job. republicans do not believe in socialism. this administration seems to pick, seems to want to use taxpayer money to support and prop up these types of industries. at the same time, using that labour force to block a boeing because of a right to work.

host: michael, we will have to leave it there. in 45 minutes we will be talking to tom freemen. he will be the co-author of his ridgy he will be here with a co- author of his new book, michael mandelbaum. but next, the co-author of the fiscal united states. we will be right back. ♪ >> this is a confession in front of a large and very influential audience. i have never embarked on a book, on a subject, that i knew all about. host: more than 100 authors and books tv, returning to the national mall for the national

books festival. hear about the latest releases from the authors themselves, online at the c-span video library. archived, searchable. washington, your way. caller: start with -- >> start with the assumption that when a politician and ceo is not telling you the truth. they might be telling you the truth, but it is on them to prove it. >> he is a best-selling author and have made some of the most popular documentaries of all time. this sunday, on "in depth," your chance on c-span 2. >> the last time he ran for president was from prison. he lost, but he changed

political history. one of the 14 men focused on in our new series, "but contenders." get a preview about him and watch some of the previews at a special web site for our series, c-span.org/contenders. >> which part of the constitution is important to you? that is the question this year in the studentcam competition. tell us about which part of the constitution is important to you, and why. entries are due by january 20, 2012. there are $50,000 in prizes. for all of the details, go to studentcam.org. >> "washington journal" continues. host: chris hoene, leader of the

national league of cities. here is the headline from yesterday. "more than half have canceled or delayed infrastructure projects." what is going on? guest: revenues at cities are declining. the full weight of the recession from a few years ago, with lack of sustained recovery, is hitting the revenues. the big fuel there is the property tax revenues are declining. host: that is at the crux of this, is it not? guest: property taxes around this country are independent. the drop in property over the last four years have meant that

eventually property tax collections catch-up. they are not the only ones that failed. there are other local sources as well. with unemployment high it means that most of the local revenues are ongoing right now. host: what does foreclosure due to that equation? do people pay property taxes in foreclosure? guest: it is all is unclear what happens to property taxes during foreclosure. who pays the -- the property tax? who pays the title and the deed? that is a good question. the longer-term problem is if the property is not owned and does not change hands and if there is an impact going forward. host: let's get a look at the impact of revenue spending over the last few years. in 2011, spending was down 1.9%.

2010, it was down 3.8%. spending was down 4.4%. so, a little bit better than 2011? what does the future hold? guest: keeping leaders up at night is the uncertainty about future. last year was a very difficult year. there were collections that were too low. what we do not know right now is where in the business cycle we are. are we about to recover? cities always lag behind the economic changes. if we are not about to recover, it means we have tough years ahead. host: property taxes, down 3.7% in 2011 compared to 2% in 2010. compared to 2010, it was down

8.4%. people were not buying things in 2010. income-tax is. down 1.6% in 2011 compared to 1.6% in 2010. compare this to last year. guest: when this stops, people stop spending money, which is worse when home values drop. so, they start spending because their overall sit -- sense of wealth goes down. when home values of down, it takes a couple of years for cities to pick up property-tax values. that is what is happening now. we are seeing the full weight of that property tax housing problem. host: who did you survey? how did you conduct it?

guest: this is the 26 year we have done this survey. with a random sample below that level. we collect more from larger cities because we're trying to increase knowledge on that sector. we also try to get a sample across the sizes so that we can get a sense of what is happening in the different parts of the country. places with different tax structures. host: only 26% responded to this survey? guest: that is a little bit lower than normal. we usually try to get to 30%. on-line surveys national in scale, that is about the standard. we would like to be over 30%. much of this has to do with it being a particularly difficult year for finances. it is hard to find time for

people to complete surveys when things are stressed. and most of what we feel good about is what we have been able to generalize from those results. >> -- host: in those surveys, 21% said that the increased fees across the board. for property taxes, 20% increase that feet. 4% bond increase for income taxes. what type of fees are cities charging? guest: the most common ones are garbage collection, recycling, water service. other forms of public utilities that are typically fees. library fees. parks and recreation. uc fees and fines going up in libraries.

kids in little league. fines for parking violations a start to increase. what happens is, there is not political will to raise taxes during recession. often in cities they do not even have the authority. host: they can increase their fees? guest: they can. but we have seen for a few decades now is that as the appetite has waned, things have increasingly turned to services as a way to pay for the cost of these services. host: some cities are getting creative in the fees that they charge. can you give us an example? guest: one of the things we have been hearing more about in the last couple of years is more fees for things like emergency services. for what might be considered a

more minor source of aid is needed, these might be fairly high, trying to prioritize the level of services provided. host: jim, good morning, you are on the air. hello? jim, you are on the air. go ahead. caller: yes. i caught some of the comments on your earlier topic of a program that can be fixed or not. i think that it could be fixed. first you have all of these vicious policies from partisan years. host: jumping in at, because we have moved on to a different topic. clinton, ohio. caller: you mentioned property taxes earlier. i wanted to know, in your research, did you find any alternatives in how cities are

addressing large, non-profit organizations with property taxes? like universities and hospitals? and how cities are getting these large organizations to contribute? did you find any alternatives in your research? guest: that is a terrific question. that has been a part of the economy for the last couple of decades. typically those properties are exempt from property taxation. one of the ways that these cities have uncovered the costs of their services, or what the folks in the industry called pilots, essentially it is a fee that these institutions pay for costs and services. they are not typically equal to the cost of the property that they occupy and a home, but one

of the things that is emerging as an alternative around the country, large snow removal budgets or other infrastructure related issues. they are starting to charge fees on public properties, so the larger the property that you have, the cost structure would be different for universities, churches, and other formal institutions that are appropriate to the ability to pay. host: you found that 20% said that the increased property taxes. how much? what is the average? guest: we have been asking that question for the last 15 years. in any given year, whether we have been in an economic boom or bust, it is usually around 20%.

the primary is that there are usually caps and restrictions placed by states, voters, and local jurisdictions themselves. the option to raise the rates of around the cities and around the country -- host: it stays the same, year after year. is it theguest: you do not intee rates get raised in a community every year. there is one tendency is that cities that control education systems, cities and states in the northeast, they have more property taxes because and other places, it would be split between cities and school districts. they raise rates to cover the cost of schools. host: does raising property tax

depend on the property -- the value of your house? guest: the big driver is the value of homes. the rates do not have to be raised to collect extra revenues. the dynamic is that the bad news are going down but the service costs have not gone down. host: an independent in virginia, your next. caller: our property taxes have been increased twice within the last zero years. not sure exactly the time, but it has been increased twice within a short amount of time. i do not think that is what is going to take to help main street. i think the economy might be the biggest problem. but we have had some trouble with corporations who move jobs

over to foreign countries, and it is like that all over the country, i know. instead of what they propose to do now, instead of giving corporations grants or subsidies in hopes that they would create jobs, could grants and subsidies be given to individuals who could start their own businesses or anything like that to help boost the economy of the main street and a small town areas? guest: a great question and i completely agree with the collar about the economy being the problem here. the cities cannot recover if the economy does not. i also think the caller has a great point. the economic development strategies of said decease -- of cities have focused for so long on large corporations. but most of the evidence and numbers have shown that job growth in this country comes

from small businesses, and they tend to be startups and new ventures that come from individuals themselves, people who take out a second mortgage or use their credit card to start small businesses. if we can provide services and we have programs in place to work with the federal government and the small business administration to try to help small business generation in cities and hope that they become big businesses, and that in turn will help main street. host: there is a tweet from dan parker. any correlation? guest: what happens is with cities that have an income tax, there tends to be more resilience during recessions. at least until the unemployment starts to affect people's wages. a lot of people with income taxes, they have faired better

over the last few years. but over the next couple of years, their unemployment effects, such a high level of unemployment, it will have an effect on wages as well. host: beverly as a democrat in phoenix, arizona. caller: i have not called for two years, but i just had to this morning. i believe that the real estate tax is so wrong, it allows big corporations to come into a city and pay no real estate tax. -- that should stop, because if they cannot allow it to a small businessman who owns business property, then it should not be allowed to big corporations. my second thing on your city

officials and state officials, county, federal, is at any elected employee -- they should get no government subsidies are benefits unless they go to individual contractors. guest: i am not an expert on the first but -- the second but i can comment on the first. economic development practices and cities are changing in this regard. 30 years ago, it was standard practice to attract a retain big companies and give away a lot of tax abatement. that has been changing gradually and more rapidly now as cities try to do more on the small business front, as they realized as they provided as abatements, they need to have provisions that the jobs are not generated or do not stay, that there is some payback for that or some penalty for that behavior.

the industry has been changing and cities are doing their best to protect those jobs and corporations without giving away the farm on the tax front. host: did you look at public/private partnerships? redoing a police station or a fire station, as long as they are allowed to develop an adjacent part of the land? guest: that is a fairly standard deal, they get the rights to deal with the retail development. host: is there an uptick in that? guest: it has been pretty standard practice for a while. some of the retail and development activity is stall with the overall economics. host: look at this side of the ledger. many are laying off or have employed a hiring freeze, 60% of

laying are canceling capital projects. however those numbers changed over the years? guest: the big changes that the rise in the number of cities making a laos and those delaying and canceling infrastructure projects, those of the overwhelming large responses in the survey. that is where cities have the flexibility to make changes. they are not great responses for the economy in the sense that they create more employment -- more unemployment and less investment in infrastructure. since some in uptick in the number of cities taking action on reducing health care benefits, trying to restructure pension costs, trying to bring

personnel costs into line. host: chris hoene we're talking chris of the national association of cities about the new report of the fiscal state of cities across the country. this was the headline in the "new york times." half the cities of america will declare bankruptcy within five years. any data supporting that? guest: thankfully, no. there have been a couple of instances in the last couple of years that have received national attention. but the overwhelming majority of cities are required by law to balance their budgets each year. they do balance their budgets each year. there are hard choices that come with this. the story is about the services they are having to cut in order to stay solvent. we need to turn our attention to the stories about the impacts of quality of life, what government

needs to do to stimulate local investment, but the bankruptcy story is not a trend. host: this tweaked to add to the conversation. stephen, a republican in maryland, what do you think? good morning. you are on the air with chris hoene of the league of cities. you have to turn that television down. go ahead. caller: i was wanting to address the issue of your title vi to government. host: we have moved on from that topic. caller: i live and a highly minority area and what i have seen in the last five years is that they have created all land bank where they have parcelled properties together.

right now there is a land bank where there are no tax is being made. these bunglers they came and -- bundlers came in with erroneous mortgages and now the city has to absorb all of that. i am sure i am not the only city that has this. how these land banks have skewed the tax base right now, since they are nonprofits. and i will take my answer off the air. guest: the land bank option is something that cities have turned to increasingly as a way to respond to the foreclosure problem. the big problem with foreclosures is you do not know who holds the high title or the deed and a land stays bacon. it is hard to transition that into a functioning and prosperous piece of property later. cities are taking control of these properties in order to maintain them and make sure they do not affect the property

values of the communities and neighborhoods around them. in order to connect that property to the bank and other letter forms of investment, they can make sure that people come back to those properties and that homes are sold. not really about the tax as much as it is maintaining the quality of the property and making sure it is viable going forward. host: pete, an independent in rockville, maryland. caller: what is the number one driver of costs to any given municipality? i think that is rhetorical. it is not raw material but payrolls. they have to pay their staffs. it is another symptom and a larger problem. united states is experiencing across at every industry and other economic sphere. host: let's get an answer to that. have you looked at the number one driver of costs for cities? guest: the larger share of any

would-be personnel and related costs, pensions, health care, the whole range. when times get tough and the cuts get deeper, you eventually going to personnel-related cuts. you need to split things out. is not necessarily increases in wages are pensions. like every industry in this country, the biggest driver is the increase in health-care costs, driven by factors that lie outside of cities controls mostly. they're dealing just like the private sector. host: scottsdale, arizona. caller: on the city and state level, report is really low. people are feeling like the whole thing as a ponzi scheme.

you see all of this money shifted here and there, they can sell land -- there is so many things that they can do. people are getting tired of the deficit. host: our cities getting created and what they can do to raise revenue? -- our cities getting creative in they can do to raise revenue? guest: they can make decisions about what of those assets are the things to keep on the books terminally or would they be more productive if they sold them all or leased them. there's some privatization schemes around infrastructure, the leasing of roads to become toll roads. sometimes the private sector is better position to better maintain those roads and charge a fee for them more efficiently. host: when you surveyed the cities, 60% said they delayed or

canceled capital projects. what is going on there? does it have anything to do with the federal government's partnership on those projects? problemt's part of the that the revenues are not there. what you're building a new bridge or maintaining an old bridge, it is expensive. if you know your budget is going to be tight over the next two years, one of the things you could do to save funding is delay or put off other projects. the federal role in this is significant, particularly for transportation funding. the federal government has been continuing a transportation bill that needs new authorization in order to stimulate certain types of transportation investment. they have been putting it off. cities are looking to the federal government to be more helpful. host: ky. caller: i have invested in real

estate in kentucky and it is a very impoverished area. we have a problem with our city government. i deal mostly with poor people. but the city has decided to raise these large deposits, like $120 for water deposit, $200 for gas. if you do not watch it here in this county, you could start -- how did people who have invested in lands deal with the city government like this? guest: a lot happens with these fee-for-service this trend that we were talking about earlier. the ability of people the pay and how it affects people in need. that is always a consideration when it comes from fees for

services. it is one of the down sides of moving away from a general purpose taxation which puts money into a general pocket the funds services, and moving the fees for services which puts the burden on individuals for that service particularly. cities can move to circuit breaker-type of mechanisms, to provide lower fees for people with fixed incomes, seniors and the elderly, or for people below certain income levels who might be in more need. that might be something to explore in your city. host: chris hoene is research developer of the national league of cities. thank you for talking to our viewers this morning. coming up in 45 minutes, we will do our weekly segment on a magazine articles appeared we're looking at a portion of the piece about railroad industries and their suppliers.

"showdown on the railroad" is what it is called. but first, and an update from c- span radio. >> an update on the european debt crisis from the head of the european commission. in his state of the union speech, he says that europe's financial crisis is a baptism of fire for a whole generation. he said that more unification is critical for the european union's survival. china's defense ministry says exchanges with the pentagon will be disrupted by the recent announcement of an near $6 billion u.s. arms deal for taiwan. the defense ministry spokesman said that some high-level exchanges, joint drills, and other large-scale activities will be affected if, that he did not add any further details. china considers taiwan its territory to be recovered by force if necessary. all small business group near the united states opposed to the health care overhaul plan to

file a supreme court appeal today, asking that the entire lobby overturned. a federal appeals court struck down the individual insurance requirement, but the national federation of independent business once more. those are some of the latest headlines on c-span radio. >> american citizens forced from their homes, no trial, no charges. for this 10-year-old, wyoming's heart mountain was home. almost 70 years later, hear his story on american history tv on c-span3, from the identification of the heart mountain interpreted learning center. explore 19th century america during it's hard and discoveries from the smithsonian's new great american hall of wonders exhibit. for oral histories, in 1973, new york democrat elicit holman became the youngest woman ever elected to house -- to congress.

she was voting to impeach president. but for the complete we can schedule at our website or four schedules in your in box, click the c-span alert button. >> this is a confession in front of a large and very influential audience. i have never embarked on a book on the subject that i knew all about. >> for the 11th year, more than 100 authors and book tv returns to the national mall for the national book festival. if there about the latest releases from the history and biographies from the authors themselves on-line at the c-span video library. all archived in searchable. is washington your way. >> you should always start with the assumption when a politician or ceo is saying something, they are not telling you the truth. now they may be telling you the truth, but the burden should be on them to prove it. >> he is an eagle scout, held a brief stint as the editor of "mother jones magazine," directed three of the top ten

top grossing documentarys of all time, and is also a best- selling author. his latest is his memoir, "here comes trouble." sunday, your chance to call, email or tweet michael moore on book tv on c-span2. >> "washington journal" continues. with the co-ack authors of a new book, thomas friedman and michael mandelbaum, "that used to be us." you call this a wake-up call. you address the wake-up call. guest: we argue that the reason this book has a backward- looking title but a four-looking book, we had a formula for success in this country and it has gotten away from the senate fundamental way. it was to educate our people, up

to whatever the level of technology is, the cotton gin or the steam shot or the computer. second was infrastructure, road, helicopters. we had the world's most open immigration policy to attract energetic individuals. we had the most government- funded research. entrepreneurs could fall -- plucked off the flowers. that was our formula for success. it was backed hamilton and lincoln. but at the last decade, a decade that we call the terrible twos, you see the arrows pointing down on all five cylinders of tarp formula. host: you decided to write a book and a pep talk. michael mandelbaum. guest: we are on a slow decline

so this is a wake-up call. we got into this but it is also, and this is where we come to the pep talk, it also offers suggestions for how we get out of it. as tom said, we get out of it by going back to our traditions, how our values, our policies, things that we abandon or have forgotten of the last two decades. they hold the key to success in the future as they did in the past. we are optimistic, although frustrated optimist. we outlined the reason for our frustrations, but the country is doing wrong, but also the reason for our optimism. host: let me go back to this success that the united states said. the first two things you talked about sound about -- sounded

like a government stimulus, that the government has to get them up and off the ground. guest: yes and no. let's start with the broad view. we did not become the world's richest company or most powerful country by accident. we had the greatest public/private partnership in the world. we are capitalists. we believe in markets and innovation, but that is best exploited when you have the proper balance with the public's sight. when each is doing its part. i thought i was one lonely guy and did this all my own. you did not do anything at all. did you build that train station of a subway on your run? did you create that market on your room? you want to have a balance between the two. that is what we are calling for. it has gotten out of balance. we talk about education or infrastructure.

we haven't $2.2 trillion deficit in and for sure to spending. we could build better schools but we do not think that education is a government problem. we think it is of parenting problem. we think it is a teacher problem. we think it is a student problem. this actually requires collective action. does not like world war ii or pearl harbor. it is happening. pearl harbor is happening but you cannot see it. host: you start a book out carping about china. -- talking about china. they have trillions of investment compared to our

deficit, and they invest in their country. some of their industries are heavily subsidized by the government. why is it so different? guest: we compared it briefly to china for two reasons. a few of the things that china is doing are things that we ought to be doing. china is very good on infrastructure and we're not. by some estimates, we are $2.1 trillion in arrears in investing in infrastructure, and china has the can-do spirit that we used to have in the united states. but we are clear that the key to american renewal is not to imitate china. china has plenty of problems. china will not have a smooth path upward. we need to not imitate china's economic or political system but get back to our own basic values in the best features of our own system.

-- and the best features of our own system. we respect what china has done but we think that that china in the uc in the united states is really a comment on ourselves, looking at the mirror and not liking what we see. one of the themes of this book is to look in the mirror and not like everything that we say. we do need to change but not more like china. we need to be more like our own best selves. host: thomas friedman, let me get your response to this headline. their currency manipulation bill, what do you make of that? guest: i am all for taking on china whether stealing american intellectual property or manipulating its currency. remember, when they overvalue their -- when they undervalue their currency, excuse me, they

are subsidizing everything that they sell to us. for 10 issues are cheaper, your computer is cheaper. we do need to keep that in mind, but they are also taking american jobs. i just not think that is the only thing that will solve the problem. host: a lot of people calling in to you. a democratic collar in portland, oregon. -- caller in portland, oregon. caller: i heard him on another new show blaming baby boomers for being an obstacle for the american dream. i wanted to say debt i'll live with and economists -- i live with an economist to as good a forecasting things like the housing boom and what that would cause. how that would affect our economy.

when you said baby boomers were a problem today, i wanted to say that i get very angry and everyone -- every time someone blames me, a baby boomer, for causing this terrible thing. guest: let me defend, and myself. we're both baby boomers and we are very hard on ourselves, on our generation, because we have let things slide. we are the generation that has not squarely addressed the four major challenges that we see facing the country and that really forms the spine of "that used to be us." we need the boomer is what we dominate the society and economy is and we have the responsibility to face up to these challenges. things at this live on our watch but we have it within our power to deal with these challenges and we can leave a better chance

at -- country for the next generation. it is up to us to deal with the consequences of globalization is and the information technology revolution. it is up to us to deal with deficits and debt. it is up to us to deal with our pattern of energy consumption and its affect on the climate. but s a boomer, speaking as one who is just as guilty as anyone else, we cannot avoid responsibility for this slow decline. if you do not recognize our responsibility, we will not be of a change things or reverse the decline. host: that is one of the four major challenges for america in your book. adapting did globalization, adjusting to his permission technology, coping with budget deficits, and climate threats as well. guest: what they all have in common is that they all unfold gradually. they are all products of our success.

we invented the i.t. revolution, we had all this consumption which created all the debt, we created of world of such fast growth. they are products of our success. but we have faced them before. we have fixed social security, we got the deficit down, we had energy taxes. we have actually done all this before. that used to be us. the problem is that we are not doing it all. host: 8 tweet. guest: very good question. if you look at growth in china since the 2008 crisis, you see a huge spurt in this kind of debt- driven growth. one enormous here and suddenly you see this happening, you have to ask a question, how efficient

you think all of that money was spent in china? i think there is real reason to be concerned that the bubble there, of which we know is in real estate and could be in other things, but china has one advantage -- they have $3 trillion in the bank. we are driving around the world without a bumper. they have a bumper and a spare tire. they can avoid to be a little more like that and we are. guest: one of the major themes of our book is the hyper connectivity of the world. we are all much more connected than ever before, even than five years ago when he wrote "of the world is flat." if and when china is in trouble, and there is a real danger of a real estate basel, that would be bad for china but we will not escape the effect. we should not be routine for a chinese collapse.

oting for chinese collapse. caller: i watch thomas friedman on bloomberg and i kind of understand what he is saying. please do not cut me off. when it comes to the lending, the the last 30 years with the great divergence, and you depreciate the value of american citizens and property. when it comes to innovation, you have not allow people from all sectors to comment. with all of the major funds cutting people off, there's no way that anyone can bring new ideas. finally, as a millennial, 25 years old, some of you need to hold fashion retire. this is in congress and in the

nectar sector. we cannot keep on living off the old ideas. it is not the 1950's and 1970's. you guys need to get over the cold war. germany is about to save america and you're talking about what happened with hitler. guest: i am not sure that germany is about to save america but i welcome anyone who believes -- and we argue this in the book -- there is a new generation out there full of spirit and ideas, and the more they bring to the marketplace, the better. steve jobs is also a baby boomer. he still has a few good ideas. host: michael mandelbaum, another tweet. guest: a very good question and we devote a lot of attention to that in the bow. there two things that we sing

aloud, and one is the political system. it is broken. the two parties are more polarized than ever before, for reasons deeply rooted for decades and cannot be fixed easily. that means that they barely even speak to each other, let alone cooperate on the big things that we need to move the country forward. there's been a serious degradation of the political system and we do have ideas in the book for fixing it. second, our values have changed. what we emphasize is that there has been a shift from all we call the sustainable values, values for the long term, to situational values, which said basically do whatever you can get away with at the moment. that is what led to the financial crisis. there is a problem with our politics but also with our values. it is a problem with us and that's why we say we have to get back to what we used to be.

we have to remember what used to be us and go back to that. host: let me read one of the critical views of the book from david from. -- frum. guest: one of the things that everyone is looking for is the press the button, and we go back to where we were. the reason there is no press here button is because we got here by getting away from our formula for success. the only way to get back is to get back to the formula for success. education, infrastructure comic imitation, incentivize, and government-funded research. i do not know how to be more

specific than that. everyone wants a simple, quick answer. we are are there going to have a hard decade or a bad century. we're going to spend this next decade, and do what got us here, this formula for success, or we will have a bad century. there is no quick fix. there is no simple answer to this. do what we were -- getting back to the fundamentals. host: in history, when was the last time that we rolled up our sleeves and got back to work? guest: we have the example of the greatest generation in world war ii and then we sacrifice during the cold war. we understood we had a major challenge, that it was long term, and we all had to contribute and make some sacrifices in order to prevail, and we did. but at the end of the cold war, as we say, we misread our circumstances. we thought that this was a

great, historic victory and it surely was. but it was also something else. he created a world in which individual americans would be and are more challenged economically than ever before. it was not at time to roll up our sleeves and take up our shoes. it was time to redouble our efforts in education and research and infrastructure. we need to understand that we face a challenge in some ways just as great as the challenges that the greatest generation faced, but not so obvious but just as serious. guest: let me make another point that we emphasize in the book, almost half of which is about education. why is that? as mike alluded to come something has happened in the last seven years and we have not been talking about it. we went from connected to hyper connected. in different talks, we say in

the book, i wrote "the world is flat" in 2004. the world spend -- has become connected. when i read that, twitter did not exist, the cloud did not exist, clinton did not exist -- linkedin did not exist. skype was just a typo for most people. there is a camera in there, there is a camera man there, there was a cameraman there. host: we may have been in a different study of them. guest: now there is a robotic camera and someone is that a toggle state. they have outsourced. here is what has happened in the last seven years, we argue. what blue-collar workers are feeling in the 1970's and

1980's, now white-collar will feel it. we've gone from the threat of cheap labor to the threat of cheap genius. it is a huge challenge. there is only one answer, education, infrastructure, rural and government infrastructure. it is getting back to basics. host: are you talking about high skilled immigrants? guest: anyone who wants to come here and work hard. caller: i have a question. where did you get your research -- who did you speak to chris marker to just people of the government? and now like to make a comment so do not cut me off. mr. george soros has organizations, tend to 15 different names. every time that they are on,

they do not say, well, we are funded by george soros. a multi billionaire in brazil right now investing in oil. host: betty, what are you referring to? caller: he supported obama. he funded obama for his election. host: a little bit off track. we will take the first part of it. who are your sources? guest: that is an interesting question for weast talk to some government officials, members of congress, who were leaving congress and could speak freely. guest: all of the republicans. guest: in one chapter in particular, we talk to employers and ask them, what are you looking for in an employee? we talked to a white-collar law firm.

we talked to an indian outsourcing firm, a call center. we talk to dupont, and to the largest green collar firm, the u.s. army. we talked to general martin dempsey, who is head of education for the u.s. army, and now is the head of the army and the chief military officer of united states. very interesting, because they all basically said the same thing. we're looking for people with critical skills and initiative and a good educational background. and when we find such people, we will give them an interview. we will not necessarily hired them. first, they were all looking for the same kind of thing, white- collar, blue-collar, a green collar, you have to have advanced skills. and those skills show how difficult it is going to be to get and keep good jobs and how important it is to upgrade our system of education in order to

train americans and prepare them for the jobs that we need. in answer to your question, we went out and talked to people who are doing the work of america every day. " we found was surprising and i think that people will find it interesting. guest: and just to the caller's question, this is a non-partisan vote. we do not have a candidate. we have an agenda for america. we are not funded by george soros or anybody else. we're quite self-initiated. host: jim hines as this tweet. guest: it is certainly part of it. when the cold war ended, we unleased 1 billion people just like us. our dominance would naturally not be what it was. others were going to catch up. what we want to prevent is an absolute decline. we recognize that india will

rise and china will rise. they are customers and collaborators and competitors. but we want to make sure we do not have an absolute decline at the same time. guest: if i could just add, to summon our view of this, change is inevitable. decline is not inevitable. we do not have to decline and we will not decline if we adapt successfully to the changes going on around us. and that -- we wrote this book to say what changes we need to make to make us successful adaptation. host: thomas friedman we are talking wet and michael mandelbaum, co-authors of several successful books, including this one, "that used to be us." let's talk to dorothy, a democrat in baltimore, maryland. caller: this is great. this is wonderful what you're talking about.

i do not know what is wrong with people now. some people want to go back to a horse and buggies, typewriters. you're right -- we need technology. i do not see how this is partisan. this is the future of our children and grandchildren. and obama has strive to priestess' the people. and they call them partisan. host: both of you talk about education in this book. you use the advance -- the example of singapore. what is singapore doing right in education? guest: it is waking up every morning and asking one simple question, what world we living in? we are a little question. how we take advantage of those trends? no natural resources.

the import sand, ok? they have to import their sand. and yet they have a better standard of living. a singapore economists said something that struck us. we feel every change increase in temperatures and we adjust. you live in a brick house with central heating. you're not feeling anything right now. they are so alive to what is going on with the i.t. revolution. and they take education very seriously. on any given day in singapore, trust me, they are not talking about vaccines for whatever. on any given day, the entire singapore government can be thinking about how we better teach fractions to third graders. i exaggerate. but that is what they are thinking about every day. they start their day by thinking

how do i take this crowbar and stick it into the wheel of the other party and other to bollocks them up for that next cycle on c-span or cnn and. that is how we start our day. it means you can never get optimal solutions. you only have suboptimal solutions. how long do we remain the greatest country when all we can do is produce about to pull out comes -- suboptimal outcomes? host: a headline about the protests taking place in spain, israel, india, and it quotes by 27-year-old woman saying our generation feels that voting is worthless. guest: voting is not worthless if you have the right candidate for whom to vote. we have a chapter called "shock therapy," this says that in order to get the political

system on stock, we need a shot from the outside. we put forward an independent candidate with a platform of responding seriously to the challenges that we face. but another point worth making -- we're not going to get out of this fix with one policy or congress or president or one presidential term. this is a long-term challenge. we have to understand our circumstances. we have to ask ourselves the question that tom post -- what world are we living in? we would be a lot better off at the people in that building would ask themselves that question every day. but ultimately we each use them and therefore we have to ask ourselves that question. host: margaret from connecticut. caller: all like to ask about the policy of outsourcing. i saw on cnbc a documentary on the production of the boeing

streamliner -- dreamliner. a senior that in 2001, engineer warned against outsourcing up to 70% of this project. he warned that things would not go well. it seemed that virtually everything happened as he predicted. they have several boeing upper management on the documentary. there were so many problems, they admitted damage to their reputation, they needed to build a plant costing $1 billion just to solve the problems that came along, and like a said, a lot of parts to not work out coming from some entities -- different sources around the world. there were three years behind in the production. and japanese customers weren't happy about that. they got up to a 50% discount. they all seemed to say at this policy of outsourcing to not

work. it seems it could produce good american jobs in manufacturing. if a company like boeing had a problem with outsourcing, what you think the future policy of outsourcing for corporations should be? guest: an important point and a good question. in the last decade, a lot of companies have experimented with outsourcing. some have found that it worked for them and they continue to do it. you're at all ipod is assembled in china and i do not think that that would change. other companies have discovered it has not worked as well as they wanted. they are brought those jobs back. -- they have brought those jobs back. it will not be one size fits all. but the most important question we should focus on, and i am glad that you ask it, is another big shift in the globalization, the term made in america or

germany or china is really on its way out. the new term in the business world is made in the world. made in the world. the head of the trade organization uses that. designing and here, manufacturing and in hong kong, that is over with. it is designed ever wear, made everywhere, sold everywhere. even at outsourcing is no longer -- we send it out and it comes back and, we have leapfrogged that now. it is not outsourcing. it is made everywhere, designed everywhere, sold everywhere. host: a republican from texas. caller: thank you for c-span. i am tired of being treated like a blob of goop, only good as a monthly payment.

my question is, is there enough to go around for everybody? can we work together as individuals and looking out for the success of each other? it is a waste of time to listen to some of the comments that i hear from the young people today. they are being distorted in the way that they can work together with each other. host: michael mandelbaum. guest: we need a minimal level of cooperation to do what is necessary for our prosperity. we have to arrive at a formula for deficit reduction. otherwise, that deficit will be there for life. but everyone has to sacrifice, and neither of the political parties has the proper formula. there has to be reduction in spending including some modifications to our entitlement programs, sells a security and

medicare. and anyone who says that you can never touch these programs is not being serious. but at the same time, we have to find more revenue, whether by modestly increasing marginal taxation rates, or as we believe, having wholesale tax reform and eliminate some loopholes and especially an energy tax which would the world of good. but we have to have more revenue, and anyone who says we can never raise taxes is not being serious. and in addition, and we make this especially in "that used to be us," we have to spend more money on our historical formula. we have to invest in research and development and much more in infrastructure. we need cooperation, we need compromise on this issue and other issues. and if we do not get it, we will continue our decline. host: john is in massachusetts,

an independent caller. caller: no one is blaming our politicians for anything. if you talk about that complicity of the politicians, who in this country has all these policies benefit? the rich and the corporation. the blue-collar worker and everyone else gets poorer and poorer. guest: a very poignant question and a very serious question, one we deal with in the book. i wish we had a simple answer. i wish we had a pleasant answer. one chapter talks about this world, when you have access to all of the robots and software, and not just cheap labor, but

cheap genius, fall whole global curve has risen. what is average before will not return average wages them. i now have a robot camera instead of a regular cameramen. as the caller indicated, it is putting huge stress on everybody. you might think, you are in new york times columnist. let me tell you about my life. i inherited james reston's office at the "new york times," agreed journalists. people used to come to the office back in the 1960's and said, i wonder what my seven competitors will right. and he probably knew all seven. i did the same thing. i come to the office and ask, i wonder what my 70 million

competitors are going to write today. how wonder what the people on twitter are going to write. if i write about india, i come in on sunday morning, you could have in front of you the " hindustan times," and we have but tweaked here -- we all have of our game. i wish there was an easy answer. polls are gone. in this world, there are many more opportunities and for people or entrepreneur, i can start a multinational almost overnight with almost no capital. if i have a great idea, i can go to taiwan and get a cheap manufacture, cut amazon and get distribution, and get my accountant. those are all commodities. if i have an idea, i can do that.

unfortunately the down side is that we all are going to have to be a little more entrepreneurial. michael and i are fuddy-duddies. we are retiring baby boomers. we had to find a job when we graduated from college. today they will have to invent a job. host: most of what you have written about in the past as foreign policy. had you come together and decide to write this book? how was it different from what you have done in the past? guest: we've been friends for 20 years and we talked frequently about foreign policy. but over the last couple of years, we discover that no matter the subject that our conversation began, it always came back to the condition of the united states. we concluded that the condition of the united states and the need for american renewal is the most important foreign-policy issue for the united states and

the most international issue in the world. the world depends heavily on the united states. we are the 10th pole that holds up the tent of the international system. that kind of role that the united states plays in the world, we both believe, is unprecedentedly constructed. it requires a vibrant united states in order to sustain that role. if we do not solve our problems and meet our challenges, we will not have the resources or the political will to continue our global role, which means so much for global stability and prosperity. when people say, why did you not write another book about our policy, our answer is that this book is about farm policy. host: thomas friedman, how does this differ from your past books? guest: i have never written another book with another person and i found it was quite fun.

two heads are better than one. they're really help contribute to the book. we wrote it for the reasons that michael said, we discovered that america, its vigor and vitality, are really at the biggest questions of the world today. if we do not get this right, greta, your kids will not just grow up in a different america. they will grow and a different world. we have -- we are at an important juncture right now. host: from your book. how you quantify 50%? guest: let's use a simple one that people are familiar with.

the old debt and deficit fight. i'm not even sure that we reached 50% in the conclusion of that. we know what we need to do. we need some short-term stimulus and invest in infrastructure. we could easily dip into another recession. we need the short-term stimulus. the second thing that we need is long-term spending cuts. we have made promises to the next generation we cannot keep. and if you'd do just the stimulus and not a long-term fiscal work to get our budget in balance, are you going -- i tell you what i will do with my stimulus. i will put it into gold. i will go into mattress' warehouse and buy a new mattress. i have no confidence to spend my stimulus except on cereal and milk. we need to do both together. in the long run, we also need to

invest in those pillars of our success. we know that. but that, and amy dog's breakfast that came out of that budget debate. does anyone think -- they say in the middle east that that camera was up -- a camel was a horse designed by committee. it is not going to solve our problems. host: michael mandelbaum, a member of the tea party rights in the "usa today" editorial pages that we will not back down. we were sent to washington to change the status quo. and that every federal dollar is worth fighting for. guest: we certainly need deficit reduction and spending cuts. to the extent that the tea party has put that on the national agenda, that is a good thing. the

that's not the only thing we need to do. we won't be able to have a vigorous, vibe rant market economy which we need for prosperity without a safety net. it will be too risky and dangerous and people will simply refuse to sustain that system, so we've got to have revenue increases and what is necessary for our future prosperity as well. i don't know representative walsh, and i haven't had a chance to read what he said, but i will respond in this way, he and all of his colleagues were sent to washington to solve the nation's problems, and their responsibility so identify their problems and find solutions to them, and so far each of the two parties has only found at best a partial solution, and that won't get it done.

>> we're talking to thomas and michael mandelbaum. we're discussing their book "that used to be us." caller from cleveland, ohio? caller: yes. i live in cleveland. i'm a 70-year-old lifetime democrat. you guys can tout your book all you want, but you missed the point in your talks this morning. the main problem is exports. we export millions and tons of raw materials, which takes minimal amount of people to get into the exports, and we import the finished products that are made by these raw materials that takes thousands and thousands and thousands of

people. host: all right. so we're sending all the jobs overseas. guest: until last year we were the world's largest manufacturing power in terms of total value of manufacturing. just in this last 12 months china leapt ahead of us. but here's the problem. china exports the same dollar value we do roughly with 110 million people and we do it with about 11 million people. so we're high-end manufacturing, but the -- we're super productive, but it's the opposite of what the caller is saying. we're designing the products here, the ipods and then we're having it assembled and manufactured abroad and there the caller has a point. how do we not just design things here but manufacture

them at scale here? and that's something that will require a real strategy to do but we're not here exporting raw materials and importing the finished product. we're importing tennis shoes and t-shirt. they are importing technology and that. host: good morning in san diego. guest: isn't it early in san diego? what are you doing up so early, honey? caller: my nights and days are turned around. anyway, we're the people on the street here, and i respect your education and what you're talking about tremendously. the problems we see here in our community, which you know, you hear about it across the country. we see people here who are unemployed, underemployed, but there's a cash flow here that's

incredible. you go to the local market and you see individuals with lots of cash and they are doing a lot of the oh, housekeeping and what have you. and actually, i have a neighbor who is renting a house out, and there's like three families living in it now. and we were offered gee, we do carpentry and this and that, and they are a wonderful family that moved in, but what we see here is we see our education in the state of california has plummeted to the bottom. we see people are pushed out of schools because of their age. they have aged out of the system. got to move them on. more children coming in. we see kids coming here from over the border, and i'm not knocking them, because they really attempt to get the education they need so that they can do for their families what the rest of us wanted to

do years and years ago. host: so gloria, do you see an immigration problem? caller: i see that but also a huge welfare system that has gotten so out of control. we just had our tax dollars driven into our little sidewalks here so people are not tumbling out into the street. host: either one of you have a comment on that? guest: i'm a native californian and i grew up when california was the golden state and the things that have happened to california over the last four decades are tragic, and one of the points we made in "that used to be us," california could be the future, the future of the whole country if we don't seriously start addressing our challenges. we have a jobs problem in our country. it's a short-term problem. we need hope to get people back to work but even as we have

over 9% unemployed, we have jobs customers can't fill because they can't find people with the qualificationings for highly skilled jobs. the burden of that problem rests on our system of education. that's why a huge part of "that used to be us" is about our system of education. because that is the key to sour economic future. one of the points we make is that we've got to trays people who are at the lowest end of the educational achievement spectrum at least to the average. because these days, if you don't have a good high school education, plus something else, vocationalnal or military or some college, you're not going to be able to make a living. that's the result of the global realization. the people the caller sees on the streets in san diego and that we see on the streets all over the country are people who don't have the education that's necessary really to survive in

the 21st century, and that is a huge challenge for us. guest: unemployment for people with a college degree is significantly lower if -- education is still your best ticket out. host: fript michigan, good morning. caller: good morning. i'm taking that book from a different perspective, "that used to be us." and we used to be our unto the lord, god, jesus, but now we've gotten away from that. you're talking about china. china is on top for a little bit. but we'll get back to christ and god. we're not going to -- because god made -- and he tears them down. so the point of "that used to be us," we used to be a godly nation. we've gotten away from that. so bank on that. guest: well, we don't really say too much about religious faith. in fact we don't say anything

about it in this book, and religious faith is an important thing and important in the united states. but i would mention one old saying in which most americans are familiar, which i think is relevant to the theme of this book and relevant to american renewel and that is god helps those who help themselves. host: the united nations meets again tie discuss the bid by palace for statehood. we're going to have live coverage of that starting at :30 a.m. eastern time in about 20 minutes. tom, i wanted to get your thoughts on what palestinians are trying to do here? guest: they want to get recognized as an independent state and use that as a over there pressure into negotiations. i don't think it's going to work.

i understand their frustration, why they are doing it. if there's one thing i have learned, it's that in any of these norningses, the person who wins and gets what they want is the person who has the israeli public on their side. because ultimately it's about israeli having to give something back. when anwar sadat got his republic on his side, he got the west bank in principle back. right now we have to look and ask the question why is -- it has to do in part with the fact that israel did withdraw from gaza and got rockets in return and the is rail annual prime minister made sweeping offer to the palestinian leader mahmoud abbas. and really didn't get a vigorous response.

it has to do a little bit with netanyahu with his draw backs, in my opinion considerable, they gave them things and the israelis only showed up at the last minute. the israeli sentiment is inin an effort. you can say netanyahu doesn't want to negotiate, but unless you can say they are really for a secure peace, i don't see anything happening. and there's a lot more israel could do, as i wrote this morning. so i think israel should do another settlements freeze. test the palace. stpwhinet what's the span of a 10-month freeze if you can bring about a peace agreement? i think nothing is going to come out of this that's good, and that's sad.

host: let's go to democratic caller in michigan. caller: good morning. the reason i was calling is i think that they need to hold these politicians accountable. let it be democrat or republicans to see what people is actually taking money from these lobbyists and selling america out. and i think that they really need to put politicians' feet to the fair to. host: let's stick to the point. michael mandelbaum. we had in the first 45 minutes, we asked viewers how to fix washington. if you think it's broken, how do you fix it? one caller said you've got to get the money out of it. lobbyists have too much information. guest: money is a problem. lobbyists are too much of a problem. these trends have gone much

further than ever before. but we have to be realistic. we're never going to exclude money from politics. we do have a proposal in the next to the last chapter and that is for an influential candidate running on the platform of radical centrism and proposinging solutions to the four major challenges we outline in "that used to be us." such a candidate would not be elected. but if that candidate did appreciably well as well has the they did in previous years, that would send a signal in the two major parties and create incentives for both parties to move to the center and it would mean that whichever candidate was elected, would have a powerful incentive to adopt some of the program of the independent candidate nord get that candidate's voters in the next presidential election. we think in short that the

political system needs some shock therapy and the proposal that we make is perhaps not the only proposal, and but we think one well worth considering is an independent candidate for president next year. >> you give me an insight sfwoof c-span program run every night. and looking at those who ran and lost but changed political history nonetheless. ross pro-, you referred to his bid in 196. george mcgovern and going back to henry clay. so fur interested in that. tune in 8:00 p.m. friday night and go to journal@c-span.org you can find a the contender's series. and next republican in kyi. caller: goofpblgt i had 10 quick questions for your guests if they don't mind. i eye agree with the potential for entrepreneurship everywhere.

but the first question was when they spoke about little to no availability of capital with entrepreneurship. what's the best way to go about that? and the second question is what are the three most importantly rules or guidelines or steps to entrepreneurship in their snn thank you. guest: well, it's a really good question. the point i was making to the caller, and we actually profile companies in the book who demonstrate this, that if you leverage global zphation i.t. now, you can actually access talent and markets and suppliers more cheaply and easier than ever, but it's not free. people that start up things have having trouble to get access to capital to grow. that's something we need really be thinking about. i would be for a tax cut on capital gains saying if you

fund a successful startup, you pay no capital gains. at the same time we have to remember we cannot bail our way out of this crisis. we have to invent our way out of this crisis ultimately. we have to invent zwhroobs make people more healthy, educated and comfortable and more scumplete host: wright today, every job requires an entrepreneur. what we can do and absolutely must do is knock down all hurdles that create disincentive for business. >> yes. guest: that's true, and we say in our book, "that used to be us" we need more regulation. we surely needed more regulation of that in our book. it cost us $12 trillion of -- in wealth but we have a huge thicket of regulations that make it hard for people who

want to start new businesses and we've got prune that away, because new businesses are where the jobs are going to come from. so we have to encourage entrepreneurship in every way we can. host: thank you both for being here, thomas friedman and michael mandelbaum co-thors -- co-authors of the book "that used to be us." we'll be right back. scombl 17 past 9:00 a.m. eastern time. here are some of the latest headlinets. the commerce department says orders for durable goods slipped last month and the companies ordered more machinery in august while cutting demand for autos and primary metals. this left demand for manufactured goods relatively flat for the month.

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your way. >> "washington journal" continues. host: mina kimes is joining us from "fortune" magazine and wrote a piece on -- in the october edition. we show our viewers the cover of that and you write 0% of freight rail is owned by about four companies. 40u did that happen? who are the big four? and what impact has that had? >> well, it sort of starts in the 1970's. at the time, there were dozens of large railroads, but the industry was in basically disarray. there was about 1/3 of the industry was either in bankruptcy or close to it. the infamous bankruptcy, biggest corporate bankruptcy ever happened in the 1970's,

and part of the reason the industry was suffering aside from the trucks and that was that they were overregulated. the government controlled the rates they could set so they were able to earn small returns on capital and as a result not investing in their tracks, so you have an industry that's large and competitive but not doing well, then in 9800 -- in 1980 a period of major mergers kicked off. in 1980, there were 40 class i rail leads to declined to seven and really four burlington northern, santa faye and northern pennsylvania in the west and host: what happened after that?

you wrote congress stepped in with its legislation. then what happened? guest: well, the railroads then did quite well and gave them permission to set their own rates, shed workers. and they passed on a lot of those stivings shippers but were able to grow their businesses, become more efficient. as they merged they became more efficient and a great deal more profitable. in particular in the last six to seven years they have become very profitible. i mentioned in my story that since 2004 their profits had gone up by something like 120% and talked about union pacific the biggest railroad whose profits had increased by 25% over each year for the last five years. host: you also wrote the railroads are writing that they are free market success stories but suppliers think there's a cartel going on.

so explain 3w0e9 sides of this issue. what are suppliers saying and what do the railroad industry folks say? >> with all this con some dation, there's suppliers that have held to one railroad. 1/3 of the shippers are in this situation. as a result these railroads have pricing power over them and a lot of them have seen their rates go up, for some, a great deal. so on the shipper's side you have companies saying look, i'm essentially being monopolized and this company has the ability to charge more. something should happen to make them compete more. and on the other side some are saying if it ain't broke, don't fix it. the industry has been doing well and a bright spot in

american infrastructure today largely because they have invested $480 billion of their own money into their infrastructure. so their stance is if you make us compete more or adjust regulations, our returns will decline and we won't be able to invest? >> yes. that we take money and reinvest in the rails to keep them safe. and we won't do that if there is going to be further regulation. >> exactly. and that's clearly a common sfons more regulation, if you regulate us more we won't be able to invest and our customers will suffer in the end. that's something we've heard before from a number of industries. it is potentially true in some ways, in large part because they do have to invest so much

of their money into infrastructure. >> how much? >> i think there's a study that estimates over the next 15-20 years, something like $90 billion and they are currently investing at a pace to attain that. host: well, the association of american railroads has responded to your story and contacted "fortune" magazine and said that there were a number of inaccuracies in your story. how has "fortune" responded to their criticism? guest: i think all of the points that they made, which we addressed to them, were not inaccuracies so much as interpretations. as one example, we talk about how railroads are currently allowed to engage in agreements called paper barriers saying you, the small railroad, can only do business with me.

in the story i said that these were secret but the railroad lobbyists pointed out no,. they are not secret. you can do this and this and this to find it out. but effectively, i would say that's secret i have. and the regulatory commission doesn't know how many of these exist. >> host: they also said in the letter that they take issue that friar 190 there were four but they said all toad there were only 80. -- all told, there were only 0 that -- host: whether or not that rule is the same is a matter of smantics. because if a railroad is making slightly less and they are a class i it doesn't mean the at

least there wasn't competition. host: they also take issue with the writing that railroads in july, unparalleled set of antitrust exemptions. guest: i stand by that assertion, because i was really surprised to learn about some of the assertions that the industry enjoys. i think a lot of people would be surprised. and 20 state attorney generals have have written protesting these and the american bar association on antitrust laws so effectively, there are a few things. one, the rail roads are gone

and ship eshes are not able so seek legal recourse outside. another issue is mergers are approved of this transportation board and the department of justice has no ability to intervene, which i believe it's very unusual. 2 airline industry, for example, is not in that situation. if d.o.j. can stop mergers. as i pointed out in my story, one of the last major mergers was the marriage of union pacific and southern pacific. pardon me, and the department of justice actually wrote a letter criticizeding the merger and advising it not to happen and pointed out that it might cost consumers and businesses something like $800,000 a year and the s.p.d. pointed out.

so also the trucking and maritime to name a few -- if you want to read more of the viewpoint of the association of american railroads, we're going to post what they sent to "fortune" magazine along with this article. but i want to go back to the splires versus railroad part of the controversy and talk about what congress is doing or not doing. guest: there are really two congressmen leading the charge on this issue. one is senator herb kohl who has a railroad antitrust enforcement act. essentially what that would do is undo all these antitrust exemptiont. he has been pushing that through for some time and spart

one who fwoonts to the reform the regulatory agency who oversees the railroads. host: we're talking with mina kimes. if you're a democrat dial 202-737-0001 and republicans dial 202-737-0002 and independents 202-628-0205. you said if the carrier is true and charging above 80% of their t courts and pointed out in my

story over the last 10 years, they have only issued 14 decisions on the matter despite that fact that there have been hundreds of complaints and the railroad said this is theavet there's not that many complaints and that it's not as serious an issue as shippers make it out to to be but the shippers say no. it's just too hard to prove everything and the burried season on the shippers that they are rude and paying complete with tracks and hiring consultant the costs are too much. host: let's hear from stephanie, the democratic caller we're talking with mina kimes of "fortune" magazine. caller: you've already addressed on the monopolies that are occurring between

them, i think the competition is at the bedrock of capitalism. it's not just here. it's in the oil companies and in the pharmaceutical companies. and i think the writers are letting the public know what occurs in the railways and all the products that are put -- host: well, let's talk about the competition. is there competition? guest:y. there's definitely competition in some cases, the big four and southern east do compete with each other for business and put out a lot of data showing this. however there are cases where

they could compete but do not this has obviously been a case bicase basis but some the points that the fewer companies there are in the industry the more businesses will opt not to compete. host: and so because they are exempt from these antitrust laws, then there is no issue with competition, is that correct? guest: in some cases, yes. some of the practices that they are able to do because of these exemptions, could be deemed anti-competitive. host: grand forks, your call? caller: i see the headline being flashed on the screen. railroads, cartels or free market? that suggests to me that somehow free markets are associated with competition or excessive markets, but that's

absolutely not true. it's a free market ideology. i don't subscribe to that myself, but the free market ideology is literally what leads us to a cartel, because free marketers don't want antitrust intervention, which is government intervention into the consolidation of their industry whether it's the railroad or banking industry or anything else. warn bift is a big player of the railroads and recently on the charlie rose show and talking about two fwoig fail banks. that means you're not subject to the personal pressures or responsibilities that you take, because you have a backstop from the government. >> host: mina kimes? >> i guess this is in troords what you're talking about. it's definitely an issue at

play. the railroads should be allowed to set their own rates and should be allowed to sort of operate freely to an extent. but they also have so compete, i think, to ensure that there's balance between them and their customers. and then with with regards to your point about warren buffett. i think that, you know, because if and it's been a very luke aretive ack decision before and he does like to purchase companies with purchase power. host: mena, -- man mean, this quotes the association saying railroads will hire 15,000 conductors, engineers and yard

workers this year. host: what about competition from trucks and trucks on the highway? guest: well, railroads definitely compete with trucks all the time and other forms of transportation like barges and the like, there are times where it's only economical and safe to ship by rail. on a case-by-case basis there's situations in which rail is the only option for some shippers. host: so for some, they have set their business up around the rail system? why is that? guest: exactly. that was an issue that taylor

my story around dupont, the huge chemical producer noting they to i think because their rates had been lower in the past and they had expect expectations, they had sometimes ingesting lls of dollars you've called question between the industry and suppliers. four class action suits have been brought accusing the railroad companies of price fixing. guest: although it's a waiting class confirmation that involves a group of shippers, potentially 30,000 suing the railroads over allegedly colluding to overcharge them

for fuel. the trial is still have said is one, the two wearned eastern railroads started to use the same surcharge systems at approximately the same time making it easier for them to implement these systems, and a number of documents had also been read in trial to suggest that the railroads were aware of the success of these systems did depend on cooperation. >> but as an i grew up going to different places right on the job and they used to run trains about every hour or so. they had large, long trains. and now i'm up in age and travel all over the united

states in the military, and i see all these 18 wheelers. the roads are -- the interstate highways are being pretty well damaged by the 18-wheelers, and the volume out there is unreal i'd say 90% of the railroads are gone since i was a child. i can't see why the rail reds can't compete with the 18 wheelers when one train moves many 18-wheelers. host: that's like going from d.c. to boston on one gallon of few. man mean can you speak to the callers comments?

guest: sure, because i think part of the reason why you haven't been seeing trains is because they have shed a lot of tracks and merged and increasingly they are prefering to do long hauls of commodities like coal and grain. so in certain parts of the country you might not be seeing them much anymore although overall they are getting the market share that trucking agencies are. host: do you know what the market smare? guest: it's been pretty even. host: from missouri? caller: railroads right now are probably doing three times the amount of business with less than half the employees. so that's -- host: alan, how do you know that? >> i just retired from them.

host: from the railroad? caller: yes. host: do you mind telling us what your salary was? caller: it was $80,000 to $120,000. host: did you work on it for how long? guest: too many years. on call 24 hours a day. seven days a week you don't know when you're going to work or when you're getting off. enough to life but the railroad. host: alan, why do you think the change in the industry over the years? >> money. and they have reached now three miles long. host: and what is the impact impact of that? caller: well, for the public, if anything goes wrong, i would say disastrous.

but for the railroads it's making money. it's either coal or truck trailers and grain. host: is that what you snoved caller: yes. host: were you a conductor? caller: engineer. i know this american railroad has statistics about its employment that there are about a 65 freight railroads that the number of frate rail -- number of freight rail is up. caller: i think to talk about competition between railroads is affirmative louse. it's a private mon op limit we don't expect our highways to

compete and make a profit. we should let it be handled by the government. we've been doing that for some time. our knew the miss approximately lines have been run by the government for quite some time also. that was -- railroads were a huge controversy 150 years ago, and there were a lot of arguments that they should be nationalized, the transcontinental railroads, they are natural monopolies and cannot compete and folks will look at people like henry george who argued just like the mu the miss approximatelyis, highways. think they should be operated by the government otherwise we're just going to continue to have the same problem and it's not new and we were talking about this 150 years ago. host: mina kimes?

>> i heard that in my reporting that hey, railroads are a natural monopoly. they are private companies but heavily regulated, so yes, they have monopolies in a lot of cases, but the at the same time there's a lot of checks and balances to make sure customers are not being gouged. host: i want to go back to the class-action lawsuit that is going on and you said they have not classified that yet but when might that be resolved? what court is looking at it, and also what sort of conspiracy to fix prices that do they point to? when it comes to prices, fees, where do they think the conspiracy lies? guest: i think the case is about a fee called a fuel

surcharge that they started to implement in the early part of the deck tied deal with rising fuel costs and these surcharges themselves are not illegal and are widely used even in trucks. but what they are charging in the lawsuit is that the railroads colluded to implement a special kind of surcharge, so before 2003 or so, the price of fuel was baked into a weight-adjusted index sort of moves that price soup that they were paying more for fuel. this applied to the overall cost of the contract, some shippers groups did studies and estimated they overcovered $6 billion worth of fuel between 2003 and 2007.

host: greg, a republican in sarasota, you're next. caller: yes. i have a background in phosphate, moving phosphate by rail through the state of florida. some of our challenges were that up front rail companies would want you pay to put this on your property. once you've paid, then whoever had it, they negotiated for a strong position. host: he was breaking up there. a little bit difficult to understand but did you hear him? guest: i had some difficulty making out what he was saying. host: moving on to an independent. caller: mina kimes i was shocked reevently when our passenger rails finally got the money in our new york dwrire

refurbish and get new passenger cars to find out there's not a passenger car manufacturer in the united states of america. we had to go through canada, taiwan and singapore to get bids. how does that translate over to the freight rail cars? is there, besides them moving freight, is it generating that other kind of business in the united states? do they manufacture their own locomotives and freight cars? guest: that's a great question. . i have to admit i don't know the complete answer. there's a cottage that supports this and provides equipment. as for whether or not the majority of cars are manufactured here, i don't know. one interesting thing i know is that increasingly more shippers are being called on to own

these cars rather than the railroad, a means of pushing costs towards them indirectly. host: the association of american railroads breaks it down as far as what is being shipped on the railroads. 49% is coal. farm products make up 9%. chemicals 8%. food products and waste and ore, etc., make up what the railroads are shipping across the rails. caller from brian, texas. caller: yes. i would like to they to the listening audience. there are only two main channels throughout all human existence. think about it. number one is communication. number two is transportation. and if either one of these is monopolized to the extent that they have all the abilities to do anything, parned me, i've

always loved the train. i think it's one of the best transportation things we have in this country. but now you know that it is dominated by the gasoline companies. they don't want the railroad companies to prosper. but it would be a safer -- it's safer. the trucking industry has just beat the highways to pieces. it's costly. it's costing everybody more money for the trucking industry. and the news industry has been bought out and owned 2/3 by rupered measure -- by rupetrupet. rupert murdoch. host: it's said monopolies cannot survive. someone else else will always jump in. name one monopoly that contradicts this. scott hesterman also wrote this --

guest: sure. well, i think we talked earlier about how not all shippers are able to use trucks or barges as competition, and sometimes rail is the only feasible option. with regard to the free market and someone always jumping in, i don't think that's the case with the rail industry. you have people disrupting your southwest airlines and your jetblues, but you and i cannot start a railroad and lay out billions of dollars worth of tracks easily, so there's a large feet in secures it from threats.

host: republican from georgia? caller: yes. i'm a retired manufacturer and logistics manager and had a lot of experience with railroads and track car-type movements. but i think the railing roads are our key to returning to manufacturing in the united states. it will be -- great for our -- i think also the inventory task and most companies have to be -- also i think pricing in order to be real competitive and helpful to our economy, pricing has to be reasonable and profitable. fuel charges are way above the 190's level. so all that needs to be

considered. but i think we need the to have more private support and also more governance support of railroads. baz that's one of the key factors -- because, that's one of the key factors that's going to return the united states to manufacturing. and spur more jobs and help our economy. host: mina kimes? guest: sure. well, i think you make a good point about railroading and manufactureers and i think it is in the interest of this company to make sure there's an even plague field. the railroads don't exist in a vacuum. there are dozens of other industries impacted by these rules. so while they may be benefiting

from the current system, for every dollar they safe, a dollar is being paid out by another system so 23409 only are the railroads competing but shippers have the means to compete as well and do well. host: does the shipping industry have its group of lobbyists here in washington as well to help them with their charges? guest: they do. there's a group called consumers united for rail equity, a bit smaller than the rail equity. largely composed of chemical producers, manufacturers, coal shippers, and utilities pay a lot in rail weight. caller: i've had a lot of years

with negotiating with railways and j.b. hunt is also a big player in the rail line. a lot of things i would say, first of all, unless you are a manufacturer or shipping, -- or shipping a lot of freight, railway is not a viable option for you. the way we're set up especially in the supply chain where companies are running leaner and leaner, the railroad does not fit the in-time model anymore. also you have to look at where are you located? where are your products coming in? unless you have a ton of products coming in from the west coast, i'm not sure it's the best way for you. since i started in the industry, it's really if you're a major shipper or manufacturer here in the united states or you're shipping a bunch of cars in, the customer we're looking for is anything else out of the

lines, you don't fit the rail model. host: did you move to snarlse what did you do? >> -- to airlines? what did you do? >> i worked for a large engine and car manufacturer, and we used rail a lot, because we had consistent freight that came in the country from a consistent spot and knew what time of the year i needed to buy all this equipment, if you look at wal-mart and look at where their warehouses are placed, it doesn't fit the model so they know that. so unless you're moving greens, coal, cars, the rail -- roads

are not fitting into your business model. host: any indication that the railroads want to expand? you talked about in the 1970's and congress in the 190's, shedding lines that weren't possible? >> absolutely. guest: i think they are definitely looking atx panneding their capacity. our highways are not in great shape, so i think they are expanding or looking to expand in the next years so in order invest in their infrastructure, they need to earn sufficient returns. host: tyrone, can you make it quick? we're running out of time. caller: yes. i just wanted to ask her, didn't this start back in the 1970's?

i was originally with con rail and as it was established, what happened was we ended up being one company, so that meant seven companies made one company. we started to get out of the local freight, because as manufacturing started to do a lot of closing, all you had was straight through rail. so wouldn't that be a lot of this that the government ended up making seven railroads one. and i think that was a very hard hit on railroad workers and on the industry. that's why southern owns a lot and doesn't have to maintain the yards. guest: yes. you're right. i think it's a combination of the fact that all the railroads didn't contribute to the shedding of workers and lines.

i believe your first point was railroads are no longer serving manufacturers, because manufacturers were shutting down. but i don't think that's what we're seeing today. i think a lot of manufacturers do want rail service, but the question is what is the appropriate rate if they are not shipping huge quantities of coal and such. host: here's the cover right here. there is her story. thank you very much for joining us, mina kimes. guest: thank you for having me. "martha" host: next week our spotlight on magazines will include looking at cities. how to make them greener, smarter and better. thank you for watching. we'll be back tomorrow morning at 7:00 a.m. eastern time.

[captions copyright national cable satellite corp. 2011] [captioning performed by national captioning institute] >> c-span's 2012 road to the white house coverage continues this morning with live remarks from republican presidential candidate michele bachmann. live coverage gets under way at about 10:25 eastern here on c-span. and house update for you tmplet the house comes in in what should be a pro forma session but are expected by unanimous accident consent to pass a