mails every day >> inouye kingery unveiled his campaign platform today in what he is calling his 24 century contract with america. that is next on c-span. after that, former chairman john allison talks about the financial crisis. later, discussion on online privacy and a look at the way social media is changing the way news stories are covered. >> he founded labor unions and represents socialist party of america as a candidate for president running last time from prison. he lost, but he changed political history. he is one of the 14 men featured in c-span posing new series, "the contenders." get a preview about eugene debs

and some of our other previews .org/ him at c-span -- o thecontenders. the former house speaker is calling his 10-point plan that 20% to contract with america. it will make changes to the tax system, repeal the health care law, and and out -- allowing younger americans to opt out of the social security system. this was held at the financial services company in des moines, iowa. [applause]

>> i am particularly delighted that billy and bobby ray have served the state. in an effort to talk about practical realities -- these are not on. and i wondered. [unintelligible] are they on? ok, so -- i apologize. i was a starting to say that this was in the tradition that gov. ray established when he was governor because it is an effort to lay out what we need to do in a way that we can all

understand it as citizens and put it together. i and particularly glad he was willing to come and introduce me. he is a dear friend. but i did not realize until last night we were at his house that he had kept the original contract that was a tv guide. it tells you how long ago this was. it was in a tv guide. this was in the early days before cable. [laughter] every time we pass something, i would go to the floor and i would use a hole punched and i would click it. backup is now on the so -- in the smith -- that kotb is now in the smithsonian. the only center that has written about it was senator chuck schumer a couple of years ago. he pointed out that the real purpose of the contract was a management document for the republican party. while it had a powerful political impact, as greg just pointed out to you, we voted on

all of these things in 93 days. and enabled us to say to our team, like you got here. here's what you're doing. -- glad you got here. here is what we are doing. the largest one party in creation in american history was in 1994. it we gained 9 million votes over 1990. the democrats' only lose 1 million votes. the real swing was those who never turned out before. and it was really simple. it was no attack here. when you see advertisement in tv guide we do not attack bill clinton. we were serious. it was an adult document for .dults i if there are concerned citizens about the country, that you can treat them like adults. it is not about who has the best 30-second attack ad or who has the most clever consultant.

i had been at my dad was a career soldier and spent 27 years in the infantry. we were in france when the paratroopers were killed and the gall was brought back. -- when charles de gaulle was brought back. it really hit me that the country was dying without leadership. in high school and began to study three things and i've been setting them ever since. to what does america need to do to be successful? how would you explain with sufficient clarity that the american people would want you to do it? and how would you implement it if they gave you permission? i was working as a volunteer in the reagan administration and i've worked during the bush administration.

let me ask you, how many of you agree that america is on the wrong track? how many of you agree that getting back on the right track will be an enormous effort? how many of you agree that very substantial interest groups will fight deeply against cutting back on the right track? i just want to feed back to you what you have just said. this is the heart of why i am proposing a 21st century contract with america. our challenges are enormous, i think, the biggest since 1860. the difficulty of changing direction for an enormous national government, an enormous national elite, whether it is the courts, the news media, the academic world, the bureaucracies, the laws, is when

to be tremendous. and there will be people who legitimately and authentically fight desperately to stop us because whether of an interest group or an ideology, they do not agree. if you are serious about saving the country and moving forward, you have got to start with that design. you have got to say, this is what we are trying to accomplish. are you trying to develop a canoe for a local creek are you trying to build a ship to cross the pacific? you better decide what size you need. this contract is designed in a much deeper way. there are four parts to the proposed contract. this is the one talking about today in detail. but the four parts give you a sense of scale. the first that i agree to deal with today is the legislative part. what should we pass as lot? the second, which will begin -- we will be beginning to unveil and you can see it at newt.org is called, imagine the first

day. we take an hour, and for one hour i signed between 50 to 200 executive orders, fundamentally shifting the direction of the united states government before 5:00 p.m. on the first day, all within the law. that is why you have to have this stuff to change the law. but for example, the first executive order we know for sure, abolishing all of the white house bazaar's ad of -- white house czars as of that woman. there's a lot you can do pretty fast. reagan, for example, signed an executive order which eliminates rationing gasoline and liberate gasoline and within six months the price has collapsed. there are things you can do better decisive. third, we will need a training program for the transition team and a training program for all transitional appointees. if you want to change the scale,

there's no reason to believe that normal traditional appointees have a clue what they're doing. they will run the old order and the old system. they do not know how to run this new system. and finally, this is something i say to everyone in the audience. we need a citizen-centered model that uses social media. i do not ask anybody to be for me. if you are for me. -- if you are for me, you vote and you go home and you say, i hope he fixes it. i asked people to be with me because for eight years we need to work together. we need to work together in aligning the congress on what we need to get done. we need to work together in making sure that as things do not work and if you have the scale change, some things do not work. if you send an e-mail and have a conference call corporate dissipate in a video conference you've got to be able to say, that is not working.

you have to get constant implement -- constant evolution and constant change in order to implement what you are talking about. it you cannot implement in a stable way because things change. you have to be part of that active feedback. there is another reason. if we implement the 10th amendment and return power to the states and citizens as you shrink the washington bureaucrats, if you have to grow the citizens. that means you will have more responsibility. the fourth part of this is how do we build a genuine citizens movement that is prepared to take responsibility for our country? i think the change is so enormous -- and this is the one that i want to read to you today. this is a message abraham lincoln said mr. the congress in december of 1862. -- sends to the congress in december 1862. the civil war is not going well and things are going much harder.

he said -- he writes to the congress, opened with the dogmas of the quiet past are active to this to repressive and we must rise for the occasion. as our case is new, so we must think a new and act anew. we must disenthrall ourselves and then we will save our country." i think the reason that washington is a mess is because no one is prepared to disenthrall themselves and take the risk of thinking you. let me walk you through this in great detail -- and if you want a great deal, there is a 23-page version of this at newt.org. this is not the final document. this is -- there are two big differences between this and 1994. i could not possibly show you everything i want to do because the scale is so large.

i will treat the beginning of a conversation, which by said kemba 27 of next year, the anniversary of the contract -- september 27 of next year, the anniversary of the contract, we will show you what we are doing. the second difference is, in 1994, we stood on ronald reagan's shoulders. he had been talking about welfare reform since he first ran for governor in 1966. there were 700 pages of legislation behind that. and congressman dick armey is doing a great job of putting that together. we do not have the advantage of 30 years of reaganism. some of the things i will describe to you we do not know how to do yet. it will take about a year to pass all of this. we have had in this current administration a stimulus package and a member had read. we had no, care so complex that

speaker pelosi said you have to -- we had and obamacare so complex that speaker policy said you have to pass it in order to know what it is. that is wrong. the subcommittee's hold markups and report to the full committee. they hold marcus and the go to the floor and have a chance to amend it -- they hold mark ups and they go to the floor and have a chance to amend it. it is a much harder process. it is not ramming things through. it is legislating. it is trying to bring to bear the intelligence of the american people to solve our problems. the first thing we need to do is to repeal obama care and we need to work towards transformation. there are all sorts of ideas in the paper at newt.org.

one reason we have to repeal it is because it is a 2700 page document. you cannot repeal part of it because you cannot trust the staffs to tell you what part you are to repeal. there is a little over 10 percent of it that is really good. it is going to take a couple of months to actually pass the replacement. second, we have got to create jobs. the reagan recovery was so dramatic that in this month, said cameron 1983, -- september of 1983 -- and he had inherited a bad economy from carter just as obama in here today that the economy from bush. -- inherited a bad economy from bush. in 1983, the american people created new jobs.

reagan had a four-part plan, cut taxes, cut regulations, the american energy, praised the people who take risks and create jobs. a policy of saying, and glad you are going out to invest, i'm glad you are starting a company, i'm glad you show up every monday and run your business. a fundamentally different attitude. when i became speaker, we follow the reagan model. the first tax cut in 16 years, the largest capital gains tax cut in history. people went back to work and back to school and cut regulations. guess what happened? in the four years that i was the speaker, the american people created -- notice i did not say i create. i have created jobs, but i did that as a business leader, not a

politician. the american people created 11 million new jobs during the time i was speaker. i remind my good friends that is more jobs in utah, then under gov. huntsman, more jobs in massachusetts than under governor romney, and in four years, more jobs in texas than in 11 years under the governor. . -- under gov. rick perry. if you want to create jobs. i know how to do it. if you like it 1-page alternative that can be developed on the revenue neutral basis, it has been experimented on in rhode island and used in europe. it gives you a choice. you'll hear a lot about choices today. zero capital gains tax. 12.5% corporate tax rate so that we liberate this a trillion

dollars locked up overseas that is currently locked up in profits that will not come home. and 12.5% will make it cheaper to pay taxes than to hire lawyers to avoid taxes. 100% expensing for all new equipment for farm equipment, factory equipment, office equipment. with the knicks -- the specific goal that we want americans to be the most, most productive workers on the planet. finally, we want to have businesses successful, focus on job creation, not focused on tax avoidance. repeal dodd-frank immediately. it is a disastrous bill. it is 2300 pages and does to services what obama care does to health. it is killing small banks, killing small business, crippling housing, and it is

creating the center of corruption at the treasury micromanaging large banks. is a terrible biele pete -- terrible bill. second, repeal sarbanes oxley. third, replace the environmental protection agency with a brand new environmental solutions agency that focuses on rationality in cooperation with kennedy's back home. frankly, common sense. the best example is here at home. some people in washington who have never been on a farm are writing regulations involving dust. writing regulation suggesting that your gross should not create dust. just look at what is senator grassley has been saying. you cannot imagine an agent that is more out of touch with reality. finally, i would replace the qana fpa with -- current fda with a 20% three food and drug

administration whose specific jobs -- 21st century food and drug administration with specific job is fundamentally opposite of the current fda. if you want to create jobs, help the biggest economy in the world. if people want to get healthy, they will live longer. we will dominate the health market in the world and if we can do so, those are very high- value jobs that pay very well and produce a lot of capital for the united states. it is thes most logical area if you are trying to promote a high income economy. we have more total energy, whether you want to talk ethanol or oil and gas or coal or nuclear power or solar or wind, we have more toward energy than any other country in the world. more than russia, canada, saudi

arabia. it energy jobs pay pretty high salary. in western pennsylvania, developing shale is about a $72,000 per your job. in the woods yet, about $80,000 per year developing oil and gas in the gulf. these are good jobs. i like them. one of my first goals would be to create american aaron -- american energy that keeps $400 billion here at home. i would rather it go to south dakota and saudi arabia. i'm very comfortable saying to the american people, let's develop our own energy. if you develop american energy, government revenue goes up dramatically because the government gets royalties. to give you an example of how much potential revenues you've got, we own 69% of alaska. alaska is twice the size of texas. if we own 69% of alaska, that is

1.5 texas's. you can say, look, we keep will give you half of texas. pick the 25,000 square miles you would like to keep as parks, wilderness areas, terrific. that means we get to develop 250,000 square miles, an area the size of texas. can you imagine the net value? you get more people no longer afford and lower costs because they are no longer on medicaid and food stamps and welfare and unemployment. and you get more energy production and you get more revenue out of federal lands. all of those increased revenue flow with no tax increases. i spent years on this project. i chaired the medicare reject -- medicare tax reform of 1996. i have been involved in health

transformation. it involves new thinking on the lincoln tradition. on social security, it is simple. every young american should have the right to choose whether or not they want a personal social security and counted the chilean model. it is a very simple model. i am against making things compulsory if you can avoid it. you go to them and you say, would you rather have -- and you show them the quotes of obama in august saying, i may not be able to pay your shores of security check. do you remember that? do you want to spend 60% or 7% of the life working knowing that politicians may not give you your own money? or would you like your own account that you can control? would you like to have a system that has no estate build up or a a a system that has your money? would you like to have a system where there is a working age where there is no

required working age. and by the way, over a million people over the age of 75 still work. this is a model for an industrial era society that is gone. if you get the kind of economic growth that these two great, social security is fine -- that these two create, social security is fine for the next three years. they get two and half to three times as much money as they're going to get out of the current system. and medicare, very simple. we start with something that we publish a book on called stop paying the crooks. you would have thought that title was clear enough that even in washington it would have led to serious conversation.

it did not have any impact. the senate bill transformation published in three years ago. i was very confident it would break through. no impact. here are the numbers, just as we understand what we are talking about. if you have an american express card, they use massive expert systems to track fraud. so does visa and mastercard. how many of you have ever had a call to make sure you did the charge? and i am not making this up, just for the benefit of people in washington. [laughter] it is literally true. american express pays .03 of 1% to crooks. as a taxpayer, you are paying

three and 33 times to crops. -- 333 times that to the crooks. is between $70 billion and $120 billion per year. but it requires thinking to do it differently. it requires new approaches. i have talked to all three major cards and all three are ready to go to the the congress and explain it. the head of i.t. -- ibm did go to the president and explain it. it did not work. this is why lincoln talked about new thinking. you have a paper based bureaucracy trying to keep up with crooks who have a and ipad. it is impossible.

second, you give people a choice. why did you just passed tom price's law that says if you are successful and you would like to contract out, you are allowed to contract out. if you want to pay more to the doctor or hospital, you can pay more. every liberal will tell you that is impossible. medicare today is more restrictive than the british national health care service. why not allow people who are successful to have a choice? you could institute next year paul ryan's model of support, but make it voluntary. and then you say to the insurance industry and others, to you want to compete for the customers? fine. if you want to stay in the old system, fine, but we will give you more and more opportunities to have better choices. we do not compel people to go to wal-mart. you'll hear some folks say, oh,

senior citizens get too confused. you cannot allow them to have this many choices. the idea of walking through and saying to my mother when i take her to wal-mart, there are 250,000 items at wal-mart. maybe you do not want to go to all of the aisles. [laughter] she would think i was crazy. but the right to choose is different than being forced. there are ways to modernize social security and medicare that will save money in the system and allow people to get better interactions. you want to balance the federal budget and i want to recognize mike george. take it out. -- take a bow. [applause] he is an example of why america is a unique country.

his first client was going in 1981. he did pretty darn well. he made enough money. then he decided to take his own lot -- his own money voluntarily to organize and his promises that if you modernize the federal government, you will save billions. in order to apply modern management to the federal the 130nt, you end of thend year-old regulatory system and you can move every day with continuous improvement, which is part of getting to a quality system. this is a big, not a small idea. of i am the only speaker of the house in your lifetime to balance the federal budget. we paid off $405 billion in debt. i am here as testimony to my own candidate saying to you -- [laughter]

i know we can do this. and we should pass a balanced budget amendment so future generations are reminded not to say yes to every interest group that shows up. sixth, we need to control the border by january 1, 2014. this is not hard. anybody who thinks this is part -- i have written two novels about world war ii. i used to teach about it. from december of 1941, the victory f. japan to 1945 is five years. in 3 -- is years. it recently took longer to build a terminal at the atlanta airport. you can do that if you are really rich and nobody threatened to. but if you have real competitors and you have real problems, it is useful to apply common sense.

i have said, for example, there are 23,000 department of and security personnel in the washington area. if necessary to achieve this goal, i would be willing to move half of them to texas, new mexico, and arizona so that they can serve on the border. that would double the people available. but this idea that you cannot control reporter is nonsense. every country in history that wants to, does it. it is a matter of willpower. we want to pass and bill in 2014 to control the border. and you go do it. that does not solve all the problems. is the beginning of a process. we need to deal with the issue of appropriate immigration. we need to modernize the current visa system. it is actually more expensive to get a legal visa and it is to sneak into the country. that strikes me as backcourts. -- backwards.

we need a serious national conversation about national security. we are in vastly greater danger than anybody wants to talk about. and part of that danger is the rise of modern weapons. part of that is terrorist groups who hate us. part of that is the rise of china. part of that is international crime on a scale that we are not prepared to deal with. and which manifests itself, for example, in mexico. this conversation is tragic and dangerous that our leads are exhausted, our news media as timid, and as a result we are not having a discussion about national security. in some ways, it manifest itself in things like admiral mullen, the chairman of the joint chiefs of staff, who has just now said -- he has come to the conclusion that pakistan is not our allies. that is a very bold thing to say in washington. it is a very obvious thing to

say if you are anywhere else in the world. if bin laden was living for five years in a building on lyell from there -- a mile from their defense university, using that was physically possible without the pakistani government knowing it? of course not. and this proposal that we keep 3000 troops in iraq is, i think, very frightening. 3000 troops is too small to defend itself. it should be thought of as a target. this administration is making political decisions that risks the lives of young men and women in uniform and is profoundly wrong. my dad served 27 years in the army. i know what military life is like. it is wrong to put american debt risk for political reasons and leaving only 3000 troops. we ought to either leave enough to defend themselves or get them all out. you leave a small group in a dangerous neighborhood and

somebody is going to try to kill them. is a very dangerous thing to do. i wish we could have two or three debates only on national security. i will be making a speech that outlines the war later on. imagine a projected cost between now and 2015 of $20 trillion. -- between out and 2050 of $20 trillion. in washington, this would be a radical and even weird idea. that is what alzheimer's is projected to do. and after that, parkinson's, autism, mental health. brain science will be the most rapidly accelerating knowledge. in the world in the next 25 years.

experts say if you could send to postpone it, not cure it, but simply postpone it for five years because it is largely a disease of aging, you save somewhere around half, $10 trillion. if i could save $6 trillion to $10 trillion, would i do? -- what would i do? this is not an irrational conversation. in washington is weird. i cochaired for three years department -- and autism working group. -- and alzheimer's working group. it is the most feared disease for people over 55. at a financial level, it is 1.5 federal debts. i want to propose very dramatic -- this will be a speech in the

near future and i would like to give it at the university of iowa on the scale of change that we need to fundamentally rethink how we explore brain science across the board. how do we help these diseases? the net payback will be several times the national debt in the next generation. and to have an industry helping the entire planet deal with these problems will create at an incalculable number of new jobs. the ninth one is the other one. there is no judicial supremacy. this is an artifact of the warren court in 1958. in the federalist papers, alexander hamilton says, the judiciary is the weakest of the three branches and will inevitably lose in a fight with the two elected branches, the legislative and executive.

in the judicial reform act of 1802, thomas jefferson, the secretary of state was james madison -- so you have to assume that the two of them knew something about the constitution. they abolished 18 out of 35 federal judges. they say, go away, you do not have a job anymore. some of them tried to file a lawsuit claiming it was unconstitutional. and the judges said, are you crazy? if we agree to hear the lawsuit, they will abolish our offices. is a huge fight. people forget that in the declaration of independence -- look at it some time and look at the number of citations of british judges. the second most popular complaint of the american people have turner taxation without representation was imperial british judges acting as dictators. when you have a judge who in san antonio on june 1 issued a ruling that not only could students not pray at a high

school graduation, but they could not use the word prayer, they could not use the word god, they could not use the word benediction, they could not ask the audience to stand, and he would arrest the superintendent if any student broke his order, that judge is about as anti- american as you can get. this is a country that was founded by a document that says, we are endowed by our creator. this is not about theology. this is about and and then the effort -- an unending efforts to fundamentally change america. we're going to have a very big fight over the proper role of the judicial branch, because the idea that appointed lifetime lawyers get to dictate the future of america is crazy. jefferson was asked about it at one point and he said it would be an oligarchy. lincoln in his first inaugural, speaking of the dread scott decision, which would have

eliminated slump -- slavery in the whole country, said if nine people can dictate to the exclusion of the other branches, we are not a free country. we need to enforce the 10th amendment. washington is too big. washington is too powerful. we are citizens, not subjects. washington is supposed to serve us. the only way to fundamentally change is to go step-by-step and take everything back home. in order to shrink the bureaucrats, you have to grow citizens. this is a fairly decisive first step. we will flush it all out -- flash it all out between now and some kemba 27 of next year. -- september 27 of next year. the only way you're going to

save this country is for the american people to save it. no single president, no set of politicians, no magic. just hard work, common sense, and a willingness to put the country first. i would like to, if i can, take questions. and josh, by the way, is learning some school credit today. [laughter] he is an example of what this is all about. my daughter, jackie, is here with her two children, my grandchildren, maggie and robert. politics is all about their lives one day if we do our jobs. >> you said that you are not for state impose religion, but from

what you said it sounds like you support religion imposing its ideas on the rest of us. i am very concerned that a branch of christianity has gotten some of its tenants into our laws, like stem cell research, linking foreign aid to reproductive issues and so forth. i was pleased to see -- i did not think you have a lot of social issues in your contract. if you are president, would you work hard to make christian social issues the law of the land? >> the two that you just cited are not necessarily christian issues. i think orthodox jews have as a profoundly believe in those issues providing a lot of other people do as well. i am very much for adults stem cell research and i'm very much for stem cell research that comes from, for example, any device other than killing an

embryo. but i'm opposed to getting in process of killing children in order to have research materials. if you look at what is happening with stem cell research, we have less and less demand that you have a thing except regular stem cells because we're learning how to use them. for some people i think that is an ideological fight, not a scientific side. i would not use the american tax dollars to pay for abortion. i do not think the people of the year and states should be paying for abortions. i am very much in favor of adoption. i was adopted. my father was adopted. i think we should make it very much easier and more desirable to be adopted. i did not desire to impose a particular branch of christianity. my argument about religion is different. we said in our founding document we are in doubt by our creator with certain inalienable rights. should we teach children that

are not? sure they learn what the founding fathers meant or not? abraham lincoln said in his inaugural address and he reverences god 14 times and has two quotes from the bible. can you explain lincoln without understanding that he read the bible every afternoon, or is it just bad history because we now have this politically correct model that says we cannot tell you anything about religious beliefs anymore? the idea about taking school prayer out in 1963 made the country better, i do not see any evidence that the children that do not spend a moment recognizing that they are subservient to god -- now the average guy in any way they want to. -- now they approach got and anyway they want to. i always tell my friends who do not believe it in this stuff, how do you believe we came to be?

we could have been rhinoceroses, but we got lucky this week? obviously, i assume that is better to be human than a rhinoceros. [laughter] nobody wants to see the headline, "gingrich shows anti- rhinoceros hostility." [laughter] >> i cannot see how $14 trillion going to $16 chilean national debt is going to be overcome. do you have any idea? >> you put simply what i'm trying to describe up here. for a while i carried a poster that says to plus two equals four. and i actually got that from a movie. there were signs that people put in their windows in poland.

the reason i carried it around for a while was to say to people -- lincoln says at one point, if you cannot get your opponent to agree that 2 +2 =4, you have other problems. we're currently on a trajectory to go money to the chinese and get our oil from offshore. how do you get to a balanced budget? we did this as a conscious act of wilke in 1985. we said -- 1995. redounded in four straight years. how do you do that? pretty straightforward.

spend less than you take in. everything else is details. you are increasing where you are taking in and i would do it by generating revenue without a tax increase. or you do it without -- by cutting spending and i would do it with little pain. if you get to where you are taking in more than you are spending, you have what is called a surplus. this is not theoretically hard. we did it in your lifetime. nobody in washington wants to think about it. can we do it? of course we can do it. but we currently have a machine whose entire existence is based on spending enormous amounts of money. in order to change, you are now going to have to defeat the machine. this is why sacramento is such a mess. it does not matter who wins the election in california. the machine own suit sacramento.

californians can i get a grip on their government. if you look at what i've done over my career, this is a very, very bold proposal. it is saying, for example, the whole idea of balancing the federal budget, we are saying to end the civil service system as it currently exists. do not make it impossible to fire someone who is incompetent. there is a series of very bold proposals here. if you are prepared to go through the level of change i'm describing, will get to a balanced budget and pay down the debt. if we will pay off the chinese and create our own energy so we do not sit -- need to send any money to brazil and we will be a much wealthier countries with greater national security. but it is real change. it is not just more of the current model of washington bureaucracy.

>> i'm a former marine and combat veteran and you said that 3000 people left in iraq would be a target. i agree with that. if the other way is to have nine or more, which where would you want to go? >> with the current president, i would go for nine. >> thank you -- i would go for none. >> thank you. >> i think the right now, the iranians are on offense in iraq end we are on defense. it is going to get worse, not better. the same problem with the embassy. the embassy is way too big, way to indefensible, way too expensive. it was designed for a different world. and the world that obama wants, it makes no sense to half the current american embassy in iraq. it is much too big. it is over $1 billion. what are we doing?

we have to rethink the entire region. general john abizaid, who i think is the only four-star general who speaks fluent arabic, said to a couple of weeks ago, we have a bigger strategic deficit than our fiscal deficit. i think people should take that really seriously. we are grossly underestimating how dangerous the world is and we have no strategy to match those dangers. it is a very serious problem for us. >> first, speaker, thank you for coming. i have been following you and some of the other candidates for the last couple of years or so. you seem to outline a lot of specific ideas. can you explain your thoughts on why you are not being better received across the country in some of the polls?

>> i'm glad you asked it now instead of a month ago because the polls have gotten better. [laughter] my family, we all went through a lot of conversations about whether or not to run. we started with the assumption that if i did run, i would get attacked prefer to sleep. certainly, june and july met that standard -- attacked pretty ferociously. certainly, june and july met that standard. and some of it is my fault. what i'm trying to do is very different. it is something i did with reagan in 1980 and something i did in 1994, that is, it's positive, ideal oriented campaign that reaches out to hold new groups of people. for example, people interested in brain science, modern management, a new coalition in tradition -- in addition to the traditional republican

coalition. and i made a mistake in early spring of bringing some very fine consultants. this is not about them personally. they're all smart people -- and anybody who watches money ball will know i'm talking about. they're all smart people doing .ne thing i no i'm not going to run attack ads. i cannot compete with the sum of money. -- with some of the candidates on monday. i can attract an enormous amount of volunteers and network them together, and in the process build a new way of thinking about governing america. i lost about four months being involved in that. the other thing -- i want to say this just right. remember, we just talked with a former combat marine. this is a country in which the

media is more comfortable spending two or three weeks on a congressman's truly bizarre tweets then it is on serious analysis. bring science could be the largest single breakthrough -- brain science could be the largest single breakthrough in saving medicare and medicaid. if you look at the front page story about the contract and you look inside, opposite it is its story on dementia. and i think every fifth person on medicare has dealt with a person in their life with extreme dementia. trying to get the news media to understand what i'm talking about makes you feel stupid. fundamentally rethink the entire garment system. -- government system.

rebalancing the constitution and the tree branches of government. if we can get the media to slow down, get away from gotcha questions, actually have some open debate -- i will make it clear, if i am the republican nominee, i will challenge the president to seven lincoln- douglas style debates of three hours each with no timekeeper no moderator. we are in enough trouble that we deserve to have a serious, adult conversation between the two competitors for the president of the united states and not have mickey mouse situations where reporters -- and if you look at some of the articles that have come out about how they have planned some of these debates, the level of cynicism on the part of some of the people asking the questions is disheartening. and it is unworthy of the united states of america. if you have a serious candidate who wants to talk about serious issues, your first challenge is to get the elite media to decide that they will give up the cynicism and spend at least as

much time on this as they do this stuff that currently passes for news. [applause] let me thank the principal port for having us here. i can take one more, ok. did you notice how obedient i was? we can take one more. [laughter] >> you mentioned deregulating and making it easier and less costly for companies to do business, but how do you go about regulating enough to hold people accountable and keep them from cheating the system and the greatness without making it so hard and so costly to do business?

>> i think that is a very powerful question. i think part of it is that you need more transparency and less -- fewer bureaucrats. and you need more ability to respond if they lie to you. i am not for a society in which there are no rules because i think people will on occasion be greedy and lie and cheat and steal. let's be clear. there are profound reasons -- supposedly, theodore roosevelt was reading about in sinclair's "the jungle -- reading upton sinclair's "the general." -- "the jungle." and he was reading the part about the gentleman who fell back into the machinery.

and he supposedly bad day the but the food and drug administration. -- that today developed the food and drug administration. i was a kid in world war ii and you could not always drink the water. i am for those requirements necessary as a base line. i am against turning massive power over to bureaucrats who inevitably politicize and are inevitably ignorant. they are a thousand miles away. you have to have laws that hold people accountable. you have to have laws that provide for transparency. we now live in an age where, frankly, with the internet and everything, you have enormous amounts of information flow have relatively low cost. that is why this gives you a way to have a real safety and efficiency and productivity. it would -- we ought to be able

to have all three. i will say this again. i'm not going to ask anybody to be for us. but if you want to be whitney, then -- if you want to be with me, then something between 2005300 executive orders will be filed -- between 250 and 300 executive orders will be filed the first day. and we can and arch of an anchor and children will once again live in the safest and most prosperous country in the free world. that is what we owe them. thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> is this the heart and soul of your campaign? >> yes, this is the essence of, hopefully, the next 10 years. i think it shows you the direction the country needs to go and insurers to how i think we can get there. barry variety of speeches and proposals and papers over the next year. -- there will be a variety of

speeches and proposals and papers or the next year. >> [unintelligible] >> you have to read into it that they did not do it. on either hand, what will happen if they do? >> do you feel that this separates you from the other candidates? >> i think we are the kind of country that puts a premium on having solutions rather than slogans. this will be an election where people really are worried and want to know what you would do end how and why should we believe you. i am the only candidate running who has actually on a federal level balance the budget for four years. you worried about the sound bite world that we live in because it is 26 pages? >> you can go to newt.org and read all 23 pages.

you are right. i have a bias. i believe that to be successful, free society, citizens have to be willing to learn. and i am prepared to have a conversation on the grounds that people care. people are worried about the future of this country, not in a shala way, but in a genuinely deep concern. -- not in a shallow way, but in a genuinely deep concern. i hope to inform them of the options the concern america. >> to the stock market shake your foundation on the view of social security? >> know, any look at investments are on a 54100 year cycle. i never tell anyone to go in and out of the -- on a 50 or 100 earmarcycle. i never tell anyone to go in and out of the market.

>> why give people a choice of there? doesn't get more complicated to administer? >> of the flat tax is so easy to administer. steve forbes learned campaigning out here a very painful lesson. you cannot impose a flat tax because it becomes translated into a will take away your home mortgage. the only way to start giving people an opportunity is to have it as an option, not as a replacement. it is too hard to give people to agree to take the risk. you may only have a small number of people take that choice. giving them the right to choose that is very popular. >> would you pull troops out of

the other countries or is iraq a special case? >> when you are next to iran and you have the hostilities that a number of key leaders have expressed, you have to think about it long and hard. i would say the same thing in afghanistan. you want to be large enough to defend yourself or you do want to get out. you do not want to become small enough for you become vulnerable. it is very sobering what he is saying about his view of pakistan. >> how are the numbers looking? >> i am not going to entry. -- i am not going to answer you.

>> rick perry holds a town hall meeting in new hampshire. this is the governor's first town hall meeting in new hampshire since announcing he would run for president. live coverage starts at 6:00 on c-span. >> watch more of video of the candidate, see what political candidates are saying. it helps you navigate the political landscape. >> the head of the aflcio will talk about jobs and the economy tomorrow morning at the

brookings institute. live coverage get started at 10:00 on c-span2. former new bb&t chairman john allison spoke earlier. it is hosted by the harvard law school tea party. >> good afternoon and diane the co-president of the harvard law school tea party. on behalf of my fellow co- president, i am proud to introduce today speaker. one of the things we constantly discuss and debate in law school is the virtue of free markets. and the ability of each person to engage in rational trade with this fellow citizens to generate a value. most of our professors seem to adhere to three axioms regarding economics. business will prey on consumers

to the extent that they're able to. participants in the free market are ignorant of their best interest is and need to be guided by public servants. this self interest this of businessmen means that they are never going to help their fellow man unless the government forces them to. story contradict each of these axioms. he began his story -- his service in 1971 and managed a wide variety of responsibilities. he became president of bb&t in 1997. during his tenure, bb&t grew from $4.5 billion to $152 billion in assets. his success was inseparable from that of its customers.

that success derived from multiple -- multitude of successful partners with businesses large and small. he is a graduate of the university of north carolina at chapel hill. he received his master's degree in management from duke and diversity -- duke university. he has received six honorary doctorate degrees. he has been inducted in the north carolina business holophane. he received lifetime achievement award from the american banker. he was recognized by the harvard business review as one of the top 100 most successful sec -- world in the last decade. he has piled academic achievement on top of his business success.

in addition to all of this work for bb&t, he has given generously to his fellow man. the bb&t has spelled the programs at over 60 universities across the country to encourage the moral and at the could -- morals of capitalism. this background makes him uniquely qualified to discuss the most serious economic crisis to hit the united states since the great depression. one of the largest challenges to free-market capitalism and our nation's history. ladies and gentlemen, i am very proud to introduce mr. john allison. [applause] >> good afternoon. it is a pleasure to be here. i always enjoy talking to bright

young people will be the future leaders in our society. my focus of this conversation will be on the great recession and the ensuing failed economic recovery and the financial crisis that created that phenomenon. i wish i had a more fun topic to talk about. it is an important subject to talk about because of the broader implications and the decisions that will impact the quality of all our lives. i have five basic things. financial crisis was primarily caused by government policy. we do not live in a free market and the united states. we live in a mixed economy. the mixture of various a lot. the least regulated industry is technology. the most regulated industry is financial services. it is not surprising that the most regulated aspects is where we have the biggest problems.

government policy created a bubble. that bubble burst, destroying the trillions of dollars of wealth. a number of financial institutions made some very serious mistakes. those companies should have been allowed to fail. however, their mistakes were secondary in the context of government policy. almost everything we have done since the crisis started will reduce the quality of life and our standard of living forever. we've made a lot of serious errors in terms of improving our long-term productivity. finally, there were a number of economic problems, the real cause of the financial crisis and the real killer or philosophical. what happened -- and a real cure is philosophical. we built too many houses, we

build houses in the wrong places. we should have been investing in technology and manufacturing capacity. in education, agriculture. we should have saved more and we should have spent a lot less. we should have borrowed a lot less. this miss investment was destructive for a couple of reasons. housing is consumption. we consume housing. it is not like a manufacturing plant. once a house is built, it does not create any new job. we made a huge mis investment and consumption instead of production. we told a lot of people how to do the wrong things. for 15 years, we have this housing boom. we drove a lot of jobs overseas because construction rates rose.

this is not just the destruction of wealth, it is the destruction of productivity, the destruction of people's ability to produce and create. how did we make a mistake of that magnitude? three primary culprits. the federal reserve, the fdic, and government housing policy -- freddie mac and fannie mae. the fundamental cause of the financial crisis was errors made by the federal reserve. something that people that study economics and no is that in 1913, the monetary system in the united states was nationalized. we do not have a private monetary system. the government owns the monetary system. you cannot go out and print your own money. if you are having problems in the monetary system, by definition, they are government costs. -- caused.

the federal reserve was created in three to reduce volatility. unfortunately, what the federal reserve is the reduced volatility in the short term. in a free market, we are not omniscient. free markets are always -- that corrective process is very productive. it allows us to reallocate resources. when you take out the downside of the correction process, all you do is push problems out to into the future. it is analogous if you do not discipline your children. by trying to moderate the correction in the economy, they made them much worse. in addition, the very existence of the federal reserve allows the federal government to leverage dramatically. since the federal reserve was created, the leverage by governments in the united

states has grown exponentially. why is that? california can borrow a lot of money because they can tax people. they will run into a limit some day. on the other hand, the federal government can borrow a whole lot more money. when you can print money, it is a huge temptation to borrow. we have had a dramatic increase in leverage since the creation of the federal reserve. we had some very specific errors made by the leaders of the federal reserve. alan greenspan wanted to be the maestro. he wanted to be the hero. in the early 2000's, he created- interest rates. what that means is that inflation was higher than the interest rates. inflation was running 3% and you could borrow money at 2%.

ben bernanke, the current head of the there are reserve, when he took over the federal reserve, he converted interest rates. short-term interest rates are higher than long-term. that is not unnatural phenomenon. only the federal reserve can do that. if you invest long, you want a higher return because it is riskier. banks make money by borrowing short. if you convert the yield curve and create negative short-term rates, the margins go negative. that is why -- we are buying watermelons for $10 and selling them for $8. the banking business is a funny business. you can get higher interest rates by taking more risks. if you look at most of the bad loans that were made, they were

made during the periods of inverted interest rates. at the same time, the federal reserve, economists and ben bernanke were setting, this would not create a recession. not only did he give us incentive to create risks, he said, everything is going fine. in a fundamental sense, it is not mathematically possible. the secondary factor was the fdic. that sounds like a good thing. however, it destroys market. bb&t took over a failed bank in atlanta. a lot of banks failed in atlanta. it is a very typical story. 10 guys in the hotel business raised little capital. leverage that capital dramatically.

they lend that to their cronies in the motel business. those counties go broke and that community bank fails. large financial institutions that fail, countrywide, washington mutual, all financed high-risk lending operations using fdic insurance. without fdic insurance, the depositor would care about the strength of financial institution. they finance those operations. the proximate cause of the financial crisis is government housing policy. this goes back along time. the government is trying to raise the homeownership rate. homeownership is a good thing. homeownership is a good thing in one context for however, there is no evidence that owning a home changes human behavior.

the evidence is the opposite. giving somebody a home does not change behavior. it is consumption versus investment. we did it with the tax laws, community reinvestment act. the big event was a decision made by bill clinton in 1999. he set a goal for freddie mac and fannie mae to have at least half their loan portfolio in what is called affordable housing. a number of economists said, that is risky. the legitimate affordable

housing market is not that big. they will have to take a lot of risks. freddie mac and fannie mae,. government sponsored enterprises, even before they got in financial trouble, they were leveraged 1000 to 1. no private company would be able to leverage at that level. when they failed, they owed $5.50 trillion. now you owe it as taxpayers -- congratulations. they absolutely dominated the subprime mortgage market and day the -- they had a huge dominant market share and everybody else was competing. they kept lowering their standards.

politics played a giant roll out with freddie mac and fannie mae. i can tell you that from the personal experience. we were running the numbers and it was mathematically certain there were going to fail. anybody can hear said they were going to fail. we met with congress on numerous occasions and they were absolutely not willing to kill us. ar us. dodd-frank -- ready-made and fannie mac were huge political contributors. they were the biggest single contributor to the democratic party. they simply evaded.

if you look at the financial crisis, there are a lot of nuances. the federal reserve planted too much money to avoid a correction that led to a bigger correction. that correction got focused and the real-estate market because of freddie mac -- freddie mac and fannie mae. it was a destructive bundle -- bubble because we over consumed. we over consent and that is why we are having such a hard time restoring our production capacity. let's talk about some other aspects. one of the more destructive products that was outside of bernie madoff and -- any day and freddie mac. -- fannie mae and freddie mac. each month you owed more on your

house. it was bad because you could qualify at $500 so you could buy a much bigger house. these products work very popular in places like california, nevada, southern florida. house prices had been rising very rapidly. the theory was go by a big house and refinance in five years. they were not subprime targets. they were targeting mostly young people in the expectations that their income would go up. it turned out to be a very destructive product. people had massive losses in their mortgages. guess to the big players were. washington mutual, countrywide, all large financial institutions that financed those loan portfolios with fdic insurance. they could not have raised the capital and the private

marketplace. in addition, they got into a vicious cycle with higher rates that they paid on specific deposits. it became a vicious cycle using fdic insurance. bb&t chose not to offer a bad product. we chose not to offer it over ethics, not economics. however, we knew that these were bad products. we did not know the disaster was gone to happen in real estate, but we knew that home prices could not appreciate in a year. we were setting up a lot of young people for economic disaster. one of our fundamental commitment is to help our clients achieve financial success. never do anything that you know will be bad for your client.

easy to make a profit in the short term, but it will always come to haunt you in the long term. if you do the right thing for your client, they will be more successful. we decided not to offer the product over ethics. i want to come back to that in a few minutes. one of the interesting questions is how did the federal government and up dominating house financing in the united states? it is a very unusual phenomenon. it is not a natural phenomenon. our housing finance markets is far more specialized than europe. our housing market is far more socialize than the european housing market. if you go to a bank with a 95% probability, they will sell it to freddie mac and fannie mae.

they have about a 95% market share in the united states. we have a government dominated financing market in the united states. how did it happen? there are lessons to think about. it really started back in the 1950's. it is interesting what happened. when i got my first mortgage in 1975, i went down to a local savings and loan. you had to put 20% down. at those times, interest rates were 8%. the success rate were incredibly good. very few loan losses. they knew they were going to hold the risk for 30 years. into the market. they understood the local real-

estate market. the savings and loan industry was systematically destroyed by a government policy. lyndon johnson was to create a great society and wants to have a war in vietnam, said he did not want to tax people. the federal reserve lots that to happen. -- the federal reserve left that to happen. there is a long lead time, but in 1970, that turns into a roaring inflation. by the end of the 1970's, our financial system is under severe stress. the total reserve steps in, drive the prime rate to 21%. they have been doing it for 70 years and suddenly they're paying 16% interest. not a good formula. the few that may get to that

crisis, they get some help from the regulators. the fslic cost the taxpayer $300 billion. they had to go work for the fdic. none of them ever got fired. the regulators of the savings- and-loan industry encouraged to hedge their home mortgage portfolio. here is the dilemma. you cannot have lunch a home mortgage. when interest rates started to fall, they prepaid their mortgage. the regulators decided that you could not make money in home mortgages. they forced the savings and loans to get into the commercial real-estate lending business. shopping centers, office

buildings, commercial property. they helped create a commercial real-estate bubble that burst in the early 1990's. only a handful made it through that cycle into that vacuum is where fannie mae and freddie mac took over the business in the u.s.. bb&t, we could head are risks because we were making loans to businesses. we could not compete with the federal government. they are leveraged 1000 to one, they have lowest -- the government guarantees your debts and you have an advantage. right? they did not do subprime mortgages. they drove all of the private participants out of the marketplace. by the way, i have no empathy for golden west.

they could not compete against the federal government in the traditional home mortgage business. the option was to go out of business or be creative if they had not dominated the home mortgage business, it probably would never been invented or would have been a much smaller portion of the market. it was invented in the u.s. in reaction to compete against the dominant government competitor. after they take over the prime market, bill clinton and the government in general but lot of pressure on ready-made and danny mac on the fannie mae and freddie mac. traditional banks, we did not to subprime mortgages. they had to find people to help

them. they went to people like countrywide, washington mutual. they set up these programs so these companies would generate subprime mortgages. they kept lowering the standards because they had to meet a portfolio or congress would not guarantee their debts. they got more broker relationships with more brokers. to go back to the old savings and loans, in the broker model, you make a loan and use salad. you really do not care about the rest. -- the risk. it leads to a lot of default. an individual says, i made $75,000 last year and want to buy a house. he rarely made $65,000. -- he really made $65,000.

some of that volume went into fannie mae and freddie mac. a fair amount of that went into the international market where these things were securitized. the security instrument is what made people buy them, standard and poor's and moody's are interesting entities. they're the only people that are allowed to write financial as to ms. that are held by public pension. that means they have an oligarchy. they're supposed to know what they are doing. they have a special certification. they did an awful job. that is where so much toxic

mortgages were bought by hedge funds, pension plans. people say the investment bankers were greedy. that cause the financial crisis. i will guarantee that investment bankers were greedy. i have been in this business for 40 years and wall street has been consistently greedy. but they were no more greedy in this for years. they were exactly as greedy as they were. it is the nature of the beast. they did make some very irrational decisions that had some severe consequences, but they are not any more or any less greedy than they always were. let me tell you call that unfolded in the capital markets and what happened.

a lot of people that want to blame it on grade from that statute. -- greed throw that out you. the idea is pretty simple. it is a credit default obligation. it is a way to diversify risk. it started out -- a bank makes a loan to general electric. it is a $5 million loan. even though they're a good company, they want to diversify their risk. they are looking at the same opportunity with their mortgage bonds. they have a mortgage bond portfolio. the people that would like to buy a-rated bonds, and the way

we can do that is to create trudges -- tranches. they went about selling these bonds in the marketplace, making a lot of money. ben bernanke in first the yield curve. i am sitting over at merrill lynch and i need some assets in my own portfolio. the only assets that i can make a positive spread and is a c- rated mortgage. i do not think it is that the height of a risk. i will hold it and sell the a's and b's.

when the meltdown started, merrill lynch loses 100 cents on the dollar. a year before they went, they were making a fortune. they go broke very rapidly. another interesting thing in the capital markets is something called a credit default swap. that sounds very esoteric. that is where aig was a big player. it is also a simple idea, it is an insurance policy. i have a portfolio of be-rated mortgages. for some reason, i'm going to hold that portfolio, but if i can get them rated a, the sec will let me have a lot less capital. all i have to do is to go over to aig, and they issue me an

insurance policy guaranteeing me that bonds will default. i paid them a premium. the insurance premium -- aig does this on a huge scale. they screw up a badly. the risk is greater. one of the interesting questions, why did we saved aig? aig is the large insurance company, but the subsidiaries -- there was something called a counter party. this is another explanation. the county party risk -- if you are the secretary of treasury and you spent your whole life at

goldman sachs. you can honestly believed that if aig fails, it will take out goldman sachs. that is simply not true. bb&t had a lot of derivatives and we hedged all for derivatives risks. we were doing business with bear stearns for 80 years. we did business with lehman brothers and we lost not a penny. only a few people, like goldman sachs, were really out the risks. that whole systems risk argument is an interesting argument. a couple of other thoughts about the crisis. there is an interesting myth is the the banking industry was deregulated during the bush era.

absolutely not true. we're not deregulated, we were missed regulated. -- misregulated. regulations increased exponentially. there was a huge focus on two things. the patriot act. sarbanes obsolete -- oxley. we are behind one back from the early 1990's. the patriot act was bare spots to keep -- catch terrorists. do you know what the probability of us catching a terrorist is close to zero. if there are that dumb, they will get caught anyway. if we caught a terrorists, --

the only significant conviction of the patriot act is eliot spitzer. he was convicted of soliciting prostitution. in some ways, that is humorous and in some ways, that is poetic justice. in other ways, it should scare you. what is the terrorist risk of the governor of new york? why should that be used? what information is being gathered under the patriot act? i will tell you that your privacy is being invaded on to the patriot act. there is a huge focus on the mathematical modeling. all the mathematical models failed. we were told numerous times that

if we just had mathematical models, we would be in great shape. they can be very useful tools, but they have something called detail. -- call the tails. if something is one% probable, gives it enough time. if you build your house in a flood plain, you will have a flood. nobody can mathematically modeled human behavior under stress. all these models collapse. one of the biggest myths right now is that banks are being

encouraged to make loans. the banking regulators have dramatically tightened lending standards. this happened in 1980, 1990. the regulators always overreact after the fact. if you are a government regulator, you are a lifetime bureaucrats, you are not at risk, the only way you can get in trouble is if your bank is in trouble. it is a self protecting mechanism. i guarantee you that bb&t is putting people at a business that should not be at a business because of the banking standards. it is a tough regulatory environment. let's talk a little bit about what we did economically and we should have done. one of the most important things

that we should have done is let markets correct. that is a very healthy process. when you prevent markets from correcting, you push problems into the future. let me give you a couple of examples. keeping businesses in business that should not be in business is a good thing. citigroup has failed three times. they will get a bigger and they will kill again in 15 years. -- fail again in 15 years. main culprits the of creating problems in the automobile and the street. they invented the one under% seven-year car loan. what that meant is that a lot of people over a lot of money on their part that it was worth. worth. than it was so

bb&t has been in the automobile business for 50 years. a more interesting story is chrysler. chrysler failed in the early 1980's, bailed out by the government. they failed again. what if chrysler had been allowed to fail in the 1980's? their plans -- their resources would have been redistributed. where would they have gone back some of their resources with a gun to ford and general motors. -- there are resources would have gone to ford and general motors. what they learned is the government is going to bail us

out. if chrysler had been allowed to fail, they would have learned a different lesson. a lot of the resources may have gone to a private u.s. company. that company may have been a non-union company. people talk about the genius of the japanese automobile industry. the only genius is they operate in the non-union plants. we would have a much healthier automobile business if chrysler had been allowed to fail. we of not allowed people to foreclose on houses that kept the housing market from the bombing. it has driven house prices lower than it would again. why's that? they are not gone to buy a new homes if they know the price is going to go down that quick.

there is a huge inventory of foreclosed houses. the inability of the real-estate market is a drag on the economy. most economists will have to admit the stimulus program did not work. it is not surprising. do you believe that spending money that you do not have on things that do not need to be done is gone to raise your standard of living? that is based on a theory who was a famous economist. in his book, he argues that under adverse circumstances, you

should pay people to dig holes and the ground and then pay people to fill them back up. if you want to stimulate activity, cut taxes, but make them permanent tax cut so people can plan ahead. a lot of those job creators -- if you want to create jobs, you have to great set incentives for people that create jobs. be a that a massive increase in regulation. we have -- they change the law pretty radically and we have that a tightening of regulation in the u.s.. introducing a new regulation, new rules, ambiguity is very destructive. i teach leadership at a business school. one of the things that you teach people in any adverse circumstance, the worst thing you can do. when people are concerned and they do not know what is going

on, they become more concerned. they assume the worst. whether you think obama health care program or the dodd-frank financial bill are good bills, they have terrible timing because they have created a huge amount of uncertainty. a lot of small businesses are not hiring people because they cannot figure out what their health care costs are going to be in the future. the economic discussion is very interesting. it is far more important is the philosophical issue. this is not an economic crisis. this is a philosophical crisis. the real cause of the financial crisis is a combination of altruism and pragmatism. where did affordable housing come from? everybody has a right to a house provided by you? everybody has a right to free medical care? my right to free medical care is my right to imprison a doctor to

provide me that medical care. that is exactly the opposite of the american concept of rights. you produce what you create. you do not have the right to what anybody else produces. in business, businesses may pay lip service to all tourism, you can not be successful in a competitive market. the philosophical position -- what we teach in brentwood business schools is pragmatism. pragmatism's -- pragmatists do what works. a lot of things work in the short term that are very destructive and the long term. there is also a deeper problem. if you are a pragmatist, you can not be rational. if you are a pragmatist, you cannot have integrity. if their goal is do what it

works, there are no principles to act consistently. it is the free lunch mentality. nobody proposed a serious solution for social security and medicare. if they had, they would not have been elected. the free lunch mentality leads to a lack of personal responsibility. the lack of personal responsibility is the death of democracy. the founding fathers talked about the tyranny of a majority. they also realize that when 51% of the people figured out they could get a free lunch from 49%, the party is over. just like the cause is philosophical, so was the cure.

life, liberty, and the pursuit of happiness. each individual's right to their own life. each individual's right to pursue their personal happiness. ifh individual's right -- they produce a lot comment they will get a lot. if you think about that, it demands personal responsibility. there is no free lunch. it also demands and rewards self discipline. liberty is very important. that is an old idea. before jefferson, everybody existed for somebody else is good. nobody existed for their own good. jefferson says each one of us has the right to your own life. success in that pursuit of

happiness, we have that right. that idea change the world. when people have the right to their old life, they're nicer to other people. the united states was the first country created on the idea that people should act in their own self-interest. not taking advantage of other people, but not south sacrificing. we help our clients be successful and they help us make a profit. my favorite book -- it is very relevant today. she wrote the book in 1957. current predictions are coming true. -- current predictions are coming true. the bad guys are writing the book.

where do we go? we are struggling. we've never had a recovery this week and we have hardly had any recovery at all. i do not think we are in for a second dip unless europe collapses. they are 20 years ahead of us which is an interesting lesson economically. we're more likely to have stagflation. it looks like higher inflation, particularly in commodity prices. not good times by any means, but not horrible times. what really scares me is long term. everybody in this room ought to be worried about long-term. if we continue with our altruism, free lunch mentality, the united states has in place

mathematically certain an economic disaster. if you look at the unfunded liabilities under social security, medicare, public pension plans, they are in excess of $100 trillion. it is a stunning number. we are running $1.30 trillion annual operating deficit right now. we have a dysfunctional foreign policy. we have a big problem with the retirement of the baby boomer generation. a lot of us old people want to keep being fed. if you look at japan, it is all explained by demographics. they have too many old people. we have a failed k-12 education system. we were running the numbers for fannie mae and freddie mac. it is mathematically certain that we will go broke.

if we do not change direction. countries do not file bankruptcy. countries print a bunch of money and they use -- it is a cycle. it is exactly what has happened in this phenomenon, more government interference. argentina, 1940, higher standard of living than the united states. we are the next argentina if we don't change direction. we can change direction. it is not too late. we do have to change direction relatively soon. we have to do something in the next five years. here is the dilemma. we cannot do something without pain. i use the analogy.

it is a form of terminal cancer. will not treating ed, we die. it is not treatable without any pain. do we have the courage to deal with the pain? that is the fundamental issue. we have terminal cancer from an economic perspective. i like to talk to young people because we are setting you up for the bad times. i happen to be in the optimistic group. the reason i am optimistic -- i think the two-party -- tea party symbolic of the american sense of life. we are independent people. we are very productive people.

we can fix this problem. we have never gone through this, but the 1970's were really bad and we turned it around. we bought some time. what makes be encouraged is the american sense of life. it is a very intangible thing and we need to provide the intellectual ammunition. one reason i tried to talk to groups like this, the people in here are leaders. you have an impact on other people. if you look at the problems we have had, we have had ethical problems. we have had failures and leadership in business, government. we have individuals that have acted in a very on ethical

fashion. we need to reenergize that ethical commitment. purpose, reason, and self- esteem. as human beings, we are purpose directed entities. for organizations to be successful, the people and those organizations must step and the purpose of the organization. on the individual level, they describe their work as some kind of burden. if your work is just a burden, at your missing a lot of what life is about. this is it, this is not practice. if you want to the passion and energy, you have to have a sense of purpose in your work. i would argue that purpose is

the cop -- the context is the same for everybody in this room i believe that everybody in this room wants to make the world a better place to live. i think that is the characteristic of the vast majority of human beings. there are a lot of ways to make the world a better place. businesses make the world a better place to live. the primary difference between the quality of life in the united states and africa is that we had better businesses. businesses produce something before it can be given away. good attorneys, the doctors, good teachers make the world a better place to live.

you need to believe that your aunt worked is making the world a better place to live. -- that your work is making the world a better place to live. you need to make the world a better place to live doing something that you want to let -- doing something that you want to do. we had a fundamental right to your own life. if you try to make the world a better place doing something that you do not want to do, you will not do it very well. everything that is alive has a method to stay alive. we have the capacity to think. it is our only means of survival. no shortcuts, no free lunches. that is the way it is. i talk to employees about

thinking. i do not know what role iq plays in the thinking process. there are a lot of bright people that do a lot of destructive things. you can make a choice. you can choose to be as disciplined thinker, commit yourself to be a lifelong learner. in that context, commit yourself to that a very active mind. people that are lifelong learners have the capacity to become masters of what they do. that is what we need in a global look economy. people that have that commitment are affected at learning from a life experiences. we learn from our life experiences.

it looked at people -- everybody in here can associate with learning from your mistakes. on the other hand, a lot of times we do not learn from our mistakes. we do them over and over again. we do not always learn from our mistakes. why don't we learn from our mistakes? we have to have the courage to admit that the psychological cause of the mistake. on fortunate, a lot of times, we invade. it is the ultimate psychological senate. -- sin. you refuse to examine it. you literally do not hear it. when you evade, you are detached

from reality and bad things happen. one of the fail is the leader of that business. things are going along fine. something happens in their business. it is more interesting, more dramatic. the higher acre could geniuses. they run their affordable housing. they said they would make less money. they juggle the citigroup around. i would argue must that i have seen it was made by highly intelligent people. the second thing is that life is

a constant education. i would go to the banks and have lunches. i never had a boring life. they were always asking me questions. we were always paying attention. you could see why they were successful. they were not in focus. a lot of people live their life out of focus. you cannot live your life. my observation for success is not that correlated. what i find in terms of success, they are much more likely to be successful. the most evil don't stay in focus. when you are clear but your focus, you raise your self- esteem. higher levels of organization,

people that go to harvard law school -- if they fail, it is because they have some subconscious low self-esteem issue that results in self- destructive behavior. you see that fairly often. self-esteem is the foundation for happiness. happiness is the end of the game. i do not mean having a good time on friday night. that is the ended the game. they think money is the end of the game. money is a good thing. happiness is the end of the game. self-esteem is the foundation. self-esteem is a complex subject. it is fundamental self

confidence and ability to live in reality. you earn self-esteem by how you live your life. nobody can give you self-esteem. the cannot give your children self-esteem. self-esteem has to be earned. live your life with integrity. forever by the in room, most will come from your work. it is very productive and hard- working. most will come from your work. this is what makes it work. it is real important that you do your job well. if you do not do your work the you you can possibly do it

will lower a year self-esteem. the flip is also true. do the work the best you can and you will raise your self-esteem. that is more important. you get more money. you get a promotion. that concept has huge subjects. take an entry-level construction. he has a tough, hard life. he gets there it. they raise their children. they have a successful life. the interesting thing is you get something very precious. he is to be proud of themselves. take the same bricklayer and

give him more out there. he may be better off materially. he gives off his pride and self- esteem. a lot of people are focused on security. the united states is not the land of this. they did not come to the united states to become secure. it is a land of opportunity to fail and try again. most importantly, this is the american sense of light. this is what is so precious. thank you very much. [applause] i would be glad to take

questions. you think you're supposed to go up there. there is a brave soul. >> you mentioned atlas shrugged it caught the country is pushed to the point of desperation before anything happened. so is the democratic side your people have you both for the changes. how do you view us making these changes without being pushed to that extreme? >> that is a really good and tough question. i am in the optimistic category.

he had the advantage of seeing the power of individual freedom. aristotle never made the connection. i think her ideas can actually change her mind. i think people can finally put it all together. they have an intellectual mind to do it. we have 65 or more for capitalism. we have thousands of students that go. we have thousands tell us now i get it.

now i get what we cannot have a free lunch. i am hoping they will be leaders. a lot of people are committed to getting a free lunch. they do not want to do anything about social security and medicare. we have got to tell people the right ideas. the whole purpose of this is the

bill of rights. this is how we drifted to where we are. they are going back and looking at the incredible men in history. they come together at one time with the right ideas. they could do what they did. it was amazing. their goal was to limit the role of government. they got a pair -- they got it. compare the declaration dependents urging the declaration of independence compared to today -- compared the declaration of independence to today. as things get worse, maybe this time people will be there.

>> i have a question about the structural about the method of the government. it seems that part of the problem with long-term issues like social security and medicare and make some focus on the next election. but do you think there is a structural problem or a way to overcome that on the next election? >> i think the structure could be improved. this is what they wanted. also communication. they're making the terms longer. limiting it would structurally help. i think unfortunately we elected

people we deserved. we elected people we deserved. we have to change their ideas. there is a belief system that is being taught to our teachers that teach our students that has changed. life and the pursuit of happiness are not taught any more. everybody should get the same. all of those eyes are destructive ideas. >> thank you. how would you go about thinking about trying to predict if and when a catastrophic effect and the collapse of the dollar will happen.

what preparations would you take in preparation of that? some things that come to my mind are the total number of dollars that have been printed, outstanding obligations, and looking at how humans have reacted in previous situations in history where there has been a massive printing of a currency. what are your thoughts on all of that? >> that is a very critical question. i am more worried about it than i think a lot of our politicians are pureed the united states has the reserve currency. people would extend dollars the matter what. if we did not have the reserve currency, we would already be in economic disaster. we're so in debt, no telling where our interest rates would be. the fact that we have the reserve currency is a huge benefit.

at some point, at the rest of the world has confidence in dollar. this is just paper pictures of george washington. this is not functioning properly. a lot of people who are buying gold -- i am not recommending people buy gold -- when criticizing the rise in the price, it is confusing. if corn is going up, and there could be speculation. goldas people believing that paper currencies are getting ready to go. if they are all based on the government. they all made these commitments. .t is not just greece it is everybody by germany and maybe france.

france's marginal. it will be interesting to see. they were speculating that paper currencies are not holding up. i tend to think it will not happen in immediate future. i tended to think we've got 10 years in which will be go directly with determine it. i think the dog will collapse. when it collapses, there will be a lot of warning. when it happens, everybody will be stunned. i think we've probably got 10 years. every kid going in the wrong direction, we might have less.

i do not think this is likely to happen. i think we were direct, will not have to fix all of the problems. we would jump on any proposal. this was not a radical of a proposal. the number of conservatives jumped on it. bernanke needs to wake up and realize it could happen. he is very naive. he has never been in business.

we hope it will work out. then one day it is over. the company is best. that is how we will go as a reserve currency. i do not think it will happen in next 10 years. >> a sense of pride and self- esteem seemed to depend on in comes. -- in comes a driving inflation. there are figures saying they are not. i am wondering what you see as the cause of that, if you think it is true. some people say it is globalization. some people say it is technology. some people say it is policy.

what do you say are the causes? >> is another series of important questions. there is another debate. it is not self evident to me. it is below the poverty line. what happened since 1999, they have gone up exponentially. misstating what is happening. i'd think the income negatives are all from this.

shouldn't have risen as fast as it should have, no. i think it will go down. there is a debate over what has already happened. i think globalization has paid a factor. globalization has raise our standard of living. we are buying goods in china that are cheaper and better. the labor raises our standard of living. if you have workers that are not trained to be competitive, that will be there. technology has raised their standard of living. in the quality of life.

cell phones are a lot better. my grandmother had a nine party phone in her house. technology has raise our standard of living. we have to be problems. we have a field education system. -- we have two big problems. we have a failed education system. without a high-school degree you have no prayer. a lot of people that graduate from high school cannot read and write. we cannot hire high school graduates that cannot speak english. it is now globalization.

they're starting to work harder for a lot less. we are competing. the smart people are always valuable. they are competing against people that are willing to work a lot harder for a lot less. i tell you. i for years tried to fix a public-school spirit i would argue republics school. i would argue it is run for the benefit of the bureaucrats. we have to privatize the education. we have to create incentives. businesses paid incentives.

they cannot stop innovation. the attack on microsoft was not initiated on the justice department and microsoft competitors. they get more money. we have to create an incentive for innovation. if you think about a market economy, what makes it work is a bunch of experiments. there are millions of experiments going on. most are failed. there are 10,000 failed bugles -- googles. he said the 999 that failed or the last ones that worked. when you take up the learning process when businesses cannot

fail, you destroy creativity and innovation. if you look at our technology has advanced and how little in education, the time has come. i do not know exactly what the answer is. there is a solution for low income kids. walmart is a classic example of a model that worked. it created a lot of jobs. we have a failed education system. it is not the highly educated partner. every employee will tell you they're trying to hire this. a lot of them came out of

construction industry. they do not want to except the compensation. there 50 years old in dublin to do it. -- do not want to do it. or they are minority teenagers that the school systems fail. it costs about $10 an hour. a lot of small businesses cannot afford to pay and skilled workers $10 an hour. -- unskilled workers $10 an hour. the fundamental one is a loss apply a in man. -- is a law that applies to man. it is a price that clears the market. some of the supply will not be

used. if you went into the grocery store and look as $100 a gallon, you probably would not buy it. if you raise the minimum wage, people go unemployed. if you raise the minimum wage, 40% are in face a bolt recession. he had to get entry-level jobs. small business cannot pay $10 an hour. this is policy. minimum wage is a policy issue. even with inflation, it is a lot less than minimum wage. i do what prison guards do now.

i learned i do not want to do that job. these are very valuable things. people have to get a job to get started. all these other policy things i just decided. it is a combination of a failed education system and failed policies. technology will probably help raise our standard of living. not necessarily create more jobs. >> there's a lot about regulation. what is the way forward? >> if i were in charge, i would say every regulatory agency had to regulate and the next six months and reduce it.

i went to work in in 1970, we still have the regulations. at least 3/4 was on necessary in united states. if they have staff, it will create work. then the staff has exploded. as trying to remember this number. we have added 65,000 regulations. reading the names of regulations, there is a wall that happen in the library of congress. it is full of books.

we have a massive over regulatory structure. in six months, in business we have to do it. we have to go back to ground zero. would you really do this if you're going from 0? which is at dawn. we never go back and visit anything. here. the role of government is free lance. we should not be involved in this. it is a terrible economic and

human mistake. we needed a policeman to punish the bad guys and put them in jail. what the porpoise -- purpose of the court system is more contracts. the contract lot israel. i am not an expert. it takes a lot of time. we could argue we do not need any regulations. i think they're really about enforcing contracts. there is room for regulatory structures that are in contrast. theoretically they do not have to be called regulation. making sure the contract is in forest will always get into the court system. by 75% will be more than making

their read up. -- is more than we can get rid of. anarchy is failed. i know some libertarians that are anarchists. there is an important role for government in protection of individual rights. it could commit fraud. we need good laws. we need in effective court system. there should not be this redistribution of wealth and deciding which energy is better than what. that is not what the government should be doing. >> thank you. i come from brazil. we are achieving quite success and economic development. government taxes reach people.

they say they're getting $100 per month. the of putting more people into the market and getting an extra 1% a year. did they say something about digging a hole? countries like china and brazil are following this lesson. we make a lot of public works. given that some are not necessary, we have a very good

fiscal situation now. even today there meeting in washington to decide how much money they are relaying to the union. >> i think brazil will have severe economic problems not far in the future. you state the history is a mecca less than the united states. i think brazil will not dwell long term. i do not know what you're talking about in china. china has basically two different economies. they have a privatized economy

with tougher regulation. industries are having huge economic problems thing subsidize by very successful private economies. it is much less regulated. the united states is much heavier. we have a welfare system, too. a lot of these things are bigger. we're coming out of a bigger economy. dollars are much higher. the thing that is smart was finally creating currency. it is one of the united states problems.

we have been creating money like crazy. that stabilizes the economic system. you have to look at the potential. brazil has phenomenon national resources. it is doing better. should it do better? yes. the brazilian structure is not any more difficult. i know a lot of companies that operate in in brazil. they get more subsidies from the brazilian government. i do not know that the government is more anti business. it is hard to make those kind of issues. the chinese i think all had big

problems. they have demographic problems. the way they spurred huge growth of in japan was by not having babies. babies are expensive. japan created an economic boom. they chose on their own not to have babies. then they are creating an economic bust because we do not have enough young people. china has government making decisions to have one baby per family. the of drastically reduced the number of babies. that has a short-term impact on the quality of life. these are expensive. they set up a lot of resources. the chinese, the reason they are saving so much is that they're

not having babies. they want their money back. they are going to expect us to pay them back. their savings rate is phenomenal. they do not have any babies. children cannot take care of you. they do not have the children to take care of this. this is why our debt will become a problem. we are their savings. their civilization of the currency picture all the stuff is harder to fill through.

>> we have this since 1995. there's money that goes directly against this. >> is much bigger than what brazil has.

it is way above the poverty line. >> the income here is there. >> you do not distribute money to the people at the level we're disturbed eating it at. it is a different -- distributing it at. >> i have not been very long time. >> if you bought insurance, you went. the united states health care is objectively the best in the world. that is a fact.

one of our problems is we invested way too much as a percentage of our gross national product in the medical care. we spend more than any of their country in the world. whether how productive that it is rather argumentative. we have the best medical system. the united states says of the medical research in things like pharmaceuticals and those kind of things. any hospital has to treat anybody that comes in. that is just the way it is. here is the answer is -- interesting thing. ed canada was socializin medicine, you'll get treatment for cancer be making the six

months later and you will die. you get treated. they come to united states. the cost is delaying the treatment. the united states has 10 times the technology in scene. we treat people very fast. we treat more people at in united states. whether that is good or bad, that is a different question. and maybe one of our economic problems. >> thank you so much. >> we are out of time. i think we can all appreciate this great speech. thank you so much for coming. [applause] thank you all for coming. we afford to seen at are few -- seeing you at our future events. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011]

>> we should always start with the assumption that when a politician or ceo is saying something they're not telling you the truth. they may be telling you the truth, but the burden should be on them to prove it. >> he is an in goal --- an eagle scout and best-selling author. his latest memoir is called " trouble."mescomes >> up next, a discussion on online privacy. been a look at how social media is changing the way news stories are covered. then it gingrich and dell says campaign platform in iowa. >> showing health insurance has

risen over the past year. we will talk with "new york times a" reporter reed abelson. then we'll discuss the debt problem at in year. it is the bureau of economic analysis. it is how it affects policy decisions. "washington journal" each morning at 7:00 eastern. admiral mike mullen stepped down tomorrow. he and his 40 year military career. president obama and leon panetta will take part in the fare will send money. -- in the farewell ceremony. correct next, a discussion on online privacy.

we'll hear from security lawyers and a technology reporter for politico. this event is from the activism media policy or amp summit in washington. >> good afternoon. thank you for joining us. i am the author of morning check. welcome to privacy, personalization, and security. i am sure it not have to tell this crowd how important this is here in washington when lawmakers are looking at a host of areas. i have a great panel here. to run them down i have the ceo. i think we should jump right into this red ink could there a long discussion. some of us were here last year

and saw an informative panel about privacy and security. a lot has changed. how much has this landscape changed in the past year? we do see things going? >> thank you. it is great to be here. it is great to see everybody. i think a lot of progress has been made by the business community in developing tools to help give transparency and a choice to consumers and explain to them all the benefits and use of personalization and the use. the effort i most closely associated with is that which is the digital advertising alliance.

it is an effort or a number of the leading trade associations in united states came together, developed principles for the broad business community working with all of the companies and players within the space. they have rolled out what many of you probably see in browsing have its today and adds. it is a blue icon triangle wen "i" onan" -- iwtwith an it. now we are estimating that we are probably approaching over 90% of behavior as the provide this choice to consumers.

it describes all the value of delivering interspace adds to consumers. >> thank you so much. let's keep it going. >> thank you. just a common disclaimer. if you hear anything smart, you can enter the did to me are the clients. i am here on behalf of myself, not representing any of our clients. i think this is important. one of the things that we have really seen change is the evolution of privacy from a function to being integrated directly into a business and strategic role within organizations. the best example was a few minutes ago. did the city of chicago has an

officer who is not sitting with the i.t. folks. it is inherently ubiquitous. what we're really seeing is an evolution of a public discussion about the relationship between what we in business of the data. how can we ensure that this that and not only flows but is used responsibly and with the perspective of stewardship? that is very interesting to me. in the realm of activism, that is a great crucible to see tension about how we activate voters and consumers, how we get people to take action but do so

in a way that is not deceptive or misrepresenting information. there is a perception that it can be a row challenge. what crystallized for me was the on star system. we saw that after users to stop using the on star system that it would continue to collect data. senator schumer sent a letter to the company. the company then changed and turned up that functionality. something important got lost in the debate. that debate in some respects focused on whether we should have an opt in not or opt out standard.

one thing we really need to talk about is how is the information going to be used? by whom? we generally operate from the presumption that more information is better. we believe there is an enormous amount of this. this strikes a balance between innovation and respect to stewardship. that is something that the debate has increased dramatically. what does this mean? the time has come that we send lawyers, guns, and money because it hit the fan. this is one of the most important public policy challenges that we wilson -- we

will see in our lifetime. >> i am the only non-lawyer on the panel. my answer will be shorter. how we look at things and how we have taken into account the privacy potential legislation as well as our stewardship of the data we have. what i have seen in past year is that the industry has really taken on the burden of before anything actually gets there, let's get ahead of this. let's show we are good stewards. even though it is not identifiable to individuals. what we have looked at, let's make sure it is clean data that is not high anyone from unidentifiable status. we looked at opt-in versus

opt-out. we have on the altar conservative roots. we deliver advertising for political advocacy as well as grand campaigns based on the values and beliefs that people have. it is interesting to do that without understanding who that person is. it is one that we do not have any pi. we look at it from the standpoint of making sure that is what we do.

>> is a great place to start the discussion. you're talking about some of the word that industries had done. there was a report from stanford not long ago. it to notify consumers the type of ads that were out there. it has not been effective. they have these educational goals as some have specified. what did the metrics look like? >> let me start of the stanford study. the more i said it was completely inaccurate. it i do not think if you were to take the way it was done and put that in front, that it would have passed the standard.

the reason i-about to -- i am negative is our program provides them notice and transparency for information collected over time. this is always an by their parties. they looked at this year most -- a look at this this year. most publishers would have an independent service provider providing services to that company. the most censuses they are not cooperating. they are just cooperating. they took that steady. they said these are the other

parties that show up on this site. we do not see choice of in any of those. of course they will not. this is not what the program is designed to do. we see it as disingenuous. we went from zero the point where we are serving trillions of icons. you will find it. you will find it immediately that provides transparency to consumers. we have hundreds of thousands. i think we're up to 40,000 a week just to the info website.

they are doing great things. they provide the services sector showing that tens of thousands of consumers every week are going on to find the choice. a percentage of them are actually exercising choice. 75% are not. there is engagement. we had a little chicken and egg problem. you cannot educate about an icon that was nowhere to be found. you had to get it out first. we will be doing major work. we are creating dialogue. it is meant to provide the transparency that these accompanies doing the right thing.

most consumers do not want to go through any of this stuff. they want to know that the reputable companies that they do with -- deal witih are due -- deal with are doing the right things. >> for those who have not gone to get that info, are they now doing this because they prefer its? is it because they do not understand the advertisement? >> it is both. people did not know what it was. it is a big society we live in. " we, how many companies are engaged here. it takes time.

we're having a societal discussion to make progress. it is all of the above. we are seeing engagement. you would get to a point where there will be a lot more engagement in changes. people will get more comfortable with it. people are not concerned that they're winding up with free resources. in choice, and they're getting an ad that they might be interested in automobiles. americans are very comfortable with that exchange. our challenge is to make clear to them that is all we're doing. nobody is taking the fact that you're denying health insurance. it is not happening. i want you to show me one

instance where that is happening. it is not. the companies that are providing jobs across the board, and they are delivering this. >> you talked about on star. that has been a big topic of conversation. there is a letter from the senator who said it helped spur in this. to bring up this point about innovation. i'm curious if you think the problem was the way that they hoped to use the data. maybe it was not a problem at all. what is your general thoughts about what happened? >> i'm going to refocus this. it goes to the heart of your question.

how do we determine what size fits many decks if we allow the toople who are 6'2", 240 dictate the seats that each of us has on the airplane all the time, and that'll be an inefficient use of seating. maybe it to be inefficient enough that a 7 foot person that we put it on. everybody has to have the same amount of seating space. this could be an efficient use of the space. do we allow those people to dictate how much space everyone has by roald? as opposed to an organic evolution.

i would submit that i work with many of the companies. incentives are enormous. they can act in a way that will enable you to continue to work with publishers and others. the incentives are all there. i do not want to lose sight of my original point. we have not had any public discussion of why it may be a good thing for vehicles to be network devices and useful information. i do not know anything about what they plan to do. they proposed that we can get a 10 cent decrease in possession.

i am not sure many of us would oppose that. the question becomes, who can get to the data. how might it be used? . we have not had any of that discussion. every season their plan will be billed for someone who's 6 ft. 6 inches. guess what. most of us are not. >> i am sure we will get into that conversation shortly. but how do we have that conversation that you just detailed in a way that most americans understand? all of us can have this conversation at length about whether to of been/opt out of the system. but how you have it in a way that can be conveyed to the average mom and dad who owns a car with on star.

who does the onus falls upon? is it congress? is that the company? >> acting in a with is consistent with what most people expect, people get into trouble are the ones to act in a way that is inconsistent with those expectations for most. that becomes very important. a very smart man for mine said before you do anything, think or will you be very comfortable reading about it in the front of "the new york times. " if you're not comfortable about it, then maybe that is something you should not do. sunshine is the best disinfectant. when we think about education getting to these standards, there is a real crooks. this relationship between innovation and regulation and the need to have and express

recognition that, owen we regulate, we have an inherent in of the need to innovate. we will make some choices that may prevent the next google, the next facebook, the next thing that nobody knows about. those are real risks. when we look at the economy, we look at a price parts and innovation and say how do we get more of those? i am not sure that we have the votes in the senate dictating that this will be the standard for all of us. there's one to a bright spot there which think is tied into that. social median dahlov the tools that we have to enable us to have a much richer discourse. >> i want to rescue a follow- up. >> where should the discussion be occurring? it is occurring at this table, all around the country, and the

business community is driving it. but i think congress is driving it. i'm sure that we do not want to blunt instrument of the law. but we have not had one yet. but have had proposals. as much criticism as the congress gets under current items right now, it is an issue on a bipartisan level. they're people who have strong views on both sides, but it has gotten over the last several years a really public discussion, a lot of hearings. a lot of different ideas and bills put forward. i think that is really large place where the discussion should happen. but the -- and our friends of the federal trade commission have been leading a year-long dialogue or that has been a very public debate with a different suggestions and proposals, none of which are really law, but what frameworks' should be.

it is a very thoughtful and delivered a process that they are running. they give different views on things, but there are very smart people over there working on this issue. the same thing is true of the administration and the department of commerce. the have a big study that they are evaluating. i would argue that the level of discourse is terrific and excellent right now. we just have to make sure that we stay on top of it so we do not get the type of results -- >> then the lawyers, guns, and money. [laughter] >> we started this entire segment of the conversation with on star. you talk about being a good steward of data. when you think about what happened with on store this weekend you think about what gerry said, acting in a way that consumers would expect, do you think they acted in a way that consumers would expect in that particular context? or is there a different way that you look at this? >> i look at the rash -- i look

at the consumer as a rational consumer on the average. if they understand the value they will get back from this data, if you're in an action, we will know where your and we will deploy help. there are things like that that are valuable to the consumer. one of the biggest challenges is does the consumer feel that they're getting value? i did the mother test. i went to my mom. there is a bunch of privacy stuff going on. she said explain it to me. we will deliver advertising to you that will be more relevant to you. because of that, we will know certain things about you. we will not know your name, how much money might, except we who you are, or where you live. >> that is bad. >> but here is the valley. it is relevant to where you are in your life and what you might want or what you might need.

you may pay less for certain products and other things. in addition to that, if you -- if we do not do this, you may have to pay for content. the fact that you go to the local paper, you could potentially pay for content because it is advertising- driven. she said, that does not make sense. if i am getting relevant adds to do not know who i am and i can get the content that i want, then i am ok with that. my mom is not the most sophisticated internet user, but she is a good representation of a typical consumer. i do think this is one that has been driven more out of legislation. it has been encouraging to see companies in the business community saying that they want to step forward and do this work. >> i wanted to check in with the audience to see if anybody had any questions for the panelists.

just stand up and say your name. >> i am from georgetown university. i think this is a very productive discussion. but i have a question. i think we need to look at some assumptions. what sort of they are talking about? when we connect to the internet, just doing that action, we have to get a number of information, our ip address, are location, something about our computer that can be traced back to us personally. when we talk about privacy of information, what information are talking about? where do we draw a line? what is ok and what is not to?

>> i do not know much about tour, but he uses the zip for all of his browsing. >> i want -- [laughter] >> no one to make sure that when i go outside, nobody sees me. [laughter] >> it begs the broader question on the theme that i sort of articulated in the beginning, which is innovation vs regulation. each person will have a different perspective on the sensitivity level of their information. the sort of made light of that, but made a crystal clear point. when each of us goes out on the street, we have a couple of things that work there. what do each of us think is acceptable? what does society think is acceptable? and where will we accept the bar? more importantly, where the tools we would use to said that

far? can someone file class-action lawsuits because you went out on the street and you could be seen? we will all probably think that that sounds ridiculous. but i would not say that is ridiculous for that individual consumer or an individual because i think different people have different points of view. but i come back to that this is a baseline to establish one side fits most and that is where we want to evolve. we have self regulation. we have business communities and incentives built in. we have different of ways to get there. so i will not answer your question because i do not know where the baseline should be. but it is a good line. >> i will take a shot at it. but i think you're asking the right question. i think the answer depends. that is the classic lawyer answer. what data and in what context and what standards apply to it?

the area that i was describing in the self-regulatory area, we're talking about anonymous click stream data, in most instances, from cookies. it keeps -- it knows what website you visited, not you by name, but the computer you are on. and it is used to deliver non sensitive as the likely to be relevant to you and your given notice that that is happening in the form of this icon. and then choice that, if that is something you do not want to do, you can exercise that choice. i think there is a belief borne out in the numbers to date that there will be a percentage of people for whom it does not matter how anonymous it is or how taylor did his or how innocuous is busy innocuous it is, they do not have interest in it. most people do not really care at that level. they're happy to know that it is

confined to just that type of data. if they -- if that data would be used to identify you by name, identified certain products you bought and deny use certain benefits you would otherwise be entitled to or society has determined in the statutes in one context are that important eligibility for credit, eligibility for health care, treatment comintern's, otherwise, then there should be a higher standard in limits their -- it really will depend on the type of data and the context. >> thank you for your question. others in the back? >> by latest count, every single member of congress has gone through a privacy your data security detention bill.

i would like to hear from the panel, if you had to design a bill, what are the three things that you would put in it that would be essential something that would be effective, but also allows a company -- >> i think that one is for brian. >> sure. first, identifying the individual by kind of who they really are on the new perspective from social security number and those types of things, if it is allowed, i do not think it should be allowed, but you can opt in in that scenario. the ability to use cookies -- actually, the ability to attract people on may of bases is valuable because of the advertising. i have to come up with a third.

i think the ability for you to opt out, which actually exists today, should be part of that. a big majority of those exists today. >> if you're going to draft the law, you have to look at what you want to address. what further goldi want to achieve. greater privacy is too amorphous to put into statute. it means something different to every person. in my view, while this issue has gotten a lot more scrutiny given the developments in social media and advances in technology, volume of data, these issues have actually had been considered in-as for 30 years and maybe even 100 years.

i think you have to look at where we have been and figure out how that maps here and, if something needs to be changed, what would be different? i would take off the table any non-sensitive markets. it is very clear that that is, in many ways the heart of the american economy. that is have people get new customers. that is how many entrepreneurs in the crowd now that the fourth thing you want to do is figure out who might be interested in your product that you can sell to. you will have no one opted into your new business. our country is built on new businesses and innovation. so i would take that off the table. on the other side of the equation, you have the fair credit reporting act talking about some of the eligibility criteria. people are going to be using data that is tied back to you, for eligibility purposes, not for advertising of health products, but will you get credit and not, i think that the

expectations that have developed in statutes have to be built in there. outside of that, you just have to look at specific uses. i think that is why there has been such a challenge in figuring out what the privacy laws because you have 70 different approaches, but they are all trying to cast a wide net over all kinds of use of data. it is like saying let's have one law that regulates all society and everything. there was a hearing in one of the committees recently. they had a group -- there was a privacy hearing. there was somebody there in the mobile environment. they had somebody they're talking about internet and another person talking about health. they were different types of data all in the name of privacy. from where i said, because i do so much in this industry and with the data, it was no different than having it hearing that had somebody from

fema, federal emergency disaster, and somebody from the airlines. maybe that is not even a good example -- the coal industry, three different and related industries and have a lot around it because they did so omnipresent in our society in every different silo. you cannot just tried to drop one net on top of all of it. i think that is why you continue to have struggles in furthering legislation. >> i see some low hanging fruit. i do not think anybody disagrees there would be some benefit to having harmonization. if that came to the expense to greater state security standards, i do not think that that is something many folks are willing to have on the table. but five or six years ago, i testified at a committee hearing in virginia. i am a country lawyer from

virginia. i said that i do not cross the river if i do not have to. and a state senator said that you seem to be opposed to this bill. i said i apologize. i do not oppose the bill at all. as a lawyer, every time you pass one, someone has to pay me $150,000 to tell them how it applies to their business. >> today, it is only $40,000. [laughter] >> in the item of touch ", where you have to run the gauntlet of what you will do, how you will vote, and why you will good, it is the purpose of those laws to get businesses to invest in security. if businesses hurt, they're making the investment. we had some harmonization. there will probably be a good fix. i do not -- i would not say it

is necessarily an easy fix. secondly, for that bill to not create a private line of action -- when i said that one size fits many and we think about class-action litigation, oftentimes, that class-action representative is the love ron james of the consumer world, right? the thing that upsets them the most that causes them to be a class-action plaintiffs is not something that each one of us in this room would agree with. and when we do have it, it leads to enormous cost, significant decreases in innovation over problems that are not documented to exist, that are just not clear. when you make lawyers and entrepreneurs, you will create incentives that will not necessarily be healthy for the rest of us. those are the two things i have to say. >> i think the pendulum typically swings too far back.

youets in fighinsightful to whe pull a industry back a year to two years and then they try to figure out how to make this work again. i think that is a bad thing for business. something that is slightly off topic or hot topic, but slightly off this point is that one of the things that i have always been amazed that is that direct mail does so much more than the online guys. we get talked-about as knowing so much. the reality is that we do not know nearly what plenty of other people are doing in traditional advertising. >> i want to double back to data security really fast. it is one of the issues i had hoped to get into. is in sight congress wants its pound of flesh so to speak on the date is 3. so do the privacy groups in washington.

they also want to hand down security rules saying that companies in this circumstance should be doing x, y, and is a to prevent the kind of breach. nothing some of them, to what happened at sony and epsilon. left to their own the size -- left to their own devices, companies may not be doing what they should be doing. is there any area in which industry groups could live with congress handing down security roles or will it be a no-holds- barred situation? >> let me react on two levels. six or seven years ago, the federal trade commission have been saying for several years that you need to have reasonable information security. hundreds of my clients would say, ok, what does this mean? i had the opportunity to talk with some of these really smart folks over at the agency about

what that meant. and they were very circumspect about their ability to provide guidance on what reasonable information security meant. why do i really this? it comes back to a point that still made. when we start setting baselines, if they are more loose, if we had a federal standard that settle security must be reasonable, the devil is in the details. and what will happen quite predictably is that we will over invest in security because, as a matter practice, if you had a security breach, clearly you're security could not have been that good. you had a breach, right? is 2020ort of hindsight and it is a real concern. but what it means for business is that business will spend money on things that are not helpful to all of us has consumers and users. i will give you a simple illustration of that. if the hillsides on an airplane

is wrong and the federal standard says it needs to be 18 by 18 inches and it needs to be used-filled unless you have analogy, then you get a hypoallergenic fellow, but we cannot keep the airplane in the air so that every third one crashes, why we focus on the pillow? the key is that we want to be able to keep the planes in the year. i think you hit the nail on the head. privacy is inherently nonpartisans. it is hard to be against privacy. we are all in it. i am not sure that there is a standard that we can legislate because i am not confident that people agree on what a standard is. i give a slightly different perspective. i represent various companies and trade associations in that dialogue.

there has been support for uniform national law for a number of years from the business community speaking broadly. part of what has bogged down the bill -- what the legislation should focus on is a consistent standard so that companies comply with one standard when they get notification across the country. it is pretty well understood what that is. most already do that. that could get achieved. it would be good for businesses and consumers. but the proposals keep going beyond that and getting all of this extraneous detail where businesses are saying, well, i do not need a 51st standard are one that is even more complex. we will just live with what we have. that is ultimately going to be the best thing for consumers to get divergent notices. the other thing is that you hear that may be one of the state laws would have had a higher notification standard or when

you have to notify. i cannot do anything less than protecting -- i have to make sure that consumers are not losing protection. but what they failed to articulate in that discussion is that most of the bills that are proposing data security standards across -- it would apply to companies across the country, only in one or two states have that. i think it is too. they have data security requirements. you would be adding data security requirements throughout 48 states. some of what is reasonable and all that needs to be fleshed out. but it is an issue that has worked in financial institution type of privacy. that could all happen. but they keep wanting to throwing stuff that would turn into privacy, not security legislation. so you restrict certain types of data, which will ultimately --

for the data is used for fraud. it would end up with a scenario -- in order to stop, you need more data to determine who everybody is. we may get there. >> previously, i was seven information security company. we spent a lot of time with the data breaches. it was an interesting team that did a lot of credit card data and a bunch of different things. what we really saw is that there is a good amount of legislation. the reality is that the business community is more interested in making sure that the speeches do not occur. even the legislators are. they have a huge level of commitment in a structured program. the government could never figure out how to mandate it because they do not understand the complexity of each business. so the businesses themselves have benefits to make sure there are no ridges and security.

disclosure is a big deal. disclosing beaches, i think there is an additional incentive for the company. they do not want that to happen. but i think it is a good place for businesses doing a good job and really getting ahead of that problem. >> is not clear to me that any of the bill's proposed at this point would have actually changed what happened that some of these security standards where there was already high level of security. >> less turnover back to the audience. i think we have time for a few more questions. in the back. >> [inaudible]

that could be the next step to changing a lot to adapt to elaborate with signature and collaboration. >> i want to make sure i heard the question correctly. >> electron signature. >> we have the federal e-sign act. my experience in the past 13 years of practices that, virtually, all transactions -- that in virtually all transactions, it is not an issue and businesses create a whicwayn

which they can work around it. i am not sure that i would agree with the assumption that these signatures are limiting or preventing business. we still have the country lawyer from virginia -- do we have a contractor not? federal law has done a pretty good job at showing that we do have contracts. i think we can point at the quick to grasp have done. for the most part, those are enforceable. >> others in the audience? in the front. >> you talked earlier about giving up the data and issues of the value. i wondered about instances of collective action problems. we could really make a lot of decisions through traffic. however, if one person did not want to do that, they could still reap the benefits of

everybody in getting together. in instances like that, where the value to the consumer is more complicated, are there situations where we could be justified in sort of taking that sort of data without permission or making a law that says you have to network your card. you do not have an option? >> i do not think businesses would say that. i think government would. my view is that you should have the right to opt out. you should have the right for me to not collector data for a specific reason. i think that is fair and reasonable. if the government requires a national card for everyone to carry and it has data that they can track, i think that is much more likely than a business person saying that we will track your regardless of what you

choose to do. >> the business community generally is not mandating your salaries or any of the stuff that goes into tax information. consumers would be out raised some thought of that would happen. but the government mandates that and consumers to not have a choice because of the benefit of the good and everybody has to pay their share. >> businesses will decide whether to offer or not offer the product. so there are products that do not get offered where having a choice is a requirement. i think a great example where we have seen that is in the area of websites directed at children, a collection of information for children. the ftc has a new proposed rule that has come out for great consideration in there could you do not have to look far if you have been working in the internet economy for long time

to realize that starting a business will be focused on children and online or on a is reallypp complicated. is really easy to get it wrong. if you are an entrepreneur and you want to launch an app, and still wants to help you, the last recorded fine was north of $1 million. and you have $25 -- $25,000 may be to start the company, it is a really challenged barrier. they will offer a choice wherever we can, but there will be times where you will decide that figuring it out is too hard and you will go the other way. >> there were more questions in the back earlier. >> our -- we do survey research.

we work with the panel people on facebook who opt into the surveys. what about taking them off facebook, matching them [inaudible] they have given us permission non facebook to answer surveys. response on facebook is kind of low. people have to watch the content in order to do that. do you have any thoughts or expertise on any of those? >> i will use this in the context of our lunch speaker. she said that our task in chicago in terms of being the chief data officer is the predicate that public information belongs to the

public and we should create tools that make it available. i will assume that your question begins with the idea of should we have any kind of restriction to prevent me as an individual from going out and learning about people? i think there are very strong policy reasons not to have that be the baseline for the law. but i think the crux of what you say really comes back and comes back to what bryant said with his mom. if the people on your panel know and understand and agree, is very hard for them to critique what you did. it is when they did not really know and they were really embarrassed or surprised that it creates a problem. the way i think about this as a lawyer is that we are in the risk-management business. we identify risk. we shift risk. we remediate risk. or we accept the risk. it usually is a combination of

those things. every privacy problem is solved by, well, if the person said it was ok and they understood what they're doing, the risk is a business. it will probably below. >> here is the legal answer, which is -- it would be determined first by what facebook's terms of use are with you. once you get past that, it will be determined by both facebook and your privacy notice and what consumers understand or what you told them you will be doing with the data. if all of that is permitted, there is nothing that would restrict you from doing that other than you would have to look at the industry's self regulation. in this case, it would be the network advertising initiative with the matching of anonymous data. >> they are not doing that. >> so there would not be any limitation was to get past those things. then you have to get back to the

real world question and will consumers care -- will they be ok with this? >> we are almost out of time. let me ask one last question. we talk about it is security and privacy and regulators. let's offer a forecast. we have a couple of months left. there's a lot happening in washington. the consumer committee has sought a lot of the air out of the room. whether the chances that we will see some type of database law or some kind of privacy effort move somewhere in congress this year? >> on data security, you have a 50% chance that something could cross the finish line. but there's a lot of work to do and the calendar will get closer. i think that a broader privacy bill will have a lot of discussions. but it is a much more complicated debate. i think it will wind up being informed by these reports coming out of the congress.

>> i think still sort of hit the nail on the head. in terms of the short-term, i think longer term there are a couple of factors that suggest to me that we will see more regulation rather than less. i think there are two that are very important current number one, think we will develop and evolve our consensus about what is reasonable security and what level of privacy is appropriate. it is the discourse that will continue and will get closer to figuring out as a society of what is the one size that fits most. i think that the second thing that is an enormous driver is that, increasingly, u.s. companies have difficulty doing business abroad because of privacy and data security

issues. and so there are tremendous incentives lining up toward a global harmonization. one of my mentors once said many years ago that i do not need a good law. i just need a clear one. and the challenge for us is to get both a clear lot and a good one. that will be a tough road to row. longer term, i think we will see much more regulation. >> there is much more territory we have not begun to touch. will there be any data security done this year? >> i will not contradict. i will be surprised if we see their of those legislations come out this year. we do not -- i do not see it coming this year. >> i want to thank everyone. thank you everyone for joining kind i believe our next session will be getting underway shortly. thank you again everyone for coming. [no audio[applause]

[captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> more from the activism media conference. analysts from npr "the new york times," and others talk about the results of social media. this is one hour. >> good afternoon, everyone. i will be your moderator for

what i hope to be a very exciting conversation on a topic that is near and dear to everyone on the panel. hopefully, that is why you are in front of me. i want to thank you. it is the second annual amp summit. it is an acronym for something i think it is important to understand the interconnection between media and politics. we will be focusing today in this particular session, from an engagement perspective, what is the future of the news industry and have it has changed. i am the general manager of a yolo's political division in town. i have been there for a cup -- manager of aol's political division in town. i have been there for a couple of years. my background is from the political trade history here in

washington. i will let everyone on the panel introduce themselves. >> i study they lot about non- profit models for journalism. before that, i was a washington correspondent for "the and oregonian -- for the oregonian. >> i was most recently the editor for four years. now i am in charge of strategy, both on the digital side and the old prince side for our publications. >> director of community engagement and social media for a social register co.. i have been active in teaching journalists how to use water and other social media for a few

years now. gger.am a blocke i am part of a social media team that started off about three years ago. it was an evangelizing thing. now we manage the facebook page and npr social media presence as well as crowd sourcing experiments and such. >> fantastic. so the structure of our organization, the organization for this conversation, i want to throw out a framework for the program. that free market is that, when i look at medium companies -- media companies and we talk about it as a group, when you look at the media landscape and you're trying to evaluate what a news organization is doing, there is a back of the envelope

with a look at the organization to look at how it is being generated, distributed, and monetize. for our conversation, costs and generation, distribution,-is a sham. we will talk about the organization and what the has seen as too trends to three tenths -- to the rio trends to three trends in that category. -- two trends to three trends in that category. and what that means in terms of how we gather content, what we consider the byline. >> the thing i would throw out also is the rise of the nonprofit modeling in journalism. it is not just would people's idea of what nonprofit is. it is like baskin-robbins. there are many flavors now.

everything from europe texas tribune to aarp. legacy models are crumbling still. nonprofits, new and old, are jumping into the business and they're doing the news or something that looks a lot like this. we will have to figure out how we can have news within an organization and we can discuss those things today. >> at the chronicle, in the last five years, we have gone from a very centralized model of consecration where it was only created by people in our newsroom and people on our staff to a model that is now more decentralized. we still have a staff of 70 reporters and editors here in washington. but we now have many more free- lance correspondents around the country. we're using a lot more contributors through our blogs and other opinion and advocacy areas. that is something that is definitely different in the last five years. the other difference is that we

are partnering with other organizations in a way that we have not been before. we partner with "the new york times" where we jointly run stories. our reporters are working on stories and they enjoyed a run in both "the chronicle" andean "the new york times." that is something we would not have considered five years ago. as news sources have exploded and more so given that higher education has expanded around the world, we have expanded with it. we need to find new ways to generate content. >> we saw a great example of how the community is generating content at the lunch presentation. the picture of the easy chair in the sinkhole was a good example of the fact that the tools of pushing are in everybody's hands with their cell phone now.

so the community is generating content. that content has different three degrees of reliability. that was a actual picture. it made me think of another picture involving chairs. some of you may have seen it. it was tweeted a lot after the recent earthquake. there were a couple of plastic lawn chairs that had tipped over. i do not know which earthquake it began with, but it circulates everytime there is a mild earthquake. so a lot of the work -- journalists still need to produce content that the community is not treating. but a new function of the journalist is the curator where you are gathering content from

the public and finding the best way to present it and also to get it and say, ok, this one is legit. that is a sinkhole. this is what the city is doing about it or not doing. this one was just some the having fun and they had that funds several earthquakes ago. so vetting and verifying the content that the community is creating is a big function of the journalists now and a function that in the carbon has really pioneered in a way that i think we're still trying to figure out what is the future vetting and verifying in real time. >> for us, it is probably a

little bit easier than for most. in some ways, the public prius system has always had crowd sourcing. it has always had the public creating content. you see it very simply in college shows. that is a very symbiotic relationship with the public. going from that to going into gathering information on the air of spring 3 twitter, i think it takes a bit of a mental leap for some. but it is a natural transition. what has been happening in our position is that people have become believers that the people, the masses can provide high quality information that we do not have access to.

when things started happening in libya, we realized that there is no one there. we had no one there. very few news organizations had people there. so what we were getting was the wrong stuff coming out on twitter. we are still very much learning how to the vet that and how to present that. my colleague and the carven, he asserted has been doing it on twitter -- let's just do it. let's go for it. on our blog, we have been trying to take some of that and crafted in familiar ways for the broader audience. the point is that we're still learning on the part of it. >> i think it is important for all of us who appreciate the distinctions of each of the panelists in terms of the platforms that there is a great

scene we're hearing right now. there is a broadening of the definition of what we consider as input into the question of what is content. that has broadened its self not just from my line and original content, but taking in what profit journalism is doing, taking in the social space in terms of infrastructure. there's also the news room supply chain making decisions and vetting about what is real content. but the bloggin of what we might consider input into that decision is interesting. another good point that i want to talk about that you brought up is how a nasser orientation can start working as a news organization. at the core, it has an agenda. no judgment on that at all. [laughter]

but in terms of the world that you have been trying to help them think through, how you -- as an advocacy organization, how do you turn into a news organization? >> one of the things that an organization has to decide right away is whether you want to support journalists and all of what that entails? one of my favorite examples is from 100 years ago. the founder of the christian science church was being attacked by the old and journalism of the day. she decided that three independent journalism would support the mission of her church. several cultures letter, that model is established as a way that an average organization can support real journalists and it continues to this day. so how do you organize it within your organization? how do you fund it? is the case for philanthropy attached to a mission about

journalism or at least independents? that is something you have to think about and decide how you will do that. then you have to roll with the punches. if your chosen takes you to places your organization does not like, you have to except that as part of what you're doing. if you're not willing to do that, then you have to rethink the idea of having a journalistic enterprise. >> if you could say a couple of words of how technology has allowed or facilitated or celebrated the ability for an advocacy organization to act as a news organization, that would be great. >> the american red cross is not a news organization, but it often acts like one to and it has the first people on the ground. i think technology is accelerating the need to be transparent when people take a

source of information, they are willing to take it from aarp or the american red cross or anybody else. but they want to know where you're coming from. they want to know in a shorthand way what is behind this and how to structure. over time, you can have a model that works we have more than one voice coming from the same organization. >> when you talk about non- profit journalism, there is one that we're not thinking of as a type of journalistic enterprise to support its cause. another one that is a huge trend that all of you appreciate is an organization like supporting the traditional aspects of journalism. if you want to talk a little bit about that, let's think about what the role of journalism and how traditional news outlets

taken that the content. >> with the decline and possibly the collapse of traditional business models, we are in a time where we will see a lot of different models. it will not be like here is the model of the future. here are the models of the future. the path was multiple models, too, including the public broadcasting, which was a combination of government and donation, member support and so forth. clearly, is popular in newspapers, the traditional media that i come from, even though my work now is pretty much all digital. to sing the praises of the newspapers and all of the watchdog journalists some that you did, the fact is that the

journalism that we did was pretty much routine commodity coverage of stuff that was happening in the community of that could be done somewhere else. i think that the pro-public and texas tribune type of non-profit model, calif. watches is another one -- there are several out there that i think very encouraging -- is trying to say that we will not try to do everything like a daily newspaper did. we will focus on this one hugely important public service kind of journalism and hope that we can find philanthropy that will support that. so far, i think they're doing a good job. >> the idea of the public service supporting public service journalism i think it is crucial in thinking about the changes that happened in the news industry come modernization. when we think about the way

that we think of a story, the challenge was they were not telling the story differently. it all started sounding like the ap. i want your opinion over whether you think that foundation in this vein is continuing or bringing something new to bear on how we approach a new story? >> i think the fact that all of these public service-type foundation-funded stuff is starting was not having to cover sports and all of these the things. they can say that we will cover this thing and cover it very well. they are choosing slices that are not commodities. there were some good dated

journalists doing things in texas, but i am not aware of a texas news organization that made data analysis and data presentation as central a part of its mission as texas tribune. where that data can be available and certainly our lunch speakers showed have government itself can make the data available and marketable -- if you're in a place where the government is not doing that, you are really in new territory that, at this point, commoditized.onetize that is part of all entrepreneurship. you have to adapt and adjust. the market will change. >> some of the examples that we have talked about are still fairly general. what we have seen in some areas, especially in education, is that many newspapers have given up on

covering k-12 education and especially higher education. you now see some incentive support in areas as well. that worries me a little bit. you can see the hechinger institute now producing content. you can see them in "the washington post" and other places. you do not know who is supporting those efforts. brack injured, we know that it is the superdelegates foundation. is the loomis foundation. they all have an agenda. you start to wonder about what types of stories are not being covered by these non-profit organizations because of the agendas of their foundations that are supporting them. you may say that newspapers used to get advertising, but for the most part, national advertising. we had student loan companies and banks and other things. but they supported the whole enterprise. they supported our coverage on everything from athletics to

government. but in this case, the kids foundation has a specific agenda on college completion or on k-12 education. you have to wonder about the story trusses that those organizations are making or, in most cases, are not making as a result. >> we're talking about the agenda-driven concerns. talking that npr and some of the challenges that npr has had in the past year about putting a spotlight on funding being an issue and whether or not there was an agenda-driven news room, how has that affected you? >> obviously, that was all over the news. the idea in traditional newsrooms is that there is a fire wall. i think that is what we're getting to. in the traditional news room,

journalists, as soon as you get tired, you sign that code of ethics and you were supposed to abide by that. obviously, that does not happen all the time. a lot of people brought up some issues about a project we just launched, state impact, where we're trying to put to reporters in each state, two did reporters in each state to report on state politics. people were wondering where that may came from. it came from george soros. so it got some attacks on that part. but there is a well-defined fire wall in the newsroom. you tell your public you have to trust us on this. and i think that is what news organizations have done all along. in my experience, fire wall is certainly there.

>> fox news has a pretty transparent agenda. a transparent agenda that was launched in response to an alleged agenda with varying levels of truth behind the allegation of the liberal media. it is interesting that going back to the firewall issue, most of the organizations in the so- called liberal media are organizations of journalists who might tend to be liberal working for companies that are very -- quite conservative. so those fire walls, if the liberal media really is liberal, that is some evidence

of the fire walls working, even if journalists sometimes have their own agendas or their own bias. >> something people forget is the non-profit models are evolving very quickly. you are seeing more and more successful nonprofits having grass-roots efforts. they are trying very hard to develop some revenue streams. a variety of revenue sources. you are seeing new structures in place. i think about investigative news networks. they are working very hard to develop revenue sources that each of these members could not do on their own. disco matter of a number of things.

there is also a case for philanthropy. if your case is to be paternalistic, then the people who give the money have to sign off on that. >> the market makes a big difference. if aarp is successful in producing a credible news about topics of interest to the retired an aging population comic-con they are going to find a sweet spot that will keep sustaining. if they are pretty much a pr arm of aarp, they will not be very successful and they will not last. >> transparency is important, the idea that just put it out there. i think we underestimate the intelligence of the public, which is what you are getting too. the public will know if this is

good or trustworthy, if this is something you are not getting from someplace else. i think news organizations should allow the public to make that decision by giving them all the information they need to make that decision. >> we are going to move to the next topic. we have looked at the first 10 minutes on content generation. we will talk about generation. it is extremely successful media company that is not necessarily on everyone's radar. it is helping people in its readership do their job, the people who are running into higher education -- higher institutions in terms of their career and navigating the various different nuances.

in terms of thinking about contributions, one challenge is you only want you to write for the university, but public content was important. talk through a little bit in terms of distribution from the perspective as a former editor, how you have to balance the need of focusing on the core audience, being a trade publication, as well as being admission driven on the higher education market. >> we have had a pay wall since before people knew that term. we have always had a pay wall. at the beginning, you cannot get through it at all.

everything was behind the pay wall. that has evolved over time. at least 40% of our content on any given day is free, and it is in front of that pay wall. we do not use a meter system. we decide on content by content basis what should be in front of the pay wall and what should be behind it. we put a lot of our opinions of because we want to reach that broader audience of opinion makers out there who may not be subscribers. we put breaking news where it it is a commodity. a couple of years ago at virginia tech when the shooting happened, we have reporters on the ground, and so did every other news organization in the town. we wanted our stuff to be out there. we talked about news being a commodity. anything we feel that other people -- we put that in front of the pay wall.

we also teased a lot of stuff in front of the pay wall. if you want to know how much a college president makes, all of that stuff is behind the table, but we will write stories about it that we put in front of the pay wall to give you the basic information, but if you want to go deep into it, we put it behind the pay wall. with all these news organizations moving to pay wall models, that is interesting. i am a big advocate of that. i think news organizations do need that revenue stream of readers, but unlike the new york times, they made a mistake by treating all of their content the same and saying there is a meter and you run out during the month, whether you read a sports story that is everywhere today or if you read our big investigation of obama. i think the news organizations that treat their content as specialized, put that behind a pay wall and put everything else in front of the pay wall.

those are the models that are going to succeed in the future. >> when you are thinking about the pay wall, we are thinking about one platform. what is interesting is that maybe through the distribution channels, you try to find differentiation. we will open this up to the panel, but tell us about the role that ipad have and what you think about distribution of your content through those various platforms. >> that is where our futures are going. we launched our ipad at in march and within a month we had 15,000 users down low the at. we are in a slightly different situation because we have readers who are willing to pay

for information that they need to do their jobs. >> you want them to pay for access on the other platforms as well? >> yes, for right now we have to, because once we start giving away content for free, readers are going to expect that. i think is a really hard. the new york times seems to have succeeded in that. the baltimore sun is going to try that, but they have a bizarre plan. once you let the genie out of the bottle, it is very difficult to bring it back. we found some advertisers interested but we cannot find. -- we cannot find a ton. somebody has to pay for it. when you take readers out of the occasion -- at of the equation, that put so much pressure on

you to get revenue from other sources. about npralk specifically and looking at the role of social media in terms of lead and in the life cycle of eight news story. talk about that and then in terms of how npr has evolved into something more than just radio content and using these different platforms to extend the life cycle of a story. >> we are where the listeners are. that is where npr evolved from a radio company to a media company. that is not necessarily where people are getting all of their information from. we have to be on facebook, on the ipad, the iphone.

we have to be everywhere. a few years ago, i think it was two or three years ago we put out essentially a fire hose that you can book onto. i think our philosophy has been taken, it is there. this is our public service, which is informing you. obviously people pay for in your content. the listeners pay for in your content through their member stations. we obviously make those pitches, but we are online and we are everywhere, because that is where people are. i like to tell the story of how the facebook page was born at npr. that has about 2 million fans, which is pretty hefty for a news

organization. it first started -- the people at in pr were having discussions. what is that thing, is needed a marketing thing? what do we do with this thing? then a few days later, legal says, there is somebody who has in the are on facebook. what do we do? they are freaking out. just e-mail who ever made it and see what they want. he said i am a college kid, i love in pr and i made it for you guys. it has all the language that it needed to have. had everything. he was like, you can have its. here are the keys. we sent him a mug. [laughter]

min on thel an ad ma page. our content is incredible. reporters and producers and everyone else, it is like, get my story on the facebook page. the amount of traffic and drives is incredible. it extends that life period from radio into the web. that is really nice, and to give you an idea of how big the facebook distribution is, it is second only to google as far as referring traffic. that is from our page, not from people sharing it. >> talk about sharing and the

importance of sharing. >> we have seen that increase a huge amount, and at some point we do expect the social part of it to take over google, as far as referrals. you could see it on an everyday basis, just on how well stories do. we post only about eight stories a day on facebook, which we made a decision from the very beginning that it was going to be an editorial find, which means that it would have an editor, and each story would be handpicked. somebody would be getting the feel of what this is and how would works and what people want on its. we treat it the same as we would

offer homepage and the same as we would a show, which each one has a different feel. morning edition is very different from all things considered. the home page of npr is different from the facebook page. you are going to get news, of course, but on the facebook page you might also get cute pandas. >> i don't know of a news site that does that. >> steve, i want to put a spotlight on your background that i think plays a big role in distribution discussions. what you have seen over the last few years in this market, trying to build an audience that would

grow in a unique way. what have you learned from that and what do you see for the future? >> i think that hyper local, which is a buzzword that people interpret differently, but i would say local at different levels. it is where we are very early in the evolution -- it is survival of the fittest. in the evolution of local journalism into the digital marketplace, jeff talked about the pay wall that works for the chronicle of higher education. that is a narrow market segment that is delivering a high- volume, specialized content that the consumers generally don't

pay for. they are experiencing it or writing it off on their taxes. the same with the wall street journal which also has a successful pay wall. it is hard to picture a local organization relying as heavily on donor support as public radio and statewide organizations have been able to do. we need to look for what the successful model for that is going to be in terms of distribution and connecting it with revenue streams. newspapers never made our money, never supported our content by charging for it. if you pay for a newspaper, you are paying for paper, ink, gasoline, and maybe some of the wages associated with production and distribution.

but you are not starting to pay for the content. content is all supported by advertising. advertising does not work the same way on line in terms of volume and in terms of rates, so we need to figure out what the local model is going to be. generally speaking, when established businesses are facing a new business opportunity, new technology, they tend to cram their existing model into that. there was a display advertising in classified advertising. classified advertising was lost a lot of different competitors. craigslist is the one that gets cited most often, but this cannot be only one. so we have to find something different. but the only people saying you cannot make money on line are

journalism organizations. saying whoear amazon has ever made money on line? what we need to do is find out what are things beyond advertising that have value in that local marketplace, and can the local media organization, whether it is and metro wide organization like bbb or whether it is and local blocker, what are the ways they can connect with local businesses and help them connect with customers? we are still working on that, as we are going to see a lot of development of that over the coming few years. >> something we are doing at aol is a big investment on the part of the entire company called a patch.

from a mission perspective, we see a huge white space an opportunity of local newspapers going away. from a mission perspective, community still need to connect to one another, and journalist usually fill that need as the connective tissue of the community. we are investing -- there is a lot of cost there, but we hope the network's content will have a modernization strategy in terms of that particular audience. it could be political advertising our brand advertising.

it is a risk right now. >> and it will be very interesting to see how that plays then with the metro play of huff-po washington. with a local patches all-around, can you build a metro platform that synchs well with the local patches to serve both the audience and the businesses in a way that will build a healthy business. people frequently ask me, what do you think of patch? >> as you well know, it is kind of under a microscope now and taking a lot of hits. my response is, no start up that

succeeds succeeds by doing exactly what they did when they started up. they are not yet on a path to success, but if they make the right adjustments in the next year or two or three, depending on how long it takes and how committed they are to it, i think somebody is going to succeed in the local space. they have a lot of resources there to see it through. >> i want to take a couple of minutes and let each of you -- we talked about how all content is being generated. we talked about role of surgeon -- social and distribution and the challenges being faced. the third is, how do you put

that together for make modernization spectrum? we talked about the pay wall. do you have any thoughts? how is it working out for you? >> we have services we sell. we find that a lot of people join aarp for the product and services and discounts. the number one reason they we come back as four or magazine, which is fantastic -- the only reason they use -- only reason they renew and come back is for our magazine. it helps bring people in and helps them open their minds to being a member. that is one of our-is asian models. we want to give you some great journalism -- one of our-is asian m --onetization models.

once you are in, people find that is the reason they want to stay. your membership underwrites the magazine and the aarp bulletin as well. >> i think magazine publishers are really looking for that silver bullet. local newspapers were licensed to print money for years. they made a ton of money and classified. [laughter] they made a lot of money in classified advertising. classifieds and display advertising and even in circulation. to many newspapers are looking for that one big play that will make them a ton of money. the future at the chronicle is a

lot of smaller plays that add up. repackaging content. somebody might not subscribe to the chronicle for $85. a graduate student might not subscribe to the chronicle for $85 a year, but they will probably pay $5 for a package of articles on how to get that first job or how to revamp their resume. you sell lot of those things at $5. that is what we are looking at now, more of these micro payments, smaller payment plays, especially where we are repackaging content. creating it once and delivering it on multiple platforms and in multiple ways. that is where it can even help local level as well. i think people are willing to pay for content on local level. i know i am desperate for information on my local community, what is happening to the restaurant down the street.

that is the big play, where parents would be really interested in paying for more information on what is happening with their public schools. >> my old boss, jim brady, is now my colleague at the register. he talks about the silver bullet, saying there is not going to be a silver bullet in journalism, it is going to be shrapnel. there will be multiple revenue streams. they are not all tied to technology, although certainly there is an issue with technology. the iphone, the ipad, we have the kindle fire coming out, all these things. these are great opportunities, but keep in mind that a

significant amount of that money goes to apple and amazon. part of it is working out those partnerships and those delivery systems, but those are actually formats where people are more willing to pay and they have been to pay on their laptop or desktop computer. some of it is going to be thinking differently about the basic models, not just all in the technology. an example i see is obituaries. newspapers bge we used to write obituaries as news stories and they were formulate an adult. they did not give the full flavor of that person's life unless he was a newsmaker. then we saw it as a revenue stream and we started charging for it. most obituaries are written by someone at a funeral home who is not a good writer.

we can say they went to be with the angels instead of they died. if your willing to pay, you can put more about the person. i am thinking, is there a possibility for all of these out of work journalists that we can develop a model of commissioned life stories pitched it is there an ethical problem in that? i suppose so, but journalists have been ghost writing biographies of sports figures and entertainment figures and politicians for all of my career. we can work out those ethical issues. is there a whole different revenue stream in there? that goes beyond obituaries. you can commission life stories at retirements and anniversaries. it is a matter of thinking differently about lots of different revenue opportunities, rather than a silver bullet.

>> i am not a money person, i am and editorial person. a fully digital -- obviously it crosses into radio, but it is at website. somehow, staff has grown and somehow it has flourished into its own thing. they are doing well. >> i will open it up to questions. i want to thank our viewers from c-span and across the country watching us right now. i want to welcome them. questions from the audience. >> we said that traditionally in

social media [unintelligible] in humanitarian assistance or disaster, documentation not on social media becomes relevant to a population. the ucla that social media and traditional media can truly work together in times of disaster in a way that will be beneficial and get better information to people who need it faster? >> there is a mapping program based on putting together the messages from the public, which is one of the first break uses was in the 1980 earthquake and identifying clusters of messages mostly by tex were coming from.

it shows that there certainly is great potential for that. the news media jumped on the disaster stories like nothing else except maybe a celebrity sex scandal or something like that. the social content is just astounding in its volume. tools that help us curate and highlight the themes from social media are an example of where that is coming together. any media at -- traditional media that are not using social media to cover disasters are not covering them well. >> in terms of something that has largely cemented outpost -- anything and has a significant

barrier to access like natural disasters. from the iranian elections, it was a big part of a seminal movement for huffington post to be able to curate what is happening on the ground. we saw this in japan and in haiti. the challenge of the storytelling in on-line journalism is using a component of an input of a quitter feet or a facebook update to complement a long-term story. something we haven't talked about is the role of blogging to facilitate more people to create content. content even from a co2 an ordinary citizen to extend the

conversation and give it more debt. the challenge for us is to take all these different inputs and hopefully present a really which textured view of what the new cycle is really about. using blogging and traditional journalism. >> i understand if there is a sort -- a story on cnn about dogs and cats that are abandoned in that disaster, there are people who will then send 10,000 of booties to that location and clog up the supply chain so that the bible stuff cannot get through. if they had a crisis plan on how they would work together in crisis and that actually did it rather than worry about the repetitiveness of the stories at that time, you would be speeding the velocity of the response in that emergency in a different way.

>> this is not to say that what you are suggesting cannot be done, but he said the social media as if that were just a matter of the traditional media -- the new york times, cnn and who ever get together with facebook and twitter. it is not facebook and twitter.com at it is the millions of users of facebook and twitter. social media is not the platform, it is the users. to think that you are going to coordinate that, that is way beyond herding cats. not that there is not some ideas that you can probably use traditional media and social media to get out the word about what you need, and it is not dog sort's --booties and that

of thing, but that chaos of the social media is here to stay. we need to figure at how we deal with that chaos. >> i work in tv news. there is no question that we look [unintelligible] my big question is, the think that the social media audience we have on line and the tv viewership are two separate groups of people, and if so, what can be the key to getting that population online, tuning into tv and watching the content we have on television, and is there one news agency or outlet -- our outlook that is doing it right right now? >> i don't know the answer to your question. i would think there is some

overlap, but i will tell you some numbers i wrote down here which are really interesting and i opening. we did a survey of our facebook users, and 51% of them said that facebook was a major way in which they get their news. the idea that if disco important, it will come to me. 74% sun -- if it is important, it will come to me. i think that tells you a lot. >> [unintelligible] >> i think they are going to tune and if you give a video that you can pose big post on your facebook page. the average age whether it is television news and viewer or a newspaper reader is

significantly older than the average age of people on social media, even though people my age are starting to use social media. i don't think we are going to change those habits. what we need to do is find out the best way to reach that audience and deal with it where they want to be. >> i don't understand why it matters. my feeling is that people reading you on facebook or twitter, why do you need them also -- it reminds me of newspapers trying to drive people from their website to the paper. i just got back from atlanta. some was telling me down there that the atlanta journal constitution is only putting some stories in print. what is happening is that people are just not seeing those stories. i am not quite sure why a lot of

news organizations tried to drive people to the print paper or to the television. people just do not want to consume news that way. what you are doing for social media is expanding your audience. >> you use the word ratings. the people who create ratings are trying to figure out how to track all this stuff. if you have a news clip on youtube, does that count? how do you do that? over time, that demarcation of when a newscast happen is not going to matter anymore. once demetric is in place, that is going to change everything. >> we have time for one more question. >> anything i see, it happens on

twitter first. i see it first on twitter. with a significant lead before someone else picks it up. it may not be the full content, but it happens there first. i don't have a television and i do not subscribe to anything. when something happens, i go to twitter first. >> he does not have a television. you cannot reach him at all. but you can put your video content where he can see it on twitter and click and watch it. >> i want to thank everyone. the last point is that probably the biggest challenge we are all facing is an appreciation of each industry for the idea that if it is important, it will find its way to you. to understand how people find information is the game changer

for our entire industry. so thank you, everyone. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2011] >> newt gingrich unveiled his campaign platform today in what he is calling the 21st century contract with america. that is next on c-span. after that, john allison talks about the 2008 financial crisis. later, a discussion on online privacy and cybersecurity. >> the kaiser family foundation released a study showing health insurance premiums have risen over the past year. and tomorrow's "washington

journal," we talk with reed abelson. then a discussion on the debt problem in europe, and later, steve landefeld and how the nation's economic productivity affects policy decisions. "washington journal," each morning at 7 eastern. avram mike mullen stepped down tomorrow, ending a 40-year military career. obama and defense secretary leon panetta will take part in that burial ceremony. live coverage at 11 eastern. >> republican presidential candidate newt gingrich laid out his vision for the country in a speech in iowa. the former house speaker is calling his 10-point plan that 20% to contract with america. it will make changes to the tax system, repeal the health care

law, allowing younger americans to opt out of the social security system. was one of the architects of the contract for america. this was held at the financial services company in des moines, iowa. [applause] >> i am particularly delighted that billy and bobby ray have served the state. in an effort to talk about practical realities -- these are not on.

and i wondered. [unintelligible] are they on? ok, so -- i apologize. i was a starting to say that this was in the tradition that gov. ray established when he was governor because it is an effort to lay out what we need to do in a way that we can all understand it as citizens and put it together. i and particularly glad he was willing to come and introduce me. he is a dear friend. but i did not realize until last night we were at his house that he had kept the original contract that was a tv guide. it tells you how long ago this was. it was in a tv guide. this was in the early days before cable. [laughter] every time we pass something, i

would go to the floor and i would use a hole punch and i would click it. backup is now on the so -- in the smith -- that kotb is now in the smithsonian. the only center that has written about it was senator chuck schumer a couple of years ago. he pointed out that the real purpose of the contract was a management document for the republican party. while it had a powerful political impact, as greg just pointed out to you, we voted on all of these things in 93 days. and enabled us to say to our team, glad you got here. here's what you're doing. here is what we are doing. the largest one party in creation in american history was in 1994. it we gained 9 million votes over 1990. the democrats' only lose 1 million votes. the real swing was those who never turned out before. and it was really simple.

it was no attack here. when you see advertisement in tv guide we do not attack bill clinton. we were serious. it was an adult document for adults. if there are concerned citizens about the country, that you can treat them like adults. it is not about who has the best 30-second attack ad or who has the most clever consultant. i had been at this since august of 1958. my dad was a career soldier and spent 27 years in the infantry. we were in france when the paratroopers were killed and charles de gaulle was brought back. it really hit me that the country was dying without leadership.

in high school and began to study three things and i've been setting them ever since. to what does america need to do to be successful? how would you explain with sufficient clarity that the american people would want you to do it? and how would you implement it if they gave you permission? i was working as a volunteer in the reagan administration and i've worked during the bush administration. let me ask you, how many of you agree that america is on the wrong track? how many of you agree that getting back on the right track will be an enormous effort? how many of you agree that very substantial interest groups will fight deeply against cutting back on the right track? i just want to feed back to you

what you have just said. this is the heart of why i am proposing a 21st century contract with america. our challenges are enormous, i think, the biggest since 1860. the difficulty of changing direction for an enormous national government, an enormous national elite, whether it is the courts, the news media, the academic world, the bureaucracies, the laws, is when to be tremendous. and there will be people who legitimately and authentically fight desperately to stop us because whether of an interest group or an ideology, they do not agree. if you are serious about saving the country and moving forward, you have got to start with that design. country and moving forward, you have got to start with that design. you have got to say, this is what we are trying to accomplish. are you trying to develop a canoe for a local creek are you

trying to build a ship to cross the pacific? you better decide what size you need. this contract is designed in a much deeper way. there are four parts to the proposed contract. this is the one talking about today in detail. but the four parts give you a sense of scale. the first that i agree to deal with today is the legislative part. what should we pass as lot? the second, which will begin -- we will be beginning to unveil and you can see it at newt.org is called, imagine the first day. we take an hour, and for one hour i signed between 50 to 200 executive orders, fundamentally shifting the direction of the united states government before 5:00 p.m. on the first day, all within the law. that is why you have to have this stuff to change the law. but for example, the first executive order we know for sure, abolishing all of the

white house bazaar's ad of -- white house czars as of that woman. there's a lot you can do pretty fast. reagan, for example, signed an executive order which eliminates rationing gasoline and liberate gasoline and within six months the price has collapsed. there are things you can do better decisive. third, we will need a training program for the transition team and a training program for all transitional appointees. if you want to change the scale, there's no reason to believe that normal traditional appointees have a clue what they're doing. they will run the old order and the old system. they do not know how to run this new system. and finally, this is something i say to everyone in the audience. we need a citizen-centered model that uses social media. i do not ask anybody to be for me. if you are for me. -- if you are for me, you vote and you go home and you say, i

hope he fixes it. i asked people to be with me because for eight years we need to work together. we need to work together in aligning the congress on what we need to get done. we need to work together in making sure that as things do not work and if you have the scale change, some things do not work. if you send an e-mail and have a conference call corporate dissipate in a video conference you've got to be able to say, that is not working. you have to get constant implement -- constant evolution and constant change in order to implement what you are talking about. it you cannot implement in a stable way because things change. you have to be part of that active feedback. there is another reason. if we implement the 10th amendment and return power to the states and citizens as you shrink the washington bureaucrats, if you have to grow the citizens. that means you will have more

responsibility. the fourth part of this is how do we build a genuine citizens movement that is prepared to take responsibility for our country? i think the change is so enormous -- and this is the one that i want to read to you today. this is a message abraham lincoln said mr. the congress in december of 1862. -- sends to the congress in december 1862. the civil war is not going well and things are going much harder. he said -- he writes to the congress, opened with the dogmas of the quiet past are active to this to repressive and we must rise for the occasion. as our case is new, so we must think a new and act anew. we must disenthrall ourselves and then we will save our country." i think the reason that washington is a mess is because

no one is prepared to disenthrall themselves and take the risk of thinking you. let me walk you through this in great detail -- and if you want a great deal, there is a 23-page version of this at newt.org. this is not the final document. this is -- there are two big differences between this and 1994. i could not possibly show you everything i want to do because the scale is so large. i will treat the beginning of a conversation, which by said kemba 27 of next year, the anniversary of the contract -- september 27 of next year, the anniversary of the contract, we will show you what we are doing. the second difference is, in 1994, we stood on ronald reagan's shoulders. he had been talking about welfare reform since he first ran for governor in 1966. there were 700 pages of

legislation behind that. and congressman dick armey is doing a great job of putting that together. we do not have the advantage of 30 years of reaganism. some of the things i will describe to you we do not know how to do yet. it will take about a year to pass all of this. we have had in this current administration a stimulus package and a member had read. we had no, care so complex that speaker pelosi said you have to -- we had and obamacare so complex that speaker policy said you have to pass it in order to know what it is. that is wrong. the subcommittee's hold markups and report to the full committee. they hold marcus and the go to the floor and have a chance to

amend it -- they hold mark ups and they go to the floor and have a chance to amend it. it is a much harder process. it is not ramming things through. it is legislating. it is trying to bring to bear the intelligence of the american people to solve our problems. the first thing we need to do is to repeal obama care and we need to work towards transformation. there are all sorts of ideas in the paper at newt.org. one reason we have to repeal it is because it is a 2700 page document. you cannot repeal part of it because you cannot trust the staffs to tell you what part you are to repeal. there is a little over 10 percent of it that is really good. it is going to take a couple of months to actually pass the

replacement. second, we have got to create jobs. the reagan recovery was so dramatic that in this month, said cameron 1983, -- september of 1983 -- and he had inherited a bad economy from carter just as obama in here today that the economy from bush. -- inherited a bad economy from bush. in 1983, the american people created new jobs. reagan had a four-part plan, cut taxes, cut regulations, the american energy, praised the people who take risks and create jobs. a policy of saying, and glad you are going out to invest, i'm glad you are starting a company,

i'm glad you show up every monday and run your business. a fundamentally different attitude. when i became speaker, we follow the reagan model. the first tax cut in 16 years, the largest capital gains tax cut in history. people went back to work and back to school and cut regulations. guess what happened? in the four years that i was the speaker, the american people created -- notice i did not say i create. i have created jobs, but i did that as a business leader, not a politician. the american people created 11 million new jobs during the time i was speaker. i remind my good friends that is more jobs in utah, then under gov. huntsman, more jobs in massachusetts than under governor romney, and in four years, more jobs in texas than in 11 years under the governor. .

-- under gov. rick perry. if you want to create jobs. i know how to do it. if you like it 1-page alternative that can be developed on the revenue neutral basis, it has been experimented on in rhode island and used in europe. it gives you a choice. you'll hear a lot about choices today. zero capital gains tax. 12.5% corporate tax rate so that we liberate this a trillion dollars locked up overseas that is currently locked up in profits that will not come home. and 12.5% will make it cheaper to pay taxes than to hire lawyers to avoid taxes. 100% expensing for all new equipment for farm equipment, factory equipment, office equipment. with the knicks -- the specific

goal that we want americans to be the most, most productive workers on the planet. finally, we want to have businesses successful, focus on job creation, not focused on tax avoidance. repeal dodd-frank immediately. it is a disastrous bill. it is 2300 pages and does to services what obama care does to health. it is killing small banks, killing small business, crippling housing, and it is creating the center of corruption at the treasury micromanaging large banks. is a terrible biele pete -- terrible bill. second, repeal sarbanes oxley. third, replace the environmental protection agency with a brand new environmental solutions agency that focuses on rationality in cooperation with kennedy's back home. frankly, common sense.

the best example is here at home. some people in washington who have never been on a farm are writing regulations involving dust. writing regulation suggesting that your gross should not create dust. just look at what is senator grassley has been saying. you cannot imagine an agent that is more out of touch with reality. finally, i would replace the qana fpa with -- current fda with a 20% three food and drug administration whose specific jobs -- 21st century food and drug administration with specific job is fundamentally opposite of the current fda. if you want to create jobs, help the biggest economy in the world. if people want to get healthy, they will live longer. we will dominate the health market in the world and if we

can do so, those are very high- value jobs that pay very well and produce a lot of capital for the united states. it is thes most logical area if you are trying to promote a high income economy. we have more total energy, whether you want to talk ethanol or oil and gas or coal or nuclear power or solar or wind, we have more toward energy than any other country in the world. more than russia, canada, saudi arabia. it energy jobs pay pretty high salary. in western pennsylvania, developing shale is about a $72,000 per your job. in the woods yet, about $80,000 per year developing oil and gas in the gulf. these are good jobs. i like them. one of my first goals would be to createme