remember that. remember what people did here and like that man who came all the way from japan to joplin, make sure in your own life that -- you pay it forward. as you have learned the goodness of people, you have learned to the power of community. you learned from the other speakers how powerful that is, and as you take on the roles of co-worker and business owner, neighbor, a citizen, you will encounter all kinds of divisions between groups, divisions of race and religion, ideology. you will meet people who like to disagree for the sake of being disagreeable. their differences. have in common.

to cooperate. -- where they can cooperate. but, you are from joplin, so you will always know it is always possible for community to come together when it matters most. after all, you could have spent her senior year scattered throughout different schools-- far from home. dr. huff asked everyone to pitch in so school can start on time. right here in joplin. he understood the power of this community and he understood the power of place. these teachers worked extra hours, coaches put in extra time. that mall was turned into a classroom and the food court was turned into a cafeteria which may be some of you thought was an improvement. [laughter]

and yes,the arrangements may have been a little noisy and improvised but you hunkered down and you made it work together. you made it work together. that is the power of community. together, you decided the city was not about to spend the next year arguing over every detail of the recovery effort. at the very first meeting, the first town meeting,every citizen was handed a post-it note and asked to write down their goal for joplin's future. more than 1000 notes cover the wall and became the blueprint that architects are following for this day. -- to this day. i am thinking about trying this with congress, giving them post- it notes. [laughter] [applause] together, the businesses that were destroyed in the tornado

decided they were not about to walk away from the community that made their success possible. even if it would have been easier, more profitable to go someplace else. and so today, more than half the stores that were damaged are up and running again. 11 more plan on joining them. every time a company reopens its stores, people cheer the cutting of the ribbon that bears the new slogan, remember, rejoice, and rebuild. that is community. i have been told, class of 2012, that before the tornado, many of you could not wait to leave here wants high school was finally over. so the student council president, julie lewis. she is too embarrassed to raise your hand.

where is julie? [laughter] i am quoting you, julie. she said, "we never thought joplin was all that special -- they don't think their parents are in the special either, that is typical of teenagers. seeing how we responded to something that tore our community apart has brought us together. everyone has a lot more pride in our town." it is no surprise that many of you decided to stick around. going to community colleges that are not too far from home. that is the power of community, the power of shared effort and shared memory. some of life's strongest bonds are the ones that we forge when everything around seems broken. even though i expect that some of you will ultimately end up leaving joplin, i am pretty

confident that joplin will never leave you. the people who went through this with you, the people who you once thought of as simply neighbors or acquaintances, classmates, the people in this auditorium tonight, you are family now. they are your family. my deepest hope for all of you is as you begin this new chapter in your life, you will bring that spirit of joplin to every place you travel, to everything you do. you can serve as a reminder that we are not meant to walk this road alone. we are not expected to face down adversity by ourselves. we need god, we need each other, we are important to each

other and we are stronger together than we are on our own. that is the spirit that has brought all of you to rebuild this city, and that is the same spare we need right now to help rebuild america. and you, class of 2012, you're going to help lead this effort. it will build an economy where will build an economy where every child can count on an education. [applause] you will make sure this country can find a job for anyone who puts in an effort and supports the family. [applause] you are the ones who will make sure our country controls our energy future where we lead the world in science and technology

and innovation. america only succeeds when we all pitch in and pull together. and i am counting on you to be leaders in that effort. because you are from joplin, and you have already defined -- defied the odds. there are a lot of stories here in joplin of unthinkable courage and resilience over the last year, but still, there are some that stand out especially on the stage. by now, most of you know quentin anderson. , a joplin high senior. he is already looking embarrassed. someone is talking about you again. i will talk about you anyway. quentin's journey has been joplin's journey. he was across the street from

his house. when the tornado struck. the young man who found him could not imagine quentin would survive his injuries. he woke up in a hospital bed three days later and it was then that his sister grace told him both their parents have been lost in the storm. quentin went on to face over five weeks of treatment including emergency surgery but he left the hospital determined to carry on and live his life and be there for his sister. over the past year, he has been a football captain who cheered from the sidelines when he could not play. he worked that much harder so he could be ready for baseball in the spring. he won a national scholarship for the national football awards and planned to study molecular biology at harding university this fall. [applause]

quentin has said that his model in life is always take that extra step. and today, after a long and improbable journey for quentin, and for joplin, and for the entire class of 2012, that extra step is about to take you towards whatever future you both for and what ever dreamed you hold in your hearts. yes, you will encounter obstacles along the way. i guarantee you that you will face setbacks and you will face disappointments. but you are from joplin. and you are from america. and no matter how tough times get, you will always be tougher.

no matter what life throws at you, you will be ready. you will not be defined by the difficulties you face but by how you respond, with grace, and strength, and a commitment to others. langston hughes, a poet and civil rights activist news in -- who knew some tough times, he was born here in joplin. in a poem called "youth" he youth"we have tomorrow bright before us like a flame. yesterday, a sundown name and dawn today brought park above the road weekend and we march." to the people of joplin and the

class of 2012, the road has been hard and the day has been long but we have tomorrow so we march. we marched together and you are leading the way because you are from joplin. congratulations. may god bless you. may god bless the class of 2012 and magaw bless the united -- may god bless the united states of america. [cheers and applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012]

[cheers and applause] [cheers and applause] >> in over just half an hour, vice president joe biden will be campaigning by speaking ed keene state college in new hampshire talking about the economy and we will have that live at 1:45. on wednesday, secretary of state hillary clinton, defense secretary leon panetta, and the

joint chiefs had will testify before the senate relations committee how to ratify ocean rights could strengthen national security interests in the asia- pacific region known as the law of the sea convention and that will be on c-span 3 tomorrow and also a secret service director and acting homeland inspector general charles edwards testified on the recent circuit -- secret service prosecution in columbia. there will be low for the senate, and security commission live at 10:30 a.m. eastern right here on c-span. from 1971-1973, president richard nixon secretly recorded his phone conversations and meetings. this weekend on cspan radio, you're more of the nixon tapes saturday as 6:00 p.m. eastern with conversations between the president and cia director richard helms and j. edgar hoover. >> some people think i will make

a statement about the freedom of the press that we are trying to censor them. my inclination is not to say that. i think i should stay out what is your public-relations judgment on it? >> you should remain absolutely silent about it. >> in washington, d.c., listen at 90.1 fm. vice president joe biden live coming up and about half an hour from keene state college in new hampshire. until then, political conversation read this morning's "washington journal."

host: get back to how all this started. we will take a look at that -- >> for 30 years, we had a

reputation for quality products. it was something american made and we were not rich but i was able to put my daughter to college. >> i had a good paying job you can support and raise a family on. >> when they had the sale of the plant by bain capital. >> i know why jobs, and when it -- where they go. >> bain was majority owner and was directly responsible. >> they may as much money as they could and they closed it down and filed for bankruptcy without any concern for the families. >> he came in and sucks the life out of us. host: that was the advertisement attacking mitt romney's time at bain capital. let's get to the funds and see what you have to say. good morning. caller: good morning, i am confused about the controversy

surrounding this whole thing with the occupy movement. everyone is paying attention to the 99 percent who are hard- working and a 1 and light bain capital who have contributed to gutting jobs and the working class of the country. i am confused about the cory booker comments. for president obama to win this election and hopefully win on a mandate for the 99%, highlighting a company like bain capital makes smart political sense. host: let's look at the cory booker comments on "meet the press" sunday. >> from a personal level, i am not about to sit here and indict private equity. we're getting too ridiculous point in america. i live in a state or pension funds and unions are investing in companies in bain capital.

if you look at their record, they have done a lot to support businesses and grow businesses. i'm very uncomfortable with this. >host: here is the "usa today" -- let's take a look at the advertisement beckham online attacking president obama's suggestion of not wanting to use bain and takes obama's own allies in use their words. >> have you had enough of president obama's attacks on free enterprise? his own key supporters have. democrat mayor cory booker of new jersey -- >> my personal level, i'm not

here to invite private equity. >> a former congressman from tennessee. >> private equity is not a bad thing. it is a good thing in many instances. >> former obama economic adviser stephen ratner, a leading democrat -- >> don't think there's anything bain capital did they should be embarrassed about them if you look at their record, they have done a lot to support growth businesses. >> even obama's own supporters have had a not very >> it is a nauseating to the american public. enough is enough. host: that is by the romney campaign. is the bane record fair game? democrats' line, good morning. caller: good morning. americans have the kind of get

real a little bit. this is politics. we all know that everybody is playing games on both sides. to win. and control the government. the thing with cory booker, everyone knows he is president -- positioning himself -- he had aspirations for national office. i think he got a little bit over confidant and thought he could get away with doing what he did on sunday. , understanding that when you are on the team, if you are not following the rules, guess what? if you will face a penalty. he deserves what he is getting right now. as it relates to mitt romney, obviously, he is positioning himself as a businessman, the

one that knows the economy so it is there game to dissect what is bain capital and what they were all about and it was not about creating jobs. it was about making people wealthy and that's it. the people creating jobs, is not like you open up a restaurant or grocery store, they just go in to companies and five companies that are in distress and they take the mover and load them up with debt, they write it off, the taxpayer pays for it and walk away with hundreds of millions of dollars. there is a lot of things that people are doing on wall street. host: let's look at how americans are feeling about this. this is the headline in "the

washington post." next caller is a republican in california, good morning. caller: good morning, obama is quite a hypocrite. he just attended that fund- raiser at that home of tony hamilton, the ceo of blackstone, an equity firm. he does not know how business works. that is the meaning of this

story. he is over his head when it comes to anything that has to do with the economy. he is just a start ideologue. what would you expect from a man whose only experiences are as a community organizer. ? you have mayor booker, harold ford, stephen ratner saying what they are saying. democratic governors who are dependent on the bond market to fund their plot -- pension plans will not be able to go with you, mr. obama. the president cannot see two moves ahead. he is as an amateur. host: let's look at the headline in "the washington post." listen to the president in his own words yesterday. >> cory booker is now standing there and doing outstanding work in newark and helping us turn the city around.

i think it is important to recognize that this issue is not a distraction. this is part of the debate we will be having in this election campaign about how we create an economy where everybody from top to bottom, folks on wall street and folks on main street, have a shot. if they work hard and act responsibly, they are able to live out the american dream. now, my view of private equity is that it is set up to match some once profits. as a healthy part of the free market. that's part of the role of a lot of business people. that is not unique to private equity. my representatives had said -- have said repeatedly and i will

say today that i think there are folks who do good work in that area and there are times when they identified the capacity for the economy to bring more jobs or new industries. their priority is to maximize profit. that is not always going to be good to four communities or businesses. host: that is present obama speaking in chicago yesterday. amherst, mass., independent line, good morning. caller: hank you having me . i having mebain capital i think they are destructive for the economy and is a bad idea -- the idea for them to get involved.

it is problematic for present obama to attack mitt romney because he recently appointed jeffrey is i am -- zion . obama is attacking mitt romney yet he has appointed the brains of bain again and againbain is a terrible thing and neither candidate to be involved in it. it is outrageous. >> let's look at another comment on twitter - tennessee on our democrats line is next. >> good morning. caller: cory booker made a

statement last night clarifying himself that he did not approve of the ad the republicans put out. i would like to say that they will always criticize the president. he was a community organizer. yes, when you are an organizer, he said -- he had to get ready to get there for people to make sure that everyone was in line trying to buy the jobs and help people. talk about gram a big a job creator, if he was that good, how committed not reelected and massachusetts? they were fed up with all the ads not telling the truth about what is going on in this country. romney is paid for bible written to him. thank you very much. host:bain has addressed the ad in a rare statement.

a republican in bethesda, maryland, welcome to the conversation. caller: good morning, you made a comment earlier about romney's

ad. he was defending what he did with bain capital. president obama's comments about private equity terms and investment tax -- task forces, that is what companies are all about. you can't survive as a company unless you make money because you have to be able to return the earnings a you could have future payment points. it proves president of obama's naivete and how business works. it is not just about creating jobs for the sake of creating jobs. thank you for your time. >> we are talking about romney's record at bain capital. there has been a lot of talk about this this week. there have been ads going back and forth over this issue.

let's look at "the washington post" talking about what these companies are all about.

in los missouri, on our democrats line. caller: i think the issue with cory booker actually helps president election hoenig zarras. even with the issue that exploded and made the guy just a plumber relevant to the conversation where he talked about serendipity mess and the quality. also, private citizens and corporations and trying to make a more fair playing field. when you look at his approach to business, what he is trying to say basically is to make the playing field more fair.

is it fair that businesses can collectively petition the government for things like the chamber commerce or anything like that? the same businesses don't want unions to be able to collectively bargain for employee benefits and employees. es' salaries. the thing with cory booker help to present obama to try to try harder to connect the dots with what he is talking about with regard to making our society and who did the government and businesses work and how they affect little guy. . that is my interpretation. > host: cory booker attacked the town of attack ads. what you think about that? >> i think it is

caller: the obama campaign connected the dots and i think a lot of the cynical aspect of the way we do paul dickson's country is usually just give the regular citizens bill level to get them excited about their issue and their team but they don't want to go into it -- they don't want to bother to explain what their actual position is. you can find this conversation at facebook.com.

middletown, new york, republican, welcome to the conversation. caller: good morning. the whole thing with obama ann romney -- barrick -- they are two sides of the same point. ron paul just one minnesota and last week, was ready for an apology because i emailed him wshenscully had a tweet. i did not know if i would get an apology or not but thank you for cspan. host: that was not intentional. we're talking about the mitt romney record at bain capital.

do you dig it is fair game for the nomination process. miami, fla., democrats line, good morning. caller: i think it is fair game that the president should go after his reputation because that what republicans put out there as such a good job maker and all these things. it is not an attack on all companies, just on that company. it is telling them that he created jobs in america while he asked me to get the money out of a company.

you need to show he is corporate for america, not the poor people who needed their jobs. america is not just corporate america. it is they people who work for these companies and make them rich. once they get what they want from these people, they don't want to give them health tips or good wages. they just want to take the jobs. that is not good. host: from "the washington post's" --

medford, new jersey, in japan and caller, hello. caller: how're you this morning? i have -- a lot of the points i wanted to address have been addressed. it is fair game to bring up his past. if he is using that as part of his experience.

the duplicity of the president' who can ask other rih people for money or in the same business as bain seems to be ok but it is a negative if your his opponent. but that doesn't make any sense. bain tagore like many investment companies -- the takeover sick companies. all the employees would lose their jobs. if you think about it, the federal government acted as an investment house when they took over general motors. they put in a lot of money and they came out of bankruptcy. they care a whit less employees which is it a different pay scales.

thank, god it seems to be working. >> just click on and on twitter.

for a different perspective, the op-ed page of "the wall street journal." saginaw, mich., democrats line,

what do you think? caller: i want to really believe that being honest in this discussion, the key factor is integrity. , your character. you could become a hypocrite. mitt romney is a very big hypocrite and a liar. when you talk about private equity, you're talking about profit making. you are destroying the image -- ignorant of the people because business about bargaining power to make a profit. you do that by policies like

price-fixing. there was not like they were going to help the people or create jobs or be honest. it was a money-making machine. >> also from twitter -- we have been talking about out advertisements have been used in the campaign.

what do you think about the mitt romney record at bain and is it the right time to said during the election season? caller: i am listening to all

the democrats and i am totally in shock. do they have any idea how the country and the world works? we're not a community organizer like the president. he wants to take from everybody and spread the wealth. we are in $5 trillion debt. we're up to $16 trillion and he added $3 trillion to that. if i was karl rove, i would get all the car dealers around our country that the government went in and shut down. these are car companies that were doing very well. they took them away. my mother had stopped in gm and do you know what the government did to that stock? they stole that stock from my mother and they gave it to the unions. , his buddies. do you know how many tens of thousands of people who worked on those car dealerships?

do you know how secretaries and people lost their job? you give me a couple of hundred billion dollars i could make something work. this is private equity. this is not regular money. the head of bain that is giving $40,000 dinners, i am sick of it. the president does not like what mitt romney does that he will take the money. he said this is not doing very well for the president. he could make the case but is hard to put that end out there. host: this is from twitter -- let's look at some other stories

in the news. this is from "the washington post." the u.s. ambassador to canada stand, ryan crocker, is expected to step down as nato cemented pullout. cbs news reports that ryan crocker who previously served as the american envoy in iraq, pakistan, and syria is expected to step down soon. the surprise move came monday night hours after the conclusion

of the nato summit in chicago where carter was in attendance with president obama negotiating an agreement for drawing down troops and continuing the support of the man at -- of the afghan military our next independent caller is in florida. caller: how are you? i have been disenchanted with the republicans and democrats coming in. they are all delusional. the question is whether or not being capital should be [inaudible] when barack obama was running for president 2008, the republican party with mitt romney open up everything he did including his economic plan and what counsel's he was sitting on. they vetted him as early as

possible. mitt romney is running on the economy. his business experience as part of that. mr. -- mitt romney is a businessman and barack obama is an economist. it is a propaganda machine out there and the democrats have no idea how to actually take that attracted to the american people. bain capital is fair game. he worked for a company that went in and fired employees. it bought them out and make a profit. >> let's hear from a democratic

caller in exeter, new hampshire, welcome. > caller: good morning. of course it's fair game. you have a private equity firm versus a community organizer who is concerned above all, the community. mitt romney is a private equity guy. he made 1/4 of a billion dollars. he still takes $30 million per year in retirement from bank capital. there is a lot of extraction there. there is the depth of between venture capitalism and private equity. a venture capitalist loans money out and create businesses. the private equity fees are for those businesses when they are in trouble. of course it is fair game. host: this is from twitter --

taking a look at some other stories -- we run champ -- we mentioned ryan crocker is expected to support a nato leaders fields of the afghan exit plan. looking in other stories related to that -- + + other stories in the news --

that is from "the baltimore sun" who also recommends 30 days and the spying case. it was also on the front page of the new york times. the student gets 30 days. a year after the tornado, president obama salutes joplin's power to grow. he was in joplin, missouri yesterday speaking to high school graduates.

the small city of job and held a validation of perseverance in the face of untold adversity. with the help of present obama as a commencement speaker, joplin major the class of 2012 went into the world as a living testament "usa today"talks about what these students are doing and how much progress has been made. 50,000 volunteers have helped a joplin recover and rebuild and the president highlighted some other milestones that community has achieved.

from "usa today" -- we wanted to hear from you about what you think about mitt romney's record at bain capital. republican california, welcome. caller: as voters, we have a choice. we've got mitt romney who is successful in everything he does and we have the worst president

in history inside a first term and that is who we have to vote for. i can't tell with your callers -- i don't know have to know their affiliation -- but obama supporters, i can tell obama supporters because they are completed dummies, thank you. host: let's hear from an independent scholar in ogden, utah. good morning? you are on the program. caller: yes, i think we should go back to the very beginning. like to say thatmitt ormney - any big investor knows that if they buy a big company, they are in control of their union bonds ended control of their retirement funds.

there's lots of money to be made buying, he's >> we will take you live now to keene state college in new hampshire with a speech by vice president joe biden. he will be talking about how president's plan for the economy and economic proposals for mitt romney. this is a vice president's campaign stop and for a trip to new hampshire this year. >> hello and welcome. my name is mali kelly and i am the state senator for keene, new hampshire and a proud graduate of king state college. . keene state college. before i turn the stage over, what to say a word about our local economy. this region is home to more than 70 high-tech manufacturing

companies. when the vice president talks about an economy built to last, you should know that the thousands of manufacturing employees here and across new hampshire are just people building the economy. over the past 26 months, the u.s. economy has added 4.2 million new jobs and i will say that again. the past 26 months, the u.s. economy has added 42.2 million new jobs. [applause] the manufacturing industry has expanded for 33 straight months and since february of 2010, new hampshire added over 600 manufacturing jobs. the new hampshire's average monthly manufacture export rate grew by 24% from 2010-2011.

[applause] it is truly a testament to be obama administration hard work. we have come a long way but of course there is much more that needs to be done. this is a make or break moment. is the make and regular -- of the american middle class. we can choose to go back. we can choose to go back to an economy built on outsourcing, loopholes, and risky financial deals. the same one that crippled our economy and punished are middle- class. or we can invest an economy built to last, one that values americans, manufacturing, and job-training for the jobs of tomorrow. we need to keep the promise alive that if you work hard and if you value responsibility, and if you play by the rules, you can support your family center

kids to college and save for retirement. ladies and gentlemen, president obama and vice president joe biden have put us on that path and that is why it gives me great pleasure to introduce the vice-president of the united states, joe biden. [cheers and applause] >> thank you all very, very much verymolly thank you. i am joe biden. miolly's friend. thank you very much. i don't know whether you have seats behind you but if you do, please take youryo seatu don't? i see some over here. yes, we will. ladies and gentlemen,

thank you. i think we can, too. folks, crowd-chanting: yes we can. >> i would like to, especially for those standards, will not make this too long. what i would like to do -- folks, i would like to have a straightforward discussion with you, as straight as i can be and make it as plain as i can. i like to get right to the heart of the matter. you all know what we inherited.

and when governor romney's line of argument is. he says that since we have gotten in office, things have gotten much worse. he says our policies are the problem. as former senator pat moynihan used but they are not entitled to their own facts. so, folks, i would like to talk about the facts for a moment if i may. i want to show you -- and i think you all got a copy of this graf before you came in. i would like you to take a look at that. it says job creation between december of 2007 and april of 2012. the red lines are the jobs that we lost. the blue lines are when we started adding jobs back to the economy. in the last six months of the

bush administration, we lost 3.5 million jobs. as a matter of fact, on that magnificent day on january 20th, and some of you were there, and i see so many great old friend out here. and by the way, as you know, i don't want to hurt your reputation, but i really love keene. i love being back here. it is such a great city. [cheers and applause] such a great town. but some of you were there on that bitterly cold day on january 20 when we were sworn in. before i llodra my hand that day -- lowered my hand that day before taking the oath, that month we had lost over 76,000 jobs, that month, by january 20. so ladies and gentlemen, we lost before we were sworn in 3.5 million jobs. and before any of our economic policies could be passed and put in effect, we lost another

4,000 jobs. that is what this red line here is. the red line is bush, and the blue line is us. you can see the jobs lost in the first several months of our administration. that is before any of our policies were put in place. you can see these jobs were lost on the republican watch as a consequence of a represent-induced recession. the nation inherited it, not just the president and i. we had not had a single one of our policy initiatives passed yet, and there were almost eight million jobs that had already been lost. look what happened when our policies were put in place. we siberiaed the auto recovery act, we gave tax cuts to businesses and homeowners, and

things began to change. we ended up in positive territory. as a a consequence of these actions, you can see things have marketedly changed. we climbeded out of the gaudin-awful hole this economy had been pushed into. instead of losing jobs, the private sector has added over four million new private sector jobs, and for the last 26 months, every month -- as you know we kept pushing. in march of 2010 we gave tax breaks to companies for hiring unemployed workers. in august of 2010 the president signed into law a provision to let the states hire and rehire over 100,000 educators who had been laid off because of state and local budgets that had been crunched as a consequence of the recession. in december of 2010 we passed the payroll tax that gave every

american an average of $1,000 tax cut. $1,000 less was taken out of their pay. we repassed that not long ago, allowing another $1,500 to go in the american people's pockets. 90% of the american people get a pay stub. they stephen paea roll taxes. when you cut taxes for people with a payroll tax, 98% of the team are getting tax cuts. we gave breaks to businesses who hired unemployed veterans. it was a fight, but finally our republican friends agreed. look at the results. 26 straight months of private sector job growth. more than four million private sector jobs. one million of those jobs created in the last six months. as was pointed out a moment ago by molly, manufacturing is coming back to the united

states of america. 480,000 new manufacturing jobs in last year or so. that is the strongest growth in manufacturing since 1990. one million jobs saved as a consequence of the auto rescue. by the way, you hear these guys say well, if they just did what ford did, we wouldn't bail everybody out, and we would be ok. i spoke with the chairman of the ford company, and they are investing $16 or 1 million in the united states in factories, plants and places. if g.m. and chrysler had not been saved, we would have not made it. 200,000 new decent paying jobs, auto worker jobs that you can raise a family on, live a

middle-class life on. just imagine. imagine what would have happened had they passed our jobs bill. every independent expert in the outside said it would have added another two million jobs. they refused to let us pass it. imagine where we would be if the republicans in congress hadn't played brinksmanship with our national debt last august, causing us for the first time in our history to have the united states gold standard -- the gold standard is our full faith and credit, etched in gold, put in jeopardy. we were downgraded. the economy took a hit. jobs took a hit. and by the way, if you listen to speaker boehner now, what is he saying when he met with the president last week? he said there is going to be another showdown on the debt limit. the reason being they want to change social policy. they can't get it done

legislatively. unless we change policy, they are going to vote to not pay our national obligations. imagine where we would be if the tea party hadn't taken control of the house of representatives. they are honorable people, but a group set on obstructionism. they have one overwhelming goal, prevent barack obama from a second term with apparently no care of the consequences to the economy. and folks, we have persevered. but more importantly, you and the american people have persevered through all of this. that doesn't mean a lot of people aren't still hurting. we are determined to change that. we have made important progress, but there is much more to do. but progress you can measure. just look at the chart. progress that cannot be denied. progress you can see.

progress people know is occurring. but for that man or woman going to bed at night staring at the ceiling, wondering whether they are going to have their job tomorrow, are wondering whether or not they are going to be able to stay in their home because their house is under water through no fault of their own. for that person, it is still a dire circumstance. we are absolutely determined, we are absolutely determined, that that be turned around. so november the american people are going to be faced with a stark choice as to who is best prepared for lead this nation for the next four years. i think the choice can be simplified, and obviously i am prejudiced. [laughter] >> but i will try to be as straight forward as i can on this. i think they are going to have a simple, stark choice. are we going to continue to move forward with the initiatives and the type of

approach we have taken, or are they going to move back? it is really that simple. the good news is the choice has never been more clear for the people in new hampshire and the people of the united states of america. that is because governor romney and this new republican party, they are not hiding the ball. they are not pretending. you listen to those, whatever, two, five, 10, 20 debates they had. it is hard to believe the things they said. [laughter] i'm not joking. even your republican friend, weren't some of them surprised they were debating whether or not a woman has a right to contraception. this is talking about going back to the future. but look, governor romney is telling you exactly what he would do, exactly what he believes. governor romney says he wants to go back to the good old days on wall street, i might add,

when the economy crashed in 2008. he wants to get rid of the common sense reforms that were put in effect in 2010 to allow wall street to serve its function as the single greatest allocator of capital in the free world. he says wall street should have fewer regulations like the good old days. in spite of the deficit we enharrieted from the last administration, a large part as a consequence of two unfunded war, $a 1 trillion prescription plan, and a tax plan giving people making over $1 million, $800 billion in tax cuts, and he wants to double down on it for the next 10 years. in addition to that, he is proposing that there be another -- and i'm not making this up. he is proposing that, romney,

is proposing another $1 trillion new tax cut, which will mean for people making a minimum of $1 million, they will get another $250,000 year on average tax cut on top of the bush tax cut. to paraphrase president clinton, who you all know and love, he not only wants to go back to the last administration's economic policy, he wants to do it on steroids. [laughter] folks, the governor's philosophy seems to be whatever the last administration does, let's do it and do more. literally. think of anything new he has suggested that deviates from the policies that got us into this hole except more of the same. ladies and gentlemen, these are the guys that ran us into the ditch, and they begin to sound

a little like the horse that just won the derby and the preakness, i'll have another, except the horse is a real winner. [laughter] governor romney's prescription of trillions of dollars of tax cuts to the wealthy, eliminating rational wall street regulation and making the middle-class pay for it, is put forward as a new idea. he is arguing this as a new idea. folks, like something we haven't seen before. we have seen this movie before, and we know it doesn't end very well. let me tell you what independent experts have said about romney's economic plans. they say his tax cuts alone will cost $5 trillion over the next 10 years. they are talking about the deficit that we inherited by and large, and the recession that forced us to continue to increase it. that is going to force the

governor, if he sticks with his $5 trillion tax cut -- it is going to force him to do two things. it is going to balloon the deficit, and it is going to require dra cone anderson -- draconian cuts. it cuts out millions of dollars that americans have depended on and the initiatives that have always grown the american economy, infrastructure, rhodes, dams, things that keep the economy moving, as well as education. we rank 16th in the world in the percent of population we graduate from college. how in the lord's namente can we lead the world in the 21st century ranked 16th in the world? folks, it will take us back to a world where nothing is secure about retirement, where

medicare as we know it will no longer exist, replaced by a voucher plap. where social security is cut and capped for the next generation. that is what he calls for. anybody 50 years or under, they are going to cut and cap what you can get, which means you are going to get a lot less than you thought you were paying for. and where deep cuts in medicare will push americans out of nursing homes. 75% of people in nursing homes are women who have lost their husbands, who couldn't been there except for the medicare. they are going to cut it by close to 40%. ladies and gentlemen, in a nutshell, i think our philosophies can be summarized in two ways. republicans who believe this is not your father's republican party, the new republicans believe in a government where there are noah rules for the

big guys, no risk to the party, and no accountability when they fail. we have a different approach. we have a basic american 0 common sense approach. the idea is that when everyone is in a deal, when everybody is in a deal, the country benefits. the idea is that everybody deserves a fair shot, a fair shake, and everybody should play by the same rules, and everyone should be held accountable. an idea that says when the middle-class does well, america does well, everybody does well. [applause] folks, not just the middle-class. when the middle-class does well, the poor have a way up, and the nwaelete do incredibly well in a healthy common.

but governor romney has a trump card he says. he says he is better qualified to be commander in chief because of his business experience. that is why he should be -- well, it is not an irrational argument depending on the business and your success in the business. [laughter] ladies and gentlemen, that is the crux of his rationale. he is not out there saying he is better qualified to handle foreign policy or national security. he is talking about he is better qualified to be president because of his business experience. so look, he raised it. let's take a look at his business experience, as straight forwardly and fairly as can be done. obviously i am going to be looking at it, and the folks are going to watch us on television and say obviously biden is a democrat. he is going to not be fair about it. let me try and be as fair as i can about it and take a close

look. you hear all these stories about his partners buying companies where they load up with a tremendous amount of debt. the companies go under, everybody loses their job, the community is devastated, but they make money. they make money even when a company goes drupt, when workers lose their jobs and pensions are wiped out. look, folks, the fact of the matter is, when they succeed, and the company success, they make money. when the company they get involved with fails, they still make money, a lot of money. here is the dirty little secret. when the companies fail, it costs every taxpayer money. it costs taxpayers money in unemployment insurance that we all pay for that person who is unemployed. it costs other businesses money because we have a thing, a national pension fund, where other companies pay into. it is called the pension

benefit guarantee corporation. when a company goes broke and you lose your pension, there is a fail safe where at least some of the pension you are entitled to can be made good on. so somebody pays for this. somebody pays for this. not romney and his investors. somebody does. some of romney's defenders say, and it is legitimate, that it is not fair to criticize governor romney for the work he did in the private sector. that's true. they say it wasn't romney a's job to create jobs. absolutely true. they say it is the job of his private equity companies to create wealth for its investors. that when you provide what private equity firms are supposed to do, is make wealth for the investors. exactly. that is their job. it is legitimate. it's legitimate. but folks, making money

regardless of the consequences for the workers, the companies they acquire, on the communities that get wasted is another question. folks, making money for your investors, which romney did very well, is not the president's job. the president has a different job. [cheers and applause] so when romney says we are paciorettying private capital, it is not true. the guy they quote now as saying that we shouldn't be criticizing romney, when i made this same talk a couple of weeks ago said biden is right. i'm not criticizing private equity firms. but i'm suggesting the people who run them, the same quality and objective of running a private emwie firm is not what qualifies you to be president.

when you are president, your job is to see to it that companies make a profit, but not maximize profits at everybody else's expense. you look at workers laid off to retrain them and get them rehired. your job is to think about communities, how they can get back up on their feet and get a new start, creating new businesses. your job is to set an equitable tax system so that everyone gets a fair shake. [applause] >> your job as president is to have a tax system that rewards entrepreneurs and investors who invest in science and technology. your job as president is to promote the common good. that doesn't mean the private equity guys are bad guys. they are not. but that no more qualifies you to be president than being a plumber. and by the way, there are a lot

of awful mart plumbers. [laughter] >> all kidding aside, it is not the same job requirement. so it is totally legitimate for the president for point this out. to quote president obama, so if your main argument -- this is quoting the president. he said this yesterday. he said, "if your main argument for growing the economy is i know how to make a lot of money for investors, then you are missing the point of the job of president." [cheers and applause] folks, our focus -- this is the other thing i want to hit directly. our focus on the middle-class, and some of you have known me for most of my career. what have i always talked about? the middle-class. not because i am middle-class joe. i do very well. you pay me a lot of money.

[laughter] you pay me a lot of money. but i was raised as a middle-class kid. the fact that i don't have a savings account, don't own any stocks or bond, i put everything into my house because i thought it would eliminate conflicts of interest, the house i live in. i have a beautiful home. i don't live like i did when i was growing up. i have a beautiful home, and you pay me a lot of money. but i remember. i remember. ladies and gentlemen, i find it fascinating shah when we raise the -- that when we raise the middle-class as an rlt are argument, that this is a class argument and we are engaging class warfare. ladies and gentlemen, it is not a class argument or a political argument. our focus on the middle-class is a reflection of the fundamental economic story of the journey of the history of this country.

that is what built this country. that is not some selfish thing. this is wapped -- what happened. this is why we are strong. [applause] as i said earlier, when the middle-class does well, everybody does well. there is no period that when the middle-class does well, everybody else does better than they otherwise would. ladies and gentlemen, everyone who is willing to work hard, and willing to be held accountable, should have an even chance, an even opportunity to make a living. ladies and gentlemen, i haven't even touched on romney's foreign policy. [laughter] where he says, for example, that russia is "our number one geopolitical foe." where he says we should be keeping thousands of troops in iraq. where he criticizes us for

setting a date to turn over responsibility in afghanistan to them so we can come home. [applause] i haven't even touched on romney's social policy either. one that says a woman should no longer get to make her own decisions about her body and her health. one that says it is ok for insurance companies to charge women more for health insurance than men. to count pregnancy as a preexisting condition. [laughter] i know this sounds like fiction. [laughter] ladies and gentlemen, the new republican party's attempt to run ralph the bipartisan consensus on something that i wrow and proudest of in my

entire career, the violence against women act -- [cheers and applause] the violence against women act has become part of our popular culture. businesses, everybody, has embraced the notion that a woman has a right to be free of violence and intimidation on the street, in her own home, wherever it is. these guys in the house just voted down our version, the continuation of the existing violence against women act. and they cut out big chunks. for example, this is not your father's represent party. all these things we are talking about, i will have time to cut the social policy. ladies and gentlemen, let me make one thing clear to all of you.

we will not go back to the cold war policies, the policies of the last administration, or the economic policy. well not do it their way again. we intend to move forward. we intend to rebuild the middle-class. we mean it. for as the president said in his last address to the congress, there is a basic american promise that if you work hard, you could do well enough to raise a family, own your own home, put your kids through college and put away a little money for retirement. the president went on to say the defining issue of our time is how we keep that promise. that's why we are running.

[cheers and applause] folks, many of you know me too well. you know i am an optimist. you think it is genetic with me. [laughter] i am not an optimist as my grand pop would say -- i love it when you pick up the national press and they refer to biden as the national optimist. my grand would say i just fell off the turnip truck yesterday. i have been there longer than all of them. i am an optimist because i know you. because i understand this country. i am an optimist because the american people given half a chance have never, ever, ever, ever let their country down. but they need a chance. they need an even playing field. they need an opportunity. and ladies and gentlemen, the deck has been stacked on them, and we are unstacking it. folks, you know first hand, you

know when you give people a chance, what it means. you have seen it here in new hampshire, right here in keene. you watch it happen, and you create the environment for people to take advantage of new technologies, when you have a nureturing environment when you invite companies and people who have new ideas to come in. you have seen it. ladies and gentlemen, the whole country is ready. the whole country is ready. all we have to do is is level the playing field. not punish anybody wealthy. ladies and gentlemen, i get a kick out of it, and i will conclude with this. as i said, you are going to read about me, and i am middle-class joe, like i am the kid from scranton who just climbed out of a coal mine with

a lunch bucket in my hand. what i find and i recent is those people talk about we are engaged in wealth and class warfare. they don't understand that in your house and mine, middle-class neighborhoods, we were raised by people who not only wanted to live in a decent neighborhood, be able to own their own home, not rent, et cetera. they also had dreams for us. they dreamed that their kid could start a business some day, maybe be the new steve jobs, maybe be the new multi-millionaire or billionaire. maybe be the woman or man who helped find a cure for cancer. maybe be president some day. in my household, as middle-class as we were, my mother and father never doubted that i could be president of the united states or vice president of the united states. they never doubted my brother could make his own business and

live a better life. they never doubted my sister's ability to be an officer. they never doubted. these guys don't understand us. they think somehow we don't dream like they do. but ladies and gentlemen, for our dreams to be realized, you have to have a platform, a middle-class platform, where you can live a decent life first. that is what this race is all about. that is what this is going to be in stark relief all about. and ladies and gentlemen, i have faith in the people of new hampshire. i have people in the people of the united states of >> i have e of new hampshire, i have faith in the people of the united states of america. we will win because we happen to be right on the subject. thank you all. i appreciate it. thanks. ♪

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>> joe biden campaigning in new hampshire. a reminder that all our coverage is available at our website. you can see speeches from the

president and mitt romney, plus the electoral college maps and the latest delegate counts. all that on our website. wisconsin voters are heading to the polls next month to decide whether to recall their governor. friday, governor walker debates , tomemocratic opponentm barrett. >> i want you to look right you and think not about where everybody has been, but where they are going. that guy in front of you could win an academy award some day. the girl behind you could be a future president of the united states or the mayor of new york city. the guy sitting to your right could be future nobel laureates.

certainly the one to your left. >> watched commencement speeches on c-span on memorial day weekend. saturday through tuesday at noon and 10:00 p.m. eastern. >> people say here is a company that made a stupid decision, did something dumb, did not collapse, a fired people who were responsible. why this government me to play their role? >> this some extent that is true, and is because government has played a role. if j.p. morgan had lost more than $2,000,000,000.50 years ago, you would have seemed much more panic in the economy, more concerned. what we did in the legislation was to require institutions to

be better capitalized. one of the things that is the result of the government telling them you have to have more capital, that gave reassurance. >> barney frank spoke about the over $2 billion loss by j.p. morgan chase as well as the state of the u.s. and world economies, the dodd-frank law, and the gay marriage. >> now a discussion on trade. mark anderson says the united states needs to strengthen intellectual property protection. >> my name is michael davidson. i am the ceo of gen next.

for those of you, to give you a context, we try to find successful people who are forward thinking, they want to do better, be better, and we try to give them information, access, knowledge, a network to be consequential on issues. primarily in economic education. many of you here are already members, but those of you who are not members, that will suffice. that is part of the process, exposing members and guests to leaders who moved ideas and advance them and shape the debate across the board. tonight that is mark anderson, the ceo of strategic news service, the first online newsletter on the internet, a subscription based newsletter on the internet, and bill gates

reads it, any major thought leader reads it, he is prominent in the space of prediction. 95% of the time since 1995 all his predictions have come true. two cools ones. he predicted the liquidity collapse before anybody else did. he also predicted steve jobs returning to apple. he runs the conference on technology that "economist" has named the best economists in the world, and fortune 500 has named him one of the smartest people we know. you will see him on bloomberg, c nbc, in every sense of the world he is a thought leader and

entrepreneurs. we're fortunate that in here tonight. put on your thinking caps because there will be questions, and i will moderate those questions. with that, mark anderson, everybody. [applause] >> hello, everybody. nice to be here. thank you for having me. my marching orders are people to 15 minutes of be talking away at you and then we will talk together for the next 45 minutes. i trust you have complaints, and we will recover -- we will cover that right after. i want to talk about something that is half obvious to you. yet he is behind this lead you to a new idea of america and other nations, and what they should do today and tomorrow

which they are not doing get an which they may have no choice if they want to succeed. this sounds dramatic, and i think that, as well placed. i spent time making predictions and technology and markets. you have to look around the world and looks at levels of things. i was forced to look at the countries around the pacific- asia graham and try to figure out how they ran their business models nationally, not what was in the newspapers, but the truth of the matter. beginning with post-war japan, and in south korea, picky up all these tools that i will call for lack of a word. this first step is hard for americans to get rid which took

about free trade and win-win situations. you have to put a different thinking cap on because that is not the view of the countries i will talk about this evening. it is a win-lose situation, all whole idea of import-export numbers. if you want to be successful in modern times, the whole idea is how can i be unfair, how can i do things where my partner gets hurt and where i do well? that means i have a lot of exports and no imports. they have a lot of imports and i do not. this story has been going on for a long time with smaller nations, and it is fascinating, japan, there was a time not so long ago when japan was reaching full flower in the exercise of this model, and they were focused on the united states. we were a real power then.

we lost about five industries, major industries come up overnight, because they were so efficient at what they did. the business model is a perfect match for the u.s. business model. the things we do make us very strong in some ways and very vulnerable in other ways. in that case, japan was able to quickly not only compete well, but destroyed the american presence in the industries of steel, ram chips, television sets -- a world of -- we were the leading manufacturer of television sets. we lost all those companies to all those industries and a matter of a few years. finally, intel came along and

fought back and the new intel emerged. japan continues in that model, but in a wiser way, more nuanced way, and this began a long -- and if you watch south korea today, they are doing exactly what japan did to america. if you vote for tv's, the not vote for japan, a vote for south korea. lcd screens, flat screens, so clearly samsung and the guys in south korea have taken the japanese model and one-upped them. these are relatively small countries, but then came china. china has not only a top-down government, but they have that

ability to bba. quantitate matters in this case. we were able to tolerate the experience of the economic -- having somebody steal our intellectual property, dumping it into our markets, destroying our industries, and still survive. we're here today. when it was a small problem, we survived it. we're now looking at a quantity situation which is so large and focused that i do not believe we can survive. i do not mean we america. the number of nations which invent things is now imperiled. the global economy, based on essentially technology and inventing things, based on intellectual property, and we have a level of theft occurring right now that is ramping up and getting worse, that is so intense, focus, clearly plan, so effective that richard clarke

last week set probably every american corporation which has crown jewels of the interest in china has already been robbed. that went out from the head of the gshq in britain. is the first chapter which is already over. all those crown jewels have already been taken, no matter whether it is a chip design or an airplane design. whatever it is, it is gone. we are at the stage where we asked ourselves, if you are a microsoft person who is a systems analyst, can this thing run forever? the answer is no, it cannot. the level of effort we are looking at, and it is called parasitism, it is not likely that we will continue to be able

to enjoy the economic efforts of those images in the way we did before. i go further to say that is already happening. you can look at markets today and see the destruction of those markets. everybody knows there are bodies over the road. a company from china, which is about to be champion in that market, and the bid is 40% or so lower than all other bids, we are seeing this over and over. you saw the announcement from the solar industry this week that they are firing 2000

employees. in every place you look, you might think is strategic, the same problem. what are we going to do? complain? whine? whining will not work. threats will not work. saying you're upset will not work either. bringing wto actions are not very effective for a couple of reasons. there's no teeth in it. you cannot bring in enough per week. there are so many infringements and it takes several years to go to the appeals process to get one done. we just found tschida guilty of dumping solar panels. -- we just found china at guilty of dumping solar panels. teh wto is not the right engine. this means as a country, not

just this country, but others cannot anybody in the inventing business has to rethink it. the way we did business before, eight more gentleman's game, that is not how it works now. good luck. make the best man win. how do we deal with that? two steps, one step is often discussed. we have always ben and inventing nation. that is america, what we do. germans have also been that, and we need to start seeing ourselves. self-image is a powerful tool. , i do not think we have an image today. we do not say that we come from and inventing nation, but we do. that is the simplest way i can describe the economic history of america, and that is what we

have to get back to perry, i am from an invented nation and i will change everything. we have been doing it for so long, but we do not see ourselves that way. we have to imagine ourselves with that role model in mind and understand who we are. spears, weritney are not celebrities, not drug addicts, not fast car drivers, and we are not jerks. we're pretty smart, we work pretty hard, often too hard. working 90-- we're hour weeks sometimes. we have to work smart and that kind of smart. .ot mcdonald's smart we have to work in a way that advances the whole idea of this nation being and inventing nation, and if we do that, great things will happen.

that touches your own personal agenda, whether kate-12 education, higher education -- make a list of things we are worried about -- all those things peel back off the original opinion of we are an investigation. the positive story is if we do this i believe it is possible to recreate the economic elite we have a joint for a long time. people get this hard and look at all these lost jobs or have been stagnant for 20 years. probably all true. what you are really seeing, and this is the part i get through to you tonight, this is not because he just had a president who did not know anything about economics, banks that got out of control. this is a bigger story, the story that what happens when in an inventing nation all the

intellectual property goes somewhere for nothing. that is why jobs are not going to come right back. that is why there is no old normal, there is gone to be a new normal, and that is not want to be the one you want. if you want a different one, you've got to have high value intellectual property created in a regular way. this leads to part 2, once you invent something as beautiful as it might be, if you give it the way, or if you expose it or if you lose track of it or if it is stolen from you, the day after it will not do you much good. it does not matter whether you are microsoft and operating systems or airplanes. the return on investment for those will begin to fall, and i will say again i believed it is not in the future this will

happen. this is happening right now. the return on assets that we may have enjoyed 20 years ago we are not enjoying today and that is why. it does not matter what you make. there is a list in china right now, it used to be 115 things, it is now 407 things of academic interest. you are in it. it is big enough to include everything in a phone book i can think of. you have got to be aware if you are in charge of innovation in your company, this is the primary risk you face, and if you are a national leader, this is the primary risk you face. the risk is not to read-create jobs. that is not the answer. the job is to recreate jobs, creating high dowdy, high-margin intellectual party which you can lived andhe town's he

that will go on for a while port in mention. it will not turn to 0 on wednesday. you will not be competing with your own engineering talent on friday when it shows up for half price in town. all these things are happening right now. how do you protect it puts a lot of people feel is impossible. i have been working on this with people who know what they are doing, and it is not possible at all. the military does it all the time. what is hard to get ceo's focused on this. it is an educational problem. once you convince them they have to act as the way that the military acts, the teams being assigned to them our military great people, and that is why they can cut through normal corporations like a hot knife through butter trick it takes them a little effort to get you to start. it does not matter who you are. when you saw rsa at their master

keys lifted almost effortlessly by china and that used against lockheed, that should have been the alternate week called. it is not as if you could spend money and solve the problem. even rsa was attacked. we know google was. google was brave enough by the weight to stand up and talk about it. it gains huge points for this, and part of it is just dandy up and talking about it. it is like everything else, if everybody keeps their private little secret that they got hit, nobody will solve the problem. we need to make sure that people have the nerve talk about it. intel filed an fcc notice that

they were hit. we have to be opened up to these things, describe the problem, and get on with it, and there is a solution. there are technical ways to identify your crown jewels, give them a high dow you internally, put them onto a server, and unplug the server from the internet. this is exactly what the department of defense does. it works great. does not cost anything. pull the plug. restrict the number of people who have access and review them once a year. the attention to what car you are driving. there are several institute, and the expensive stuff comes behind that and it takes years, but the simple things are very effective. i think those two things, if

america wants to really launch again, we could beat high energy, high income, high success, but it is not because we are going to pass some new bridge project. it will be because he took this to heart, identified ourselves as an inventing nation, and are to protect the stuff we make. that is my 15 minutes, and now we should open it up to you for conversation. >> that was fantastic. thank you. round of applause? right up our wheel house. we will get you in one second. i have a question. you mentioned china. i have a watch given to me by a member, and it is chairman mao waving at me, and it is a reminder you only have so much time it, but you have to compete. we did a program with the former

chairman and ceo of intel, and one i remember, he did not win unless you choose to compete. what i'm hearing from you is we have not chosen to compete. you run a conference call future in review, a cool name. imagine the future and we are successful, and review it. what was our action plan to get there? >> it is a lot like what is described. we're trying to get stories in "fortune." "business week." it was 12, 14 months ago. it took a while to get into print. people need to understand the problem. that is step one. people standing up and saying -- i get it, this is what we will do about it. they become all models for

someone else. giving you an example, jeff and melt, he gave the blueprints for jet -- jeff immelt, he gave the blue prince away for chinese aircraft. it was the only thing holding them back from competing. he gave it away. the day that he was made the jobs are, on the steps of the white house, i personally told him it was a bad idea. he would be a good example. i think he would be perfect guy to do this. i get it. i am stan. i will not put this stuff at risk -- i get it. i understand. i will not put this stuff at risk anymore. we will protect that technology and get the highest roi we can for our shareholders.

it is an all new idea. if he did that, a lot of other people would get the message, i think. ok? >> brian. brian [unintelligible] [laughter] >> i wanted to ask, i am an entrepreneur. it seems like the tone of society has changed. and i was a kid, they were heroes. now you have occupy wall street, attacking them. saying it is unfair to make money and go after folks. how do you change this town in society where entrepreneurs are the bad guys? >> i do not think you are right about that -- about that. there is a lot of money cost conversation. have you seen -- >> have you seen a movie in the past 10 years where business was portrayed positively? >> not talking about business, talking about entrepreneurs.

nobody has gone to jail yet. i think there is a lot of anger over wall street. 11 million people share the blame. in the public view, that it's vague, fuzzy. people do not keep track. they're busy. they do not have the time to recognize someone on wall street selling derivatives -- selling derivatives that they knew were crap. the political pundits and strategists make great hay from this. you are fighting a machine that is out there doing the right thing for the wrong reasons. i think it we need to have a cultural change, but the people who see themselves as a great company, they enjoy it.

people around you will see that and think that brian is pretty cool. i do not think you have to go to washington to make that happen. >> is the future going to be better? [laughter] >> thank you for coming out to talk to us tonight. some one could infer, though you do not say this, that government action is more necessary based on your description of world problems. as soon as he said combining government and cronyism with capitalism, you get crapitalism. we see that happening right now. the fear is that industries, because of this threat of congress -- competition and our need to get urgent about a entrepreneurism, we continue to

fund things without money that we have. we are greasing the skids. >> i want to say something. someonlindra. what was the other company that just fired -- first solar. you are seeing the american solar industry getting vetted -- guided by a fish -- gutted like a fish. it is not because the technology did not work. it was because right in the middle of the plan, someone dumped 10 trillion tons of silicon into the market and destroy their business plan. you can say that that is right, but it is really a plan. it is a plan that china had to make sure that those guys did not succeed. and it worked. do not blame cylindrical, blame china. be smart.

i hear that so much. look larger. look around. in terms of the government part of this, not trying to espouse a particular program, but the only part that i see the government playing is a role in trade. governments may trade deals. my hope is that we have created a loophole for this purpose. that one of the results of that ip, which i will not talk about, is the government in america, australia, the u.k. and europe, getting together to agree that these nations will have trading with other nations as a top priority. if they do that, good things will happen. >> i encourage you to ask questions.

>> a couple of questions. these sound like my partner, behind me. tariffs or something of that nature. it seems like more of an exclusionary path that you are talking about. by doing business with like. i understand that a little bit. on the flip side, you mentioned the fact of unplugging the server. i want you to talk a little bit about the idea of how real the danger of reverse engineering or being able to take a finalized product is, working a backwards, so that on plugging the server would not need any thing. >> it is real, but it is a small

enough problem. there will never be a time when it does not leak somehow. where employees will not have to get stuff somewhere. it is a story of degree. right now the level of staff shows it as very high. they have all been fulfilled. the shopping list is done. it is a 100% success, or from our perspective a 100% loss. instead of saying that there has to be zero, i think that the nation could tolerate 30. i do not know the numbers. we are trying to get people to

think about the economy. not in terms of dollars, but intellectual property. it was always small on the balance sheets of corporations. the market down to zero. ask yourself, what is the competitive strategic value of that asset on the international market to the people that want to compete with me in my own business? what is that value for a jet engine? $100 million, something like that. probably about $10 billion. to be in his market for 10 years, rather than sit it out? to answer your question further, understanding from the steel group, one of the best consultants on aerospace, india

has spent nine years trying to reengineer a proper jet engine. is not always that easy. if they would not just give this stuff away, maybe it would be harder. >> what caught me was the idea of finding that energy again. it made me think of a country, israel, where they have more start-ups for person than any other country. from an advertising perspective, how do you recapture that energy where individuals are encouraged to naturally find their way towards entrepreneurship? >> i think that seattle is already doing it. no? i have lived here a long time. seems like the venture guys are a little bit behind.

a lot of that money comes from california. it is like mobil games and these different segments. we are developing people, somehow, and this is a pretty good answer to what you do. i would not say we are doing it wrong, i would ask how you accelerate. the technology transfer on energy, costs have gone way down, increasing the number of start-ups. there is a lot of dna from those days, from mobile companies. it is pretty cool. asking " we did hear made it faster.

i love the idea of starting companies like this. it is pretty easy now. but i would like to make it easier. where you have a two page piece of paper, you fill it up and say you have two years to get it right. but right now, i want to see if this works. creating a beautiful entrepreneurship program. it would not be that hard. >> just had a question. you mentioned a relationship with china where the playing field is not level. that is broken. >> because china has not signed on. >> i completely agree.

one of the things you did not mention was the current manipulation. i would love to get your thoughts around that. do you think that the government is doing enough? what is the solution? >> when you are a pauper like me, you have to find these claims to fame and market them to people. one of them for me is the use of the word currency wars and what it means to me in modern time -- modern times. i have been following this story for 20 years. it became more and more interesting as i've learned about the story. peg is a great pr word.

here's what it is, constant intervention messing with a not free-market to make sure that your side wins. on a daily basis. if i am any country and i decide there are two ways to get rich, work really hard and do the stuff we are talking about, or i have another idea, i will do what china or japan did, or south korea. i will just mess with the currency. that is easy. i can get 15%, 20% rent. every time there is a partner dance with china, what the unfortunate dance partner. the first sign is currency getting slammed. it went up 30% in one year.

ouch. that makes things expensive at home. now we have a situation that is really out of control. every president and prime minister knows this. how do you play? try asking them to stop intervening in the markets. they will laugh a u. where are you from? are you going to do it? if not, you are an idiot. we are in a situation today where we have taken the wrong debt for the wrong reasons to get ahead on nation vs nation competition. the result is a completely out of whack currency system.

everyone has to stop. no more intervention. we find you intervening in the markets? we will gang up on you if you will not enjoy it. we need that kind of situation. the united nation of money. we do not have that right now. >> i would like you to address one of the greatest assets i think we have right now for the future of the united states, creativity. in general. how much of a commodity do you think it is and what can we do to leverage it? >> great question. hard question. there is a book i have not read yet that i think is -- book i have not written yet that is very good. it is about creativity. i think that this guy knows what

we are talking about. i think that he has an understanding. the scientific method is very simple. i will explain it to you now. you have an idea, you test it, compared to what you have got. we teach this to our kids in science. this is like the answer to what they are supposed to do. they forget one thing. where did the bloody idea come from? it is the most important part. i have never been to any class that teaches that. when he was 16, he asked and self -- if i was running along next to it, what would i see?

where did he get that question? what makes a kid who is 16 ask a question like that? there are things that we can do the lead to more creativity. the one thing that we know that this book touches on, if you sit and stare at the problem at your best, that will not do it. you could do it for 10 hours or 20 hours. it does not matter. it just gets worse. the hardest moments are when you step aside, go for a walk. get off the bus, it is a dream. people in these conversations offline. we need to improve the idea of going off line in your thinking. if we learned how to teach that,

it would not be a teachable thing. >> you talked about the united states trading with countries that protect ip. a two part question. one, do you risk trading with countries and not to another value? do you risk not spreading democracy to places like eastern europe, russia, china, and other places where we want to spread our ideas and values by shutting down the kind of trade? >> first, i did not mean to imply shutting down. i assert that -- assume that there will not be a shutdown. it takes that to get china to pay attention.

there is a meme, myth, people have been living under a bunch of them about china. the same way we did about eastern europe. i do not know if it is someone trying to help china, but this is literally the opposite of what is happening. a couple of examples, human rights are getting better because we're trading with china. no, they are much worse today than 10 years ago. interesting. how about more companies now trading with china? sorry, two years ago it was a fraction of the total that was before. let's say that china tells us they are not turning away from exports and to domestic consumption and we can stop

worrying about this stuff? if you check the numbers, turns out the percentage of gdp is actually declining because there is less consumption today than there was last year. ok, you get my point? these guys are not about to give up. whenever you think you are achieving, your not. it is a wish. we wish that were true. it is not true. is that the definition of insanity? you do something different. >> i wanted to ask you a question about what you just said. you said you are not planning to stop trading with these countries? how do you define that? >> hard. >> that is how you get in the trade war thing, right?

we know that that does not work. >> what you do not realize is what you do not know. let me put it clearly. america has been bled to death in a trade war that we do not recognize and are not allowed to talk about. all the tools i am describing are unfair, on balance, not fair trade tools. >> i review. >> it has come to the point of almost destroying our economy. funny?w what is military guys are worried about a cyber attack bringing down the grid. it could be done. the have a lot to worry about. until now, their job has been to protect the nation through military ways. you know how they say not to fight the last -- the next war

like the last war? that is why we're doing. the chinese do not want to fight a military war with us. they have no interest in that at all. my favorite metaphor, the last thing the vampire wants to do is upset the patient who is dying. they are making too much money. why wait until we have so long last? if we do not get the economic stuff working, and there are a lot of guys in the pentagon that do not know the difference. more guys in the department of defense notice more than the commercial world. they consider the economy to be the number one security issue. they said this was their number one concern. elevated to no. 1.

a lot of people do not get it. we are in a trade war. say it. the ask, how do we get out of it? what do we do to make things normal again? >> the question i was going to ask -- sorry, if you would let me do that -- my issue is improving education. i think that that is our best attempt at creativity and invention and i think we are failing in this country in our -- i would say in all of our education system. particularly k-12. what is your take on that? how do you improve that for the future? >> i can solve the problem in four minutes. i have the advantage that i stand -- stood for six years with project inkwell, where we looked at the problem that you are asking from a technical

perspective. we work with kids and superintendent. i know the answer. ignore everyone and what they say to you, just to the following two or three things. number one, provide broadband to every school. no. 2, provide some kind of appropriate device to every student that can link to the internet. number three, provide access to those students at home, no matter what your parents make in terms of money. so that every kid can do his or her homework. number four, provide professional development for the teachers ahead of time so that in the months before they are properly trained. by the way, there are no exceptions. no one gets out of this. if you are going to be a teacher in this new school, you have to take a professional development. no. 5, provide support at the school so that when teachers need curriculum advice they have

someone to turn to. i'm done. ok? that is all there is to it. i will suggest that that is not even very extensive -- expensive, the usual objection. now this kind of like we want to do that, but it is expensive. no, it is not. today even get a really good laptop court-ordered $50. broadband for not very much money. the look at this from a business model perspective, and i was just saying this to jay, hopefully your future governor. -- he is a tough guy -- i think that what is meant to happen is there is a business model where the school becomes the broadband distributor. they make some money doing that. and it can be a public-private

partnership. so, you get all of these good things out of this. basically, you have the student and teacher connected to the world of knowledge correctly. there is no way around it, it will be the future, but if you wait 30 years, it will be 30 years of misery. it is the only way out. >> quicker questions, quicker answers. >> along the lines of developing creativity and talent, i believe one of our strengths is that we are an immigrant nation with talent coming from other places in the world. as the world becomes more liberal and economies become more strong, the you anticipate having any effect in attracting creative talent? >> do you know how many students

come here for university? all these countries we are talking about. i was just in australia and they were the no. 2 or no. 3 revenue line. they send 140,000. huge numbers. yes, i think that if you put your head down and do the job, do your work and be creative, people come to us from all over the world to learn how to do that. you bet. >> james had the misfortune of sitting next to me on a five hour flight. it melted under the pressure. you have the cameras, you cannot melt. respond to the observation that wal-mart is the greatest anti- party program in the world and it is the tag that we have these low-cost goods and are able to serve all kinds of people with foodstuffs and goods?

>> i disagree with everything you say, so. let me try to say that in a way that was reasonable. i used to think the same thing. i thought wal-mart was great for poor people. then i saw what it did to american businesses. here is the story. you take your sleeping bag, you go to wal-mart, and they say it is made in north carolina. then they say that i would like to sell this -- sears does this as well -- you are charging as $19.95, it will be $9.95. i cannot do that. my family has to eat. i do not care about that, right? in china they are happy to do that for 19 reasons. so, wal-mart becomes an agent of the pla, an agent of the chinese government economically

checking how many things are made in china. the people that would have made those things are here on the street. >> [inaudible] >> the guys that used to make north carolina furniture are on the street. they are not selling shares of wal-mart. i do not know the numbers. gets guess, maybe 30% i am not against competition. paris the intrinsic problem. you look at free trade. there are people who would kill to get a dollar a day. but your the president of this country.

you say to yourself, politically i am inspired to believe in free trade. we had both parties. we had busch sr. and had clinton. they are all for free trade. i think that it not think it through. ross perot was absolutely right. if your willing to say note terrace, no questions, no boundaries, of course, it is going to happen. your average wage is going to drop from whatever it is today to 50 cents an hour. are you ready? i am not. if you don't want that to happen, you have to talk about trade policy, industrial policy. if you want to save steel, that is not necessarily free trade. in this situation where we need to be honest with ourselves internally, if having a middle- class is important, we can do

that. we just did the free-trade thing, and now they are gone. >> you said something that brought up my question. he said we are in a trade war and you have to recognize that, but if we make any changes, it is time to get back to when it was normal. when you think it was normal prior? >> i have no idea. [laughter] i guess it is like saying it is ok. there have always been wars. a lot of wars are caused by trade problems. what is normal? it is pretty ugly. but if you are in the mind that you would like to have a somewhat sustainable project,

the nea have to plan for it. [unintelligible] >> exactly right. i am not saying it will not win or lose half the time, you will. that is what i call normal. if you lose every time, that is not normal. >> you are describing a situation where there is a slow bleed, once you finally realize you are about to die, you are pretty much dead. >> know, and it is when there is a fast lead that you are dead. >> what are your predictions going to be, the seminal moment, the catastrophic moment or something, the catalyst where the broad public or the political environment is going to realize something is going to happen [unintelligible]

>> let me put this in an interesting way. i have spent a lot of time on boats and other dangerous situations. i have learned something about life-threatening crises. the earlier you realize your in one, the more likely you are to get out alive. for people that do not want to talk about it or recognize that the boat has a hole in it, i am going to suggest to you that we are in that moment right now. if you look at the economic carnage right now in the countries i am naming, with the exception of australia because of mining, it is breathtaking. we are in the middle of that cusp, and half the people you know -- you ask when is it going

to happen? it is happening now. the question is, had we polkas are self when you are in the middle of it? -- how do we focus ourselves when you are in the middle of it? i was on the boat when it hit the brocken almost sank. people were thrown off their chairs when we hit this thing and the captain said get back on your seat, everything is fine. no problem. at that speed, we probably ripped a 15-foot hole in that boat. " we did, we were sinking. and the captain said don't worry about anything. >> where are the lifejackets? we need to ask for the life jackets are right now.

>> last question. the founder of paypal wrote a piece called "the end of the future." one of the arguments in the piece is there is a major change between change and progress. we tend to look at technology as a panacea that will solve everything. we may be to focus on technological change and we are not seeing new inventions, new ambitions. do you think he is right? this technology now the big solution here? >> when i said that i think we are -- the whole connection between pure science and applying the technology in making money. we are doing a good job of that right now.

you can look almost anywhere. it is my job to look out at these things and see what is going to grow and what will not. they are everywhere. even in this economic climate, we have a lot of people starting new companies, inventing new things. it is really exciting. here's the problem i never thought would help. when i was a kid and we were shooting for the moon, i thought i was going to go to the moon. i was prepared to be an astronaut. i was ready to go. if you had said to me then, half of your country is going to start thinking dinosaurs walked with men and they will ignore signs entirely. all the liberation and all decisionmaking is going to come to a halt because we cannot be civil to each other. i would have said you were nuts. but that is my description of today. i am not worried about if the

technology is useful. i am worried about, do we have the maturity as a people to protect ourselves and to do the right thing and make decisions together. and i do not see that we do. so i am very worried about that. >> thank you so much. we have a bottle of line because we know that some of these issues require little cocktail. it says sophisticated, dynamic, and old, with firm structure and multiple layers, resulting in a commanding but acceptable offering. please enjoy this. everyone, a round of applause. [applause] you all can get up and go get a drink.

>> tomorrow morning, secretary of state hillary clinton defense secretary leon panetta, and chairman of the joint chiefs of staff's testifies before the senate foreign relations committee. the alaska senate to ratify the law of the sea convention. that hearing is live at 10:00 a.m. eastern. -- they will ask the senate to ratify the law of the sea convention. mark sullivan on secret service agents accused of hiring prostitutes while they are on a presidential trip to colombia. the director will testify before the senate homeland security committee. wisconsin voters had to the polls early next month to decide whether to recall governor scott walker, less than two years after he was first elected. on friday, governor walker debates his democratic opponent, former milwaukee mayor tom barrett. you can see the debate live from milwaukee at 9:00 p.m. eastern on c-span, c-span radio, and c- span.org.

>> from 1971-1973, president richard nixon secretly recorded his phone conversations and meetings. this weekend on c-span radio, hear more of the nixon tapes, saturday at 6:00 p.m. eastern, with conversations between the president and richard helms and also fbi director j. edgar hoover. >> my inclination is not to say so. i think i should stay out. [unintelligible] >> you should remain absolutely silent about it. >> in washington d.c., listen at 90.1 fm, and screaming that cspanradio.org.

>> what are some of the key issues ahead as the senate debates the food and drug in ministration bill? >> the manager's amendment that we all see on the floor today is about the national drug tracing system to track different models of drugs with the serial number as the pastor the system. we will see some amendments on giving the fda more power to investigate things and to give their employees a whistle-blower protection. >> what is the overall purpose of the fda reauthorization? >> it is to give the fda more money to conduct reviews of products like drugs and medical devices and to get money from the companies for a fund to get the product approved. the fda said they really count on this money to do the things for approving new products. >> let's dig more deeply into some of the amendments we are likely to see and debate this

week. >> we will see one from senator john mccain on importing prescription drugs from canada. senator brown of ohio is a co- sponsor now. it is something a lot of senators support, but it is still controversial and i don't expect it will get adopted on to this bill. other amendments from bernie sanders of clinical trials. we will see different things pop up. we might even see a flood insurance program, which really does not have anything to do with the fda, but they are trying to get it passed. >> an article today writes about the issue sunscreen regulation. what can you tell us about that? >> some of the democratic senators want the update stronger, labeling restrictions on sunscreen. they want the fda to have a lot tighter restrictions on how those products can be marketed.

>> fda officials responding to the senate bill. >> they very much want the bill to come through. they have worked out agreements with the industry and lawmakers. there have been working on this bill for almost two years now and there really want this agreement to get through as quickly as possible. the authorization does not expire until september 30, but we are trying to get it through as soon as possible, so there is no doubt whatsoever that this can be done. >> from what we've seen so far, is the house bill being developed significantly different from the senate bill? >> there are only a few places where is different. overall, they are very similar. there will have to be a conference committee to iron out those differences. for example, the antibiotics language is different between the two bills. it is not too far apart, nothing incredibly different that would keep it from coming to a final agreement. >> when did you expect the senate to finish work on the

bill? >> i think it will be done this week, we hope by thursday, possibly friday. they are often recess next week, but definitely before then they want to wrap it up and get it over with. the house will take a good bill next week and then come back from recess. >> emily ethridge joining us from capitol hill, thank you for being with us. >> thank you. >> earlier today, witnesses at a senate energy committee warned of major setbacks in the development of alternative energy in the coming years. federal funding runs out for several programs. we will hear about the government's role in supporting new technology development and how oil and gas revenues could be redirected toward federally refunded research and development. it is an hour and 20 minutes. >> good morning. thank you all for coming. today we are here to discuss the

report of the american energy innovation council on the role of government in developing innovative energy technologies. the business leaders of the council have a long track record of commercial success, building technology companies that compete in the global marketplace and make a strong case in that report that with the government as a partner, the united states can continue to lead in the clean energy sector. as all of the witnesses today point out in the written testimony, there is a global race on to produce the next generation of energy technologies. though prices on our electricity bills or at the pompidou not always reflected, our current energy system is very expensive. the costs all of us pay in national energy and climbed an economic insecurity are unacceptably high, and its

likely the fast-growing economies throughout the developing world will be looking to a new generation of technologies that avoid these costs. it's not only a concern about costs, it's also a significant commercial opportunity for u.s. entrepreneur. fortunately, developing new technologies has historically been a great strength of the united states and, as the witnesses have pointed out, an area where the government has been an effective partner. although i think there has been a broad consensus in congress in the past in favor of investing in these emerging technologies, we have been spending much more uncertain signals recently.

important support programs have either already expired or appear to be in danger of expiring, and despite repeated calls to address the real problems in the so-called belly of debt in initial technology deployment, instead of expanding on crucial current programs, some in congress are looking to in the programs that we have in place. meanwhile, our competitors and potential competitors in the developing world continue to press ahead aggressively to court new energy companies and the talent that will develop the next innovations. as these technologies continue to improve and become more cost competitive, we should view this as an opportunity to take a global -- take a global leadership position. we have some of the best minds in the world walking on this problem. it's very much in our national interest to show them a clear path which for developing and deploying these technologies here and exporting them abroad rather than forcing them to go overseas to find opportunities. i have said many times i believe the only losers in the clean

energy technology race will be those that fail to participate, and i hope that the recent paralysis' we have seen in the congress does not lead us to miss this opportunity. the witnesses testifying today have given a great deal of thought to what leads to success in developing new technologies. oliver forward to hearing about their conclusions and what we can do here to put american our jurors in the best position to succeed in this vital area. let me call on senator murkowski and acknowledge that this is her birthday. we were delayed just a minute while we are celebrating that in the back room. let me call on her for any comments she has before return to the witnesses. >> thank you, mr. chairman. it would be a fine birthday present if we could figure out as a committee how we really advance of good, strong energy policy for this nation, using the ingenuity, just the

opportunity that we have as a nation to build on all of our strengths. so thank you for that recognition. i would like to welcome mr. augustine to the committee here this morning, also mr. jenkins. it was a report on competitiveness, rising above the gathering storm, that serve as a foundation for legislation that passed by an overwhelming margin back in 2007. it would not surprise me if your work on energy innovation encapsulate in the report we are going to hear about today ultimately could lead to a similar result. i think most would agree it is time for us to renew a coherent, long-term approach to energy development, truly and all the above approach. innovation, of course, is absolutely at the core of that strategy. i think it is one of the few areas where the government can and should be providing greater funding. at the same time, i am aware that if we do decide to spend more on energy innovation, we

will have to make some very difficult choices about the amount of spending and the duration as well as what our priorities are. a couple, each of these areas. investments is code for spending. that will require taxpayer dollars with the debt situation sitting at 15 trillion dollars right now. greater spending in this area will need to be offset. it will be challenging to find space in the budget, but it presents an opportunity to be financially created. let's figure out how we make this work. let's focus on the priorities. for years i have suggested that a portion of the revenues from domestic energy production should be devoted to energy innovation. it is the key part of my legislation that would raise an estimated $160 billion for the treasury at today's oil prices. even a fraction of those revenues to go long way toward developing resources and technology that will rely on --

that we will rely on in the future. i am glad to see the revenues listed as a possibility in the catalyzing american energy report. beyond how much we spend, we need to think carefully about our priorities. when we look back at where taxpayer dollars have been spent in recent years, i think it is clear that we have not really gotten to that all of the above policy. we can see that and how much the federal government has been on solar and wind as opposed to some of the other areas. -- how much the federal government has spent. we can see that in the direction the administration has taken in choosing to focus on an electric project to focus on electric vehicles as compared to other promising alternatives. it makes good sense to invest in energy are an dee perry that is clearly in our interest. it is against our interests to keep subsidizing technology year after year without a clear path

toward allowing those technologies to stand on their own in the market. to strike the right balance it will record for existing programs, possibly the phase-out of many of the subsidies that are currently in place. some experts believe the federal effort should be oriented more toward basic research and away from deployment. in the tight fiscal climate, the government should spend on priorities. i tend to agree with that approach. when it comes to energy innovation, we have a lot of thinking to do and a lot of decisions to make. i hope that with the hearing this morning we will have an opportunity to explore some of them. again, i appreciate the good work that has gone into the report. thank you, mr. chairman pierre >> our first panel -- thank you, mr. chairman. >> we have a retired ceo and chairman of lockheed martin corp.. he has been a witness here many times in the past, and we welcome him back and look for to any comments he has about the report and what he thinks

congress ought to do. go right ahead. >> thank you, mr. chairman, and members of the committee for the opportunity to share some thoughts on the future of america's energy. the council is an informal art of seven of us who came together because of our concern over the under investment of energy r&d in our nation. the names of the other six members are in the written statement out like to provide for the record. >> we will include the entire report in our record. >> thank you, and i also should acknowledge that we received excellent technical and administrative support from the bipartisan policy council, an organization that was borne by four of your former colleagues.

-- that was formed by four of your former colleagues. we are highly informal group. i think my comments will closely reflect the views of that entire group, because there is little difference among us on this issue. we have prepared to reports. the first of those had to do with the underfunding of research and development in the energy area in our country, but by the government and by the private sector. we also came out very strongly in supporting -- which has exceeded most of our expectations to date. the second report we put out deals with the need for the government to involve itself and energy research and development. i will speak more to that in my remarks. it is probably fair to note we are not a group that in general welcomes government involvement in the private sector rose the business and industry. the reason being it tends to

form distortions in the way people in business behavior, and hurts our competitiveness globally. on the other hand, there are certain areas where programs are of importance to the citizenry, but which the private sector cannot or will not invest. those would seem to me to be exactly the sort of thing that governments are designed to do and indeed, our government has done in the past. there are two areas where the private sector is particularly reluctant to invest. the first of these has become known as the valley of death. i think there is a second valley also, a second valley of death, if you will. the first describes a situation where basic research leads to a promising idea, but it has not yet been proven to be feasible in practice.

it is very risky, because applying research or a former research is a long-term proposition in terms of time. it often produces failure, and even when it succeeds, the funder of the work may not be the end beneficiary, yet the work may well benefit society as a whole. the second challenge in the energy field is that energy is so capital intensive. that tends to discourage new entrants in the marketplace and discourages putting ideas into the marketplace because they are so disruptive to the investment that is in place. the government has many options to support energy research and development, and the advancement of energy in general. this goes from contracts to grants to direct involvement in the marketplace in regulation,

to tax policy, in kind support, and more. the government has done many of these things in the past. we are all familiar with that. one thing that one certainly has to reflect upon and be aware of is that when performing research and also the kind of development we deal with an energy, were the second valley of death requires taking a proven concept and showing that it could be scaled to be economically competitive. that is a very costly job, usually more costly than the first threshold. it is fairly unique to the energy field. i was going to say that we certainly should be prepared to accept failures. that is a characteristic of research and development.

i would not for a moment excuse failure as incompetence or nefarious activity, but we are dealing with the unknown, and even the best intentions can lead to failure. i would just note that innovation really is the key to succeeding in this area. fortunately, america has been very good at innovation in the past. it is one of the few non diminishing advantages that we have today in the global marketplace. in that regard, our desire to solve the energy challenge is just a microcosm of america's position in the overall competitiveness arena in today's global marketplace. with those opening comments, mr. chairman and members of the committee, i would be happy to

address any questions you have. >> thank you very much, and thanks again for all the work that went into this and other reports that you have championed and been involved in. let me start with a couple of questions. whenever we get into this discussion, it strikes me that a major change in the environment which needs to be acknowledged, as we talk about what roles should our government played in working with industry in these areas, a major change in the environment is what is happening with other governmental support around the world. i think for a lot of our history, the involvement of the government in order to assist and work weeks and part with industry work with -- and work with and part with industry

would not require to a great extent -- gunnoe there are exceptions to that, but it strikes me that when you look at what is happening in renewable energy technology and development now, world wide, you have very aggressive efforts going on by the germans, by the chinese and various other countries to not only further develop the technology, but also help with the commercialization of the technology and the capturing of the jobs that result from that technology. that puts a new importance on our own government finding the right level of involvement in the right type of involvement to have in this same area. i don't know if you have thoughts about that. >> i would certainly agree with

your conclusion that things have changed greatly. we do have foreign governments very much involved in supporting their so-called private sector. i have learned the hard way in my own experience that private companies cannot compete with government, whether it be another government or our own. i think an unfortunate thing has taken place. on the other hand, it is a fact of life. my hope would be our government will have to involve itself only to the extent of helping preserve a level playing field so our companies can compete fairly internationally. secondly, our government would support those things to the private sector cannot or will not do, and the government has done for many years, all the way from building highways to putting the research in place to produce the internet or gps or at many of the other things we take for granted now. so yes, is a changed world.

other governments are deeply involved. the first line of our government should be to try to encourage other governments to limit their involvement in that second category i described, and not become active participants in the marketplace. the good news for governments that become overly involved is that when they make a mistake, it is usually a big one in areas throughout the economy. i think there are reasons for our government importing itself as it has in the past, but we cannot hide from the realities of today. >> a follow-on to that first question, we love to give speeches around the congress here about how the government should not pick winners and losers. like most of these statements, it is a clear, simple

formulation that is almost always wrong. you pointed out that arva-e has been a great success. darpa has been a great success over decades. as i understand the way that they have operated, it is in the business of trying to pick winners. does not always do it, and it does not make big bets, in a relative sense, but it certainly tries to identify those areas of technology development that have great promise for the country. you mentioned some of them, the internet and tps and some of the others that have proven to be very useful -- the internet and

gps. >> that is the first accusation that usually is made the, you don't want the government picking winners and losers. to make that simplistic, i guess i would agree with the comment. the problem is that in the real world, the government does and has to pick winners and losers every day. the government decides who will win contracts and who gets grants for research, what projects are continued in which ones get canceled. that is once again of fact of life. there are three guards at a very important if the government is going to have to make difficult choices, which the government has to do. the first of those is the government a ploy -- employee competition so that everyone has a fair shot of contributing in being involved. the second is to be highly transparent.

the third thing that needs to be done is to assure that we have competent people in our government who are able to make sensible judgments without conflicts. given those three criteria, i believe the government not -- the government not only can but has to make choices, to pick winners and losers. many parts of the government do this. there is a certain parallel. there are number of tools in the tool kit of congress that go from giving grants to contracts to giving advice. it has been quite successful in carrying out its mission. they make choices every day. >> thank you very much.

mr. augustine, in the report, you have concluded that we can have the greatest impact if we focus on energy r and d. others have said the focus or the major impact should be on the deployment end. as we try to figure out how we allocate scarcer dollars, and how we prioritize, what part of the technology chain do you figure we here in the government should be focusing on most? >> that is a difficult question. certainly if you don't focus on research, there will be nothing to deploy. on the other hand, if you focus entirely on research, there will be no money to employ the benefits.

so you need to do both. research costs a lot less in general than the development of deployment. more money may be required for the latter, even though ideally i think the role of the government is more usually justified focusing on research. it used to be that the u.s. government -- and i mean two or three decades ago, the u.s. government provides about two- thirds of the research and development spent in this country. today is about a third. the problem is that industry that has picked up the two- thirds, spent almost entirely on development and is getting out of the research business. bell labs is a classic example of what is happening in industry, and i've had my own experience in that regard. the short interest, we need to do both. i think we focus on those two

valleys of death. had we take just basic research ideas funded by the national science foundation and places like that, and how do you turn those in to engineering projects? secondly, how you get across that second valley? in all cases, i think the beneficiary should involve some of their own investment. they should have some skin in the game. >> it is trying to find that balance, and determining where you have those areas where the private sector just is not willing or able to be involved. how we define that as far more difficult than it might sound. let me ask about how we pay for all of this innovation. in my opening statement, i mentioned that one of the things i think makes sense is to take

the revenues from greater domestic energy production to help pay for our innovation. your report outlines that as one of the options. i appreciate that. some of the other possibilities include raising energy prices, but that is kind of tough for us all right now. i think we have looked at that. i am reading your language that says that the aeic does not advocate one revenue option over the other. as one of the individuals on the committee here, do you think there is one approach that is perhaps better than some of the others that you have outlined for us? >> i suspect once again that some are better than others. the reason we try to make a choice is that we simply did not

get into enough detail to bake be due to take a strong position. -- enough detail to take a strong position. today we will send a billion dollars overseas to foreign countries to pay for the net cost of the oil that we buy. for the last two years, have been averaging $2 billion a year on energy research and development a year. that suggests to me that there is great opportunity to find the kind of money we need to triple the research and development, which is what our little group has recommended. the various sources of that, certainly i think back in my own case, probably 25 years ago or more, i was proposing that we add 3 cents more to the cost of a gallon of gasoline, back when it cost 50 cents a gallon.

i said let's at 2 cents or 3 cents and put that money into research and development. my congress friends tell me i would destroy the economy if we did that. today the money goes to other nations who would like to kill us with the money that we send to them. so there is clearly something wrong with that model. i would hope that we would, in fact, provide a tax on some of the energy sources, some of those that are the high polluting sources, much along the lines you have suggested. i personally do not have a problem with a modest tax at the gas pump, but i realize that is a very difficult issue today. but the idea of having the industry with the most benefits

in the long term paper part of the cost seems appropriate to me, particularly when you have an industry that is spending nearly half a percent of its sales revenues on research and development. the industry i came from, the pharmaceutical industry spends 20%. it seems not unreasonable to me that, given the importance of r&b and the modest pain that would be added by some of these taxes -- i am not a tax bite, but in this case i think it is justified. guy. am not a tax b >> one of the ways of getting to our energy future is using those revenues from our fossil fuels to help build out the technology and the innovation to advance as to the next generation of energy. i appreciate your comments.

>> thank you for holding a very important hearing on innovation. always good to see you, mr. augustine. thank you for your continued service to the country. your ideas are always spot on. i hope we will listen to and then implement recommendations. as you point out, we are in the midst of an energy revolution. by that i think we mean all energy sources and all energy technologies. we cannot have inconsistent and uncertain innovation policies. that is what you have underscored it here and why this hearing is so important. we need to be leaders in this field, and we have always been a paragon of innovation. i think about the fact that we have been leaders in every

energy technology. thinking about solar and wind in the 1970's, for example. we are trying to play catch-up to some countries that have seen the possibility. i am honored to represent the state of colorado. we are a national leader in many areas, and we have a great model of how industry, research institutions, and the government are all encouraging energy innovation, which then spurs job creation and economic growth. i would venture to say that means that americans haven't more secure energy and economic future. thank you for pointing out all these possibilities to us. you talk about arpa-e as a

program that we can innovate going forward. would you speak to how this model could be applied in more abroad and specific ways in other areas of activity? >> i would be glad to do that. let me try to describe what i think are the essential facets of arpa-e. arpa was always willing to take risks, and realize that in some cases they would faila. rpa did not dick -- some cases they would fail. when they succeeded, it was really an impact full event. they were willing to take risks. they set high goals.

they were very decisive in deciding what they would support, and when they could see that something was not achieving what they expected, they stopped it and put the money elsewhere. very important to arpa is that they attracted extremely high quality talent. one of the ways they did that was by delegating a lot of authority to program managers who oversaw the projects. another thing they did, that expected people to only stay there four or five years. they have a lot of rotation of people. clearly, the best way to freshen an organization is to rotate people through it. the best way to transfer knowledge to other organizations is by rotating people out and into those other organizations. the government has been very

constructive in supporting arpa financially so that it has the resources it needs to pursue good ideas. those are the sorts of things -- and also they are problem- solving oriented. >> you are saying you have to be willing to risk failure and you need to revive a lot of space and to decentralize the environment and turn people loose with the goal of not increasing the values of of the product and service by three times. that is not necessarily the way things are done in government or the private sector. under your tutelage, you would put teams together. in the remaining time i have, let me talk about how we help

american households transition into noble energy systems. we now see some creative ways in which -- creative ways in which energy systems are released. center alexander and senator whitehouse have released a bill. i have joined them in cosponsoring that legislation. it creates a secondary market by having the government ensure the value. the cbo score this at no cost. can you speak to that model and are there other areas you might have identified were can help those who want to make the right investments but find the cost prohibitive or difficult to embrace initially? >> yes, i think the sort of thing you describe really addresses the other side of trying to encourage clean energy

implementation. one side is to encourage the research and development and so on. the other side is to help the .onsumer afforde it they can certainly be done by subsidizing -- and i don't like the word subsidizing, but utilizing certain forms of energy, helping people defray the cost of new buildings that are very energy-efficient, and then they could pay that back with the savings that they gain from being more energy- efficient. i think in the grand scheme of things today, we have a remarkable opportunity of bringing together the idea of a horizontal drilling and hydraulic fracturing to recover shale gas to really buy us the

time to pursue some of these really promising clean energy opportunities did otherwise we did not have time to pursue them, given our dependency on oil, and there was not much we could do about it. it was not long ago that we were number one in central thermal systems and wind power. today we have lost our lead. i was recently in japan and i was struck by how much we have lost our lead. >> thanks again for your leadership. great to see you. en.senator frank an >> thank you, mr. augustine. we seem to have a debate over the very nature of the role of government in development and new technologies.

again, i appreciate the ranking member being here, but i don't see any of my colleagues from the other side. lot,ve these hearings allo and either they don't show up at all, or they come in and make a statement and leave and do not even want answers to their statement. your report points to government support for development of all kinds of technologies that have led to all kinds of jobs. we talk about jobs. civilian nuclear reactors would not have happened without the government. gps technology would not have happened without the government. civilian aircraft, the way they have developed, would not happen without the government.

the internet, darpa. along list of government support -- the long list of government support for all these industries shows what the track record has been. i don't see any reason why the track record would not continue to be -- is there anything a bowel clean energy -- is there anything about clean energy and renewable energy that is by its nature different than all these other things i cite? >> i think these things have in common the fact that they were high-risk undertakings, offering high pay off. that is not an area that is particularly attractive to the private investor.

i think energy fits this very well. energy happens to have additional characteristics. it is very costly to go to nuclear power. you would never get there in the private sector. if you talk about nuclear fusion, that is a 60-year project. i think it is a very important one. >> i know that you mentioned fusion, and that is something i have been interested in. they always said that nuclear fusion is the energy of the future, and always will be. i think that has tremendous promise, and we should continue to invest in that. there has been support for industry for the development of shale fracturing and directional drilling. that has been done by government support, as well as 20 years of

tax credits for production and subsidies. we have to pay for some of this stuff, why not pay for it was some of the subsidies that we are already paying to this very mature industry. it was government support that got shale gas to go from inaccessible to dominating much of our energy sector. i don't understand the unwillingness of my colleagues on the other side to even the present -- to even the presence -- to even be present and to recognize the role the government has played. you mention energy efficiency, and about retrofitting.

that means things like smart meters to better gauge energy use, or efficient microprocessors to make batteries last longer. batteries are something we have been doing in this latest round of government-funded research. one thing we did in minnesota that has helped create jobs in retrofitting -- and this will be a question, actually. we have an energy efficiency standards that are utilities have to meet. every year, their customers have to improve their efficiency by 1.25%, or 1.5%. do you think that is an area where if we did that nationally -- because it works in minnesota.

the utility companies say they will invest in the retrofit of the customers, lending the money up front, and energy savings will pay for itself. if we did a national, renewable energy standard, not a renewable energy standard, but an efficiency standard, for these utilities, do you think that would have a good effect on our use of energy? >> i do believe that energy efficiency is an important part of the solution to this problem. there is no one thing that is going to solve it, nor did you suggest that. but if we can improve either through the use of controllers in power, or the time of day they use energy, or just using less energy, that has to be a clear positive. if it encourages the public to do that, at it is an important

thing to do. my bottom-line is that i spent 10 years in the government. i travel to a hundred other countries, and i am a great believer in the private sector doing whatever it can. one area where there is an exception to that, is when the market itself fails. the energy market has failed. without government support of the type you describe and other types that have been described, we will not solve the energy problem in this country. >> thank you, sir, and you have been a successful businessman, haven't you? a i don't know if i have been businessman. >> i think you have been successful. >> senator murkowski, do you have additional questions for

mr. augustine katula >> i do, but i also know we have a second panel coming up. i have to have you fill in the blanks. why do you think the energy sector has failed? what is it about energy that has made it more complicated? >> i think a number of things. one is the high capital cost and a long time that facilities remain in existence, 40 or 50 years. more importantly, it has been a highly regulated industry. the oil industry is controlled by cartels abroad. the free enterprise system has generally not found its way into the energy market. one of the things that you all could do is to help bring the free enterprise system into the market. >> mr. augustine, thank you very much for your testimony and the good work that has gone into these reports. we appreciate it very much.

>> thank you, is always a privilege to appear before this committee. >> let's go to our second panel. we have two witnesses on our second panel. we have had a policy analysis with bloomberg new finance. he has testified with us before. mr. jesse jenkins is also here. he is the director of energy in climate policy with a break through institute in oakland, california. we are told that today is your birthday as well, mr. jenkins. congratulations, it is big day for birthdays. >> we have cupcakes in the back. samey don't we have the procedure here that we did with mr. augustine, and have each of you give us five or six minutes of summarizing what you think we should know. we will include your full testimony in the record and