>> we will talk about labor issues. a panel discussion is getting underway shortly live on c-span 2. christie and the guard talks about the global economic recovery and efforts to handle the euro crisis -- christie and the guard --christine lagarde. speaking at the center for strategic and international studies.

>> when we are evaluating, our foreign policy moves globally it has to be part of the dialogue. >> president and ceo of the lan tos -- >> the reset policy with russia and the upcoming issue of whether or not the u.s. congress should pass the act -- whether not we will stay on record as saying human-rights matter.

>> for president george w. bush said any move to raise taxes would discourage economic growth. he spoke in new york. he is fall by chris christie -- he is followed by chris christie. this is about an hour. >> they came home to texas and began writing the book and a distorted the presidential center on the campus of southern methodist university.

it is a beautiful building that will be finished at the end of the year. we will dedicate the building in april at a ceremony in dallas and have the building will be given to the federal government to be the permanent home of the george w. bush presidential library and museum. the other half of the building will become the permanent home of the georgia bush institute. the institute has been working for three years to be a platform for the continuing service on issues that they are interested in. we have launched a program to eradicate a cervical cancer on the continent of africa. we have worked to document the

work of dissidents who are trying to bring freedom to their home countries. today we launch or contain the launch of our economic growth perspective in the 4% growth area. i would like to recognize a couple of members who of help bring the center along. donald evans, chairman of the board. karl rove, and a panelist as we build the center here at smu. here is the founding director, james k. glassman, a smart and busy man.

>> thank you. we launched the project a year ago at a major conference in dallas. the goal is to research, discover and promote ways for the united states to achieve sustainable, real 4% growth or about twice the rate that is being projected by many economists. we want to change the conversation in america so that it centers on growth. you'll hear from the panel later today. the me try to channel her -- let me try to channel our. this is not going to be a boring conference. it is about competition. people like competition. it is fun.

tax competition is a reality. the debate normally ignores competition. we like it. we think it is exciting. competition makes the global pie bigger. people say economics is the dismal science. it is not. it is a happy science. it is the science of choice. economics is about the decisions that people make. public policy plays a key role and tax policy is the most powerful of those public policies. the way a structure can get people to work more last or to

invest more less, to start more or fewer new forms and expand more or fewer current ones. in europe, people work a full 1/3 less than we do. reason is not culture or climate. the reason is the marginal tax rate. they are in a global and national tax competition. we will see today. much of what we will be doing today is looking front results to causes. we have asked the question, who grows? we look at countries and states and there are places and times where growth has been strong. we want to know whether tax

policies are at the root of that success. the governors who are here with us today understand the intensives -- the incentives that produce growth. one state has outstripped its neighbor, missouri, does have such a tax in personal income and in gdp did in employment. -- and in employment. they understand the power of incentives and competition. we will turn the spotlight on state taxes and what they mean to a national growth. these sessions will default by a panel on international tax competition.

we will break for lunch and have an address by representative paul ryan. in the real-life impact of taxes on the people who run businesses. then we will look at what we learned in a start-studded panel. then we will close with a reception sponsored by the u.s. chamber of commerce. i would like to thank the chamber for their sponsorship of this event, as well as our other sponsors, dark media partner -- and our media partner, forbes. we like being in the heartland of america. what are we doing here in new york? this is a city built on a global trade and competition. what better place for this

conference in the new york historical society, deeper roots in the commerce of this city. our next speaker, steve forbes. his grandfather was a journalist who emigrated to new york from scotland and started a great the eponymous business magazine that he presided over 437 years -- over for 37 years. "forbes" has a circulation of over 6 million. 25 unique -- 25 million unique monthly visitors at forbes.com. in 1996 and 2000, he sought the republican nomination for president, focused on growth and

driven by low marginal tax rates. ran third in the new hampshire primary in 2000. i can remember -- i cannot remember who beat him. no more optimistic campaigner than steve forbes. steve. >> thank you for those kind words. this meeting cannot be more timely. i'm doing the introducing today. it is a great honor and we should recall that president

bush's two tax cuts. many people to remember president bush inherited a faltering economic when he came into office. for some reason, he did not feel the need to remind us of but for eight years. [laughter] president bush understood that taxes are price and a burden and not just a means of raising revenue. that is a profound insight. when you lower the tax burden for people doing good things, you get more of those good things. president bush understood that economic numbers represent real people. the purpose of positive tax reform is to give people the opportunity to improve their lot

in life. this focused on people is a distinguishing characteristic of president bush. we know presidents must make decisions that can meet harm and death for people, most obviously our men and women in uniform. president bush never hesitated to make these necessary decisions. the casualty numbers in a vault human beings and their families -- because the numbers involved human beings and their families. lincoln was moved by the wounded and dying maen. for him it was impossible to drift into the habitual callousness of the sort of

officialdom that sees men as pawns. president bush shares if fundamental similar arctic with harry truman -- similarity with harry truman. never before had america played such a consistent role in the world as it did under truman. to respond to the threat of soviet communism, truman had to navigate with no playbook to go by. new useful precedents. the secretary of state entitled his memoirs "present at the creation." so, too, did president bush

faced a situation without precedent. austin churchill -- winston churchill expected to see nazi paratroopers from the skies. we all expected follow-up attacks on terror after 9/11. a second 9/11 did not happen while george w. bush was in office. leadership counts. president bush rose to the occasion. one example under scores president bush's ability to rise to the occasion. by 2006, the war in iraq was going very badly. against criticism, president

bush forced a fundamental shift in strategy. the change worked. the war in iraq was won when he left office. he was right on the big ones. ladies and salomon, the 43rd president of the united states -- ladies and gentlemen. >> thank you very much. [applause] thank you very much, steve. overly generous in your comments. i appreciate it. i appreciate you coming and i appreciate our sponsors. want to thank steve and the media and the u.s. chamber. i appreciate our governors being

near. pretty cool job. i am looking forward to hearing you. i want to thank my old friend harry kissinger. i appreciate those who serve on our board. i want to thank mark and jim for getting this conference going. [applause] we're proud to host the conference. it is a part of our mission to enlighten and to achieve results. these are for the supporters per alan to the facility the other day and it is in austin building and a great campus. the architect has done a fantastic job.

the gardens are going to be beautiful. i look for to the opening in april of 2013. the bush center is comprised of three parts. one is the library and archives. there will be tens of thousands of boxes of materials and hundreds of millions of e-mails, all stored and sorted so they can be analyzed by historians. there will be a museum the museum is not going to last if it is about me. the museum will be about principles and have you made decisions. it will be interesting. we have a piece of the world trade center that will remind people of that fateful day.

handfe, you'll be dealt a you don't want to apply. the question is, how do you play it/ t? then there is the institute. there is a daunting feeling. i have decided to stay out of the limelight. i don't think it is could to undermine the president. i intend to remain involved in areas that i'm interested in. the bush institute is an opportunity to be engaged in public policy in a positive way. the building is not open but the institute is. every day the scholars and directors come to work to advance this mission -- how do

we promote freedom? how do we honor traditional values, timeless not use? -- timeless values. our programs are designed with clear goals in mind. we want people to note that we are going to achieve concrete results that have an effect on our country and on the world. to have a prosperous and more free america, we have an education system that works. the bush center is part of reform movement. we're focusing on a key component on educational excellence, how to better recruit and train our nation's principals.

we believe that all human life is precious. we have a calling to help save lives in the developing world. i believe we are better people when we serve the admonition -- we will act out that call. we have the pink ribbon, red ribbon campaign diagnose and treat server cancer on the continent of africa. isre getting after it measurable results. we believe all freedom is universal. we believe in the concept of the universality of freedom. i'm not surprised in the middle east that people to man their god-given rights.

we recently announced a freedom archive where dissidents, political prisoners, heroic figures, with their stories will be made available over the internet. i think it is important to record a heroic figures like the apostle paul -- vaclav hovel or the dali lama. it is in our interest to support those who are willing to take risk for freedom. it sends a signal to those on the front line that the united states hears them. you can go to our website, freedomcollection.org. we believe women will lead the democracy movement in the middle

east. we have invited egyptian women to come to the country to see help civil societies developed in our own society and to introduce them to mentors and to send them back home full of confidence that they have support in the united states to take on the tough task of helping democracy advance. one goal is for them to set up a , asn's network across egypt they remind the man of egypt that egypt needs a society that is pluralistic, and that democracy yields to peace. we support our patriots and veterans. we have the military service initiative.

you are giving money to these thes and you don't know if money is being well spent or not. it was an interesting experience. it is in giving to have to stop at some stop lights coming over here. i guess i missed that. i do miss being commander in chief, a lot. the bush institute will give me and laura an opportunity to repay as best as we can our vets. i'm taking a bunch of vets mountain riding. i love to mountain bike ride. i did not like being been on a ride by a one-legged veteran.

we believe in free enterprise at the bush institute. we believe our economy can be more robust and provide better opportunities for our citizens. we believe a clear expression of freedom is that the aggregate demand of our citizens deserve but that which is produced. we believe government is important but we believe that government should trust the people, the collective wisdom of the people. we trust people when it comes to spending their money, and so should the government. much of the political debate is about our balance sheet. that makes sense. the debt to gdt is pretty high.

sell the balance sheets, you have to grow the private sector. that private sector growth will yield increase revenues. with fiscal discipline, you can better solve your account deficits and your entitlements. the bush institute this year is publishing a book. has to be a staggering thing. they didn't think i could read it much less publish a book. we're publishing a book. 21 experts have provided the content on how to achieve 4% growth in the private sector.

we recognize that this is ambitious. most of the experts believe this is doable. i help policymakers take time to read what the experts think. you'll read about cutting wasteful spending or increasing trade, energy policy and pro- growth tax policy. the goals the public sector growth and it would be a short conference, which is raise taxes. we believe the best policy is that which creates a robust private sector. what does it mean? it means that an understanding of who creates jobs.

70% of new jobs in america are created by small business owners. most small businesses pay tax on the individual income tax level. if you raise taxes on the so- called rich, you're raising taxes on the job creators. if the goals private sector growth, recognize that the best way to create growth is to leave capitol in the treasuries of the job creators. if you raise taxes -- i wish day when i call the bush tax cuts. if there were called some of the bodies tax cuts, less likely they would be raised. if you raise taxes, you're taking money out of the pockets of consumers. all the data about taxes causes

capital to stay on the sidelines. concern it means the capital -- the fuel for private sector growth will not move. that is what we are here to discuss. i think you'll find it a fascinating day. chris christie has caught the attention of a lot of people, including texans. we see your enormous personality, your robust defense of freedom, your belief in the individual, and we admire the courageous stance that you take and look forward to hear you today. welcome the governor of new jersey. [applause] >> good morning, everybody.

thank you for the invitation to be here today. i'll be proud to say that i was a proud member of the bush administration for seven members -- years. to be governor of new jersey -- it is a demotion. [laughter] that, is more significant for some than for others -- that and comment. i agree with the president. the most important thing you can do is to try to institute pro- groth policies -- pro-growth

policies to increase the pie. in the eight years before i became governor, our state raised taxes and fees at the state level 115 times. in the decade before i became governor, new jersey had a private job growth decade. in that decade before i became governor, we became the state in america that have the most government workers per were mile interstate. that is an enormous achievement. [laughter] and one that took incredible worke.

when i came into office in those last few weeks of january, 2010, you would think that the news could not get worse and i was assured that my predecessor, he was leaving me a budget that was on a glide path for the rest of the fiscal year, as he said. we have a different definition of the term "glide path." $0.2 billion cut of spending in the next five weeks, new jersey would not meet payroll for the second period in march -- if we did not cut $2.2 billion.

we had to find $2.2 billion in money that we have to sequester, there was being spent across the state in order to meet payroll, not in order to meet a lofty goal like cutting taxes. in order to meet our payroll. if you need any greater example of what happens to an economy when a state government over taxes, over spends come over boroughs, and over regulates -- overspends, overborrows, and overregulates -- we were unable to meet payroll. i had two choices.

the democrats retained help the majorities in both houses of my legislature. i was dealing with a democratic senate president and democratic assembly speaker. we had to stress is on the cuts -- we had two choices on the cuts. we could cut spending through executive order. for those who of watch me, if you believe i made the first choice, then you need to leave now. [laughter] we sat in a room over three weeks and we went over all 2400 items of the budget and we ca

cut $2.2 billion from the budget. here's what it was. i came into office and you gave me the problem. you did nothing to fix that. i cut $2.2 billion in spending. i fixed your problem. thank you very much. see you later. the press descended on the floor. they were calling me all kinds of things. julius caesar. napoleon bonaparte. all those great leaders of the

past. [laughter] the next day i was coming into the state house. senate president is a friend. his name is steve. steve is the president of the ironworkers local in new jersey. he is a good guy and we came walking in together. i said, a read all those things you said about me. you turn around. i will send this problem down the hall. he said, wait a second. no reason to overreact. [laughter] so, we then swiftly within three weeks of that speech, i had to

present my fiscal 2011 budget. that had a projected $11 billion deficits, the largest deficit of any state in america. now my democratic friends that now was the time to move in the hkill. we'll have a millionaire surcharge. people mess this up. in new jersey, we are had a millionaire's tax. in new jersey, they said the millionaires' tax applied to everyone who made $40,000 a -- 00 a year or over.

we all aspire to be wealthy. if you're not a millionaire but you like to feel like one, come to new jersey. [laughter] even if you're not a millionaire, will tax you like one. the tax was 9% on everything $400,000 and over. now what they wanted was 10.75. we had a little discussion, a debate about that. they decided they would pass that tax. and so they did. with great fanfare, he passed the bill in the senate. he called all the cameras. he marched myself down to my office -- marched himself down

to my office. you know, everybody has a good mother. she taught me to be polite. i put my coat on and i came out to greet the guests. he handed me the bill. i forgot what it was called. they think that maybe slide it by. "i am for that, sure. where do i sign?" he handed me the bill. mr. governor, here is the bill. wait one second. i want you to sit down for a second. i sat down at a little table and i vetoed it. "here, take it back." this is not where we are going in new jersey anymore. he said, we will be back. i said, we will see. we went ahead and proposed a budget and balanced the budget

without any tax increases, that cut spending by 9%. [applause] that one guy started clapping, that was about the only clap i got initially. [laughter] we cut every department in state government, every one of them, everything was cut. everyone shared in the sacrifice. and so -- they said that budget was dead on arrival. but that is fine. we believe in resurrected life. especially during this easter season. we resurrected that budget. the democratic legislature passed it with 99.8% of the line items exactly how we sent it.

it did not increase the cost of their government. you cannot start pro-growth policies until you get your house in order. you have to first step up to the plate and do the difficult things. what do we do next? new jersey has the highest property-taxes in america. as they were passing the budget, at about 2:00 a.m. the day before the constitutional deadline, i faxed them a little surprise. i called back into session on july 1. we're going to consider a 2% cap on property taxes before we leave for summer vacation. they passed my budget, and then went back to their offices and found that letter and had to come back to work. this place is a strain on a

family. they came back to work on july 1st. come back on the 2nd. we're getting closer to the fourth. it was over the weekend. all of a sudden, on the 3rd, spouses from all over new jersey were calling their husbands or wives saying, listen, we are already at the jersey shore. we are waiting for you. the kids are driving me crazy. give him whatever he wants and get out of there. [laughter] i am still indebted to the husbands and wives of democratic legislators all over new jersey. in the afternoon of july 3, we came to an agreement on a permanent 2% cap on property taxes in new jersey. later in the year, totally reformed the interest arbitration systems that were driving salaries up. put the same cap on arbitration awards.

2%. this was on accountable to the people -- this was un accountable to the people. again, done with a democratic legislature. we had another big problem to fix. the same way that medicare, medicaid, social security are threatening the fiscal health of our country, state pensions and health benefit costs were threatening the health of our state's economy. in the fall of 2010, we had a $54 billion deficit in our pension fund. and a $67 billion deficit in our health benefit fund. $121 billion combined. that would be four years of the state budget to bring that to balance. i came in september 2010 with a proposal. the public workers in new jersey, they paid nothing for

their health insurance. from the day they were hired until the day they died. nothing. on pensions, we had to make significant changes. we proposed increasing the retirement age, eliminating cost of living adjustment until the health of the fund was back at 80% or higher. and end early retirement for -- ending early retirement for political appointees and increasing the penalties for retiring early for anybody. by the way, increase the contributions by public employees to their pensions. you can imagine this went over -- extraordinarily popular. a one to put this proposal out in the first week -- i went to put this proposal out in the first week. the firefighters' convention, right on the boardwalk, 4000 firefighters at 2:00 on a friday afternoon. lunch was not solved that day --

not solid that day. they were fired up and ready to go. they were booing me like crazy. i got up there. governor, i am sorry, the guys are a little bit upset about your proposal. my staff had some talking points. they were booing. i have to do something dramatic. i took the talking points and i threw them away. it did not work. they booed more. [laughter] i said, let it out. they booed more. finally, i said, you guys can do better than that. and they did. finally, the exhausted themselves. literally. i said, here is all i have to say you. -- to say to you. you know about my proposal. i understand that you are angry and you feel betrayed and lied to.

the reason you are angry and feel betrayed is because you have every right to be angry. you have been betrayed and you have been lied to. because governors of both parties for the last 20 years have promised you things they knew they could not pay for. they lied to you to get your votes and you voted for them. now you are angry. i do not blame you. here is the one thing i do not get. why are you booing the first guy that comes in here to tell you the truth? there is no upside for me coming here and telling you that. i will be done in 2017. there is no political upside. here is what i will tell you. if these reforms get passed, 10 years from now, when you retire, you'll be able to get health benefits for your family, you will be on the internet looking for my home address to send me a thank-you note. somebody found came in here and told to the truth -- body

finally came in here and told you the truth. we did 30 town hall meetings across new jersey. this was not just pro-taxpayer. it was pro-new jersey economy, and it was pro-union worker. believe it or not, in june of 2011, with only one-third of the democrats in the senate and one-third of the democrats in the assembly, along with all the republicans, we passed that pension and benefit reform package, saving $132 billion over the next 30 years for the taxpayers of our state and securing the future of the pension health benefit programs. we did that because my friend was courageous. steve sweeney. he stood up with a minority of his caucus. he sponsored the bill and made sure it got the votes. sheila oliver, an african-

american woman from essex county, our most democratic county, stood up, and voted for the bill, posted the bill with only one-third of her caucus supporting her. they said they did it because we are partnering with the governor to do the right thing for the people of our state. i agree with steve, leadership counts. what do we see in new jersey? we are now in a budget situation where we are not dealing with multibillion-dollar deficits. instead, i was able to propose a budget this year, the first income-tax cut in new jersey in over 15 years. a 10% across-the-board income- tax cut. here is the amazing thing. you expect the democrats would be arguing with me about it. the majority of democrats are saying, we have to cut taxes. they're just arguing with me about how to cut the taxes. you know what that means.

we have already won the argument. what matters is we have changed a place like new jersey to understand the very principles that the president was talking about when he stood up here a few minutes ago. if you want to grow jobs in new jersey, you have to leave more money in the hands of the people who create those jobs. since i have become governor, we have created 75,000 private- sector jobs. new jobs in new jersey. we have cut the public sector. there are fewer public employees today than january of 2001. less government workers than 11 years ago. you have to do both. if you want the private sector to grow, you have to take money

out of the public sector. we cannot run deficits at the state levels. all of my fellow governors know that. we have the obligation to make those tough choices. exampleying to set the for the rest of the country. if you can do it in new jersey, c'mon. sitting up here from tennessee. come on, seriously? [laughter] you know. i will trade my right arm to be on tennessee and oklahoma. i have more sympathy for maine. lot.tle more, not allo if you can do this in new jersey, you can do it anywhere. you can do it in washington, d.c., most importantly. what we need again is some leadership that is not going to take no for an answer.

leadership who understands that these things happen in new jersey, not because our ideas are right, but because we have developed relationships with the other side of the aisle that allows them to trust us. that does not happen overnight. day after day after day, you have to sit with your colleagues and convince them of the goodness of your spirit. and of the understanding that compromise is not a dirty word. as governors, what we know is that there is always a boulevard between compromising your principles and getting everything you want. in new jersey, i abandoned the getting everything you want thing a long time ago. but i refuse to compromise my principles. when they want to build a tunnel through the basement of macy's and stick the new jersey taxpayers with a bill, no matter how much the

administration yells and screams, you have to say no. you have to look them right in the eye and say no. you have to be willing to say no to those things that compromise your principles. there is a boulevard between getting everything you want and compromising your principles. it is our job to find a way onto the boulevard. and to never forget that what we got sent into office to do was to get things done. not to send out press releases, not to just posture. i love all those things. [laughter] but we cannot just do that. at the end of that, you have to find a way to make progress. the 4% solution, 4% growth is not going to be achieved if we do not deal with medicare. it is not going to be achieved if we do not deal with medicaid. if we do not deal with social

security. 4% is not going to be achieved unless we can credibly advocate for pro-growth tax policies because we have our fiscal house in order. for all of us who believe that the policies the president advocated and spoke about today are the right policies, we know that job one is to be credible with the people of our state and the people of our country that we will be responsible stewards of the money they already sent us. i would contend to you that we are still a distance from making that case. governors are making a case on a state-by-state basis. we have a lot more work to do. a lot more work to do. in the end, for the people of my state, they do not always agree with everything i do.

they certainly do not always agree with the way i say it. what they notice, i am telling -- but what they know is, i'm telling them the truth as i see it. i am not looking to be loved. i think politicians get themselves into the biggest trouble when they care more about being loved than being respected. that is why we run up these deficits. that is why we cannot say no to anything. we care too much about being loved. i am loved enough at home. believe me. on occasion. [laughter] that's not what i'm in this for. my mother told me a long time ago, if you have the choice between being loved and being respected, take respected. if you are respected, true love may happen. but love with that respect is always fleeting. she was talking about women. i think it applies to politics. if you get people to respect you, you are willing to say no,

but you are also willing to listen, you are willing to stand hard on principles that you have articulated to the public, but willing to compromise when those principles will not be violated, then respect will come. in new jersey i think respect is coming for us because even those who do not agree with me know that when i look them at the eye and tell them i will do something, i do it. regardless of the political cost. and if i tell them i am not going to do something, i won't. regardless of the political expediency. on the door of my senior staff's offices, the inside of their door, they have reprinted a headline from a new york magazine profile they did on me. worried.ways the headline on this story was

"the answer is no." they blew that up. when the lobbyists come in and they close the door to have the meeting, they say, turn around. that is from the boss. we start off with the answer being no. and then we can say yes to the right things. to cutting taxes, to lowering regulation, to empower the people of the state and country to be optimistic again. i have never seen a less optimistic time in my lifetime in this country. people wonder why. i think it is simple. it is because government is telling them, stop dreaming, stop striving, we will take care of you. we are turning into a paternalistic entitlement society. that will not just to bankrupt

us financially, it will bankrupt us morally. because when the american people no longer believe that this is a place where only their willingness to work hard and to act with honor and integrity and ingenuity determines their success in life, we will have a bunch of people sitting on a couch waiting for the next government check. new jersey moved in that direction. we are moving away from that direction. i would urge all of you, the only way to fix that is by electing strong leaders in every state house across america to set the example and to set a fire underneath washington, d.c., that they will not be able to ignore. we're trying to do that every day in new jersey. we know we will be judged.

we're comfortable in being judged. we will be judged on the basis of the decisions we have made and the record we have created. i hope we will be one of the flagships in the bush institute 4% growth plan because if we are, it will mean there will be more money, more hope, more aspirations in the hearts of our children and grandchildren than there are today. that is what will make the 21st century the second american century. that will allow the united states to export hope and liberty and freedom around the world, not by just saying it, but by living it every day in the way we conduct ourselves in the way we govern ourselves. mr. president, thank you for setting that example. thank you for inspiring a whole new generation of conservative republican leaders who you

helped to create. so many of us who sit in the state houses today are products of your leadership, your willingness to give us a chance to make a difference in our country and your administration and now to make a difference in our states and a country and in the world because of the opportunity you gave us. thank you very much. [applause] >> here, on c-span, we will be live momentarily as christine lagarde talks about the global and national recovery, and handling the euro crisis. she will speak at the brookings institution. more live coverage this

afternoon. the afghanistan defense and interior ministers talked about efforts to create a military and police force in their country at the center for strategic and international studies. c-span to has coverage of the aviation summit, which includes officials, will talk about the future of the industry and modernizing air-traffic control. we will take it to the brookings institution. we will talk about the imf agenda heading into a series of spring meetings with the world bank. the meeting is taking place next week in washington. thousands of government officials will be here to talk about the economy worldwide, international development, financial markets as well. we expect christine lagarde to

get under way voluntarily here on c-span. -- momentarily here on c-span. [captions copyright national cable satellite corp. 2012] [captioning performed by national captioning institute]

>> this is the brookings institution in washington, waiting to hear from imf director christine lagarde, talking about the world economy

and a preview of the world bank meetings next week. we will also have a look at world politics and foreign affairs with secretary of state hillary clinton who will accompany president obama to the annual summit of the americas. she has a news conference. we'll have that for you life. right now, christine lagarde at brookings, here on c-span. >> good morning, everyone.

it is my great pleasure to welcome all of you here to the brookings institution this morning. we have had the honor on several occasions over the years of having christine lagarde and fis on some of the most important issues of the day, but this is a double first. her husband is with us today, and it is his first visit to brookings. thank you for being here. thank you to the budget for the support you have given your wife, -- thank you for the support you have given your wife, a cause, and your institution. it is also the first time madame lagarde has been here in her capacity as managing director of the ims. she obviously knows the fund very well. she knows this book of business. she knows this town very well.

she was an exchange student off of river road once upon a time. we will not dwell on how long ago. around that same time, she worked as an intern, i would guess, in the office of then- cohen of maine,l during the watergate and nixon impeachment. that must have been a busy and exciting time to be in the congress. madame lagarde also knows this is a tough town, and even g.o. economics is sometimes a contact sport. i just hope the fact it did been a tough town is not connected -- the fact of it being a tough town is not connected with her limited mobility here today. she also knows, as we do all,

that this is a season in washington distinguished by two things, cherry blossoms, and the fund-bank meetings. the latter of those is what she will talk about this morning. she will give us insight into the activities and the meetings that will take place here during the week ahead. she will be talking about the state of the global economy. she will be giving us some thoughts on what it will take to keep the recovery on track, what it will take to assure there will be growth and indeed smart growth in the global economy, and i suspect the subject of europe will also come up, which makes it particularly appropriate that a distinguished fellow of the brookings institution and another great european would be with us here to participate in

this conversation. this event is sponsored and under the aegis of our global economy and development program. the director of that program knows all of these issues very well, among many other associations that make him the perfect person to enter into a conversation with madame lagarde after she finishes her remarks. he has been deeply involved in the g-20 process. after a bit of back and forth between them, the meeting will be open to all of you. madame lagarde, thank you so much for being with us all today. [applause] >> i'm fine. i'm fine. thank you. thank you very much, and good morning to all of you. i am delighted to be here, and i can assure you my slight

disability has nothing to do with the hardship of working and living in washington, d.c., which is a very nice town to begin. i would like to think the brookings institution, as well as you, kamal for inviting me to speak today. this institution applies the ideal forum to address the issue of the global economic future, and to look beyond the immediate imperative of dealing with the crashers -- crisis. expect me to look beyond the crisis, and have a slightly longer come -- longer term view of what we are facing and how we should face it. in fact, talking about the ideal form, i think both brookings in the imf were formed by visionaries at a time of the big

crisis as well. as wellrookings' here, as at the fund, they took the opportunity to think about the future in the midst of a crisis, to think beyond the crisis, and they seized the day, to use the car pd m that is probably known to most of you, -- carpe diem. you are also characteristic decided to seize the day, seize the moment. you, with the work you did at the time when the soviet union fell into pieces, and you, in turkey, when you implement the reforms that helped your country to be in a better position following the crisis.

that spirit has also inspired the g-20 leading to the -- leaders at a time when they congregated in 2008 and later on in 2009 in london. that was called the london moment. they decided they should seize the moment, address the issues courageously, and look beyond the immediate urgency's. now, i believe that we may be at another one of those moments, possibly the washington moment. in recent months, important actions have been taken, particularly out europe. thank you for being here today. as a result, we have seen some improvement in the economy client, but let's be under no illusion, the risks remain high

and the situation fragile. let me also identified that we probably have at the moment a little bit of breathing space. not much, but a little bit of breathing space where we can actively pursue what needs to be done. who knows? perhaps not the cherry blossoms, but the spring meetings might be an occasion for us to actually take a chance at that washington moment. what do i need by the end? we need to address three important issues -- by that? we need to address three important issues. what are the next steps needed to keep the crisis at bay? second, whether the building blocks needed to achieve more lasting growth -- what are the

building blocks needed to achieve more lasting growth and stability not to keep the crisis at bay, but to put the crisis behind us. third, what a strengthened imf be able to help and take advantage of the tectonic shift that has happened across the world? actively pursuing what still has to be done to keep the crisis at bay -- let's backtrack a few months ago. remember, we were staring into the abyss? more recently, some data, particularly arising out of this country, are telling us that the united states are probably beginning to turn the corner. actions taken by the europeans

have also led to a little bit less stress on the financial markets, a little bit, because clearly what has happened in the last few days tells us turning the corner is not an easy thing to achieve. in the meantime, he merging and developed the developing economies have been and continue to be -- emerging and developing economies have continued to be a source of strength. as nelson mandela once said, as you pass one hill, you suddenly realize there are more hills to climb. that is exactly where we are -- more hills to climb. clearly the risk that looms largest on the horizon is that sovereign and financial stresses return with renewed crisis in

europe, not to mention the price of oil. the steps taken in europe are a reminder of policy action, but yet, as i said, there are still risks, the situation is fragile, and there are still hills to be climbed. europe must build on the efforts it has undertaken. continued strong policies that country levels -- we have good examples of that. italy, spain, most recently. continued support from the european central bank, which has the critical. continued efforts to build a healthier banking system, and continued steps towards more fiscal integration. the much expected european decision made by the euro area partners to strengthen their firewall was indeed crucial.

these actions will help slowly, but surely, to reduce confidence, restore stability, and reduce bomber abilities. we need a broader approach. -- vulnerabilities. we need a broader approach that means a stronger, global approach if we are when to keep the crisis at bay and push it back. in today's global economy, with interconnections, a stronger european firewall will be part of the solution, but part of the solution only, and in my view we need something stronger in which the imf can play a role, and that will put a circle of protection around each country that needs it. hear, the imf can help because it is here for all of its members, not just the eurozone,

countries at the center of the crisis, but all of those countries that are bystanders. we are constantly assessing and reassessing global risks, taking into account developments in the global economy, in the economic climate, on the markets, as well as all policy actions taken around the world, particularly out of europe. the needs today might not be quite as large as we estimated earlier this year, if only because action was taken by the european institutions that i mentioned earlier. but, let us make no mistake, the risks and the needs are still sizable, and it would not be prudent to ignore that fact. in this context i have been encouraged by the expression of support by many of our members to increase our resources, and i

am hopeful that during the spring means coming up next week we will see development, and we will make progress, and we shall seize the moment. that would lead to my second point in my main point -- the opportunity we have to build a stronger foundation for growth and stability, to put the crisis not at bay, but to put it behind us. to do that, it will not just the about the short-term. it will be about anchoring medium-term, long-term, decisive, well-anchored action that will restore confidence for all. the crisis has indeed shaken the foundation of our traditional economic framework. for too long the benefits of growth have been shared by too few. growing inequalities and weak

financial markets left the world prone to instability and crisis. in the nine months that have been managing director of the imf, i have travelled across our membership. that was one of my objectives, to see for myself. in most cases, whether emerging markets, developing economies, developing economies, i've seen the same thing, the cost of instability, unemployment, the economic loss -- it is the same in all countries, to differing degrees. we saw the painful conclusion of exclusion and high unemployment, especially with young people, and especially in countries full of hope that would have liked to transition from the air of spring to a better future. in those countries -- arab

spring to a better future. it is imperative in those countries that reforms succeed, and imperative that all of the people in the middle east have the opportunity for a more fair and prosperous future, and it is imperative that we help them help themselves, otherwise not only would it be a lost transition, but it would be a lost promise. appropriate financial support would be critical. the cost of inaction for the region would be much higher than the cost that is needed to help them cost to themselves. -- help themselves. in the middle east and elsewhere the global economy must help deliver the growth and jobs that people need, and it is not happening at the scale it should. even as we grapple with the crisis, we must take the

opportunity to rethink the framework and harnessing new type of growth. now, what does that mean in practice? i wish i had the answer. some of the best economic minds in the world are struggling with this issue, including here at brookings, including at the fund. let me share with you some of our thinking. it is going to include policy action recommendations. it is going to include key factors that we see likely to produce that more stable, sustainable, and solid growth, and it will take some short- term actions as well as long- term actions. in the short term, what is clearly needed is more confidence, more stability, more demand. the immediate focus of policies

therefore should be to support growth where it is still weak. but maybe clear. in many countries, especially in the advanced economies, fiscal adjustment is successful, but the base of adjustment matters, and it must be country specific. the imf is not saying any policy that supports and demand will be fine. neither is the imf saying there is to be fiscal consolidation without specificity. we see there is a base to be had and it has to the country- specific. let me be more clear. yes, some countries have no choice but to adjust now, sharply and quickly, but it is not true across the board. other countries can let

automatic stabilizers play their roles. let revenue redos, and public spending, especially if it is about 60 minutes, increase, and there are -- about safety nets, increase, and there are some countries that could lead growth actually take root. that short-term portion that i have tried to articulate by identifying those said have to take the hard measures, those that can let the stabilizer's work and those that can slow the pace, that should not be an excuse to delay efforts to restore sound public finances. grounding adjustments in medium- term plans, as the dearly needed for the united states and japan, for example, will not only address fiscal concerns,

but restore confidence and growth. expectations will be there. monetary support can also support growth. for emerging economies, a big portion is required especially if rising oil prices and extended it extended credit booms test the bounds of inflation -- and extended credit blooms test the bounds of inflation to low-income countries have to strike the right balance. even though there hit by reduced aid flow, they must guard against current risks, especially those radiating out of europe. they would have to rebuild the policy buffer's they would use during the crisis. this kind of crisis will get

growth restarted over the short term. now, over the long term, we must also work towards growth that is more inclusive, more durable, and not just pay lip service to it. actually do it. clearly, the rebalancing of global economy, from addressed in demand, external deficit, to surplus countries, is key. this is something the imf has been advocating. it has gone below the radar screen bailey, but that is the key if we want to address the imbalance. we are seeing some promising signs in china, for instance, where the current imbalance has moved from a little over 10%, to a little less than, but it is only partial. when external factors abate, it

will fight again. more needs to be done. -- hike again. more needs to be done. we also know that more equitable distribution of the income could promote growth. but we take the example of brazil, which since the 1990's has taken significant steps to transfer from the more- privileged to the less- privileged. now, if other countries were to reduce inequality by as much as brazil has done, our analysis shows that periods of the uninterrupted growth could be 50% longer than they might otherwise be. analysis, research, that actually can help and it sets standards. india and china, too, have made

important inroads in reducing poverty, yet high growth has also exacerbated in equality. those inequalities need more attention -- attention, and the governments in those countries know it. so, what will be the key factors that will help? i've gone through the policies -- fiscal, monetary, short-term, and in the medium-term. what are the critical factors? i see three of them amongst others. i will mention those three. the first one in our view is the financial system that supports rather than destabilizes the economy, and that means of repairing the financial system so that it can deliver credit, growth, jobs. this means better regulation and supervision, and coordination across countries because some countries have made progress in their supervision systems.

they have. the coordination between supervisors, that is not at its best, and has to happen. it means getting the financial sector to pay its fair share, and you know there are discussions on that particular matter. we dare not be complacent on financial sector reform. the mission has not yet been accomplished. the mission is to be accomplished. steps have been taken. standards have been agreed. major pieces of legislation have been voted, but the implementation, the court a nation is still the best we whacking. -- -- according nation is still lacking. -- coordination is still lacking. if we take one example of such policies, i would take ireland,

which is focused on improving competitiveness, but has also made sure that those people that are unemployed are getting specific training to make them able to access the job market, and have put in place measures incentivizing employers to employee at the unemployed. no one should pretend it is easy. labor market reforms are difficult. it is essential for competitiveness in creating greater opportunities in the future, especially for younger workers. it needs to be done according to the specific use of the country, he needs to be done with care, and in a dialogue that is a solid dialogue with all the stakeholders. third, remember the financial sector that works that served

the economy? the competitiveness? the reform of the labour market? finally, the appropriate safety net that will protect the less privileged. this is necessary because the reforms that i had just mentioned actually stretch society, and put them at risk, there for safety nets are important. i will take the example of kenya, for instance, where we have worked hard, and the volume of cash transfers to the underprivileged has moved from 200 families to 33,000 in just four years. that has helped. the imf will continue to work closely with countries with that in mind -- jobs, inclusive

growth, sustainable growth -- and that takes me to my final and third point. the need for us to coalesce around and take advantage of the major shifts in global economy. my worry is that the wing during risk of instability might -- that the lingering risk of instability might pull policymakers apart, looking at their own self-interest, and that the benefit of their whole, which will serve their best interest. my belief is through a collaborative approach we will have success. what kind of shift have we seen? we've seen the rise, the fall, and the rise of the emerging markets. we can say that they're no longer emerging markets. they have emerged.

we are also seen historic progress in reducing poverty in low-income countries. they have -- those countries have accounted for 50% of global growth, and in the same time span more than 600 million people have been taken out of poverty. the third shift. emerging markets want to play a bigger role in the international scene, and they must play this significant role, which they have played at the g- 20-level, and at the imf we see in it on a daily basis. they want to play a bigger role. fair enough. they are bigger players on the international scene, and they have a new ideas, and day

experiment, and our 2010 reform will deliver a better representation, and i consistently urge all of our members to rectify our reform -- ratify our reform. it is better for the imf to be relevant because our relevancy will be a factor in whether or not we represent our membership in terms of quota and in governance. what else do we see? we see more and different methods of collaboration. just look at what is happening on the european scene, the euro group. there was no bailout costs. there was no institution to deal with some of the key institutions. the role of the cb was strict and limited. that is changing. -- of the ecb was strict and

limited. that is changing. let us look at asia with regional arrangements, or the swap agreements between central banks. those are new arrangements as well the latest corporation agreements between the -- as well. the latest corporation agreements between the brics is another way of corporate aimed incorporating -- cooperating. we are at the intersection of an increasingly global world, where to stay relevant the imf must, as i said, constantly reflect its membership, serve all of its members, and help them manage the economic changes they're

going through. again, take the countries of the arab spring. we can support them with a unique contribution of the imf, which is a combination of macro- economic advice, technical assistance, financial support, and the combination of the three can be of help, because we are committed to support their needs, with their local, political support. we are doing is working closely with those governments, the countries around them, and also with the dole bill partnership. that is one of these examples of this cross-corporation within the imf and other partners at the table. i will give you another example. recently, the imf sold some gold and in the process made capital gains.

countries have the choice to keep it for themselves or reinvest in a common pot that would be used. that have decided to reinvest in the common pot are african countries. they have the choice. they could have kept it for themselves. they decided to put it in a common front for concessional used. they seized the moment -- use. they seized the moment. to conclude, clearly the crisis is not over, but thanks to collective efforts, we have a moment to reassess the challenge and to realize how to best respond. we have new opportunity to push on and take further actions that are certainly needed to put the crisis at bay, and to finally

put the crisis behind us. short-term action, long term action, fiscal consolidation and growth, long term action where possible, and longer term decisions. three principles should preside over these policies. first of all, act quickly. seize the moment. we have a window of opportunity now. number two, act together, united. number 3, act with confidence because these actions will not be needed just for the short term, but for the much longer term. i will finish with a quote from alexander graham bell. "when one door opens, another opens, but we often look so

long and regretfully upon the closed door that we do not see the one that has just opened for us." maybe a door has opened, and we can seize the moment. thank you. [applause] >> well, thank you very much. this was a wonderful, comprehensive presentation. you balance the short-term with the long term, stability with growth, fiscal rectitude with the social safety this requirements -- is a tall order, of course. you stressed togetherness. to what extent do we really live in an inter-dependent, global economy? we saw figures in the u.s., for example, saying the u.s. is

taking off, the recovery is much stronger despite europe. we head debates on the decoupling of emerging markets. to what degrees are region's autonomous in their growth dynamics, we which could lead -- which could lead to fragmentation. in what sense are we really much more independent than one realizes that it is a complicated question that the fund is doing research on, but we really live in a world economy? >> i think the answer to the question is yes, and the research conducted at the fund is based on the spillover research that has been conducted for the last few years and it

indicated there is a high degree of interconnectedness between the countries that is evident in the financial sectors, if you will, where the contagion can be propagated much faster than through other channels. we thought initially that maybe trade would be a contagion channel. we thought direct investment might be one. clearly, the one that is most connecting, in a way, is that of the financial sectors, totally integrated, and organizing links and bines between our economies. that is not to say there can not the regional constructions, regional architecture, that can help protect it or help better regulate those institutions. mo. -- no. in doing so, building this new

with the structure or architecture, those regions, those countries, must be totally convinced of the interconnectedness of our economies. that is my personal fear, we lose sight of that. some countries retire and withdraw in the best territory they have under their control and do not have much attention paid to what happens in the rest of the world, and that will have a positive or negative effect on them. clearly, when we look in europe, and the eurozone, we see clearly there could be significant spillover effects are around eurozone in central and eastern europe, but also in other places of the world. >> the u.s., even. >> absolutely.

>> as i understand, there will be a spillover report that will be an analysis of this interconnectedness? >> correct. >> thank you very much. we will open it to the floor. we will take questions 91-by- one, but i have tried to group them by two or three. in the back there, yes. please identify yourself. >> i am with "the washington post." sorry. h. i reached it -- hi. can you elaborate more on china and how it will pop back up, and secondly, you are saying your scaling back your request for

resources. can you tell us what your new number is? >> thank you, kemal dervis. when you talk about a new form of growth that was more inclusive, i was expecting you to address the nature of the energy economy and the need to shift to clean and renewable resources, and although that is not the imf per view, certainly public policy could accelerate that. >> maybe we will take these two because they are quite comprehensive >> they sure are. -- comprehensive. >> they sure are. the question about the china current account -- what we have seen is clearly a significant reduction on the surface of china's current account, moving from over 10% to a little less

than 3% from the latest numbers we have, and in an of itself is a great result, but what is important is to see what the rebalancing is about and what is comprised of. it is subject for further research. it is a deep subject to look into. it is composed of various components. one is an external -- demand has been lower than in prior years. that has had a direct effect. there has also been a portion of that reduction that is attributable to a shift, moving from less exports, to more domestic growth, and probably a bit more related to investment than consumption. it is a combination of all of that. our initial research indicates that it will move up again. we did not know exactly to what

level, but we have in mind something between 4% and 5%, which is less than the number we had before, and it is progress. we believe there is more work to be done for the rebalancing to take place, but it is in the right direction. in terms of scaling back, what i have said very clearly is we need to constantly assess and reassessed their risks. as we progress in 2012, some of the dramas that were in addition -- envisioned in 2010 and 2011 have not only materialize, but some good news has restored a little bit the confidence, and stability. is not perfect or in during, but we need to reassess to a lower number in terms of risk, which

will bring me to reassess a lower number of resources needed. i am not fixated on any particular number. the merrier the merrier, the more, the better. we will see how we end up at the spring meeting, and then further on, because it is a path that we embarked upon, and probably will take a little bit of time. i hope to make progress at the spring meeting. in terms of moving to clean energy, that is obviously a component of a growth strategy. while there has been a lot written about green growth, it is clearly a chapter that needs to be better explored, better implemented and develop. i would not want to please myself with words. i am convinced that a component of green energy within the

energy mix it is necessary. it will be increasing over time as innovation takes routes and develops. it will not overnight substitute and replace the existing energy our societies have been used to. one country that will be interesting to watch in terms of substitution and how quickly they manage to substitute is japan, with its implied decision to significantly reduce the source of nuclear energy by a combination of some supply the energy, and renewable energy. i will be an interesting study of how quickly it could happen. >> yes. the lady there. >> i am writing for a journal. i have two questions.

did g-8 meeting is happening at a few blocks away, and yesterday's state secretary hillary clinton said the g-8 is an essential forum for global economic development. from an imf perspective, how do you compare the g-20? i covered g-20 and the london summit, and the london moment has been successful. at the imf the first priority was to increase china's voting rights, and it has been executed. what is the next priority for the washington moment? thank you it >> the gentleman behind you. -- thank you. >> the gentleman behind you. >> i am from greece, madame lagarde. the question is about greece.

we hear only bad, negative things about greece and greek people, and because you are very honest and you always speak your mind, can you tell us if you see any positives for greece? [laughter] >> yes, there was a gentleman -- yes. >> thank you, very much. i'm with the department of commerce. i appreciate you talking about equality in the world. that is helpful coming from the imf, and i appreciate you referring to the imf research on tenure with the cash transfers on -- on kenya with the cash transfers. is this at a time where there could be debt restructuring within the older oecd countries to end to aggregate demand in

the u.s., -- add to aggregate demand in the u.s., and could this expand beyond foreclosure, so the middle class could have its own boost? thank you. >> ok. >> the restriction was also internal restructuring, right? >> yes. i do not want to compare the g- 8 and g-20. i think they have different memberships at that serve different purposes, but i can tell you my clear recollection of a decisive moment in 2008, the fall of 2008, autumn, others would say, when the question arose, should be the g-8, someone else, the u.n.? who will deal with a global crisis of that nature where

financial interconnectedness brought the tire economy to the brink? it was obvious that it had to be the g-20 because it has to have as many economies around the table and as much of the gdp, so they could be as good, as solid, and as heavy a solution when the decision was made to organize stimulus packages. so, i see high virtues in the g- 20 or any institution that encompasses a large membership. solutions can no longer be dictated by a narrow number of members, but it does not mean that it is irrelevant. it has a lot of topics to discuss. but, for what concerns the entire world, in the entire economy, the larger the better. u.s. about china, and you write

that the 2010 quarter reform organizes transfer of court and voice -- quota and voice. there are other ways to make sure everyone has a say i was the first one to -- everyone. i would also said that i was the first to appoint a chinese national deputy commissioner. the voices are not just a factor of the institution governments. it is also how you open up, reach out, and make room at the head table. that is what i will continue to do. all right, greece. [laughter] >> and there have been many negative things, you are right, but i think the courage of the greek people in the first place

is a strong positive, and it must be recognized. there are very brave and courageous greek civil workers, people that faced their obligation, pay their tax, and face cut wages and pensions. any progress made in tax and revenue collection is also great for the country, and i would say that a coalition of the political party to actually endorse, back up, lead in the difficult exercise the country has to face is also a positive, and i have to say, having worked with him, toward the day most -- mr. poppa demos is clearly on that road.

the last question about inequality, there was a question that had to do with debt restructuring in internal debt restructuring by way of addressing the housing problem in the u.s.. this is something the imf has had a long-standing position on. the housing problem is something the needs to be addressed as a matter of urgency. measures have been taken. there were proposals made by the administration. fannie and freddie have to be part of the equation, because clearly, the american households have to be able to unload a bit, just in the way we have encouraged banks to lend. households have to be helped to bar all. -- bar 0.

that is our position. -- borrow. that is our position. >> yes. >> i am nancy chapman, former u.s. executive director at the imf now lead johns hopkins. >> you are from here then? >> that is right, i am back home. you have worked hard to get support to beef up the european fire wall, the one problem is when the imf lends it can only impose conditionality on the borrowing country, so obviously the solution to the problems of greece, portugal, spain, or italy, are not only in the policies with those borrowing countries, but the rest of the european countries, if greece can not -- countries. how will greece get unemployment

down if they cannot find jobs elsewhere? how do you think the imf will have more of a voice on economic conditionality in the rest of europe in destruction -- when the structure is not sitting in how you deal with currency unions? >> thank you. >> thank you. my name is lawrence m. eller. i am from television of spain. could you elaborate more on spain? we have seen pressure mounting on spain, but we are doing very severe, very profound reforms. you are a straightforward people. can you send a clear message about spain? are we wrong? are the market's wrong? what is going on here? thank you. [laughter]

>> thank you. it is an honor to have a woman at the head of the institution, finally. thank you. i have two quick questions. i have concerns when we talk about labor competition because it seems that working people who can be the engines of growth through consumption are asked to cut wages and job security, and in the united states we see that taking the form of a tax on minimum wage, and people cannot survive. they are below the poverty line when they are on minimum-wage, so i am very cautious about having jobs competition in that regard. the second one was initiated not discuss, and that is in terms of the spillover from the loose monetary policies in the united states and europe, the low interest rates, and the harm it is doing some countries, as the president of brazil reminded

barack obama the other day. also, can countries put up barriers instead of just short- term emergency capital control? why does capital have to have the absolute right to my great, if people cannot? >> ok. i knew you were family because you ask a pointed question. you are right. when the imf lends, the imf imposes or negotiates, rather, conditionality is and aid program that is set to be in sync with the local authorities, with as broad of political support as possible. in doing so, we do so with the country, not the region. but mean make three points. in large in the imf -- enlarging

the imf resources is not the incentive -- is not intended for the eurozone. it is intended for the entire membership. i am concerned about been needs not only in the eurozone, but outside the eurozone, and very far outside of the eurozone, where we do know there are people and countries, there that are looking into it and will be seeking support. point number two, whenever we have been involved in europe, whether it is in ireland, portugal, greece, it has always done jointly with the european commission and jointly with european central bank. whenever we negotiate those programs, we make sure they're fully on board, and we have never had any, you know, dissenting views.

we've always managed to come to terms, which means the european commission also has to take into account what the other members of the currency can do. more to your point, we do not have, institutionally, always to kohl's members of the currencies of -- coalesced members of the currency zone around a particular program we negotiated with the country, let alone the central bank of that currency zone. we need to look deeply into debt to see whether we should not revisit the way we deal with such sections of the currency zone. now, -- what has been done, what is doing, and will continue

to do, i do not think we can compare any of the three countries we mentioned with spain because they are each very specific. to your question, there is that degree of interconnectedness. we cannot apply a one-size-fits all solution. the crisis in spain, the difficulties they're facing, have their own history. it has to do with financial agents, financial banks, a sector that was not in sync with the massive development of the real-estate development. those need to be addressed and progress is under way. when spain has done is laudable, needs to be continued, and needs to be done in cooperation, coordination, good understanding with other members of the

eurozone, good synchronization and communication with the european commission, steadily, and over the right amount of time so that it does not stifle growth. ok. the next question was a mix of the labor issue as well as a spillover effects of quantitative easing measures, low-interest rates, and all the rest of it. it was all of that together. i did not mean to encourage competition of labor. that is not the point. when i was trying to say is that one factor that is important -- when i was trying to say is that one factor that is important to help solid growth is the efficiency of the economy, competitiveness of the economy. one of the factors is labor. in many instances, the direct

costs were the indirect costs have to be addressed, and in some instances, have to be lower, which it does not mean competition. it needs to be done in a something that can be imposed upon unilaterally, brutally, but it needs to be discussing a constructive dialogue. the second issue is the spillover effect of monetary policy. i do not have a crystal ball, what my research teams are telling me is that whether you look at the first quarter or the second quarter, the spillover effects are very moderate.

what we see in terms of capital flows is essentially the result of the emerging markets producing on investors, which clearly a track like a magnet the flow of capital. of course, the spillover effect has to be taken into account. that is the reason why we continue to study them and i gave them to be i do not think it can be black and white. it is not as if they were producing capital flows to emerging markets. it is much more in depth than that. >> we will take two or questions and then we will end. yes. >> thank you.

there was a conference in japan for the first time since 1964. i was born there. i was very excited about that. can you tell me if you have any particular interest? >> the gentleman there. sari, ok, we will take three. >> i made german marshall with house financial services committee. i have a quick question concerning the situation you are in in your home country where you are facing a presidential election and mr sarkozy's talents are announced he might renegotiate the fiscal con tact the europeans agreed on. is this likely?

if that happens, will this consume the time that we want. [laughter] >> the managing director of the imf has the right to be politically neutral. >> thank you. i am very interested in your comments with regard to the reforms of the financial system and/or specific comment that coordination across the country is is not at its best. can you expand on that. thank you for your address today. >> tokyo 2012, you are still young man. [laughter] it is about time we return to tokyo. the imf is extremely pleased, as the -- , as i am sure the

world bank is. we are extremely pleased to go to tokyo. i am delighted to cooperate with the japanese. it would be a challenge because any annual meeting of the imf draws thousands and thousands of people, not just the ministers and governors, but lots of researchers and academics and people interested in the economy. so, it will be a challenge to all get there to get there. i know i can count on the japanese authorities to make that meeting a real success. if i was to point out to various areas where i hope we can make progress, one is certainly -- i hope we can move on just not

an academic research or without consideration, but with action. i hope that we will have made significant progress in the middle east that is key to transition towards a better functioning economy. we will work so they can deliver something comprehensive. if you'll allow me not to make a comment on that one because i have is a politically neutral. i am concerned that time is of the essence entered never ever be wasted. -- wasted. we have a breathing moment. not a long one. the financial system coordination -- be a proper

level of coordination between regulators, between supervisors, to make sure that we not only have good solid standards on paper, but they need to be implemented. they need to be delivered upon. whether you look at derivatives, the clearing, even the other standards in terms of capital ratio and liquidity, it has to be developed into actual practices, into implementation in a field across the board. if i may add one thing, it would be extremely helpful if supervisors were to unwillingly exchange data and information, which i am not sure they do at a sufficient level. [applause] >> thank you very much. let me think the managing director on behalf of brookings

and all of us. it all of you came from brookings for an impressive over view. i was thinking, and if we did the mental experiment that the imf was not there, right? i think we would see that very few people -- maybe nobody could give this view of the overall economic, social, and human challenges that the world faces. in a way, the staff of the imf, the traditions, the lessons it has learned over the past, represent the rich gift to the international community and to cooperation in the world. while respecting others, which you did every moment. also, the need to share some of the sovereignty for the common good. i think we are very very lucky to have christine daugaard --

laguard. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> au pair hillary clinton will speak with reporters about the ministerial -- hillary clinton will speak with reporters about the ministerial meeting in washington. they are setting the agenda for next month. they discussed iran, syria, and the middle east peace process. ministers from eight industrial nations will meet in may, may 18 and 19th at camp david. the countries include britain,

germany, japan, italy, russia, and the u.s. the imf and world bank meetings are next weekend. looking at our coverage, we are live here on c-span at 2:30 p.m. as afghanistan's defense ministers talk about efforts to create a military and police force. they are speaking at the center for strategic and international studies. on the road to the white house, mitt romney is taking the day off. no public events. newt gingrich was in delaware this morning for a campaign appearance at a diner. ron paul is in san antonio, texas this evening for a town hall meeting. tomorrow, mitt romney and newt gingrich will be speaking at the national rifle association's annual meeting in st. louis. other speakers include rick santorum, eric cantor, and rick perry. we have live coverage of the nra speeches at 2:00 p.m.

eastern on c-span, c-span radio, and c-span.org. >> i walked out after the iowa caucus victory and said, game on. i know a lot of folks are going to right -- write, game over. this is a long way from over. we will continue to go out there and fight to make sure that we defeat president obama. that we win the house back and that we take the u.s. senate and we stand for the values that make us americans. that make us the greatest country in the history of the world. that shining city on the hill. to be a beacon for everybody, for freedom around the world. >> rick santorum and his today -- 2012 presidential bid. a process he began in 2009. follow the steps he took along the road to the white house online at the c-span video library with every c-span program since 1987.

this year's studentcam competition and students what part of the constitution was important to them and why. today's third prize winner selected the first amendment. ♪ >> what we have done here take on the matter what they are saying -- >> these freedoms that people fight for and die for every day. >> the first amendment to me is all about the freedom of speech and freedom of assembly. what we have done here in new haven is we are trying to reclaim democracy. democracy really means that freedom of speech. i have to be my own lobbyist. that is what we do. we lobby for ourselves. we lobby for everyone else who cannot be here.

>> without the first amendment, there would not be any others. people would be treated poorly without any say. [inaudible] i love the people are coming out here to stand together, united. ♪ >> freedom of assembly is another part of our important first amendment rights. there are no restrictions with respect to the occupy wall street and the tea party because people are coming out in different directions. they're trying to express

themselves with peaceful assembly and that is what makes america great. ♪ >> the pilgrims sailed to the new world and they left an old world full of religious suppression where it their views and beliefs had been denied by authorities. the new world offer them an opportunity for freedom of religion, for a chance to express their views in a safe way. 150 years after that, the constitution recognized that religious freedom had to be an essential part of any structured government here in america. and so, religious freedom was adopted as part of the first amendment. >> the beauty of the first amendment in our constitution is that it provides each citizen in this country with the opportunity to worship as he or

she feels moved by heart and soul. >> i know this country was founded by individuals who left their countries of origin because they were unhappy with their government and with the restrictions imposed on religious life and liberties. they wanted something better. freedom of speech. separation of church and state. these were among my earliest lessons in american civic life. in america, we do protect these differences. we protect different expressions of faith. reassemble in our various houses of worship to pray, a chance, recite our sacred scriptures, or to come together in coming in and read together and draw strength as a community.

♪ >> freedom of information enables reporters to hold government officials accountable, which is important matter what. they will to use so much on the surface, but you can find out what is really going on. there websites and freedom informations sites that allow you to understand certain things like campaign donations and really see what someone who is representing you is up to. otherwise there were the a lot of corruption. we would not necessarily know what was going on. like raising taxes and not telling you why. there really are any checks and balances without freedom of information. ♪

>> freedom of the press is under attack today because the print media has cut back dramatically and cuts in the newspapers that used to cover general assembly are covering -- [inaudible] there are no longer representatives for the capitol. freedom of the present in danger in the united states as a whole. >> to always know, information is power. it is a powerful weapon in the hands of a free people. it is unmasks the allies -- the lies, rips off the bandage of

deceit for all to see. twitter, facebook, text messages, cell phone videos -- how rapidly the their unmasking the lies of tyrants. >> documents released in the freedom of information act can now be uploaded on the internet so that it is available not just to the person who made the request, but for the whole world to see. ♪ studentcam.org

for mroe. and 25 minutes, expect to hear from hillary clinton. she will speak to reporters about the ministerial level g-8 meeting she has been hosting in washington yesterday and today. we have a news conference live when it goes under way on c- span. until then, part of this morning's "washington journal." host: i want to start our conversation by talking to you about the out bed in "the washington post. he is a hedge fund manager and a member of the patriotic millionaires for fiscal strength. he writes --

guest: i do know him. great to see you again. i know him. i was on a tv show with him yesterday. i asked him the question if you want to pay more taxes, why do you not just go ahead and do it. -- ? . there are hypocrites that say they want to pay higher taxes but there is nothing preventing them from doing that. there is a mythology about how

much rich people pay. because we have had overcharged rhetoric about the people not paying taxes, a lot of people do not know. i did a study on this for "the wall street journal." we looked at irs data and found that the richest 0.1% pay tax rate of 27%. the average middle-class family gets about $75,000 a year ended pay a tax rate -- this is all taxes. the middle class is closer to 14%. there is very few rich people that are paying a lower federal tax rate than the middle class secretary or plumber. the average tax rate on a millionaire is twice as high as the tax rate on a secretary. the other thing that is interesting is if you look at the richest 1% in america today, the people at the very 1%, the bill gates of the world,

they pay 40% of the total income tax. that is more than any time in the last 40 or 50 years. the idea that the return not paying their fair share is just not showed by the evidence. host: he writes -- critics point out that it would only raise $47 billion. guest: i think this is an odd way of looking at the budget. we have had the biggest spending spree virtually in the history of this country. we had the hundred billion dollars stimulus been -- plan of overspending. we had cash for clunkers, bailouts of auto industries. we have the bailout of the banks. most americans look at the scandal that is going on with

some gsa with all the way stole money that that was spent and say, wait a minute, before we talk about raising taxes on families whether they're rich or middle class or poor, why do we not get federal spending under control. ? the problem is overspending, not that we are not collecting enough revenue. a top priority for our countries to get the economy moving again. the real problem i have with the buffett rule is i do not see how it will grow the economy if we have the highest corporate tax rate in the world. i saw you talking about this the other day. the u.s. is now number one in terms of the highest corporate tax rate of. under the buffett rule, we would have the third or fourth highest capital gains tax. the buffett rule doubles it from 15% to 30%. i am interested in how we can bring money and factories back into the u.s. so countries are not outsourcing. jobs are created in the u.s..

i do not see how you do that if you are raising tax rates way above the average of industrial countries that we compete with. china, india, germany, france and others. host: he writes -- guest: that is true. if you're dysfunctional government, it is hard for an economy to thrive. it is also true that if you think about countries that have much bigger governments then we do, countries like greece and spain and italy and portugal,

those countries have bankrupted themselves. one of the things i say over and over is we have to get our debt and overspending under control. that means we have to look at programs like medicare and medicaid. i think we should be talking about fundamental reforms and social security. we cannot continue to borrow 1.2 trillion dollars per year. that is not a formula for success. it starts by reining in government spending. host: is mitt romney the right man to carry that message for the republicans? guest: that is a tough question. he better be. he is the only one left standing. he was once called mr. good enough. i think there are better spokesman in the republican party. you have a lot of stars like marco rubio and paul ryan. i think chris christie, the

governor of new jersey, who i just thought it a speech the other day, those guys are superstars. there are more gifted orators then mitt romney is. mitt romney is not the most charismatic guy. he has studied. he has gotten better. he has gotten roughed up over the last three months by people like newt gingrich and rick santorum and that has made him a better candidate. this election will be very simple. when people go into the voting booth on november 4, they will ask one simple question -- can we really afford four more years of these policies? can we continue to borrow 100 trillion dollars a year? can we continue to have a national debt that grows by one trillion dollars each year? i am not so sure we can. that is the case that mitt romney has to make. this is a role in the course we are on. we need a regime change. host: a member of the editorial

board for "the wall street journal" -- yesterday, the obama role was one that was offered by him. just one paragraph. this is why the government collected roughly as much tax revenue as a share of gdp -- guest: of the thing that is disappointed me about this buffett rule debate we are having is that i really do believe we need to reform the tax system. i agree with the president that it is not fair. the way to fix that is something that was talked about 10 or 20 years ago. that is a flat tax. get rid of the multiple rates. tax everybody at the same rate. get rid of the loopholes, the

pollution in the tax system. you get tax breaks for buying, you know, energy-efficient toasters and investing in windmill's. let us get rid of all of that. one of the reasons that a lot of wealthy people pay lower rate is because there are so many loopholes taken advantage by rich people. let us get rid of all of that. let us get the rate as low as possible. let us make america as competitive as possible. what i am saying is, let us make america the lowest tax rate country in the world, not the highest. host: our guests for the next 40 minutes or so, the numbers are on the screen if he would like to participate in the conversation about economics and taxes. mike on the republican line. go ahead. caller: hey, how are you guys? i was just wanting to get this in here.

the attitude that taxing the rich and continuing to reach into their pockets is somehow going to solve a problem is largely -- is a symbolic gesture. the amount of money that they're rich have, even if he sees it all, forget about taxing. if you were to seize all the money of the rich and apply at all to the deficit, you would not really make a significant dent in it. they are spending far, far more money than is even available. what they have done here is introduced an argument that just does not hold any water because -- i ran across some statistics. in 2009, there were 8700 some odd people that made $10 million according to the irs. those 8700 people paid a total

of $240 billion. that is a lot of money for each people -- for the number of people to make. of theone 10,000th population. if you could see is that, you still would have been $14 billion in deficit. host: good point. -- guest: good point. it is symbolic. this does not have anything to do with reducing the deficit. by my calculations, if we put the buffett rule 42012, we would reduce the federal budget deficit by about $5 billion. that means that we reduce the deficit by less than 0.5%. that means we are left with 99.9% of the deficit still there. this gentleman makes an important point. even if we confiscated 100% all

the money of every millionaire in this country, we still would not eliminate the budget deficit. if we -- i do not believe we need to raise taxes, but if we do, we will have to tax the middle class because that is where most of the money in this country is. one other thing if i may, one of the biggest the efficiencies of this argument that all we have to do is that two-thirds of the people who are in the highest category are small business owners, operators, and investors. they are the people who signed the front end of the paychecks. when i am debating, i always ask my friends, how are we going to create more jobs for the u.s. economy, which is problem number one, if he will take more money out of the businesses that create the job . i never heard a good member.

-- answer. host: this tweet -- most middle-class folks depend on ordinary dividends to supplement their income. the buffett rule will hurt them in the long run. caller: good morning. the bush tax cuts need to end for the wealthy and the middle class, and there is nothing wrong with millionaires pay in 30%. all of these poor people, calling in, defending rich people, remember that you will never be a millionaire. keep defending them what you are poor. i want your taxes to go up, too. guest: this gentleman makes an interesting point. he says your kids will never be rich.

it is true that only 0.9% of americans ever become millionaires, but what is great everybody hopes they someday will be rich. it could happen to anyone. i love the story about these gentlemen that started this fall an application. host: instagram? guest: right. it could happen to you, it could happen to anyone. the point where i disagree with this gentleman is if you make it rich, and i think about people like my father who built up a small business and he did become a dog in their after all long time, if the government can then come in and take over 50% of the money, i think most americans think that is anti- american.

we should not confiscate the wealth of people because they have become successful. what we need is more successful people. we need more millionaires. if you increase the capital gains tax, you will make it harder for expiring entrepreneurs to raise the capital to start this review these businesses. host: stephen moore, president obama had this to say about economics. [video clip] a lot of folks were peddling these trickle-down theories, including some folks in congress, and people running for a certain office that should not be named. they are doubling down on these trickle-down theories. instead of moderating their views, even slightly, or saying it did not work, we'll set a second great depression, and maybe we should try something

different. guest: they did work. that is completely wrong. the president needs a history lesson. three of the greatest growth decades were the 1920's, the 1960's, and the 1980's. yet all of those -- in all of those we cut tax rates significantly. the economy boomed, and everyone got richer. that happened in the 1920's under calvin coolidge, in the 1960's under john f. kennedy, and in the 1980's under ronald reagan. arthur lefferts is famous for showing that sometimes when you cut tax rates you get more revenue. that could happen again. we could strategically cut tax rates to make america a place where people want to invest in. we will bring jobs back.

i am optimistic about the economy. if we do then do these big tax increases, but we reform our tax system, i think the u.s. economy is ready for a big boom, but the tax increase that will happen on january 1, 2013, i think that could cause a double dip recession. host: fran in oswego, new york, writes in an e-mail. guest: one of the reasons i loved doing your show is you have an intelligent viewers. i think she is excess clear right. ultimately, if you increase -- exactly right.

altman we, businesses will pass on texas to people that buy the product. i like the idea of the fair tax. i worked with herman cain when he was devising a tax plan, and we work together and came up with the idea of a 9-9-9 plan. i think that is a great idea. why don't we devise a tax system that makes america the one place in the world everyone wants to invest in because we have the lowest rates? here is the problem i would have with the fair tax. i know there are fair tax fanatics, and i like the idea conceptually, but i'm not so sure you could have a 23% national sales tax. a 9% sales tax could work. host: this e-mail. guest: this is exactly the

point that i am making. we have the highest corporate tax rate in the world, but there are some many loopholes in the system that companies like westinghouse and other major companies can find ways to pay nothing. i say let's get rid of the loopholes. general electric paid a very low tax rate because they took the advantage of green energy tax credits. get rid of them, yet the rate to 15%, 20%, and we will see more corporate tax collection but have an efficient economy. host: we have been talking about tax reform for years. do you foresee it? guest: i was here in 1986. it was a miracle when that

happened. we got the rebound to 28% -- the rate down to 28%. we get rid of most of the deductions. by the way, that past 97-3 in the senate. even the vast majority of democrats voted for a 28% tax rate. in the house had passed by a big margin as well. can we see that happen? yes. i think you could see a deal where republicans say let's get rid of the loopholes, democrats say we could lower the rate. what i find disturbing about the buffett rule, barack obama said ronald reagan did this, but the difference is ronald reagan wanted to cut the rate.

the reason the buffett rule is such a bad idea is it raises the rates, which makes america less efficient. host: the next call for stephen moore comes from new york city. rob. you're on the air. caller: the bush tax cuts did not work. look at the economy today, and you could see that. second, no one pays more than 30%, and stephen moore, he said they are paying 38%. he is paying 14% stashing billions in offshore accounts. guest: i am glad he asked this question. it is true if you look at mitt romney's tax returns, which he released a couple of months ago, his effective tax rate was 14%. by the way, that is only the

federal income tax. he did pay payroll tax, gasoline taxes, state taxes, and so on. moving at a side, the reason we have a lower tax rate on capital gains and dividends is because we also have a corporate tax. if you have a company that makes $100 million in income, 35% is taken out at the corporate level and passed on to the individual. this is the argument we made to president bush in 2003 when he passed the tax cut. we should either have a corporate tax or a capital gains tax, but you should not tax both. i disagree with the gentleman when he says the bush tax cuts did not work. if you look at what happened we

had a very booming economy. we created 8 million jobs. a housing bubble caused the collapse. what i say to my democratic friends who say what a failure the bush tax cuts work, i say what about the stimulus plan? we've had the worst decade since the 1930's so far. we are running trillion dollar deficits. we have a mortgage foreclosure problem. i do not see anyone -- anything anyone can point to that says obama policies have made things better. host: george w. bush spoke. [video clip] >> the first of all, 70% of new jobs in america are created by small business owners. it is one of the things that

makes the economy sell vital. most small business pays tax at the individual income tax level. therefore, if you raise taxes on the so-called rich, you are really raising taxes on the job creators. if the goal is private sector growth, you have to recognize that the best way to create that growth is to leave capitol in the treasuries of the job creators. guest: i agree. my old boss, dick armey, is famous for saying the liberals love jobs, but they hear employers. if you want more jobs, you need vibrant employers. you need people taking rest. that is one reason we need a low capital gains tax. 70% of the jobs come from small

businesses, and it is also true that two out of three small businesses fail. most of the time they cannot work. some of the most successful did not succeed the first time. a lot of times they failed then finally got it right. that is what we need. we need risk taking. it is the american dream, starting your own business. it is hard to do that when taxes are high. the higher taxes on the rich are taxes on small businesses. host: if you would like to see all of george w. bush's speech in new york city, you can go to c-span.org. naomi in norman, oklahoma, thank you for holding. caller: good morning. if mr. warren buffett wants to be credible, why does he not pay the $1 billion in back taxes that his corporation owes?

guest: i do not now the facts about that, but i will say this, a lot of these people like warren buffett, these millionaires for higher taxes, are hypocritical. if they want to pay higher taxes, they should pay higher taxes. if you want to pay more taxes, you are certainly permitted to do so. none of these people do. the truth is they want other people to pay higher taxes, not themselves. you have these hypocrites because very few of them pay more than they're supposed to. host: this e-mail.

guest: it is a great question. ireland is a great case study. they cut corporate tax rates to the lowest in the world, and then you had this incredible boom in ireland for almost 20 years. they became an eventual of europe. in fact, some many businesses -- the kind of jewel of europe. in fact, so many businesses were moving into ireland, the rest of the european union started to complain. it was a big success. ireland got a lot of jobs. the economy boomed. it is true when our economy crashed, their economy crashed, too. >> will go to the state

department with hillary clinton and the g-8 meeting. clackum welcome -- >> welcome to the state department. it has been a great honor and pleasure for me to host the g-8 foreign ministers here in washington. we just concluded a second day of productive meetings at blair house. this group of nations has extensive shared interests and responsibilities around the globe. we discussed a range of issues that are of pressing concern. while there was certainly frank debate about the details, we all affirm our common commitment to confronting these challenges together and working in close consultation with one another. let me briefly touch on some of the highlights. from syria to north korea's to iran and beyond. the foreign ministers discussed the evolving situation in syria. we welcome the joint special

envoy kofi annan's report that ce in syria has abated. i spoke about this with russian foreign minister. if it holds, a cease-fire is an important step, but it represents just one element of the special envoy's plan. as kofi annan reported, the a soccer team has so far failed to comply with key -- the assad regime has not pulled back from population centers and remains to be seen if the regime will keep its pledge to permit peaceful demonstrations, open access for humanitarian aid, and journalists, and begin a political transition. the plan is not a menu of options. it is a set of obligations. the burden of the this a bling

meeting all of these applications continues to rest with the regime. they cannot pick and choose. for it to be meaningful, this apparent halt in violence must lead to a credible political process and a peaceful, inclusive, democratic transition. the united states will be watching closely to see how things develop. we are particularly interested in seeing what the developments on the ground are and we are in contact with members of the opposition. we remain firmly resolved that the regime's war against its own people must and for good and a political transition must begin. assad will have to go and the syrian people must be given the chance to chart their own future. given the prejean's record of broken promises, we are proceeding understandably with caution.

the ministers agreed to remain in close contact in the hours and days ahead. as we speak to our representatives in new york are consulting on a potential u.n. monitoring mission that would go to syria under the right to authorities, circumstances, and conditions. the u.s. supports sending an advance team immediately to begin this work and both will need to complete freedom of movement, unimpeded communications, and access throughout the country and to all syrians as well as from security guarantees from all parties. let me turn to north korea. the g-8 ministers discussed our concerns that north korea continues to prepare to launch a ballistic missile in violation of u.n. security council resolutions and its own national commitments. we urge the north korean leadership to honor its agreements and to refrain from

pursuing a cycle of provocation. we all share an interest in fostering security and stability on the korean peninsula. the best way to achieve that is for north korea's to live up to its word. we also looked ahead to the p5 plus 1 talks with iran scheduled to take place this weekend. we continue to say that we hope these talks result in an environment that is conducive to a sustained process that delivers results. this is a chance for iran to credibly address the concerns of the international community. iran, in coming to the table, need to develop that -- demonstrate that they are serious. a few other points to mention -- we reviewed the outcomes of yesterday's quartet meeting and agreed that this is a moment to focus on positive efforts, to

build trust, and improve the climate between the parties. we also discussed africa and thhow we can deepen our cooperation to prevent conflict. to deal with the food security challenges and protect and advance democracy. and, we agreed on the importance of continuing the partnership and supporting countries in the middle east and north africa working to transition to democracy, to improve governance, and to create jobs, to expand trade, and investment. finally, i spoke with many of my g-8 colleagues about the world bank. i speak with our nominee, dr. jim young kim. i known him for some time. i know him to be a devoted public servant with a history of thinking big. and taking bold action. i believe he is an excellent choice and i was delighted, not

only when the president nominated him, but with the response that his domination is receiving. and selfishly, i was very happy that he named a world bank president. as i said, we have covered a lot of ground over the past two days. all of these discussions highlight a truth. the challenges today require leadership of the g-8 countries working together. i know that we laid the groundwork for a successful meeting when the g-8 leaders meet next month at camp david. now, i would be happy to take to questions. >> we will start with you. thank you. >> you just mentioned it now

that the united states supports this u.n. monitoring mission in a immediately -- mission immediately. is that the next death? what do you think about the idea of a buffer zone? or this idea of having nato protect the border with turkey? also, in kind of a broader sense, do you think that now with the cease-fire holding, it is taking the wind out of that move to do something stronger at the united nations as a security council? could you talk about what you discussed specifically with -- ? >> i had good discussions with all of my colleagues about syria. i was encouraged that foreign minister la raza -- agreed that this for agile first step is

only that. a first death. a sporadic -- sporadic fighting continues in syria. assad has not complied with the six. of the kofi annan plan. his forces have not pulled back. he is not taken any action on any of the other points. our first imperative is to test the commitment. with that in mind, our teams are working in new york on a u.n. security council resolution that calls forassad -- for assad to comply with all points in the plan and that supports his request to send a u.n. advance team to syria immediately to prepare the way for eighth full , robust international monitoring mission. let me be as clear as i can. that monitoring mission will only be a force for peace and

security if enjoy is the full freedom of action within syria. that means freedom of movement, secure communications, a large enough ground presence to bear witness to the enforcement of the six-point plan in every part of syria, and that is the standard that we would expect of any u.n. my entering mission. the foreign minister declined with the other g-8 ministers in welcoming the report of kofi annan. they want to send an advance team. we are working together to try to enforce the commitment that the assad prejean claims to have made.

we have to maintain our pressure on the regime to fully comply. at our sanctions and the sanctions of others who have imposed them must continue our support for the out -- must continue. our support for the opposition must continue because they have to be prepared to participate in a political transition process and we will continue to work in the security council and with like-minded nations as we move forward. i think we are at a point where we want to test what has been agreed upon, but with our eyes wide open. >> next question. >> thank you. you said you talked about north korea and your concerns regarding the possibility of a rocket launch. sense it is only a couple hours away, did you discuss any

consequences that might follow? >> yes. we discussed our concerns about the announced actions that the north koreans may take in the next hours or days. we made it abundantly clear, as have our other g-8 colleagues that any missile launch would violate north korea's obligations under u.n. security council resolutions, 17, 18, and 18, 74. our six-party members -- our six party members and all of the members of the g-8 are in agreement that we will have to be prepared to take additional steps if the north koreans go ahead.