administrator of the u.s. energy administration and [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013] host: good morning, and welcome thisashington journal" friday, july 26, 2013. republican leaders distanced themselves yesterday from comments made by congressman steve king on immigration. ontoowa republican made verso remarks about illegal immigrants in an interview this week aired we would like to hear your on what the republican message should be on immigration. we will take calls from republicans only this morning. you can call us up that -- online also find us

through social media. send us a tweet or join the conversation on facebook. you can also e-mail us. host: here is the headline in "the washington post." gop leaders denounced steve king for calling most illegal immigrants "drug mules." "republicans have a steve king problem." "l.a. times" said house speaker john boehner denounces steve -- "ignorantnt comments" on immigration. let's take a look at what the iowa congressman said. this was an interview with "news max" talking about who illegal immigrants are.

host: well, "the washington post" and reflecting upon that and covering the aftermath said house republican leaders are denouncing one of their own for remarks made last night -- last week that disparaged most illegal immigrants as drug smugglers. it came as the gop is trying to improve its image and political prospects among the fast-growing latino community. cain, one of the house's most vocal opponents of immigration -- king, one of the house's the most vocal opponents made these comments.

host: "the washington post" points out the house of the liberating a series of smaller scale immigration proposals right now. we would like to hear from you. what should the republicans' message be on immigration? house speaker john boehner address the comments yesterday. let's take a listen to the house speaker. [video clip] -- --i want >> i want to be clear. no place in this debate for hateful or ignorant comments from elected officials. earlier this week, representative steve king made comments that were, i think, deeply offensive and wrong. said does not reflect the values of the american people or the republican party. our work in a do constructive, open, and respectful way. as i said many times, we can disagree without being disagreeable.

host: house speaker john boehner. here is "the washington times" headline. host: let's take a listen to steve king defending his comments. [video clip] just a moment. representative steve king did talk about yesterday and really defended what he had said in responding to the pushback he had gotten.

we mentioned other newspaper outlet had called -- used headlines like this. denounces whatr he called ignorant comments on immigration." here is steve king of iowa. [video clip] >> no nation like the united states of america can continue to be a strong nation if we are going to judge people because they disagree with our agenda rather than the content of the statement. we have to be critical thinkers. we have to be analytical. he should understand fax from from emotion.t let's pull together and understand that we do have compassion. we do have compassion for every deserves dignity. we need to treat them with that warmth and love that the american people always have, just like the korean war veterans did when they gave themselves for a country they never knew and a people they never met. but we must not sacrifice the altar ofaw on the

political expediency. host: what do you think the gop message should be on immigration? speed it -- is our first call from mclean, virginia. caller: good morning. thank you for c-span. host: thank you for calling. caller: listen, this whole controversy is very, very, very, very sad. -- first of all, i think they are racist and he should resign. regards to thes immigration bill. ,f they don't pass this bill truly, truly, truly, truly, it is cutting the throats of the republican party as far as i am concerned. mainly because, what are the cook -- alternatives? the alternatives of breaking up this bill and all this stuff. it is nonsense. guess what fills the void? is nonsensehe void

and controversy like stephen king, and that becomes the overarching response. my other comment i would like to make is -- two comments. yes, the democrats will benefit in the short term. but in the long-term republicans republicans will have a fighting chance because the hispanic community at large is largely conservative. he just hate being hated. what i would like this ignorant congressmen to point out to me is, how he believes that a drug valedictorianes a ? what does the dream act and the passage of the dream act and the young people who came here unbeknownst to them -- they may have come across the border. how are they drug dealers? is the gray area he is not clarifying. he is lumping them all together.

it is very sad. it does not play well or bode well for our party. d.c.,pretty close to northern virginia. you are a republican. caller: yes. host: let's take a look at what the congressman from your state had to say about this. house majority leader eric cantor called mr. king's remarks inexcusable -- host: let's go to rose from harrisburg, pennsylvania. republican. caller: yes. i'm rose. i would like to say that i no longer wish to be a part of the republican nor the democratic party. i just recently became a republican, but i am ashamed of the party, the way they treat minorities, that statement that

came made was ridiculous. less, the way they treated the coultn saga and the ann er, ridiculous statement, talking about how little you. a child was killed. host: when did you become a republican? caller: not even a year ago. host: why? caller: i'm related to them more strongly because i am really religious and their standards were like more to what i believe in. i am really ashamed of the party. i really don't wish to be a part or -- of the democratic or the republican party. i think i would rather just be an independent. and go with the flow. host: here is what fred tweets in.

ohio.duane from we are taking republican calls only this morning. caller: i am a conservative republican, and i believe in the approach tovatives piecemeal immigration reform as opposed to the blanket comprehensive approach by the senate which includes a lot of very, very bad things i think for the future of america. in.sexual lovers to come cardsted access to green by anybody who makes it across the border. i respect representative came. in the pet -- i respect representative king. in the past he always had constructive comments. the democrats are never any of their left wing loonies for any

commented that they might make that are kind of outrageous. so, the republicans have the last chance in 2014 to be able to get ready to capture the white house in 2016. if they lose the house, we are really doomed to a one-party system. host: pensacola, florida. go-ahead. caller: yes. here. host: you are on the air. caller: i would just like to make the comment that the republicans, they tried to stand up and then they mess up every time.

they open their mouths and say things they shouldn't say. they should think with their minds instead of talking so much. host: you are a republican? caller: pardon? host: you are a republican? caller: yes, i am. host: joann. maryland. caller: thank you for letting me come on. i have been a republican all my life and i am 59 now, and for a couple of years i was a little disappointed in what the republicans did because but -- but i thank god for them now because if it was not for them standing up for obama, we would have no hope. but as far as immigration, i think the senate has it a little bit wrong. and i am glad they did not just take that bill. for one thing, there's not agents.ce

i think they should close the border. and then when it comes to the ice agents, i think their hands are tied. i am glad the republicans are taking their time and trying to come up with their own bill. the problem is, sometimes that one republican will say everybodyand then believes the whole party feels that way. i think they are misjudged in a lot of ways. but i am glad they are taking their time. said thatime they they would close the border and then later take care of the problem when reagan was in, and nothing happened. afraid ofittle bit what the democrats will do if we just take the whole bill. host: ok. gina. picayune, mississippi. republican. go ahead.

caller: i just wanted to say wasn'tes, maybe that exactly nice what he said. and of course, not true about all illegal immigrants coming over. but we also have to remember that they are breaking the law. they are breaking a law just like from the goals in the -- criminals in the united states. so i want to know why do we have to cater to them all of a sudden? that is really all i have to say. i am than the fact that just totally disappointed the entire country and what is going on in our country. it has almost turned into being a circus. and if we all don't pull together and get back on the right track, it is going to be a third world world country in a few years. thank you. host: are you concerned about the tone that the gop is putting forth? when you see headlines like this one in "time magazine ," is the opinion piece saying

the republicans have a steve king problem. do you think? i'll are: -- what i said. it seems it is all a big mess. the democrats do nothing but blame everything that goes on now with the republicans, even though they are the ones in charge, and the republicans, they just seem to be so nervous about just being constantly blamed for everything. they are just saying all kinds of crazy things, too. the country is in a horrible mess. it is horrible. racism is bad. old, and when i was a senior in high school is when the schools were integrated and we had no problems. i thought we had moved so far in this country. i didn't feel like i was a racist. i feel like you should be judged

more on how you act and how you portray yourself rather than the color of your skin. host: here is how "time magazine" looks at the story. it says --

host: this is the opinion piece in "time magazine." what do you think of the remarks and the aftermath and the pushback. what should the message be? headline fromthe "the washington times" where congressman king says he speaks the truth on illegals. jack. michigan. republican. caller: hi, how are you? former immigration agent. the whole thing is a mess anyway. i think the message for the party should be, seal the borders, give these folks 90 days to get their affairs in and then deal out with the immigration issue that way.

listen tog up and comments. host: jack. caller: yes? host: that is your opinion about what the laws should be, how you would like to see the law carried out? what is your thought on the message that republicans should have? well -- i don't know. i think the american people in general are really confused about all of this immigration issue, to be sure. undiluted and so confused, who knows? i think the whole thing is just people motivated, it is all political. the whole thing is cloudy. it is all ridiculous frankly. page story oft "the washington times" -- nominee gets hearing despite allegations.

host: another story in the news. rick, newport, north carolina. republican. caller: yes, good morning. we've got laws on the book's. why don't we enforce them? no, instead of enforcing laws we just say am a we passed a law to get elect it. we got elected. now let's just disregarded. now we come into the same problem. we will make a loop newlog. you are here illegally. we ought to do what eisenhower did.

round them up and send them back. if you don't like what is going on in your country, and you want to escape, start a riot down there like they do in in egypt and every other place. change it. don't come over and tried to destroy another country. concerned that some of the articles pointed out republican leaders are concerned that message might be turned latinos from voting for republican candidates? caller: if they are here illegally, they have no right to vote. host: but people who are here legally, perhaps born of the country but as latinos identify with people who share the same ethnicity. caller: well, i don't care. i don't care what they think. speak your mind. let everybody know how exactly you feel. and stand up.s host: here is what vivian says -- it seems like a groundswell

of ignorant comments to me. then we see bill's comment -- he writes that "the gop message on immigration should be closed the border first. i say this with surveys showing 60% of adults saying so." george. tampa, florida. republicans. caller: well, i don't know how much longer i will be a republican when i listened to some of the stuff coming out of the folks in washington. i find it interesting and rather silly that we have people calling up and talking about how long ago we did the same exact thing, but we did not follow through. most people don't seem to remember that it was a republican president at the time we let the amnesty go through and into anything about it. now, we can have our cake and eat it, too, and you can have people up in washing --

washington talking inflammatory stuff and expect the rest of mainstream america to really pay attention to what you are saying. seriously. you need to slow the rhetoric down and actually get to work. everybody wants -- democrats wanted to get to work, republicans am the independents want you to get to work. thank you. speaker nancyouse pelosi, now leader of democrats in the house, as comment that on immigration -- has commented on immigration and what immigration reform might mean for the white house. here is an ap story.

host: as we talked about with some of the callers, republicans in the house when a piecemeal approach. as go to gym in new castle, delaware. we are asking republicans this morning what the gop message should be on immigration. colorcode i think -- messagei think the gop should be the rule of law and enforcement of law. this administration has refused to enforce not only this law but many laws in this country. it is disgraceful. we have to get back to being a nation of laws and not a nation of just men and their whims. they use it as a wedge issue, as you see in a lot of the polls. racism, the division among people based on the color of their skin has increased in this

country send this president has become chief of the country. and we just have to get back to enforcement of the existing laws. you we go is illegal, and even latinos have an interest in having a nation where we had enforcement of laws. everything else is just a wedge issue to try to divide us. it is just sad. i bet you more people vote for stephen king in his district than actually by "time magazine." that is all i have to say. host: spring, texas. good morning. go ahead. caller: i think the message the republicans should send to the latino community, if you are going to vote for democrats, you are going to have a socialist government sooner or later because the democratic party has now become neo-socialists in the

european -- 18th-century european style. socialism as a governmental philosophy always, always fails. it fails the cost theialis micromanage -- because the micromanage every activity. i think the people who left this country -- left their country who have come to the united states have come for freedom and opportunity and not the micromanagement by the neo- socialist government like a democrat now are offering to theirho will listen message. and i think the republican message needs to be freed him -- freedom, with a structure by the government but not by control. host: darrell. gainesville, florida. i am a republican, like

i said, for almost 60 years. and i have come through the es ofrent eras and chang this country. and i participate in the political process. however, being a social logical -- sociological student over the years i came to realize that the republican party is like, the new ku klux klan. the hood is no longer they wear the -- thatds but they portray as being the guy wh changesto see social and aggressiveness through work and through education but at the same time the actions say that higher the echelon, the part of the social that is to

stay the higher part of the social stratification and we get there by having a low minimum wage, getting the cheaper workers of the world to come to this country. they don't care how they get there. they say they do. they have no real interest because they would shut the borders down. they could stop all of that. when they need the drugs to stop coming in the country like they did in 1972 when carter said shut it down, everything came to a halt. if you want to stay in the top, the cane does not bring the peasant up to the top -- king does not bring the peasant up. you can be the surf. host: let's take a listen to what started this discussion. representative steve king made comments to the online news site "news max hurray cohere is what he said that generated some controversy -- new site "news max." here is what he said.

host: we ask for your response to the comments and the larger question this morning of what the republican message should be on immigration. it has been pushed back by leaders of the republican party and lots of discussion in recent months about what the republican message and approach to immigration reform should be. if you are republican, you can call us at -- host: here is what berry tweets in -- the statement is more true than false. why is he wrong for talking about it? i live near the drug highways of interstate 40 and interstate 35. timesman bob goodlatte said the comments were -- congressman bob goodlatte said the comments were not helpful. the story in political. the house judiciary committee chairman joined several colleagues in denouncing the controversial comments, calling them inappropriate with an interview with "telemundo" set

to air sunday. we see some republicans coming out and talking about their approach to immigration reform. is leading goodlatte legislation and his committee, the judiciary committee, a piecemeal approach to immigration reform. we are looking at both that approach as well as the overall message that republicans want to share right now on immigration. we heard earlier that the house speaker denounced these comments. " said he times condemned the comments in a statement originally written and many did verbally. we also heard from representative labradors from idaho who called the comments irresponsible and reprehensible and said if king thought more about it, he would not say such a thing a 10. labrador also admonish the media for focusing on the kings

remarks rather than other comments on the subject from other republicans. new york, new york. go ahead. caller: yes. message should be, stand your ground. host: what does it mean to you, stephen? , we arehere in new york being invaded. mayor bloomberg as the mayor, and it is a sanctuary city. ks.can't go to the par every time i go to the supermarket, ice illegal your legal-- i see immigrants pulling out food stamps. it is a mess out here. you think the republican message on immigration should be? i'll echo -- caller: it should be the rule of law.

host: our next caller is from texas.w, caller: the senate passed a huge , and they obamacare want to ram it through. there are a lot of things in there that we are going to be wishing we had passed. broken down to be into smaller pieces and to go slower. host: you like the approach that people like judiciary committee chairman bob goodlatte are taking? caller: yes. this is the way our founders set up our country. i think there is a lot of wisdom in it. host: what does it create -- the overall message, it says what? caller: i do not get that.

host: what should the overall message be? the piecemeal approach, what should they communicate to other republicans and the country at large? caller: i'm sorry. host: should they be about securing the border, having a pathway to citizenship? what should their overall purpose be question mark caller: secure the border first. and the bill that they -- i'm sorry. i am having trouble this morning. you have a good day. host: it is pretty early. thanks for calling. hi, roger. caller: yes, hello. i think your question is because most people, including republicans, support legal immigration. the united states already admits more illegal immigrate to than any country in the world. this is an art -- the united

states already admits more legal immigrants to any country than the world. this is about illegal immigration. should we be a nation ruled by law or allow people to come into the country whenever they feel like it and without consequences? that is the real message. it has been distorted to the point that the other side would like to say that republicans are against immigrants. we are not. we are against illegal aliens. host: how do you communicate the message clearly? caller: i don't know. we have some pretty bad leadership in the republican party. john boehner is very disappointing, and other republicans are, too. they are so powered by the liberal news media that they think all they can do is pander to what the liberal media wants them to say and that will get them by. but they are just afraid to stand up and say what they really think. maybe they are not capable of

it. i don't know. the positionplain in a way people can understand, and they don't do that. they just communicate in soundbites. tweethero -- a tweet from american hero. host: we will continue taking your calls and tweets on this topic. talking to republicans only this morning, and they can call us at -- turn our attention to another store in the news. "the washington post" headline. state voting laws to be challenged. the justices respond to the supreme court. the authors of the story, sari horwitz, national reporter for "the washington post" joins us. what are we hearing from the justice department regarding

state voting rights laws? guest: this is a bit complicated issue. what eric holder and the justice department is doing is a reaction to a supreme court ruling last month in the case called shelby county v. -- out of alabama. the supreme court invalidated a critical section of the 1965 voting rights act, the landmark what he did was throw out part of the voting rights act called section four that determined which state and history ofy with a discrimination had to be granted justice department or court approval before they made any changes in the voting laws. that is called pre-clearance. it affected southern states like alabama, mississippi, south carolina, virginia, also arizona, alaska. and the largest state that was covered under this was taxes -- texas. so when the supreme court had

its ruling, it said congress can fix this. i was can come up with a new formula based on the data to determine which a state had to get this pre-approval for in their voting laws. what eric holder did yesterday -- he said, we want congress to do this. we want them to make this change. but meanwhile, we can't wait for a divided congress to agree on a new formula for voting rights because it is an important issue. we are going to use other parts of the voting rights act, namely section two and three, to go after state with a history of discrimination. hard does the justice department anticipate this will be? what are their next moves and how much pushback are they going to get? is going to be difficult. under sections four and five under preclearance, there was this group of states that automatically, if they had any changes in the voting laws, they had to come to justice or a federal court.

do isat they will have to go state by state and go and try to get these states to come for preapproval. yesterday the attorney general said what they were going to do is start with texas, the largest state. what they are going to do is support a lawsuit in texas that was brought by a coalition of democratic legislators and civil rights groups against the state redistricting plan. these are boundaries, and they are redistrict in, drawn up by the republican legislature. these groups said these maps undermine the political clout of minorities in texas. eric holder is going to the court in the western district of the judge toing require them to submit all the voting law changes to the justice department for approval for a ten-year period because of its history of discrimination. il in, state has to ba

as opposed to when all the states including texas had to automatically come. host: the justice department may over the voting laws. tol we see this coming back the supreme court? guest: we could very well see it on that to the supreme court. use the reaction to this, praised by civil rights groups but criticize harshly by republicans in texas and capitol hill saying the attorney general endverreaching and it is an run around the supreme court. governor perry came out saying it casts unfair aspersions against the common sense efforts. it will probably be a very contentious legal political battle, contentious legal battle that will probably lead all the way back to the supreme court and maybe even this coming term. from "the horwitz

washington post," thank you so much for joining us. that's turned our attention back to our question for you, what should the republican message be on immigration? jeremy. pensacola, florida. republican. caller: good morning. i would just like to say that the people who came here the wrong way need to go back and do it the correct way. and as for the dreamers, the so- called -- they want to say 11 million. a campy all the 11 million they are talking about. i am that -- it can't be all the 11 million. i understand there are children who have lived their lives here and grew up completely. this is all they know. this is their country. whatever. their parents brought them into a bad situation. i don't think they should be penalized for it. of those people who did that need to go back, and if they want to come back into this country the legal way

-- because we have laws. we are not just going to change our laws on the whims of taking the concept of something like what we do for cuba. wet foot, dry foot, you are here. now you can sit -- stay. no, no, it is wrong. you did it the wrong way. so you don't is up to be here. we welcome you, but you have to do it the correct way. host: let me run this tweet and by you and get your response. seal theets in -- border and enforce the use of either a five for employers and landlords. is that the right message? caller: the problem with the is you havefy thing these companies who are not willing to enforce that, and then the government and the same aspect is not willing to go after all of these companies that hire people illegally. they hire them anyway.

they find their way in there to work. i have worked for several employers who had people who did not have the proper documents, and i stopped working for those companies just on that concept alone. host: bill from philadelphia. go ahead. comments,eve king's it seems that pc trumps truth anymore. some comments i was listening to also was that you had said only -- latinos whoe are voting and how do we know that when we cannot even ask for an identification? that is possibly not white true. -- not quite true. i believe, the republicans, the way they are doing -- most of the bills the way they want to do them, separate them out and that way if there is a problem, you can straight in and out. we saw it with his obamacare,

the way it was lumped in there. it was a big ball of clay where there were so many problems in it, you cannot stray in and out individually. you have to get rid of it. the one man -- i hope he remembers that the original ku klux klan were created by democrats. host: a comment on twitter. somebody forgot to tell steve king sush on latinos until after the elections. -- after the elections." another viewer -- host: we see on facebook -- host: bob from philadelphia. you are our last caller.

go ahead. caller: thank you. act with no id. i converted three staunch liberals with this one comment. if it is race -- with the mean it is racist? they are going to allow you to vote without an id but in the rest of the life -- you need to rent a u-haul truck, you need an id. they just want voters. can you see how they are being used? the lightbulb came on on my friends -- three staunch liberals. you are right. that is all they want. if they really cared, they would try to help you in other 99% of right -- life and not just voting. host: what should the republican message should be? --ler: the message should be we care about you. 90% of the hispanics are staunch catholics. why would you want to be in a party that allows abortion? and then their eyes light up -- you are right. we have not thought about that, either. we should bring out about the

freedom of life and liberty and the pursuit of happiness. a liberal party is just not that at all. we are getting so close to dictatorship with eric holder picking and choosing what laws to go after. out should scare them hell of everything. out-of-control attorney general just like the irs. people should wake up to this. host: we will turn our attention and just a moment to another topic. president obama has been talking about the economy. coming up next, a roundtable to hear from our guests how they think the economy is faring and how it has done under the obama residency. later on, our weekly america by the numbers segment takes a look at u.s. energy production and consumption. we will be right back. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2013]

>> the treatment of hunger strikers at guantanamo compromises the core ethical values of our medical profession. the ama has long endorsed the principle that every competent patient has the right to refuse medical intervention. the world medical association and the international red cross have determined that force- feeding through the use of restraints is not only an ethical violation that contravenes common article three of the geneva conventions. let'sconcern is that --

just set aside the numbers that you might or might not feel you can safely push out. number, an unknown number -- but the president has apparently said it is 46 -- that you can never try. do you honestly think that the people behind me and the people who are impelling this hearing stop -- for the release ofww prisoners just because they now in the united states?ww argument touuuwwwwd keep guantanamo open is hard to understand. broughtwwwwwwwwwwwwe u.s. for incarceration or medical treatment, the detainees pose no threat to national security. who happen clearedwwwççç for transfer should be transferred. find lawful dispositionççç of war detainees andççç we have done in every conflict.

span, theeekend on c- senate judiciary subcommittee on human rights looks at the implications of closing the guantanamo bay prison. saturday at 10:00 a.m. eastern. also at 10:00 on booktv, live coverage of the roosevelt reading festival. from the fdr presidential library and museum in hyde park, new york. 's american c-span 3 history tv, president obama and hagel secretary chuck commemorate the 60th anniversary of the korean war armistice, also saturday morning at 10:00. >> "washington journal" continues. host: veronique de rugy is one of our guests, and we are also joined by heidi shierholz, who is an economist at the economic policy institute and veronique de rugy from the mercator's mercatus sent to an economic fellow.

--the "new york times" today he vows to speed shipping and transit projects. he is talking about how he thinks he can boost the economy. let's start out with some background. the economystate of now? how would you judge it to date? too weak.hink it is i've -- we have been out of the recession in four years. i think the best way to describe it is the labor market is stuck in the mud. the unemployment rate, share of the population employed, is and very low. as the unemployment rate has gone down. because a lot of people have given up working. and economic growth is not as to putas it should be all of these long-term unemployed people back to work. it is really disconcerting. host: heidi shierholz, what is

your take? with: i completely agree veronique. what we saw during the great recession, our labor markets fell off of a cliff. and to that time, since the recovery began, we basically have just been bumping along at the bottom of that hole. we have not really started climbing out of it. thehe mentioned, unemployment rate itself actually has improved. right now the unemployment rate is seven point six percent. it sounds like a big improvement from its peak of 10% in the fall of 2009. but the thing is, most of that improvement is due to people either dropping out of or never entering the labor force to cause of weak job opportunities. so, when you look at broader measures of job opportunities, what you see is if they really have not improved much since the recovery began. they are not deteriorating, not

getting worse, but just not digging out of this whole very fast. host: we are talking about the economic record of the obama administration. if you would like to join the conversation -- host: heidi shierholz, point to some things that have been done that have impacted the economy, either for good or bad. guest: a good question. the thing i think is useful is to think about whether something was the right thing to do is to diagnose what is wrong with the economy. and when you look at the data, when you look at what is going a lack ofeconomy, demand. we all know that businesses are sitting on a lot of cash right now. i don't necessarily think they are greedy business people not wanting to hire. i think they are actually smart businesspeople who will hire

when they see demand for the goods and services pick up in a way where they need tohire people -- need to hide your people. they are not hiring because they do not have demand that the stuff to the degree they need to put the factory online and get more people out on the floor. that is the problem, lack of demand. what we need to do in our economy to boost the economy and dig us out of the hole is to boost demand. the things a government usually has in its toolkit -- monetary policy. that is the fed, lowering interest rates to stimulate demand. because its defanged is around zero. the other tool is fiscal policies, stimulus. congress actually did that. a great job early in 2009 passing the stimulus package. the problem is, it was too small. it got spent out too soon. package,ion stimulus

but it was never enough going up against the bursting of the $7 trillion housing bubble. it made a big difference. stem the losses, but never enough to get us into a robust economy that's recovery. host: veronique de rugy, give your perspective of what has been done and what has or has not worked? guest: i have a slightly different understanding of what is going on. i do think that, yes, firms are sitting on a lot of cash and consumers are being very timid. it is not too surprising considering the immense amount of wealth that was destroyed during the recession. see a lot of the timidity, a lot of the unwillingness to andright now more as fear uncertainty. and a lot of it actually comes from a lot of government intervention which people don't happen tois going to them. i think there is a clear understanding that we have a big problem with debt and deficit

even if in the short term it slightly improved, but people understand it probably means a lot of higher taxes and the future. rules, regulatory rules have been passed. many of them have not been written yet. people wonder what it means since they do not know how it is going to affect their businesses. a lot of uncertainty in the .conomy good intention. as for what we need to do, i actually think that's what government can do -- there is monetary policy and fiscal policy. you are right about monetary policy. i guess there is some debate about the fact that the fed could actually do better and gdp andgeting nominal

stuff like this. but fiscal policy, i think, has the ability toed do anything. first, it has been tried. the obama administration has and didot of promises not deliver on the promises. if you believe in fiscal policy to boost the economy, one thing you note is it is only effective in the short run. we have been doing this for five years. when is the short run over? i actually think the policies, what we need to do is try to give the free market a chance. so to streamline regulations people can actually start hiring and people can start relaxing about the economy. host: we will get more from our panelists in a moment but first, let's listen to president obama yesterday in jacksonville,

adding his own reflections on where we were five years ago and where we are now. [video clip] is is afternews nearly five years that the financial crisis happened, thanks to the hard work and the resilience of the american people, america has fought back. together we save an auto industry. that the terminal i was at -- one of the places where we are sending out more american cars than ever before, all around the world. [applause] we took on a broken health care system. we invested in new american technologies to reverse our addiction to foreign oil. we doubled our production of clean energy. we put in place tough new rules on the big ranks and the mortgage lenders and credit card companies to make sure we did not have the same kinds of financial shenanigans we had seen before. changed the tax code that was

too skewed in favor of the wealthy. it was doing more for the middle-class and working-class families. we locked in tax cuts for 98% of americans. then we asked folks at the top to pay a little bit more. so, you at all of this up, and last several months our businesses have created 7.2 million new jobs. 7.2. and this year we are off to our strongest private sector job growth since 1999. strongest job growth in over a decade. host: we just heard from the president and we heard a few moments ago from the -- our other panelists veronique de rugy on her perspective of what the government could do now and what it has been in the past. this idea, iss

employment being held back because of business concern over regulations or uncertainty over what policies are going to be put in place? we have a way to test that. if that were true -- if businesses had demand for the goods and services but just did not want to hire because of uncertainty over future policy, what they would be doing is ramping up the hours of the workers that they have. they would be increasing the hours of the workers on staff. they don't want to hire new people but they could meet demand through increasing hours. we have not seen that. hours in the economy, the length of the average work week is no higher than it was before the recession began. so, there is actually very little evidence -- a very difficult to find evidence businesses holding back because of uncertainty or because of regulation. it really comes down to they just do not have demand for their staff, which means they will need to hire more people. that is where the issue is. that is where we should be

focusing our energies to get us out of the hole. host: we will talk more about the man of regulation. but first, let's hear from some of our callers. nate. kansas city, missouri. democrat. caller: i am tired of hearing about president obama. really what is going on that i see -- and i do a lot of is that they basically have taken away government jobs and even a lot of factory worker jobs and they are privatizing so much government jobs. just like in florida. , august 1, all the medical people for the prisoners, they will be laid off. application in for the private contractor, but they can't guarantee them a job. and if they do get a job, they do n also no pension. it the whole idea --

challenge c-span. you need to do a segment on -- forget about the president. -- notf the republicans just republicans -- but mostly republican governors, what they are doing right now is running under the radar as far as contracting so much of the government out. does, it makes a lot of people working today will not be working tomorrow. they are privatizing most of the prisons out now. and a lot of the inmates -- they are using the inmates to run the prison because they do not want to pay the personnel to run the prisons properly. what has happened is we have been undermined -- talking about the president, nothing compared to what the republican governors mostly are doing and the legislators and stuff like that. they are privatizing good jobs that people have had for years. host: thanks you input looking at governors. . we will take that into consideration. you talk about government jobs.

here are numbers from the treasury department. they come from the bureau of economic analysis and labor statistics, looking at where growth is happening. the private sector is leading growth. you can see, private nonfarm business, and then government right here. federal, state, and local. what do you see when you look at where development and new growth is happening? guest: the private sector, i think, is always the true engine of growth -- sustainable growth and sustainable jobs. but i think there was a very ,mportant question, -- point and that is the underemployment of the people who are employed. that is another problem we have with the labor force. thatis also another sign the unemployment rate does not capture everything that it should capture. while you have people who are working now, a lot of them are working in part-

time jobs. more than before. who would like to be working full-time are not. product ofnk, is a some regulation, and in particular health care. pollyou pull businesses -- businesses, to get around the law, instead of hiring full-time people they are hiring part-time people, which event compounds the the problem of underemployment, even for people who are in a job. that is a real problem. host: a couple of things i would like to respond to. nate brought up a really good point about the loss of public sector jobs. in this economy, we lost more than three quarters of a million .ublic-sector jobs

they're also big ripples into the private sector. i estimate for every public- sector job loss -- ripple effects into the private sector. a loss of a private sector job or a job that was not gained. a huge drag on the recovery. it was not waiting on early recovery. just to put it into context, if we had the same government spending now that we had of the --overy from 2001 recession in other words, and the recovery that george bush was president during him if we had the same level of government spending that we had during the recovery, we would likely have around 3 million more jobs now. the fact that government spending is going down rather than up is a huge drag on this recovery. good pointreally there. the other thing he talked about was contracting out of government services. there is something the president could do on that. the president through executive order could just say -- he is

talking about state and local but i will move into federal spending now. the president president through executive order could actually say that people who are employed by federal funds -- contractors who are employing people, subcontracting -- they have to pay a minimum wage. they have to offer paid six -- six days. the president through executive action could make high-quality jobs that could have a big impact. right now around 2 million lesse are paid in jobs in than $12 an hour through federal funds, through this kind of contracting. that kind of executive order could have a big impact. , and weidi shierholz are also joined by veronique de , senior research federal --

fellow at george mason. caller: good morning, c-span. the topic a change. we could talk all day about this one. . don't see any change the health care is turning out to be a major disaster which dragging the economy down. -- and i am sort of what you call a naturalist. by the government sticking its nose in everything, trying to be big brother, whatever, they have managed to, what i call natural selection. people make bad mistakes in business, they should lose. if the government feels they should bail them out. the people in the upper part of it, they win. everybody else loses. trend.t seems to be the

unfortunately, i work for a company where the management makes good decisions. and we are surviving. but we are not surviving because we had big brother looking over our shoulder. it's good let's get a response from heidi shierholz. guest: i am glad you brought up health care. well we are actually seeing is so far the evidence suggests it is not going to be implemented -- there are going to be some bumps and the road, but that it is working pretty well. for example, new york just came out showing premiums are going to be reduced by about half when the aca, when the obamacare is implemented. so, the signs that are coming out is that the insurance people are going to be able to get, the insurance they have to get through the mandate is actually going to be reasonable cost. flexibility in saying that the

employer mandate -- the idea that there are going to be sanctions against a certain set of employers if they do not provide health insurance, the administration says, all right, there are some problems with that. let us put that off a year. they are being flexible when things are not -- when it looks like there will be bumps in the road. so, it is not going to be perfect. but all signs point to this is actually going to be successfully implemented them and it is going to provide health insurance to millions of families, people who have pre- existing conditions, who were not able to get health insurance that they could afford would now be able to get to. that sort of thing is actually going to make our country stronger and it will be better for the people of this country, and it looks like chances are it is working. host: veronique de rugy. guest: i find it interesting you it showedew york, and improvement, but it was because new york's health care marco was one of the most rigid and lisa

market oriented -- at least market oriented of the country. that it should improve is good, but -- in fact, all of the signs we are getting -- california is not going to be such great news. that a loting signs of the premiums are going to increase by gigantic amount. let's not forget -- i mean, i agree that there's always bumps in the road in implementation. but these are pretty bumps. these are pretty big bumps. let's not forget that the class act that was opposed to reduce the cost of the health-care law had to be repealed because it was unworkable. now the employer mandate. it has been delayed. there are a lot of people who think it means that it is going to be permanently delete because -- delayed because it is unworkable, too. one of the problems the health- care law was making was -- some

-- is a going to cover everyone? it looks like it is not going to be the case. or better or for worse. -- certainlyyone poor people need to have access nd be able to a get better health outcomes, but the other -- some were told people would be able to keep their healthcare. we're finding out it may not happen. and premiums going to go down for everyone was one of the premises -- promises made. it is true that some people -- all the people and people -- will see the premiums go down but absolutely no doubt that again, younger and healthier people, again will have their -- the shorthand of the stick like theyo with the fact that probably will not have to see

the social security and have to pay for medicare and see like this and will see their premiums go up significantly. i am not as optimistic as you are. host: we are looking at the economic situation and also what president obama and his team at the white house have done for the economy over the last five years. the president in florida yesterday talked about infrastructure. the headline in "the new york times" is he vowed to speed shipping and transit projects. you can see him touring in jacksonville, florida. let's see what the president had to say specifically on infrastructure development. [video clip] bill in is a bipartisan the senate to improve highways, and the rail systems, port like this one. the house should act quickly on that bill. let's get more americans back on the job doing the work america needs done. that will be good for middle- class families. that will be good for middle- class security.

host: talking about infrastructure. california on the democratic line. we were just talking about your state. go ahead. not --the lady that does caller: the lady that does not support obama's health care plan, she probably really likes the plan before obama health care was passed, which was insurance rates were skyrocketing and they were going up without the plan. lands she blaming obama's for skyrocketing rates -- obama's plan for skyrocketing rates question much it is big is this manipulating the rates. host: let's get a response from veronique de rugy but let's also look at what the impact of this law will be on the economy and what it has been so far, since that is the focus of our topic. guest: let's not forget the law beeneen -- has not implemented yet.

a lot of what we are talking about our predictions of what is happening here at when i say premiums are going to go up -- or new york premiums likely to go down. these are predictions. but it is a pretty consistent message -- actually because of the law. premiums may have been going up before, but now we are talking about the direct impact after implementation on premiums is they for the most part, with rare exceptions, are going to go up quite dramatically for a segment of the population. the young and healthy people. because one of the direct consequence is that we see is we see people proactively responding and reacting to the mandate and the law by not hiring full-time employees or by converting their full-time employees into part-time employees. these cannot be desirable outcomes. we can all agree that we want

health outcomes to improve for poor people. we want people to have the choice about what kind of insurance if they can get and when they can get it. and we want it to be affordable. and i believe that choice rather than government mandates. the free-market market is often better able to provide these types of services. with the exception that i think we should take care of poor people. we all agree on this. .ost: heidi shierholz guest: the health market is one of the cases where the free market isn't the best of i do. when you have a case where in order insurance to people who are not healthy, who have pre- existing conditions. if you have a case where people are offered health insurance on the private market and health insurers can say, i don't want to ensure people who are

unhealthy -- unhealthy people are the ones who need insurance most, actually will not be able to get it. that is one of the key things that happens with obamacare. absolutely true that younger or healthier people may see increases in premiums, but think about their whole life cycle. when they are no longer young and healthy, they will have access to healthcare. so they are making this down payment on being able to get good health care throughout their lives. this is something we are doing to help set up our whole economy and our workforce and our people in this country to be healthier moving forward. this very possible that will spark some entrepreneurship. i can'ts people say actually afford to go out on my own because i cannot afford health insurance and i have to have health insurance for me

and my family, any pleasure you can get health insurance in an affordable way through obamacare, you might be able to go out and start that business that you otherwise wouldn't have been able to do here in it is absolutely right. we don't know how this will all play out, but i am optimistic that this is the right direction for our economy. guest: this is the beauty of actually, i think, america. we don't know what they will come up with and if it can really change people's life. when half of the spending is done by the government, we can't say that there is anything free and anything that resembles a market in healthcare so far. look at some tweets that have come in so far. yes: that is a very interesting

point. you are a labor economist. you know this better than me. , onee giving up working exception is seniors. seniors are staying longer. theirave seen a lot of wealth disappear and they are worried about the future. i don't think it's holding back employment cap i really don't think so. of the a bigger share population working because that sustains economic growth than the population. weh strong economic growth, could have seen is working longer, younger people working, and people working full time. it is very interesting phenomenon. we have this very new

phenomenon in this recovery of this huge pool of what i call missing workers, people aren't in the labor force, but who would be at job opportunities were stronger. -- you bring it down can break it down by gender and age. there are fewer missing workers who are of near retirement age or retirement age, but there still are some p.m. in this recovery, there are fewer people age 55 plus working that i would be if a job opportunities were stronger. point where more people near retirement age or holding onto their jobs because people near retirement age are in the point of their lexical where they were more likely to andtheir assets decimated

the value of the home because of the how to mobile. -- because of the housing bubble. but because of the lack of job opportunities, we still have these missing workers who are older than 55 here i. we are talking this morning with veronique, a senior research fellow at george mason university. we're looking at the state of the economy in the the record of the obama administration. guest: not everyone knows what this is di. it is part of a deal that happened last summer to avoid the debt ceiling seen. onis an across the board government spending.

it happened with a meat cleaver, not a scalper. it is across-the-board spending cuts. that is the wrong thing to be doing right now. the evidence is overwhelming that us dare to come in which is deficit-reduction, this kind of thing that sequestration is a hard of, during a slump has big negative effects can you kind of -- you pull that kind of spending in the economy when no one else's spending and that costs jobs. so it is a big drag on the economy. we haven't seen the full .ffects really kicked in yet but we can see the more strongly in the next couple of months. guest: i agree it was a very blunt instrument. more importantly, it was targeted, if we are concerned about future debt, the wrong part of the budget, even though

i think that everything ought to be on the table, particularly defense spending. but our future dead comes on the other side of the budget and remains untouched and puts programs on on a paper like asial security and medicaid a way to protect poor people. threatss been a lot of that we were told that the sky "the washington post" did a story a few weeks ago looking at all the 46 steps that we have heard, how many materialized and only 11 and one of the things that is particularly interesting to doug about when we talk about in frustration, which by the way is amount of money that affects the growth of spending.

we don't really know how it will play out because government agencies have the ability -- for instance, we heard that it would be devastating for defense they would lose $800 billion for lockheed martin alone. they just announced their profit and they are up 10% in spite of sequestration. so i think there is a way of handling training people and -- handling threatening people and we agree that it is not the best way to go about cutting spending or being fiscally responsible. i don't think all the threats we have heard come all the fear and the devastation that was announced is going to materialize. david inglewood, new jersey, go ahead.

i give the obama administration and at funny comics. the basic problem is that these people do not believe in capitalism at all. exhibit a is the button employment rate in a black unemployment rate is at 13.7% to a but he talks about this, not the congressional black caucus, not obama, nobody. and this program should devote more focus on the black unemployment rate. and it has actually gone up this year, ok? then you look at all of -- you look at this debate on the minimum wage. if black folks can't find jobs at $7.25 an hour, what do you think is going to happen to the unemployment rate not only with blacks, but with lower skilled people if the minimum wage is $12 an hour or $10 an hour? so this is a big focus.

the actual black unemployment rate in chicago is like 19%. no one talks about this. and all of this governments ending, if government spending it was going to take this economy to a good situation, it would've happened by now because we are running up debt to pay .or thee see some stories in news about the unemployment rate for african-americans. 13 .7% unemployment for black americans in june of this year. aprilunemployment drives virtual slow-moving recession. guest: he is absolutely right. it is true that the black unemployment rate in our labor

market ends to be around twice the quite unemployment rate in good times and in bad times. the black unemployment rate just remains extremely high. the key lever to bring down the black unemployment rate is to get back to health and the labor market overall. so we need to stimulate demand it the biggest lever that we can pull would be substantial to bringl stimulus down the overall unemployment rate which would bring down the black unemployment rate with it. is other thing he said that really important in our economy, not just now, but since the 1960s, is the minimum wage. the minimum wage has reduced and real value is since its peak in the 1960s era in the research is conclusive now that the increases minimum wage that we have seen have not caused job loss.

he should just know that there used to be a little bit more ambiguity and whether economists really thought that increases in the minimum wage caused job loss. the research is really clear now that the increase in the minimum wage we have seen has increased the wages of lower wage workers and haven't caused job lost to even in times of high unemployment and that is key. a really smart time to increase the minimum wage because we know it will increase wages at a time when wages are really stagnant. actually generate some jobs when you increase the minimum wage because what you are you income if you think you -- if you think of the minimum wage as a shift of corporate rock that to low-wage workers -- corporate profits to low-wage workers because you are giving it to people who will spend it. that will stimulate the economy a little and will generate jobs. so this is the perfect time to

do it. president obama talked about it, but i think this is actually a perfect time to do a minimum wage increase and it would actually help low-wage black workers a great deal. host: we see on twitter this -- guest: i think the color put his finger on something important here in we have had a lot of governments ending and not just under obama. he says obama deserves an f on the economy. no, president bush does not deserve in a either. he was a big interventionist in every market you can think about. i don't think that president obama and resume bush are much more than -- and president bush

are much more solar. much more similar. as for minimum wage, it hasn't caused job losses depending on the way you look at it yet but it actually stopped people from hiring the really low-income people. people with low skills, it -- you may not get fired the cousin of minimum wage, but the boat who are not having a job right now will be stopped from getting a job. if people are not employing right now, we see an increase in in additionlabor to increasing the cost of labor that will be brought about by a lot of regulations that will come around. we do want a vibrant labor

market. that is the best way to help low skilled workers. in fact, there is a proven way -- the unemployment rate, the bigger it is, the better it is to alleviate poverty. you wanted to be sustainable and you want these jobs to be sustainable. the problem is governments ending. it does not have them -- it does not have money of its own. you have to take it somewhere else. so it has to borrow it. so it has to take it from the or. .- the private sector there are a lot of really good intentions i see in government. it does not materialize. in material -- in particular, it tends to help low skilled and

poor people. we are in joined by heidi schuerholz this morning. in hudson,from mandy new york. : could she give us the top five or six actions at the federal government to do to bring down regulations and uncertainty and how it would affect the demand for labor and how the same regulations and uncertainty caused the labor collapse in 2008? anything that would woulde the labor market promote. so streamlining regulation,

getting rid of all of the regulations that are hindering the ability to hire the ability to do business or the ability to start a business would be a very good thing. the tax coderming would be a really good thing. president obama talked about and there has been an effort and a lot of talk about engaging not rates, raising marginal but actually reforming the whole thing. right now right now the tax code is complicated and unfair. it has benefited higher class businesses. it is extremely inefficient. we need to reform the tax code. reform of the way washington thinks, we need an

end to cronyism. it is not just the signature of the obama administration. this is what the administrations do. they cater to their special interest friends at the expense of everyone else. -- liketo put an end getting rid of subsidies for some businesses when everyone else is not getting it. it is not just clean energy. it is oil. i would get rid of all of the special treatment companies get because they are close to power. host: we will get a response in a moment. let's listen to president obama's, as this week on tax reform. he gave his first speech on the economic picture and what he wants to see this week in

illinois. here is the president on wednesday. [video clip] >> i hear from too many people that they hear retirement is receiving from their grasp, it is getting farther away. they cannot see it. today, the rising stock market has millions of retirement balance is going up. some of the losses that have taken place during the financial crisis have been recovered. but we still live with an upside-down system where those at the top, folks like me, get ,enerous tax incentives to save while millions of americans who are struggling get none of those breaks out all. all. as we work to reform our tax code, we should find ways to make it easier for families to put away money and free middle-

class families from the fear that they will not be able to retire. [applause] if congress is looking for a bipartisan place to get started, they do not have to look far. we mentioned immigration reform before. economists show immigration reform makes undocumented workers pay their full share of taxes. that shores of the social security system for years. [applause] we should get that done. >> president obama on wednesday at knox college. tax reform is important. we have a progressive tax code, but it has gotten less so. our tax code does some redistribution, but less than it used to.

there is strong public support for taxing the wealthy more, having them pay their fair share. i think that is the direction of tax reform should do. there has already been some of that. , some of the subsidies under obamacare, there has already been increased taxes on the wealthy to implement that. that is a step in the right direction. we need to do more. ann inet's hear from greensboro, north carolina, a democrat. caller: i would give president bush and all of the republican party admonishments for their policy on the economy. in 2008, the economy crashed. for some reason, the republicans seem to forget that. this morning, your guest is continually talking about republican free-market. but that is what crashed the economy in 2008. i do not understand.

what grade would you give the obama administration on the economy? caller: he has tried everything. the ropes of -- the republicans have obstructed everything. effort? what about the results? caller: that is the second thing i was getting ready to say. he has the jobs bill that has been in congress since 2011. they refuse to act on it. i listened to the person this morning talk about the black high unemployment. i would guess if the president said today he was going to announce a special program to target black unemployment that there would be complete outrage. he is doing everything he can to try to help the economy, but republicans decided on the first night of his inauguration in 2008 that they would do everything they could to undermine his presidency.

host: let's get a response from veronique de rugy. go ahead. i think republicans, as they have been governing for many years, are no free market advocates at all. they talk a good game, but when you look at spending under president bush, adjusted for inflation, increased 53%. under president clinton, it was 12.5%. -- inent obama has kept 2009 had a gigantic bomb in spending. it has gone down and mostly flat. as for republicans, i am no defender of republicans actions. we always hear republicans are getting away. if president obama has managed to pass two gigantic bills,

dodd-frank and obamacare. as far as i am concerned, there is a lot of bipartisan action for things that are not necessarily good, but they are in agreement to continue a lot of the same policies that were implemented during the bush years and continue this in to this term. trying to fight things they do not like. gottent feel they have in the way of president obama implementing a lot of his flagship goals. int: let's hear from jodi iowa, a republican. caller: does anyone know the main reason why the collapse in 2008 and the housing bubble? host: heidi shierholz?

guest: i am glad you brought that up. i am an iowan. i am glad you brought that up. that is often missed. economyon for the collapsing is the house in bubble. it could have been a lot less sad if we had policymakers who would have noticed the house in bubble and had done something to help deflate it, if we had fed a housing there is bubble, if they were alerting the public, we could have prevented it. the fact they did not do it was a huge mistake. they allowed it to grow to $7 trillion. when it burst, it caused massive suffering of the american public that continues to this day. you are right. was one thingbble

that caused the great recession. we are still six years feeling the great affects -- defects. with the pace of growth we're seeing, is likely we will not get back to health in the labor market for least another five years. the bursting of the housing bubble will likely cause at least 10 years of elevated unemployment and hardship for american workers. that is the source of all this. s,pefully our federal reserve's the people at the federal reserve, have learned is their job to look out for us that bubbles and warn the public to give these sorts of things from happening in the future. any follow-up from you? caller: $35,000 are lost. with your balance sheet goes to

zero, there is no way i will recoup it. when he bailed out the $50 million for gm, they still owe the american people $18 billion, but they are spending all that money and building plants in china and mexico. how is that helping to recoup? we're never going to see that money. it was nancy pelosi and harry reid and the democrats that pushed to have the poor people that could not afford a mortgage, they threatened to them. afraid for our country. from let's get a response veronique de rugy. first this tweet. i think the housing bubble is the result of the unhealthy marriage of the

government and private sector. industryt favors and -- an industry. the banks did lending. that creates a bubble. i think it is asking too much of people in government to be able to control themselves and also monitor. there were a lot of people , andng about this bubble yet no one listened. maybe they have learned something about the housing bubble. there are still a lot of tax housing.at favor they are creating a lot of bubbles in savings and loans. you can bet they will be

creating a lot of bubbles in other industries whenever that happens. it is not the government alone. , ane is an important role important player in the crisis was the government's role in housing finance. it is also when it is married to the private sector. this is why i say it is cronyism that is a real problem. the government picking winners and losers. it is a source of a lot of disruption, a lot of losses, and wealth destruction for people in the economy. host: president obama talked about housing in his speech on wednesday. let's take a listen to the president at knox college in illinois. [video clip] have heldd news is we responsible homeowners stave their homes. prices are up and fewer

americans see their homes under water. we are not done yet. the key is to encourage home ownership that is not based on unrealistic but instead is based on a solid foundation where buyers and lenders played by the same set of rules, rules that are clear and transparent and fair. already i have asked congress to pass a good bipartisan idea, one that was championed by mitt romney's economic adviser. this is the idea to give every homeowner a chance to refinance their mortgage while rates are low so they can save thousands of dollars a year. [applause] it will be like a tax cut for families if they refinance. tom also acting on my own cut red tape for responsible families who want to get a mortgage, but the bank is saying no. partieswork with both

on fannie mae and freddie mac and build a housing finance system that is rock-solid for future generations. host: president obama speaking at knox college on wednesday. we're looking at the economic record of the obama administration. veronique de rugy is with the mercatus center at george mason university, and heidi shierholz at the economic policy institute. our next caller is katherine, independent. a suggestion. president obama spoke of the u.s. economy now and in the future. if the government does a detroit bailout, i hope it will not do the same old thing of just propping up failure. instead u.s. dollars would be given to create a detroit bestn's city using the

technology, making it incrementally healthy, and pleasant. this 2200 city would be a place where experts would come to see, study, teach how to create cities of the future. host: katherine talking about detroit in a moment of opportunity, trying to create the next generation community. heidi shierholz. guest: i do not know a lot of details about detroit, but she brings up a really good point. one thing we could be doing is making investments in places that have been hard hit by unemployment. detroit would definitely be one of those. host: who should make the investment? the private sector or government? guest: it is time specific.

at a time when we are in a slump and private companies are not investing, this is the time when the government should be doing it. it was never tried. packageinal stimulus was not the government directly hiring people. but this time around, we could think about having some kind of program where the government comes in and directly hires people in places that have been hard hit by unemployment. it is not something anyone is talking about, but it could help places that have sustained high unemployment at a time like this. host: veronique de rugy. guest: i think the trick is a good example of big government policy -- i think detroit is a good example of big government policy. the federal government has invested a lot of money on rail , city and state government. the problem with the government

is you have the bad incentives in the way you decide where to invest. it is one of the striking things about the way the stimulus money was spent when you look at looker it went -- when you at where it went and tried to achieve the goals the obama administration said it would come to hire people, this is one of the way is supposedly stimulus spending works, you go and hire people in the unemployment line. this is not what has happened. then there is the added difficulty with government intervention. people on the ground may not respond the way the government hopes. we can expect this with major projects like detroit. the government was giving money to the states hoping it would hire employees.

states have big budget deficits. they did not use the money as the federal government intended. they filled their budget gaps pai. there is too much faith we put in the ability of the government, even when the government has the right intentions and there is a onblem, to actually deliver these promises. detroit is a good example of a lot of good intentions gone bad. unfortunately, a lot of and ament intervention bloated public sector with lots of promises made to public employees which are going to have to be paid for by someone. richmond, indiana, is our next caller. he is a democrat. caller: i would like to agree

with the one best you have. cronyism is a big problem in washington. people need to realize we need to get the old people out and get new politicians in. i also agree with the other woman. detroit would be a good place to start a new deal. i think that is what we need, the politicians to have the guts to go forward and implement a new deal. host: thank you for your input. let's hear from carl, a republican. caller: i would like to ask heidi about the $17 trillion debt we have. what does that do to the economy today? if you want to compare

liberalism against texas toism, compare california. compare ohio to illinois. ohio is coming out of the recession pretty good. illinois is like california. they're practically in the currency. socialism is not going to work in this country. we're going to have to get back phase old responsibility where you have to get out and work. host: let's get a response from heidi shierholz. guest: i am glad you asked that question. our deficit increase a lot during the depression, but the deficit naturally increases in a crisis. you have people losing their jobs so they are not paying taxes. the revenues go down. spending on safety net things

like unemployment goes up. you naturally see the deficit go up during a downturn. intuitive toounter think about. that is actually good for the economy. when you are in a slump, when the government spends more on nets, that helps them. when they are in a slump, the private sector economic activity goes down. people are not spending. businesses are not investing. that means we are not going to get out of this. that is exactly the time when the government coming in, spending, generating economic activity temporarily is what we need. it is interesting. i sort of fault obama for not helping the public understand this tricky part of macroeconomics. he was out there in 2010 saying businesses, the american people are tightening their belts. the government needs to be tightening their belts, too.

that is completely wrong. at a time when the american people are tightening their belts, when people are not spending, people do not have notmes and businesses are investing, that is exactly the time the government needs to step in, generate economic activity to pull us out of this. time for thehe government to spend. the boom is the time for the government to pull back. we're nowhere near the boom yet. when we get there, we need to pull back. not yet. we should be doing more. from thedi shierholz economic policy institute. veronique de rugy from george mason university, your thoughts? guest: let me grant the idea that the government should be helping in a slump. we're not in a slump. we have been out of the recession for four years. the economy is growing. theories,to all the

in good times, the government should be holding back. the problem is all the people who were advocates of more spending during recessions are never calling for the government to spend less during the times. this is particularly true at the state level. during bad times, they do what you want. they will cut spending to some extent and reduce the deficit. when revenue starts rolling back in, they go back up with spending went crazy. at the federal level, it only goes one way. it is up, good times and bad times. they spend more and more. even if i were to grant a five the government should be spending money in the short run when we are in recession, the problem is the incentives behind government intervention, the

incentives of people work in congress and the administration is always to spend more. that is a real problem. host: talking about the obama administration's economic record. is an independent caller. caller: i think the president courseset a steady toward economic recovery. he and all americans should stay away from blaming the bush era policies, the 1%, or any other issues whether it be the housing bubble and other issues that seem to create a fot in the minds of people. the elections are over. as the leader of our country, the president should establish a solid recovery plan put together with the brightest minds in this country and avoid the yes men and women who tell him what he

wants to hear. he should get this plan done by december this year. he should start implementing it by january of 2014. if not, it is going to be too late. we can turn the economy around by focusing on energy independence and made in america principles. we all should work together with the president to help the country's economy. if not, we are looking at a very long recovery. i voted for governor romney because i thought he would help businesses like mine to turn around. but the elections are over. we have a president. we all should work with him. we should all help him to turn our country's economy around. if not, we will be standing in the china redline looking for handouts from them. i do not want to see that for me or my children.

host: thank you for your call. let's listen to president obama talking about his perspective on manufacturing and green jobs. this is from his speech yesterday in jacksonville, florida. [video clip] >> we've got to help manufacturers bring more jobs back to america. we've got to keep creating good jobs. we've got to keep creating good jobs in manufacturing. we have got to create good jobs in wind and solar energy. we have to tap into the national--- natural gas industry. businesses want to relocate here because we have durable supplies of energy. we need to be building this country's future. host: heidi shierholz, the president was talking about manufacturing. what is in his record? what do you want to see happen? guest: one of the biggest things

isding back manufacturing the exchange rate. like a good word. the dollar is too strong. we all like strength. but the dollar is too strong. ,e need the dollar to be weaker a leaner, meaner, more competitive dollar. what ever you want to call it. when the dollar is too strong, that means our manufactured goods are more expensive to people around the world. they buy less. we export less. that costs jobs here. theronger dollar here means goods that are made around the world are cheaper to us, so we import more and by last year. valuedng dollar, the over- dollar hurts our manufacturing.

the biggest livre obama could pull to boost our manufacturing sector is to identify countries who are manipulating their currencies and keeping them too low relative to the u.s. dollar. if they are devaluing their currency by buying u.s. treasury you could make it illegal for them to buy u.s. treasury bonds or you could put a tax on them. there are things obama and the treasury department could do to keep countries from manipulating their currency and making the dollar too strong, which is hurting manufacturing jobs. that is what he should be doing right now. host: veronique de rugy. guest: there is this mindset that exports are good and imports are bad.

because theyood knew our producers and sellers. also very good. it means consumers can buy things at a much cheaper price than we would on our national market. that is good for the economy. about favoringon exports against imports, it is totally forgotten. the benefit consumers get from territory, from being able to go , itget the cheapest things is also good for the economy. the president was talking about green jobs. i am single minded thinking about cronyism. this is one of the areas when

you look at good intentions, when you look at what the government did to promote green jobs and clean energy, they ended up lending money or guaranteeing loans for companies that have access to capital in the first place, to energy sachs, to nrg company, a giant. a lot of these programs have upd intentions and end benefiting big businesses at the expense of the smaller ones, going against the goals that were set. 'sst: looking at the obama administration's record on the economy. the president has given a couple of speeches this week looking at his economic policies moving forward. talking about things like infrastructure, education, also green jobs and manufacturing.

our guests are veronique de rugy, a senior research fellow at the george mason university mercatus center center. heidi shierholz is also here, an economist at the economic policy institute. the next call is from delaware. allen is a democrat. caller: good morning. thank you for taking my call. regarding the obama economic policy, i think the biggest problem he has with it is he has done a poor job of communicating that to the public. case in point was the payroll tax he had. i saw tea party people picketing and complaining about being taxed, not realizing they had a payroll tax cut. host: messaging. caller: yes, it is.