if we can get a vote, i think we could move forward. he cannot make them. >> thank you all. >> thank you very much. >> more from the atlantic economy summit with the discussion on the state of the u.s. economy and the budget. speakers include jared bernstein. and a member of the committee for responsible minute -- budget. this is 50 minutes. [applause] >> thank you. my colleague who is a senior editor at the atlantic. he has the most fun job. he is going to moderate what i suspect is a feisty panel. follow by a one-on-one interview with governor knorr quest. i can't -- governor knorr quest

-- norquest. he was the chief economist and the office of the vice president. director of the washington .enter for growth a senior fellow at the center for american progress. bill hoagland, one of my colleagues from the senate. bill clinton takes credit for balancing the budget, but pete domenici had a hand in both and the bill hoagland was his hatchet man. can --guiness is president of the committee. i have never seen in organization -- it was shipwrecked and dead. she has turned it into one of the most important tax in the country -- pacs in the country.

yves smith. everything about her is provocative. finally, capping off the import have jim pinkerton. stand up, jim. he is a contributor for the american conservative magazine. a senior fellow at the new america foundation. good luck with this panel. >> if the last panel had a -- the should be

a fun one. we are talking about the domestic economy. a lot to get to. one point to make -- i wanted to make, it is easy to seem just get caught up in the numbers. when you look at the bigger picture, the story is actually surprisingly boring. we have been creating between 150000 and 200,000 jobs every month for the last three years. the economy has been growing about two percent for three years. a recovery.n the strangest thing about this thermostatic recovery is that is not how they are supposed to go. is almost as if we returned

to trend growth before we had recovery growth. what happened? why has this coverage been so boring? all, it is great to be here. thank you for coming it is great to be in the living room with my friends. has to do with the and the responses to those causes. which have been incomplete in some cases and in adequate and others. let me quickly take through that. caused by a was housing bubble. actually they were right to warn that debt bubbles can be far more damaging than equity

bubbles. your pet rock share goes from 1000 20. i know yves has insight into these dynamics. with all the machinations around insolvency versus the liquidity, the dynamics are very pernicious. you have to hit that card. i think we did hit back hard. --hink the fed hit that part hit back hard with monetary policy. -- the deficit as a share of gdp fell from 10% -- these are calendar years, not fiscal years -- the deficit fell from 10% in 2009, highly elevated, to three percent in

2013. the largest four-year decline since the mid-1950's. has beent to austerity very damaging and is one of the answers to your question. the only thing i would add, and i will stop here -- we still have a 70% consumption economy. if the growth is alluding the middle class, gdp is up 11% of expansion.his the expansion is 56 months old. the average expansion is 58 months. this is already long. upporate profitability is 50%. the s&p is up 70%. the median house hold income is down five percent. i will let heather talk more about this. the fact that growth has been such an end run around so many people has been a debiting factor. ng factor.on

>> if the story of the recovery has been thermostatic and boring, it has had a motif. one has been inequality. why has growth eluted the middle class? what characteristics are such that it is not true going down and helping typical family wages? >> there are a lot of reasons. juridical is alluding to some of them. -- jared is alluding to some of them. start.ce i want to as jared stated, we have lived period where we lived through too much debt. the housing bubble increased. we saw people taking on increasing amounts of debt. middle-class and upper-middle-class families taking on this debt.

which in no small part was a part of the crisis. we have to be thinking seriously about why we got into the situation. about thee story is availability of credit. some of the story is about the way that families coped. with declining wages. the lack of wage growth he saw. -- they saw. of a perfectt storm there. this question of why families and workers are not benefiting from where growth is going today is not a new question. it is one we have been dealing with for decades. what we just lived through is families dealing with it through debt. what we dealt with before his families coping by putting in more hours. the people participate in labor force. that was the first way they cope with declining wages.

the 1970's and 1980's. you have been seeing this for a long time. saying this is unique to this recovery is not where we need to start out questioning. why is that you have the same workers benefiting from growth? >> i will start that comment by pointed to something that larry said. we continue to live in one of the wreck -- richest countries in the world. you see that everywhere except in increases in workers wages. divergences huge between what has happened to corporations and productivity and what has happened to wages. a lot of things that go into that. policy choices we have made. from everything to thinking about the review -- real value of the minimum wage to trade and fiscal policies. the ways that workers have lost their voice at work. what happened to unions.

there is not one answer. i do think it requires a looking back over time to see what has changed. i will end by noting that one of the biggest things to have changed has been the significant rise in inequality. we now know, thanks to this very that it is the pulling apart of the top one that has shaped this rise in inequality. pickett about what that means for economic growth and how that growth is not trickling down is one of the most important questions we have to tackle. >> fantastic. it is not merely that growth is not hitting the middle 50%. there's just not enough growth. youre used to recoveries -- had catch-up growth, not at two percent. what's up through the headwinds the economy faces -- walk us

through the headwinds the economy faces. >> i thought there were basically three issues that are holding back the economy. >> one is globalization. -- iter worried about? was never there. it is a major into impacting us. the second are michael powers, ngos and lobbyists. powers, ngos and lobbyists. the internet makes it difficult for people to come to conclusions. it is confusing the american public with democracy. the biggest hurdle from my perspective is ourselves. it is the old -- we are our enemy. we ask our politicians to provide too much for us in the near term, not the long-term.

we would focusic on is after all that has been set and done, we are focused on 73% of gdp. that has not changed. that has more than doubled what it was historically. with be frank and honest about what we're talking about. that is what is driving expenditures in this country and causing the difficulties we have. -- build up the debt which will haunt us in the future. the bottom line is it is squeezing out the things that jarrett and i would agree to. investment in the future. we have social security, medicare, medicare it -- medicaid basically driving it. because of those programs, even though mr. van hollen suggests we have a budget, it is only one

third of the budget. it willest-growing -- it will beecure -- paying the interest on the public debt. a 19% annual rate of growth. that to me is the biggest danger going forward. that is the headwind we are facing. >> bill said we want to much in the short term, not enough in the long term. people in washington: budgeting. budgeting. a lot of people look at deficit loss say, aren't you happy? and wetalking about -- were talking about this backstage. we are not doing enough in the long-term. you go the beginning, if back to when people started talking seriously about fiscal policy. when simpson goals came out. wles came out.

it was right after the financial crisis. we hit deficits that were trillion dollars. people were saying, you must be worried. answers, no. that was an appropriate time to have trillion dollar deficits. d it not get helpe worse. the concern is the longer-term -- and on the unsustainable trajectory. for mediumblueprint and long-term debt consolidation. it would put in place changes that would take place gradually. you heard doug, dorf talking about this. elmendorf talking about this.

that is what we did with the retirement age. inlan that has more stimulus the short term and get control of the debt in the long-term. one of the biggest challenges facing -- creating all the problems is the political dysfunction in washington. as a result of political dysfunction, the changes we have made have been the opposite of what you would want to do. we did raise revenue. we raised them by raising tax rates and set of using opportunities to start the discussion. how do we fundamentally overhaul our tax code? are there ways to broaden the base? tax codetext kate -- as progressive as it is? we did it through rate increases . which makes things more difficult. more damaging has been the sequester policy and the ongoing squeezing of discretionary spending. when people talk about -- we

don't need to do with entitlements, those problems are down the road. the aging and health care issue. if you delay those, the results are you squeeze out other parts of the budget. we have been doing that not just now with the sequester, but for decades. we have a budget that is basically upside down. we focus completely on consumption at the expense of investment. we focused on bringing the deficit down in the short term. we have done nothing to do with the long-term. the help is costs are going more slowly, but no certainty that will stick. we should have allowed for more fiscal space to grow the economy in the short term. there are plenty of policy solutions. i would go back to the political point. the political difficulties of one, no more action forcing moments. the fiscal clips are gone. two, these are difficult choices

to make. three, it is an election year like it is every other year three -- year. four, the parties are unwilling to compromise. the only way to tackle these challenges is if everybody feels they have been a part of it. and the upside is a plan that will be with the debt and grow the economy. anybody that studies washington knows we are in a tough place. that is a huge challenge. >> one theme of what my is saying is people -- one theme of what maya is saying is the people in charge of recovery are getting in its way. how is this true in financial services? >> i want to take it a step further. >> they are working on the mike

-- mic. >> shall i talk like that? when i come to washington dc, i live in new york. when i come to washington, and you will have to yell at me if i start -- i have the feeling i ine to first i -- versailles 1780. i know my colleagues have been passionately talking about income equality. but we have a recovery where the top 1/10 of one percent has pulled away. the top 20% is doing ok. the bottom 80% has no savings, working part-time jobs. the hoursen hours -- have actually collapsed. shrunk to an unusual degree.

we are seeing more part-time work. they are largely junk jobs that are being created. job creation has been at the bottom and of the income bactrim -- the bottom end of the income spectrum. we have been running a 40 year experiment of neoliberal policies. the regulating markets. gulating markets. we have seen increased predatory behavior. -- health care reit industry industry marketing drugs that they knew would increase heart attacks. when it was taken up the market, you saw a change in the u.s. death rate. the overall statistics moved. we have had -- we have seen

significant behavior in the private sector that is affirmatively destructive. when you look at the stock market, everybody thinks the stock market is used to raise capital for capitals -- companies. have been, companies net buyers of stock. they are not using the stock market to raise capital. they are using it to prop up their prices. companies are borrowing at the supercheap rates and buying stock. they didn't move as much in the u.s. during the ukraine crisis. as because of corporations. we do not have a couple a system that is working. -- a capitalist system that is working.

they were not investing in the last expansion. they were not savers in the last expansion. we have incentives that are broken along the way across the system. until we try to fix the sick corporate this -- governance structures, we are rearranging deck chairs on the titanic. [applause] mic dysfunction was not planned. completely a mistake. jim, i want to talk about the future. of economicods growth have come from sector scenes. even the last 10 years was a housing and debt consumption fueled recovery.

a lot of people look to industrial policy to solve some of these problems. they say the u.s. needs to get behind a certain sector and push forward. that will create the jobs we lost. how do you think about building a smart industrial policy? >> it is well-known industrial policy is a journey word -- is a dirty word unless you live in germany or japan or south korea. we have called it hamiltonianism . i think it has been spectacularly successful. as we look to the future, it is worth looking back to such spectacular successes as the eureka now. rie canal. one thread running through all of them is they are pre-cbo.

they would've said, what a loss of money. we can't possibly do any dynamic analysis and think of positive benefits. i submitted big part of the problem we have is we are crippled i a static analysis scoring system that destroys as a matter of policy any idea or vision. let's take a practical sample. my and mentioned health care. maya mentioned health care. in 1938, president roosevelt created the national foundation for infantile paralysis. a non-catchy name that was organized against polio. when they did public service announcements on the radio, the line was, send your dime to president roosevelt. heard it and said, march of dimes.

it was a public-private partnership in the death since the word. -- in thevest thing best sense of the word. the first thing he did was injected in himself. then he went to president eisenhower and said, i think i have something. eisenhower said, this is important. a little is a scorch. scorge. is a 1.3 million schoolchildren are pioneers.s polio the vaccine was approved in 1955. a colossal success. forget the human nature -- human interest.

study, if wethe project future costs of polio to the year 2000, we are looking at $100 billion a year in wheelchairs and i are logs. iron lungs. there is no way the cbo would've seen that coming. andcan do similar analysis -- in smallpox. the point i am making is not only is the cbo advising, it is -- we spent the last quarter century wrangling around on health insurance.

say what you want about the merits of the programs. we made a massive financial extent meant -- extent of our commitment without a scientific commitment. even as we have extended health insurance to everybody, the number of drugs and medical vices have plummeted. devices have plummeted. the experience of minor surgery is scary. the biggest cost overhang staring at us is alzheimer's. headed for a cumulative trust -- cost of $20 trillion. you would think that somebody would be saying, nobody's held insurance plan whether it is

paul ryan's or barack obama's will be any good if we are dealing with tens of millions of people being warehoused in dementia care. the fiscal issues are crushing. somebody told me, you cannot believe the miracles they are working on. i said, i don't doubt it. history shows that the valley of death between a discovery is long and wide. the trial lawyers and hepa -- nobody will care. it doesn't register in the political community. that entrepreneur work so hard to make that drug. but it never happened because

the fda to and it down -- turned it down. if we took a hamiltonian vision and said, we have a supply-side problem, too much regulation and trial lawyers. andy demand-side problem. -- and a demand-side problem to read -- problem. there should be some authority that says, we need this drug. instead the companies take their chances and the fda says no. the rest of us are left with nothing. when the pentagon wants a new airplane or carrier, they put out a contract. they get it done. they pull it through the system, including the regulatory hurdles during that is part of the process.

you would think something as profoundly important -- they say health care is the most important issue -- you would think we would treat it as a strategic issue not unlike building canals or railroads. recommendation systems. -- or the communication systems. [applause] >> i saw you scrambling furiously. >> heather is way off. to tie some of this together if that is ok. and actually come out of the place that is more optimistic than where eve is coming from. although a lot of her comments resonated deeply. first of all, let me say where i agree and disagree. i think bill is exactly right in

nailing in a very intuitive and important way the long-term fiscal challenge. much americans want this and they are told we can get it for this as long as we are told that, we believe we can get it, and that sounds pretty good. as long as we do that we will have the problem that we have. i think this is a very important insight into the future, and folks like maia and bill and their organizations can help, avoid that in the long-term. where i strongly disagree is when i think of the problems facing the current job market, and the current income and wage package of the vast majority of working americans, problems i have been working on for 20 years, and have seen only one period where they got better, for a new york minute, there is

nothing -- those problems, that itch won't be scratched in the slightest by doing something to reduce the debt from 73% of gdp, to 55, 40, whatever you want in the long-term average. i suspect my colleagues would agree with me. to the contrary. in the near or medium term, it may go the other way. i think it is curious to be on these panels, everyone says, we pivoted too soon and it is not my fault. there is somebody out there, i am not pointing fingers because i don't know the answers but somebody out there, and it was not me, helps to motivate this early pivot. and so i am very wary of trying to address the problems with the folks on this couch, that they have talked about.

i would be wary about trying to address the problems by targeting debt for deficit. i wanted to bring some of this together. when bill talks about globalization he is right again. you can correct me if i am wrong -- this is the trade deficit. he was talking about large, persistent trade deficits that have been a drag on growth for many years in this country. this is not a protectionist or anti-free-trade wrap. i am in favor of free trade -- free-trade. but because we have had this drag on growth, this has happened because our trading partners to not practice free-trade. they manage their currencies to avoid that. that is what i'm getting at in my final comment. i think that, as bad as these things may sound, with a very compelling structural analysis of how screwed up different markets are, product and pat

-- patent markets, all of that, full employment, truly full employment, and tight labor markets, actually have been shown, in fairly recent history, and i am thinking about the latter 1990's, to counteract many of the negative effects we are talking about. including the deeply embedded inequalities. if we can achieve full equality -- these are not have love traction right now, i have a lot of ideas on how we can get back. i believe that by achieving full employment, and giving workers more of the power that they lack, and the labor markets we had the last 40 years, that would offset a lot of the problems that we have articulated.

>> can you respond? >> there are 2 clear threats -- one of them is in the midst of, -- we are in the midst of, the level of entitlement spending has not already been freezing -- squeezing out. this has a big effect on the level because the squeezing out public investment. this affects where we are today. that trend takes a long time to reverse. you can't change medicare quickly enough, to go back and say it used to be the reverse, this is more investment over consumption. that has changed the way we make commitments down the road, and it will take a long time to reverse that. if you have something unsustainable and go badly --

you want to get out ahead of it. that is part of the historical average. this is higher in the future and it means that it is certainly not the only priority, there are many economic priorities. economic growth is the overall priority here. this is better for the country that has been in the past. one thing that will help grow the economy is getting a hold of your debt, and this is ensuring that you don't have a debt crisis because you did not address the problem. this is not insignificant, and i don't think it means you should not deal with the other challenges. the problem in washington is that we comment allies -- compartmentalize the issue. we need people who believe in all these different things instead of just doing growth or income inequality. they are all interrelated. >> sorry. basically, we gave you a large

buffett of issues asked about. the first question is coming from right over here. >> my name is patrick malloy, i am a washington lawyer. i was a central banker during the 1987, 1988 period. i want to talk about what they said, we moved from stakeholder capitalism to shareholder capitalism. companies used to think they had an obligation to their workers and we have the obligation to the shareholders. we squeezed tensions out, and squeezed down wages to increase shareholder value. the other thing is that as we enter the global economy, other countries saw what was going on but the incentive to underprice currencies with low subsidies and labor cost, to make our companies increase profits, for

the show levels -- shareholders by chipping back. this led to the massive and ongoing trade deficit. the other point is that this also be the budget deficit. because production used to be here is now in china, not paying taxes here, and workers who used to pay taxes here are now unemployed. what this means to me -- and i think that sherrod wrote a great article about this a couple of years were couple of months ago, he said the real problem here that we should be focusing on is balancing trade. that the trade deficit should be the focus because once you deal with trade -- to stop the outsourcing -- and including tax policies to incentivize production in the country. that will be the goal to help us have a national strategy and help people. >> do you want to respond to

that? >> i appreciate that comment, thank you. a couple of things i want to add is the picture that you are painting, in very dark colors, is actually a little worse than you suggest, in terms of the outsourcing. there are a lot of companies that outsource and i actually have their staff tell me that they outsourced when the case was not very strong. wall street likes hearing this -- there is no reason they should have ceded the furniture industry. the other issue, i just want to tie into that, is that -- it was related to your comment. you do have industrial politics, we have a very subsidized -- financial services industry. it is so heavily subsidized, it

should not be considered a private industry. we should be regulating financial service companies like utilities. that is a conversation you cannot even indulge in, either. >> we will go over here. >> thank you. paula stern of the stern group. i want to talk about industrial policy and get back to jim's question. now i talk about the health industry, and the economy, and the role that the defense department and in particular, darpa has played in bringing us out of the manufacturing economy, into the information age. the role that they have played in the private, public partnership, seating basic research. this goes into semi conductors and the internet.

smartphones, you name it. should we be thinking more about how to build on that darpa model? so as to assure that when we are in a mode where we are exporting, we are better equipped to do this. i would simply add on this trade issue, we have not even talk about energy, gas and oil, the exports and what that will be doing to those numbers. i would not prolong those numbers to provide the basis for too good, washington-based policies for growth in this economy. >> it is supported by the institute for energy research, a conservative leaning research group, with oil and natural gas under federal lands and water. this is 128 trillion, a

statistic worth taking apart and criticizing and so on. this is what we owned and -- it is hard to think of a better place to spend the money on than dartmouth. the longest-serving dartmouth director, in its history, said, look. seven out of eight of our projects were total failures. one out of eight, a lot of the drone technology -- this was -- these were successes. he rankled me at the meeting when he said this is touring -- boring stuff. that is not interesting. because the case studies of how people do things, and the

internet, even the economists have a hard time figuring out the value of that. and that is up from zero. thanks to the magic of moore's law and the national science foundation and silicon valley in a lot of consumers and everything else. this is pretty spectacular stuff. but there are others to be had -- i'm in support of the regulatory tax policy and so on. but even now, with this economy that we have, with the household network, is $80.6 trillion. this is still a lot of money. we have $80.6 trillion out there as a pool of potential capital. and we have the cbo reading list. this is more powerful than the existing supercomputer. there is a potential economic growth. in the silo of the budget game, if this quantum computer -- there is the tax revenue that is increased, in china.

how much does this quantum computing benefit might prove to be -- might prove to benefit every american and have a strict policy for moving manufacturing across and all 50 states. if this quantum computer -- bruce to be true, the cbo will notice there is a tax revenue. how do we make sure that this quantum imputing benefits such as a might move to be benefits every american and has a consistent policy for improving manufacturing and cross into all 50 states? we could go on further. not only would it be good politics, but it would be good economics. the politicians could take credit for ushering in a state of quantum computing for or are

ohio. popular. i think they would deserve to be in the pantheon of people who invested in the railroads and interstates, and the cell phone and tv network. thank you. >> i think at the pace the recovery is going, i think the internet is cool. [laughter] we have one last question. >> my name is martin apple from the council of scientific americans. i think that what you have all been saying, is that we don't think long-term in a have been doing is intersecting all of the short-term thinking -- and the issue that was brought up, the things that are most important and the raising of the issue of alzheimer's and the other issues, tell us that good, fundamental research, and good, fundamental technology can rebuild what we think we want to have.

but we still have to understand what the real problems are. alzheimer's will cost us a trillion dollars in so many years. lima change could cost us much more but we won't address that. and other issues around the globe are the same kinds of things, so we need to look at the whole of science and technology, with all of the political and action systems and find a way to get them to work together by having the power to think long-term, so that we are not driven by the thinking that we should be triggered by. this is not quarterly because of shareholders. who are the shareholders? most people are not investing for six months, to one year or many years in their corporation. they are trading 90% of the shares every day. so think again about what you think you know, -- >> who wants to take a gander about what they think that they know?

yes. >> you need another bite at the apple. let's think very quickly. let me do this. this is a little off base. i am probably the only one up here who is a cbo alumni. let me just make one quick observation. about cbo. the cbo is there -- other people -- i'm glad it is there. i love what you say and i always agree with what you have to say but there is one thing that concerns me about the dynamic scoring. i am all for dynamic scoring, and what martin talked about in terms of science-based research that acquires -- requires application and investment. my difficulty is this. this is my second problem. the ngo is a lot of this.

we have little program, the wic program. i was told to put one dollar in the wic program, i would get three dollars from the same program. there is not an advocate in this town that won't argue to invest more. that is what surprises a little bit about what jim has raised. if you go down the tax policy route, the dynamic route that we will increase revenue by cutting taxes, but the same time, what you are talking about is increasing spending because someone will argue that it will be a return on the investment. i am all for that, i just don't think policies established on capitol hill are science-based enough to make a decision, and for you, there is more spending and i am all for the

investments. i also think those investments should be offset by an investment in long-term expenditures in growing the economy. >> one more brief comment. we have three tweet-length comments. >> we are in washington. i thought this was exactly right. it is a big mistake to think that we can say, and write rules that say, here is the share of gdp that we can devote to outlay going forward. there are various rules being conceived of by people who are nervous about where the budget is heading. they want to lock in the historical outlay of 21% of gdp. climate change itself may make that kind of a historical average a terrible idea, with the kinds of investments that your question suggested. >> i have to get in here. i don't fault the cbo

for existing, they can do their thing and this is fine. it is just that the width of the french adapted -- french diplomat -- as they said, war is too important to be left to the generals. i would go to the budgeteers, and the conflation of the assumption being that the only thing that really matters about the american economy is the deficit, with a gdp ratio, or something. in four years, this is actually creating jobs across the country. sitting around thinking, as he or she makes entrepreneurial calculations about what others are thinking about customers and regulations and capital and so on. there may be some very direct relationships to the deficit and what they are doing out there, in anytown, usa. the main point is do they have

technology available to them, and a larger political vision, and the budgeteers would say, that boring subject of american history, this actually animates us and makes us optimistic about the infrastructure -- and we will get the benefits that we need. >> with policymaking right now, it seems too important to me to be left to politicians. one of the points i like, and i like the point together that we don't have the long-term vision in any of these areas. and a small division i would think about, i think it tries to do this -- how we have some institutions that are more impartial, that is why we do commissions sometimes, some kinds of ideas -- how do you bring in techno-crats or experts about what will grow the economy the most and what will be the most beneficial tomorrow. i would say that there is less room for that right now. but this is a lack of trust in what politicians are defining as things that would work in

certain ways. that is one of the biggest roadblocks right now. >> i would give you the red light and we could have a spillover session, and then go watch them argue right behind that exit sign. thank you so much, for a really good panel. [applause] [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] >> grover norquist also took part at the electric economy on france on tuesday. he discussed midterm elections, and the chance for the republican takeover of the u.s. senate. this is half an hour. about me say a few words grover norquist. he was president of americans for tax reform. dubbed by 60 minutes as the most powerful man in washington. how many of you watch stephen colbert?

if you do not watch it, turn it on. cold air had grover on many occasions here and he had him on ad grover on many occasions and he had him on. take all of the grandmothers and put them in a container underground and we will smother the honey. unless you agree to raise taxes, we are going to let the fire ants out. he says, would you give in and raise the taxes? grover said we have got the memory and the photos. we will rest well. grover was in my office. he stopped in on one occasion. he had this big black case. on top of that case, i happened oath that was a paper sheet. it was signed by stephen cole stephen colbert.

imagined to have that case with all of your secrets in it sitting in my office for at least a day and a half. i did not even tell you i had it. i thought i would auction it on ebay and see what i could get. without further ado, please derrick thompson with grover norquist. [applause] >> thank you, everybody. one of the themes of the last session was long-term thinking. it was sort of scattered. we'll from the short term to the daveterm starting with camp's plan for tax reform. he had been talking about it for a long time. my understanding is that a lot of members of the republican party have said they cannot

support something that raises taxes by this much in a financial institution. what do you see is a positive and a negative? >> the positives are the lower rates. 35% and five percent average at the state level. we are at 40 compared to europe which is 25%. a dentist down toward the 25% average. -- it isost the local a step in the right direction. the obama administration and harry reid have both said they won at least $1 trillion over a decade in any tax reform. they want it to drive the tax increase between one and $1.4 trillion. what we ought to be doing is leaning in instead of going to the full extent -- expense. --you get it on

expend something when you spend it. would buy machine, it appreciate over a year. there are some missed opportunities. this was always a discussion draft. we should not be unhappy that it is not more than a discussion draft. >> it has been such an issue in washington. is talked about all of the countries. people have been fighting about the minimum wage. they say it is a mandate that employers have to pay people a certain amount. on the other end is that earned income tax credit. republicans seem to be saying maybe we would play with the earned income tax credit a little bit. maybe we could alleviate some of the problems of inequality, that we see by making these families a little bit richer. how do you see the benefit of

the earned income tax credit? >> when you asked to write the check for people, this is not a tax credit. we've asked to spend more money, obama has kind of spent money that wasn't nailed down. the argument that we are all focused on income inequality, the government is capable of fix.has -- the president wants to fix. if he wanted to the minimum wage he could have done this in your 1 and your 2, when he had the super majority. he did not want to. this burning concern that he has is not true. they talk about this because we have had 50 years of the war on poverty, the government could not make people not poor. they don't want to talk about the last five years, but we have shoved away jobs by spending a lot of money. so now there is a new metric, which is making everyone in the

country poor, and still have less income equality, that government is probably capable of doing. i am not sure that you want to do it, but you could make everyone poorer. and more equal. >> what you think of the earned income tax credit, is this useful against income inequality? >> i would not use the tax code in that sense because it makes you spend money -- make it clear what you are doing and have a vote on it. and there's a certain amount of fraud, to go after that -- when they want to come in and be serious and have multiple checks going, then you could begin that conversation. until they're willing to do that, no. >> a lot of people talk about how frustrated they are with the act that nothing can be done in washington. he brought up the good point that in 37 states you either have an entirely democratic

majority or entirely republican majority, and the house and the governor level. possibly useful way to compare the trajectories of these dates -- states going against each other. you draw any lessons from that? >> absolutely. in washington you have the house and the senate that want to go different directions. people will talk about the good old days of bipartisan compromise, by telling you how old they are. because it is true that 30 or 40 years ago the republicans would get together with the democrats and they would argue about today's topics. all fights in washington dc work bipartisan. going up to nixon. during reagan's nice -- lifetime the two-party sorted themselves out. one wants a more constrained view of the government, one wants a expanded view, and they are heading different

directions. one wants to go east and one was -- wants to go west. what would compromise look like? nixon wanted bigger government, and we have revised between bigger and much bigger credit each guy would go back to his corner and say you know, i got us a really good to have more -- goo deal. goo- good deal. we were always compromising for bigger government. which was not the direction that we want to go. now we have one party that wants to go to less government, once that wants to go to bigger government, and they're not going to agree. each one can say no to the other. to give you some idea of you could quantify this. congressional funds that invest when congress is out of session and goes into cash when they are in session.

the reason they do this is that for 30 years, when congress was in session, the stock market was up about 1.6%. when they are out of session it goes up 17%. 17 bytes better when congress is not sitting because you could wake up in the morning and something bad had happened. it gives you some sense of the advantage of good law. the markets are paralyzed whenever congress goes into this situation. the state level, with opposite of gridlock. 24 states have republican governors and republican house and senate thanks to the redistricting. republicans have held those

legislatures for a decade. the democrats were asked, would you like one landslide or two, and they said two. so they got two landslides that lasted for four years, and one landslide that asked for 10 years. not just in washington where we tend to focus on congressional redistricting, but for state legislatures is probably even more true. the democrats redistricting did -- to make illinois and california and bulletproof for democrats, and the 13 days that have both legislature and governor. the republicans have 24 states. republicans have half the population live in another state. the democrats have a quarter of the population living in their states, at a quarter of a places like becky and i over the

legislature is divided. 13 states, democrat-controlled state going as quickly as they want. 24 states becoming texas or hong kong. they are moving in very different, some more rapidly than others. every single democrat state raises taxes, and all the republican state's top cut taxes unless several years. you see several differences on how they treat public-sector unionism. crisis of taxes and spending, markets for tax reform, by 2050, to get all 50 state to abolish the state income taxes. nine have no income tax now. north carolina and kansas, republican governors, both houses, have announced that we are going to zero. they got about a quarter of the way there so far. watch aerosonic of what oklahoma got weird word to see more movement more quickly.

and then we can judge. if you think that more government spending and higher wages make people healthier, wealthier, and were successful, and the economy will be better cover than he can do it all loads loads of good enough to wake washington -- will be better. they can do that. you do not have to wait to washington. >> filibuster proof majority have they want to reform the corporate tax code they want to fix obamacare. they seem to be troubled by the same gridlock that troubles the administration. to worrying about the changes that you want me to the way that the national government treats the national economy? >> we have a senate and house race in november. it looks very good for the republicans, with the number of senate the that are held why democrats that are engaging. -- are indeed your. -- in danger.

in 2016, there are a number of seats that you worry but in illinois, perhaps, which is one intent but it which is not only republican territory. 51 is not what you're looking for, 54, 55 is what you're looking for. the house will strengthen going forward. the replica guns have repetitive it is for -- the republicans have better candidates than the democrats, much more than 10,012 -- 2012 and we were sloppy about running for senate. not being disrespectful to anybody's personal faith, i would refer to go with the scaling or something. episcopalians or something and get elected. [laughter] >> you said greater than 50%. what percentage would you give?

what factors do you think are behind the republican wave that is coming in november? >> the democrats who are sitting in republican states. west virginia is technically a blue state, democratic governor, democratic house, democratic senate. the house, yes. the senate, 50/50. republican.l go so will louisiana and north carolina. south dakota. left one of the seven out -- alaska. alaska republicans have to make sure they pick one and not have a third-party and then they get the win. those are the seven you need to get to cross the finish line

area but now the republicans are pulling ahead in michigan, so -- in the senate race. we have serious candidates in new hampshire and in colorado that are both in play. of those together and you start to worry about georgia. could you define warlock for the audience that may not be -- [laughter] >> one of the candidates had decided she was a witch, which was good enough to defeat the sitting republican. but wasn't good enough to get across the finish line in the general election in january. -- in delaware. she is a lovely woman, probably not a witch, she was probably making that up. [laughter]

>> as optimistic as republicans are about 2014, changes a little bit because especially on the left there is a lot of days in the clinton machine if she does announce the extremely formidable race. take us through the top candidates for the republican party for 2016 and what the strengths are? >> this field is so much superior to 2008 and 2012. you really had one of two people who are running for president of the others were running to be a radio talkshow host or marriage counseling. or to sell books. they were buying a lottery ticket because maybe they would win a primary, and then the press would come and they would get attention. and then they would raise money, and then they would get a

campaign together, and they would get a campaign manager and all the things that should have happened two years earlier for a grown-up campaign. this time away aren't we have six people who are either standing on the stage already, could step up on the stage and no one would laugh them off of it and ask what you are doing. five governors, one senator. start with chris christie, he has had some challenges, and maybe he does not make it, but he rights himself, he will be a serious person and a good raise the money, he has the capacity and the name to both raise money and run, and a narrative of successes in terms of reforming a deep blue state. scott walker was a constant attorney blue state red. they reformed the pension rules there, they report that union rules.

every year they have to have an election if the union wants to keep going. they cannot take your money out of your paycheck, they have to come and ask you for it. teachers are making $50,000 in cap and that was taken out of your paycheck by the city or the school board, and given to the union, and he never sought. not since you and your pocket until the union guys come and say can i have $1000, and you're allowed to say no. oddly enough, several do. he has dramatically changed the saint -- the state. and every republican has made a contribution to him when the unions tried to recall him. he is the only governor that defeated a recall and got reelected. then you go down to rick perry, he faltered last time because he

should not have taken pain medicine before debates. that said, he spoke with the conservative legal action conference, and the establishment press for saying he is agreeably articulate. he is when he is not taking pain medicine. he is a very successful governor for 14 years. there is a real narrative there. the governor of louisiana got an ethics law that minnesota would have been pleased with passed in louisiana. he got school choice for those kids. parents have that right as soon as schools are available for everyone who wants to take them up on that. he may well run. jeb bush was governor for eight years, perfectly competent regular republican governor. he would be a candidate who

could step up to someone would have to fall over for him to step up, but he could do that. and then rand paul, who starts with 15% or 20%-based both and all 57 states. there you have a real opportunity as a senator. it other senator, it is very different -- very difficult to pass this bill. >> it is increasingly that they don't pass bills. [laughter] >> you can give speeches, but if you can compete with the guy who could wake up tomorrow morning who could do something edges on the front page of a major newspaper and the sugar is awfully difficult to compete with that.

>> you said christine, walkabout. , bush, paul. is there a top three? real progress there. he could next year year asn exciting, scott walker did back in 2011. that could put him up front. other than that, i do not see a governor that would work within that would do the kind of a mage -- amazing backflips where i know these guys are interesting, but look at this kid. moving to the elections of

the future, it was a poll that came out. a look at some of the trends among millennial's. first, they tend not to identify as labels. they have a mostly independent. the gap for those who voted for obama versus republican candidate in 2012 and 2000 and eight was the largest of the last four years -- 2008 was the largest of the last four years. this of the most diverse generation in american history and the generation behind it. 71% said they want a bigger government with more services. this is a slight majority. these are filibusters. party have ablican serious demographic graphic to look forward to? sure.

it need to look at the demographics in two different ways. democrats think of race and gender. there are ways to look at the number of self-employed people in the number of government workers versus private sector workers. people who have stock. which is why there is talk about the health savings accounts and individual retirement accounts. the democrats answer everything with cops, teachers, and employment -- those under government employment. it makes you lower likely to be a democrat or republican. you can add into that the other things you can change. you add to the other things that you could change. this is why the demographics shift. you look at the u.s. 25 years

ago. homeschooling was illegal in just about every state. had it legal. they know the modern democratic party wants to take that away from them. -- add that to parents have a voucher in several states. we are building out schools and structures that allow people that choice, but they go to a different public school were the one they go to now might be nicer to them when they walk in and say i have 5000 -- i have $5,000. i want to know how you're good to treat make it this year versus last year. what do you think? could go to another school. think of how you're treated when you walk in to buy a car versus

the department of motor vehicles. i do not think the democrats ever come back in the states for school choice has been won. come backbor did not in great britain until they fundamentally changed their view . remember when thatcher allowed them to buy houses and you could own it? and people did. the bolsheviks ran against them, and they said they will steal everybody's houses, and this will be great, and they got wiped out. they got wiped out in those areas where people would have said those are labor voters not when you -- not when you threaten my kids or my house or the education. 30 years ago there was very little concealed issue. people allowed being able to carry a gun on them in their purse. today they have concealed carry permits.

the person who has made that decision is a different human being than the one who says that we have a government, and if something goes wrong they will draw a circle around me and this will be helpful. the person says i will be in charge of myself. try to take that away from people, try to take that away from people -- that's what the democrats always get in trouble when they talk about gun control because they do not understand their threatening something that you -- that people consider important. we can, by expanding liberty, and that is where half the country that lives in red states are doing all of these expansions of freedom, and the immigrants are voting against that, and we would not want you to have that, and if we ever get back in power, we will take your dues out and you will never see it, and you do not produce a no, and we will

go back to the way it was. that is not a real sales pitch to go to people. once you give people more liberty you changed the nature of who they are as voters. i am not sure that the challenges that you mentioned continue out. we are not the same person at 40 as we were at 20. that said, i think a lot of republican party needs to be much more aggressive in being pro-immigration and we need to be taking all the smart people from around the world and when they come here to get a phd, i'm not in favor of not letting them leave, but i'm in favor of encouraging them to stay, and stealing their airplane ticket home. we want all this talent. there's a lot of people in a lot of jobs that we need more people. the reason that we are the future and china is not because we are allowed to have kids and

a lot of immigration. >> we have one more question. make it great. right there. good luck. >> john cummings. a writer. i know you just promoted liberty and individual responsibility. how do you feel about corporate responsibility? companies, who through negligence or error, dump chemicals into a river and declare bankruptcy, how can our economy deal with situations like that that does not just fall on the government to bail them out? >> you want to have reasonable loss so that people who pollute the neighbors property paid for damage they do, just as they were in a vehicle. real damage can be done. i think it is very important that we ask individuals and

businesses to be responsible for real things they do. which is why tort reform, where the trial lawyers have been getting rich going after people force the that the guy who owned the house before them did the some of the stop where you the guy with the deep rockets, again texas has passed a great number of reforms in terms of that reform that have dropped the cost of notable care in the state, more doctors are moving into texas as a result. louisiana is about to pass the same collection of rules. i think getting those reforms so that the billionaire trial lawyers who have been abusing the systems is the thing we need to tamp down. it is killing the tech sector,

being very unhelpful. let's reform those so that we can focus on cases of real criminal activity. by individuals, or people can collectively in some company. >> we have time for one more question. the guy with the beard? >> guys with beards get to go first. [laughter] new rule >> you have taken it to an extreme, sir. >> sunshine press. i'm wondering if he could set forth what metrics would make an economy better that is -- what is the purpose of all of these policies?

how would you measure that the economy is better here than there? you pointed to some states where the democrats are predominant. do you look at life expectancy? education levels? how can you tell if the economy or economic policy is better or worse? >> you want to have metrics, if you do not have metrics, you end up with all sorts of problems. i talked to the budget guy when bush came into office. i asked what metrics are you going to use? percentage of gdp? total number of full-time employees of the federal government? what is the metric you're going to have to maintain the cost of government.

and he said we should do something like that, and they never did. it wasn't on the list of things to do to measure the size of government. what are you trying to get to? the per capita gdp is one measure. people decide to be monks or warlocks or something, and they do not care about that. some people would rather have more than less. few people are quitting jobs and few people are moving. in a vibrant, dynamic economy, where people are leaving their jobs because they're someplace else to go to, they move because there is something to move towards. when you look at all the bad numbers not the employment levers, the number of people numbers,employment the number of people who left the workforce,

we are not moving as much as we used to, we not eating jobs as -- leaving jobd -- jobs as easily as we used to. you do not want people handcuffed to a job. generally, there are measures, and that is useful. we have done some fine work on earned success by what translates into happiness. winning a million dollars does not, surprising, make you happy. people will make a lot of money, but because of lack of the draw they do not get to be happy because they're not sure they have earned it. earned success correlates with happiness. happiness through money is probably easier, when you have money as the metric. >> thank you very much. [applause]

>> a big thank you to grover norquist. what is our funniest guy? >> washington, d.c.'s funniest celebrity. >> stand up here for a minute. grover competes every year and most years he wins. he has drafted me in from august through september. >> you have some extra time. >> i've gone back to watch who has one in many of these cases. these won in many of cases. grover won last year for impersonating dick cheney. and my strategy this year will be to impersonate grover norquist. we look forward to seeing you all there. [applause] [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute] >> coming up on c-span, russian 'sesident vladimir putin

remarks. later, president obama awards the medal of honor to veteran to her previously overlooked. >> i am delighted to yield to our distinguished speaker. mr. speaker? please use the microphone, mr. speaker. the arguments asset on this floor came to me by complaint of the members. first, they had not been notified. i do not believe that they were notified. i believe that truly they did not yet the mail in their office. sense of youre letter here. i'm inviting you to hear a dialogue on my perception of what american policy and foreign affairs should be. to 1970,go back back

1972. i have thef who intelligence committee. you're going to ask a question as to their policy and how they feel about the vietnam war. a --our beefier widely did you beat your wife lately? angola.t talk of were laterwho people opposed to. very interesting. stood before an empty house and challenged these people and you challenged their

americanism. it is the lowest thing i have ever seen him at 32 years. >> mr. speaker, if i may reclaim my time, let me say -- >> ammo that we take the speaker's words down -- i move that we take the speaker's words down. [applause] by the cableade company brought to you as a public service by your local cable or satellite provider. the heritage foundation hosted a discussion on the federal reserve's mission. about how it has performed over the last 100 years. you can see it live on c-span. later, federal reserve chairman janet yellen of get a news conference after the federal open market committee. should talk about monetary policy. at 2:30 p.m.

eastern also here on c-span. adults, theoung so-called millennial generation who are having trouble to get started in life because they come of age in hostile economy, money into a system to support a level of benefits for today's retirees that they have no ballistic chance of getting themselves when they retire. they need to be rebalance of the social contact -- contract. it is it difficult challenge for this country politically. not only social security and medicare half of our budget, it is by far the biggest thing that we do. it is symbolically the purest statement and public policy that as a country we are a community all in this together. these are programs that affect everybody. bold map of these programs does not work here.

send an 9:00 p.m. on book tv's "after words." and bing west. commentsour calls and on the mid east, a rock afghanistan on in depth. join the book tv discussion. the or the book club had gone -- tag on booktv.com. defending russia's move to annex the russian of -- region of crimea. in his 45 minute speech, he said the move to annex crimea was in line with international law. his remarks are courtesy of "russia today."

>> good afternoon members of the council. distinguished representatives of the republic of crimea. russian citizens. [applause]

>> my friends, today we are gathered to talk about a very important issue. it is a historic issue for all of us. crimea saw a referendum that took place in line with the democratic procedures and international law. more than 82% of the voters took part in a referendum. more than 96% were in favor of rejoining russia. these are very telling figures. [applause] to understand why this choice was made, we need to take a glimpse into the history of the crimea.

we need to understand the value of russia to crimea and the importance of crimea to russia. everything is related to russian history. you have places where ancient knights were baptized. they laid the foundation to unite russia and ukraine. the places were soviet soldiers are across crimea. crimea means sevastopol, the city of legends. it is the place where the russian fleet is moored. [applause] crimea is a legendary city and town.

these are cities that are symbols of russia's thoughts and might. crimea has many traditions and cultures. it looks similar to russia. no ethnicity disappeared in crimea. russians, ukrainians, serbs, crimeans. they present their culture and faith. there are 2 million people of the crimean population. 50% of them are russian. there are also ukrainians who believe that the russian language as their native language. there are a proportion of

crimean tartars. they look to russia. there was a period when some ethnicities had to go through injustice and hardship. many millions of people of different ethnicities suffer from oppressions. crimean tartars should go back to the land where they belong. it is a decision that would complete the process of rehabilitation. [applause] >> the decision would restore their minds and reputations. there are many ethnicities that

reside in crimea. that is their homeland. we would support that. there are three state languages. russian, ukrainian, and crimean tartar. [applause] colleagues, crimea has always been an integral part of russia. that faith has been preserved from generation to generation. that faith has live the role of the dramatic changes that our country has gone through. after the revolution, the bolsheviks included crimea, ukraine. they did that without taking into account the composition of

the territory. they have handed over crimea and sevastopol. the initiative belongs to mr. khrushchev. what was his motive? maybe he wanted to shift the blame for the repression. he has left historians of all of these issues. that was done behind stages. of course, there is a totalitarian state.

they have free will. we will realize through the grand scheme of things that this is a mere formality. we used to belong to one big country, the soviet union. it is inconceivable that sometime in the future russia and ukraine would be divided, different states. that has happened. thoughts that were unbelievable have become a reality. it has unfolded in such a fast way. none of the nations realize the dramatic nature. many people in ukraine and the

former soviet republic have believed that the huge commonwealth of states would become [inaudible] that remains just on paper. we have not seen a new country in march. crimea ended up at a different stage. russia realized that it was in broad daylight. we have to admit that russia itself contributed by asking everyone to take sovereignty. crimea was in oblivion. they went to bed in one country and woke up in a totally different country. they became minorities

overnight. the russian people have become one divided nation. crimeans say that they were handed over just like a sack of potatoes. what did the russians do? did they give up? they put up with the realities. that bitter situation. the country within in a state where it could not protect the people. it could not put up with that injustice. many citizens reads that issue.

many said that crimea is a russian lands. a russian city. we all realize that. we all felt that. we had to make realities. we had to build on that. we want to work with ukraine, are fraternal nation. russians will always be the most important. [applause] today i would like to share with you the details of the negotiation. the president asked me to speed up the process of a legitimate nation without borders. previously russia recognized crimea as part of ukraine. there were no negotiations over

the borders. we all realize the complications involved. i requested that this process should be sped up. we should give our consent to the limitations. we recognize parts of ukrainian territory. we close the issue. we recognize the limitation of certain areas. those were our motives. we need good relations with ukraine. that is the most important thing.

it should not be held hostage to some territorial issue. we believe that ukraine is a good neighbor. russian speaking people would benefit from a civilized, friendly face. their legal rights would be insured. these were our hopes. the situation unfolded in a different way. the attempts to ban the russian language and to assimilate the russian population and to make russians like other minorities suffered from a constant political crisis. ukraine has been going through for 20 years. if i knew what people in ukraine wanted to change. during those years of independence, they have been fed up with the power. [applause]

presidents have changed. they come and go. mps come and go. their attitudes to the country stay the same. they use ukraine at the cow they milk. they use it for the financial flows. they do not understand the realities on the ground. ukrainians have had to flee ukraine. they have had to work in other countries. they have to do our jobs. about 3 million ukrainians work in russia. there are about 20 billion u.s. dollars, 12% of ukraine's gdp.

i sympathize with peaceful slogans. the misery and poverty exists as a procedure to change our. they have to keep in mind that they want to stage a coup. another coup. they wanted to seize power, regardless of anything. they would use terror, violence, murder, and pogroms. they defy their political representatives. they tried to revise their language policies. that undermines the rights of minorities. the responses of those

politicians, curators of authority, explain them. they should not do so. they realize what a fewer ukrainian state would look like. it is somewhere in the reserve. it is still there. everyone is trying to ignore it. we all realize what the ukrainian neo-nazi forces want to do. one of their members is ukraine. many of these people claim to be officials. they do not control the situation in their own country. we have no one to negotiate with. they are controlled by radicals. i visited one of the ministers, you need to get permission from

the government on the maidan. these are the realities of the situation in ukraine. i'm not kidding. people who resisted were threatened with oppression. crimea was threatened first. that is why the city of sevastopol as russia to take their lives into account. to avoid what happened in kiev. we could not leave crimeans in the lurch. [applause] first and foremost, we need to create conditions in slovenia so that they can exercise in a free

world their rights of self-determination. what do we tell our colleagues in the west and europe? they say we are violating international law. it is good that they remember international law sometimes. better late than never. [applause] >> secondly, what did we violate? [inaudible] strictly speaking, we have not exercised this right. russian forces have not been in crimea. they were in crimea. they have strengthened the contention.

there is a limit on the personnel. it is in line with the agreement. that limit is 25,000 troops. we have not increased the personnel. when the crimean legislature does this referendum, give the nation the right to self determination. ukraine did the same when it seceded from the soviet union. ukrainians have made that decision, but crimeans are denied that right. why? they have strangled themselves with their own hands.

the situation is completely insane. they recognize coast of oh, and they've proved that they don't actually need permission from social authorities to declare your country a sovereign one. the u.n. agreed with that. they said that no genuine ban on unilateral declarations of independence -- there have been no documents in council that have any precedent on that. international law has no bands in general on declaring independence. it is very clear. i do not often quote documents,

but i will give you one more. here is a written memorandum. it is by the u.s. dated 2009. again, i will quote. in the declaration on independence, they cannot violate domestic legislation, but that does not mean a breach of international law. end of quote. they are pressuring everyone to recognize laws. why? [applause]

reactions of crimea are in line with their own memo. why can they do one thing, but the same thing will be denied to ukrainians, russians, and crimean tartars. the u.s. said that it was a unique case. why is it so unique? they say that there were a lot of casualties during the conflict. is that the legal argument? the u.n. court of justice never mentioned that. this does not just come

standard. this is primitive. you cannot use the same things for your own interests. you cannot call something black one day and white the next day. do we need to allow casualties to happen? we could have seen the same casualties had it not been for the crimean self defense forces. [applause] we did not see any armed conflict in crimea. why? the answer is simple. you cannot fight against the free will of the people. it is impossible. i would like to thank those servicemen that certain ukraine.

they did not open fire and they do not have blood on their hands. [applause] there are other thoughts coming up. they accuse us of aggression, some invasion of ukraine. i cannot remember a single situation where an intervention took place without a single shot. what is happening in ukraine reflects the unfolding situation around the world. after the [inaudible] was removed, there had been no more civility. the u.s. preferred to use a strong hand.

they believe that they are unique. they believe they are entrusted to decide the fate of other people. they do things the way they think. they do whatever they want to. it is a zero-sum game. they pressure other states to get the revolutions the way they need. if they cannot do it, they ignore the security council. that was the case in 1999 with

yugoslavia. at the end of the 20th century, the european capitals -- for several weeks, that was belgrade. an intervention took place. there was a resolution. then we had afghanistan. they distorted the resolution on libya. they did not just administering no-fly zone. there were a series of revolutions. these countries are tired of tyranny, poverty, no prospects. the sentiment was exploitative. it did not fit with traditions

and culture. what we have is violence and revolutions. the arab spring has been replaced by the arab winter. we saw the same scenario in 2007 in ukraine. they have invented a third round of presidential elections. that was a breach of law. now, they deploy a well-trained army of the government. we understand the reason. ukraine is against the integration approach of eurasia. russia wanted to have a genuine dialogue with the west. we are always interested in cooperation. we want to have honest relationships. we were cheated. we were deceived.

decisions were taken behind our backs. nato made an expansion to the east. there was deployment of military troops. we were given the same mantra. it is none of your business. you can say that easily. that was the same with the missile defense. it is still going on. that was the same procrastination on the visa agreement. now we are threatened with sanctions. we are living in a world of limits. it is critical to our economy. items and goods.

now this band has been removed. it is just formal. many of them are still in play. the policy determines. it is still there. we have always been cornered. that is because we have an independent position. we are defending it and we call a speed a spade. we are not hypocritical. in the case of ukraine, they were our partners across the line. it would be unprofessional. [applause] they knew perfectly well that for millions of russians in crimea and ukraine -- why did they lose sight of the approach? they were shortsighted.

they did not think of the consequences. they found themselves at a stage of curtains. we would give up. if you pull the spring too hard, it will recoil. russia is active in international affairs. we have national interest that we need to consider. [applause] of course, we appreciate the action of countries that respects our decisions.