for or against the whole bill. there is certainly portions of that we find traveling. we have been communicating those concerns. because the bill is in such a fluid state, there hasn't been a settling down of a position because it continues to be a moving target. >> what happens if we get to december 18 and there is no bailout for the trust fund? >> this is a perpetual question we have been asking ourselves with the last 33 extensions. at some point in the music does have to stop and we need to get on with building the country. i think the good news is you see people struggling in earnest how to get there. i just hope we don't keep

perpetuating the problems of the looking more or just that what we think we can do and not looking squarely at what the country needs to do. those can be two different things. >> does the department do any recalculation of revenues on the chance we could go a bit longer if congress tales to send the president the bill and are there any contingency steps the department is taking in case that doesn't happen? them when we think about the impact -- >> when we think about the impact, it is not a small impact. internal to d.o.t., probably

4000 of our employees that would be furloughed. they range from folks on the federal highway administration who do permitting work to federal motive carriers. those are primarily the agencies that would be impacted. external to d.o.t. we send out letters to all of the states and the territories, explaining what we would do in terms of cash management in the event that we started to go below the balance. he's sensually portion of those states and percentages of the remaining revenue until we ran out of it. on top of that, let's be frank

states have been adjusting their ambitions to the federal environment. we have six to eight men that reduced projects already. probably more states that we do not know about. all of this basically comes down to jobs. it comes down to the fact that our countries that our country's infrastructure continues to deteriorate. not only me and the president the people who sit in the chair that i sit in and he sits in. i am concerned that these folks will be managing a declining system. that is not in the interest of the american people. that is a little bit of what the impact would be. the last report basically stuck to the same timeframe, which is

we would fall below the balance sometime in the early part of august if they don't find a way to move forward. again, that will be a bad day for many states and communities across the country. >> i realize these things take time, but do you have any sense of the timelines and how it will be involved. >> we submitted information requests from each of the four airlines. i think the letter went out yesterday. it is going out today. we expect within a reasonable

time we will get that information back and we will go where the information takes us. we expect the information to be sent back to us promptly. we hopefully will close this out as quick as possible. i can get you a copy of the letters. >> can you say that there will be anything other than definitely a stopgap measure to keep the highway fund knowing past july 31? and also to the end of the year do you have any optimism there would be anything other than a stopgap measure at the end of december? >> i think the american people

are going to increase in demand that congress solve this problem and really solve it, not paper over it. i have been so many places around the country where the traffic problems are getting worse, the conditions on the road are getting worse, and people are seeing no way out. people are starting to draw the line and follow bread comes back to washington. i am optimistic because i see people on both sides continuing to work at this. they are working at it earnestly. that's not to say what is being discussed in the senate doesn't have problems. we will just how to keep -- we will just have to keep watching it and sharing our conserves -- our concerns.

hopefully the end result will be something good. >> in all of your talks throughout the country, you made clear fixing this long-term highway funding problem has been one of your top priorities. if the senate proceeds as planned it will have three years of funding. this will take it beyond the obama administration. i am interested in your thoughts on that and whether there are some real priorities you hope to address. a >> it is hard to know whether we are in the second or eighth inning. i will sleep peacefully at night

knowing i have done the very best job i can do of pointing the country in the direction we need to go. i think the president said it repeatedly it is time for the country to move forward it is time to get rid of the stopgaps and again focusing on the long term and the goals we need as a country. under our constitutional system congress has to take this up and do something about it. the fact they are wrestling with this issue at all is a very different place than where we were two months ago or 10 months before that there is a chance it could work out well for the american people and that is just

what we have to believe. >> one of the parts of the senate bill under construction is the percentage of the trust fund money and a proposal and initial bill to reduce the percentage. what would the implications be for mass transit? >> we did a survey of the nation's transportation system beyond traffic a few months ago. one of the startling things beyond traffic is it points out that we are going to grow by 70 million people. we will have population increases, but more concentration around metro areas. take los angeles for instance you can you build more highways in los angeles?

no. you may be able to expand lanes in some places. that is not going to get you to nirvana. our grow america act at a 70 plus percent increase for transit, recognizing the need for it as the country continues to grow. i definitely don't think the percentage ought to go down. if anything it should be going up. i know there are folks in the senate who are very concerned about this and are pushing to at least keep it level. >> we are going to go next to david from the detroit news.

stephanie from vna. and we are going to end with bernie becker from the hill. >> are there any provisions or amendments that the white house would want to include in the current senate bill? >> that is something the white house is very much interested in. on the transportation front there are a number of safety measures we are concerned about. if we recall a car because of some defect that could endanger someone that is using the car and you go to a used car lot to buy a car, even if it has been subject to recall, you can buy that car and it wouldn't have to be fixed. we think that is a loophole that needs to be closed.

there are also pieces of legislation we wish the senate would consider, like the hazard authority. we were criticized for having a too cozy relationship with industry. when a recall occurs, if the company that has been recall disagrees with our assessment our recourse is to go to court and spend years trying to medicaid that issue while dangerous stuff is on the streets. the alternative is to develop some kind of settlement with the automaker. usually we have been able to get favorable results that way. if congress wants us to have more teeth give us the tools so we can fight those battles

directly. these are the kinds of things we proposed previously and it would be nice for those issues to be addressed through this legislation. we have seen concerns about the safety provisions in the bill. it is not just the ones i brought up. i think we are waiting to see where they land, as this goes through a fluid process over the next several days. i am not prepared to say it is or isn't a dealbreaker, or portions of it are not to deal breakers. right now we are trying to see where the senate lands and tried to play a constructive role on something that is vitally important to the american public. >> are you satisfied of chrysler has not yet recall these

vehicles in offering this voluntary software patch? >> i'm going to decline to comment on a specific automaker. there is probably something coming on that. >> how close to you are you how close are you to a consent deal in the recalls that this has been working with? >> i would urge you to give us some time. we are working very hard to get these issues closed out, but i don't have any news for you this morning. >> could you please explain exactly how your authority works in the area of price gouging? in other words, what is the remedy that you have and do you impose a fine? how much money could we be talking about?

>> the authorities are found -- we may investigate and decide whether an air carrier has been or is engaged in an unfair or deceptive trade practice we also have the authority to prohibit such conduct. the extent to which we have the ability to levy fines or issue remedies i would actually need the counsel's office reach out and give you are the clarification. if we find it is happening we can stop it or sure. i will give you more information on what remedies may be available. >> i want you to let them tell

people what is coming. grandma we are investigating whether this practice is continuing to reedit it could be going on right now. -- is continuing. it could be going on right now. obama we are looking -- >> we are looking at the period of time following the accident in philadelphia and what happened immediately thereafter. >> a technical question on this case, you mentioned the department of justice. are they actually looking at criminal charges? >> they are investigating and i think that has been disclosed previously. beyond what they are finding or looking for, that as a whole different department and i would have to defer to my colleague on that.

>> the house idea is let's to a quick patch and then worked really hard to alter tax reform for international and corporate taxes. the senate approaches from here and there. which approach do you like? >> because we think there's a purpose to extend by the end of the year, there is a reasonable chance the stars could align for them -- or some variation of the business tax reform proposal we put in our bill that we have supported the house provisions at this point. the jury is out on the current bill.

we are still waiting on the senate to settle down on a private -- on a final proposal and we are evaluating the ideas we put forward on tuesday. we are also concerned about some of the policy provisions in the bill as it was proposed on tuesday. i know the senate is working to clean some of that up. until we see a final version of it is going to be hard to articulate a solid position on it. them of the white house has not done so yet for the senate bill. do you think the administration is more likely to support an extension in terms of a long term bill over the senate bill which right now has three years of funding?

>> there is a lot going on right now, including the fact that we as an administration are opposed to continuing sequestration. that is a big philanthropic whole fight -- philanthropic fight that could emerge over the next few weeks. every time there is some effort to use a source that could help on that issue, including transportation it creates a debt of a challenge. ultimately there is a lot of government that needs to open back up and get going again. there is a in the chamber right

now. we are looking carefully at the senate proposal, we are taking the proposal seriously as we said we would for months. we are saying congress, just tell us what you want us to do. i am not here to shoot it down. i'm here to say we have some problems. we will see where they land on the senate bill. we have supported the house package because it is purposeful to the extent that it is trying to get us a longer build term done, using a revenue source that doesn't put us in a compromising position on these other issues. >> and other variation to that question, are you saying the senate package would be there now and at the end of the year

and maybe the only time for tax reform to pay for this? >> what i am saying is the proposal we put forward a two years ago and a revised version contains tax reform. we think that is the best way to solve the problem of transportation over the next few years. the political reality as we have learned from folks on the house side and perhaps even on the senate is at best the window for that tax reform discussion is at the end of the year. that is in fact why the white house has supported the five-month extension to this point.

what the senate is doing is putting forth an idea to address the transportation issue now created this bill is 1000 pages. it was draft on tuesday. they are working to address concerns members of the senate have raised about it. we don't have a final version. i can't tell you if we are going to support it or not supported. what i can tell you is we are taking it seriously. we will consider proposals that came out of congress. >> is there a chance you would accept the senate proposal? it doesn't summit there is a way you would approach that she would prefer -- there is a way you would prefer the senate proposal to the house proposal. and i think we're going to have to see.

i don't have a way of answering your question with absolute precision. we want to see the transportation system in this country be as strong as possible. the policy that is contained in this bill is just as important as the length and the amount of growth in it. we have to look at the combination of those things and figure out whether we can live with it or not. >> i want to see if there's anybody who hasn't had more than one. go a second round? from dallas to this investigation, obviously senator murphy asked you to look into it. did you look at the pricing were there other pieces of evidence? are these the only ones that fly there or did you see something in your prices that made them stand out?

>> we have sufficient information to be concerned about it. pride what an investigation is is drilling down what the facts are and understanding what is there. in the coming weeks and months we will no. >> let me ask a question on laser attacks on planes. it seems the efforts to actually nabbed the people that are doing this kind of stuff are very successful. >> we need to look at the consumer side of some of this.

if somebody is purchasing a product that could be dangerous like a drone that can go 2500 feet in the air, right now we don't have a great mechanism to backtrack and find out who the owner is. and we probably need one. finding out who has the authority to do something like that is the work we are undertaking now. i would say the same thing about these lasers. we are at an era where there are a lot of advantages to's -- to technology and a lot of great things that can happen as a result of having these unmanned

aircraft in the air space. we are going to look at every single thing we can do to make sure our enforcement mechanisms have teeth to them. put of that is being able to follow the breadcrumbs back to who is using it. >> we may make a record decision to let you out early. that would be clean living on your part. >> one of those safety provisions in the transportation bill is a doubling of the maximum fine against the automaker who paid 70 million. there is a caveat that it is

outlining exactly what the factors are in going into these fines. i know you asked for 300 million. some things -- some think there should be no cap at all. what do you think of this 70 million? >> it is not what we wanted, clearly there are little elements to it. but it is better than the status quo. we will just have to see where the senate lands on it. i continue to urge them towards the number we put in our bill. we will see. i'm just filling in. >> we worked hard not to take the decision on either the house or senate approach, or to talk

about some of the evolving pieces. i'm going to take another stab at one of the questions somebody asked before, is there anything the senate can put in that bill that would make it an -- make it unacceptable to the administration? >> we have previously expressed support to the house measure. i want to make that clear. making that acceptable to us was because we were advised that there was more time needed to get the longer-term measure done. on the senate package, i think there are a host of issues that pay for it themselves. they are bitter pills for some

stakeholders including many in the labor community. that is under review. that is something we are trying to look at. other parts of the bill, it is members of the senate raising concerns about his things. i know they are actively negotiating out, but we haven't seen the results of that negotiation yet. again, we are trying to take it seriously and trying to move things in a constructive direction. we will have to just see. >> you mentioned austin powers a while ago in response to another question. on the house bill, when they're saying we'll have this grand solution given how congress functions, particularly some of the ups and downs the house has

gone through wouldn't that be a bit like if you bet on that bill, and that approach, like going to the casinos, because you have no idea -- i mean, the odds of a house being able to come together on something, and then to sell it to the senate are very high. >> well, you know, one of the -- i'm trying to -- [laughter] >> trying to figure out how to do that. you know, the guy who is really holding the cards on the house side -- i'm trying to work with your analogy -- is paul ryan. and he's made some very strong public statements that are supportive of the type of thing we've been proposing all along. and one has to assume that he's

got the backing of his leadership and of other members of the house. and if you're sizing this issue up, really any issue, the house is -- you know you're going to have a tougher time on any generic issue in the house than the senate. so the feeling is, if we can get the house positioned to move, we can really get something done. now, that doesn't mean that the effort that's under way now couldn't happen in some way. that's why we're taking that seriously. but until it settles down into something that we feel like is congealed, we're going to continue watching and go from there. >> last question. bart? >> i think i can get a crisp answer. do you have anything new to announce on either the gulf

carrier inquiry, the norwegian inquiry or -- >> no. no. >> thank you. >> appreciate it. thank you. >> nice to see you again. >> thank you. >> thank you. thank you very much. >> the u.s. senate has a rare weekend session sunday at 2 p.m. eastern to consider legislation setting policy for road, bridges and mass transit projects for the next six years. but the bill only provides money for those projects for three years. on sunday, senators consider an amendment that would restart the operations of the export-import

bank and another that would repeal the affordable care act. texas senator ted cruz planned to offer an amendment to the highway bill. his measure would set new conditions on the iran nuclear agreement. but legislative maneuvers from majority leader mitch mcconnell prevented senator cruz from offering the amendment. here's what senator cruz had to say about it. >> madam president, today is a sad day. for this institution. the senate operates based on trust. whether we are democrats or republicans, these hundred senators have to be able to trust that when a senator says something, he or she will do it, even if we disagree on substance, that we don't lie to each other. what we just witnessed this morning is profoundly disappointing. i want to describe the context

of two preceding discussions. a number of weeks ago when this senate was considering trade promotion authority, a group of senators gathered on this floor and bought tpa for many minutes because they were pressing for the export-import bank. they huddled on this floor and negotiated a deal in front of c-span in front of the world. then when they had their deal, tpa had the votes to pass. shortly thereafter, we had a senate republican lunch, where i stood up and asked the majority leader very directly, what was the deal that was just cut on tpa and was there a deal for the export-import bank? it was a direct question. i asked the majority leader in front of all of the republican senators. the majority leader was visibly

angry with me that i would ask such a question. and the majority leader looked at me and said, there is no deal. there is no deal. there is no deal. like saint peter, he repeated it three times. he said the only thing i told the proponents of the export-import is like any other senator in this body. they could offer any amendment they liked, but i gave them nothing -- there is no deal. i gave them nothing. he was emphatic. and he was repeated. following that public discussion, senator mike lee and i approached the majority leader afterwards, in which he emphasized again, there is no deal. i will do nothing. i opens the export-import bank. all i said is they can offer an amendment, like any senator can to any bill. madam president, i went back to

my office and i sat and had a long discussion with my staff. my staff told me that afternoon, he's lying to you. that's what my staff said. we've been around the senate a long time. he is not telling you the truth. and what i told my staff that afternoon, i said, well, i don't know if that's the case or not. but i don't see how when the majority leader looks me in the eyes and makes an explicit promise -- and by the way, looks in the eyes of every other republican senator and says that to every other republican senator -- i don't see how i cannot take him at his word when he makes an explicit promise. as a result, i cast my vote in may, in support of tpa because i support free trade. and i felt i had no choice but to assume that when the majority leader spoke to 54 republican

senators and made an explicit promise, that he wasn't lying to us. well, as tpa moved on, as it went to the house it became abundantly clear, there was a deal. there was a deal in the house for the export-import bank. and so the second time tpa came up, i voted no, because of that corrupt deal. now, i will note to the public the majority leader and the speaker of the house have repeatedly said there was no corrupt deal there was no corrupt deal, we made no deal, we made no deal. that's one element of the background context. let me tell you a second element of the background context. a number of weeks ago, when we were debating the corker cardin bill, the iran review act, there were a number of amendments that senators had filed. i filed an amendment that would

actually put teeth in the iran review act by requiring affirmative congressional approval before sanctions on iran could be lifted. other senators filed very good amendments. senator marco rubio filed an amendment calling for iran to recognize israel's right to exist as a jewish state before sanctions could be lifted. our friends on the democratic side of the aisle did not want to vote on that amendment. and in response, the majority leader cut off all amendments. now, madam president, i sat in the majority leader's office and i urged the majority leader, invoke closure on senator rubio's amendment. invoke it on senator rubio's

amendment, calling on iran to recognize rainfall's right to -- israel's right to exist. i argued with the majority leader that if the democrats were so opposed to voting on that amendment, that was all the more reason, and the majority leader said no, he would not do so. that invoking on an amendment was an extraordinary step and he wouldn't do so. so he cut off every amendment. he filled the tree. and it was striking a minute ago, seeing the democratic leader senator harry reid, calling out the majority leader for filling the tee, for -- the tree, for engaging in the same procedural abuse that harry reid did over and over again in this body. now the republican leader is behaving like the senior senator from nevada. what we just saw was not, madam

president, what the majority leader told you in may and every other republican senator. what we just saw was not that the proponents of the export-import bank, like anyone else, could stand up and offer whatever amendment they liked on any issue. what the majority leader just did is, number one, he called up that amendment. he called it up himself. why does that matter? because as majority leader, he has priority of recognition. when he calls up an amendment, no one can stop him. he didn't just call it up. he filled the tree! just like harry reid, he filled the tree, blocking everyone else's amendment. and by the way, i agree with senator reid when he said the obamacare amendment is a cynical amendment. of course it is. it is empty showmanship. we'll have a vote on repealing obamacare. the republicans will all vote yes. the democratics will all vote no. it was an exercise in

meaningless political theater. mind you, when we had a fight in october of 2013 to actually stop obamacare and to defund it, the majority leader, then the morton leader was -- the minority leader was opposed to doing something with real teeth in it to stop obamacare. but an empty show boat, that's a good way of distracting from what's going on. you know, there is a profound disappointment among the american people, because we keep winning elections and then we keep getting leaders who don't do anything they promised. the american people were told, if only we have a republican majority in the house, things will be different. well, in 2010, the american people showed up in enormous numbers and we got a republican majority in the house. and very little changed.

then the american people were told, you know, the problem is the senate. if only we get a republican majority in the senate, and retire harry reid as majority leader, then things will be different. well in 2014 the american people voted to do exactly that. we've had a republican majority in both houses of congress now for about six months. what has that majority done? first thing we did, in december, is we came back and passed a trillion dollar cromnibus plan, filled with cooperate welfare. that was the very first thing we did. then this republican majority voted to fund obamacare. voted to fund president obama's unconstitutional executive amnesty. and then leader rammed through the confirmation of loretta lynch as attorney general.

madam president, which of those decisions would be one iota different if harry reid were still majority leader? not a one. not a one! this senate operates exactly the same. the same priorities. and let me tell you why. it's not that this majority doesn't get things done. it does get things done. but it listens to one and only one voice. that is the voice of the washington cartel, of the lobbyists on k street, the big money and the big corporations. you know, if you go to the american people and ask, is reauthorizing the export-import bank a priority for you? the standard response for most of them will be, the what? they don't even know what this is. let me tell you what it is. it is an egregious example of

corporate welfare. it is the american taxpayers being on the dime for hundreds of billions of dollars in loan guarantees, given out to a handful of giant corporations. it is a classic example of cronyism and corporate welfare. and by the way, among others, you know, one person who had the clarity of thought on that? then-senator barack obama, who described it as a classic example of corporate welfare. that was when he was in the senate. now that he's in the white house, corporate welfare sounds pretty good. now just about all of the democrats are supporting the corporate welfare, with the exception of bernie sanders. i'll give credit to sanders for standing up against corporate welfare. but every democrat who rails against big money and corruption in washington, every democrat who styles himself or herself a populist, their actions on this matter speak far louder than

their words. and when it comes to republicans, republicans also are listening to k street and the lobbyists. why? not complicated. the giant corporations that are getting special favors from the taxpayers hire an army of lobbyists that write campaign checks after campaign checks. by the way, these checks go to both democrats and republicans. it is career politicians in both parties that are kept in office by looting the taxpayer to benefit wealthy, powerful corporations. the single largest recipient of loan guarantees from the bank is the boeing corporation. they just had an earnings call where their c.e.o. said, and i'm paraphrasing, but we'll be just fine without the xm bank.

there are plenty of private loan alternatives out there. but you know, even though the market could provide it's a lot easier to have compliant lawmakers rob from the public to enrich giant corporations. you know who doesn't have lobbyists? a single mom waiting tables. you know who doesn't have lobbyists? a teenage immigrant like my father was, washing dishes, making 50 cents an hour, struggling to achieve the american dream. you know who doesn't have lobbyists? a factory worker who just wants to work and provide for his or her children. they don't have lobbyists. so what happens? career politicians in both parties gang up with giant corporations to loot their

taxes, to make it harder for people who are struggling to achieve the american dream. coal miners, madam president, in your state, they don't have lobbyists who are representing them here, the individual miners while the majority leader teams up with the democratic leader to take from their paychecks to fund giant corporations. it is wrong! and it is corrupt. madam president, it saddens me to say this. i sat in my office. i told my staff, the majority leader looked me in the eye and looked 54 republicans in the eye. i cannot believe he would tell a flat-out lie. and i voted based on those assurances that he made to each and every one of us. what we just saw today was an

absolute demonstration that not only what he told every republican senator but what he told the press, over and over and over again, was a simple lie. this institution should not operate at the beck and call of lobbyists in washington. this institution, the majority and minority leaders, arm in arm, again, should not team up against the american taxpayers. it's why our children are going bankrupt. now, we're facing an enormous threat with this iran deal, a nuclear iran poses the greatest

national security threat to this country. and yet the majority leader refused to do what he just did for the export-import bank on iran. refused to invoke closure. that was an extraordinary step. madam president, if he was telling us the truth when he told us there was no deal, why would he do what he just did? well we now know that when the majority leader looks us in the eyes and makes an explicit commitment that he is willing to say things that he knows are false. that has consequences for how this body operates. if you or i cannot trust what the majority leader tells us, that will have consequences on other legislation as well, on how this institution operates. there are a host of amendments that the american people are focused on, things like defunding planned parenthood after the gruesome video. the majority leader doesn't want to vote on that.

that's actually something the american people are focused on. he brought up his obamacare amendment as a smoke screen, because it's intended to fail. but you know what he didn't bring up? my a amendment to end the congressional exemption from obamacare, the corrupt deal that harry reid cut with president obama to exempt members of congress. the majority leader doesn't want to vote on that, because he doesn't want to end the cronyism for members of congress any more than end the cronyism for giant corporations who enrich themselves at the expense of the american people. there are a host of priorities that the voters who elected you and me -- madam president, i would ask you to think about when you were running for the senate, not too long ago. do you recall any of your constituents ever saying we want the export-import? no. they want other things. they have other priorities. but those are not the

priorities. not the priorities of republican leadership. sadly today, we have government of the lobbyists, by the lobbyists and for the lobbyists. that is not how the united states senate is supposed to operate. a far more important amendment than bringing back this corporate welfare and cronyism is my amendment that provides that sanctions on iran cannot be lifted unless and until iran does two things. number one it recognizes israel's right to exist as a jewish state. and number two, it releases the four american hostages languishing in iranian prisons. that is a far more important issue than enriching some more lobbyists on k street and getting a few more campaign

contributions. that's what we should be voting on. and accordingly, madam president, i call up my amendment, number 2301, to the mcconnell amendment, 2266, as modified. >> the amendment is not on order to be offered, as it is inconsistent with the senate's precedence with respect to the offering of amendments, their number, degree and kind. >> madam president i appeal the ruling of the chair, that the amendment is not in order. >> the appeal is debatable. >> the senate is back in session on sunday at 2:00 p.m. eastern considering amendments to the highway bill. one amendment would restart the operations of the export-import bank, and another would repeal the affordable care act. the u.s. senate on sunday live at 2:00 p.m. eastern on our companion network, c-span 2.

>> it's almost as if they were matter and anti-matter. >> they led a game. freedom breathes inequality. >> it is always to the right. almost always in the right. >> anything complicated confuses him. >> filmmakers robert gordon and neville talk about their documentary "best of enemies." they talk about war politics, god and sex. >> there is no someone in here very unlike today, you know, today i believe there's someone saying, you know, the numbers are -- dwindling. talk about hot topics, hot salacious topic number two whereas then i don't think that was the norm in t.v. at the

time. and i don't think these guys need that. >> in our case, you mentioned the moderator, who was a distinguished newsman, who i think was really kind of embarrassed by this. he was moderating but he disappears for, you know sometimes five or more minutes at a time. i mean, today you wouldn't have a moderator not jumping in every 30 seconds, you know. so i think really everybody at abc just stood back and let the fire burn. >> sunday night at 8:00 eastern and pacific. on c-span's q&a. >> furman, chairman of the white house council of economic advisors spoke on capitol hill today about the nation's employment rate and how economic data should be interpreted. this is an hour. >> thank you everybody. thanks for coming out today, actually on a beautiful washington summer friday afternoon. my name is jim kepler. i'm senior vice president for

policy at third way. our goal today for those in the room, and those watching at home is to make us better consumers of economic news and economic reports. in essence, to be our own blog. to help us achieve that mission, we are fornght to have with us -- fortunate to have us with us jason furman. jason, early in his first term, president obama said that he made being a nerd cool. well, peter was cool, jason furman is ice. he is chairman of the president's council of economic advisors. he's been serving president obama since day one as a senior economic advisor. he helped steer the in -- steer the nation out of the great recession. he also served under president bill clinton, which means, between the two presidents, jason is responsible at least partly for about 30 million private sector jobs. he has a ph.d. from harvard.

a long pedigree of books and articles on economics. he's a father of three and a brand-new father three weeks. his son felix. and he was also the subject last year of the best washington post profile i have ever read. i'm just going to give you a couple of highlights. one is he can juggle six flaming torches at once. number two, he unsuccessfully argued to his wife that chopping wood failed a comparative economic advantages benefits test. and he is far less successful than his college freshman roommate matt damon. [laughter] >> so, with that jason, thank you for joining us today. jason is going to lead off with a presentation. then i'll ask questions. then you'll ask questions. so jason, lead us off. help make us better economic consumers. >> great! jim, thanks so much for organizing it.

thanks for everyone here in the room. and for the people watching this at home. i'm going to take you through some slides that have ten tips, although it pretty much boils down to one really important tip that i'll be giving you. and these are a set of slides which, if they're of interest to you, a little bit later this afternoon, they'll be up on the website of the council of economic advisors. so if you just google the council of economic advisors, look for our speeches. this will be up there. the presentation that i'm going to give you. in terms of economic data, i have been following economic data carefully for the last 20 years. and it began when i worked at a staff economist at the council of economic advisors in 1996. and one of the great things about the council of economic advisors is we're responsible for conveying all of the economic data to the president.

so the statistical agencies will give us the statistics a day in advance, just for us to see. and we spend a couple hours, and we analyze them. and we put that in a memo, which goes to the president the evening before the data -- so he can understand what's happening in the economy. for a particular significant release, like the jobs numbers which i'll spend a lot of time on today, and often g.d.p., we'll brief him the president in person as well. we also share those data with the secretary of the treasury and the chair of the federal reserve, to make sure that they have the information they need to understand what's going to be happening the next day in markets and the economy. what's great about this is it gives you a real opportunity to

think hard, but you also think without the noise of everyone else. you know anyone who gets the data, the jobs numbers, g.d.p. they come out at 8:30 a.m. there's instantly tons of tweets, tons of analysis, tons of people's opinions. and that's great, and i recommend looking at all that and aggregating it. but it's something to just locking yourself in a room and trying to digest it yourself unbiased uninterrupted by the other people taking a look at those data too. then you test what you think against it. sometimes you find things other people didn't. sometimes the wisdom of crowds comes up with an insight that you wouldn't have had. the biggest tip i have, and it's underlying -- and you'll see a pattern in the 10 different tips i have -- is to never get too exercised and too excited about

any one piece of economic data. the economy is a big complicated thing. it bounces around a lot, from month to month and quarter to quarter. any given statistic we have only captures one aspect of the economy. it doesn't capture the entire economy. and the statistics we have are imperfect. they depend on limited samples. there are sampling errors. they depend on complicated statistical adjustment algorithms to make sure -- you know, every december people spent a lot more on consumer goods. that doesn't mean the economy grew a lot in september. that means that yet again christmas happened in december. so there's statistical errors, seasonal adjustment errors, parts of the economy, and then just longer term trends. so really, everything i have to say boils down to this. there's one bias i see in the newspapers. it tends to be really good and really informative and i learn a

lot about it. the only bias i would say it has, it has a tendency to get too excited. oh! this was a great month! the economy is zooming ahead! oh this month was terrible! we must be collapsing! oh, this month we can't tell what's going on. and the truth is, sometimes the economy does turn on a dime and you want to be attentive to that. but more often than not, you know, trends continue and it's better to look at a lot of pieces of data and look at it over a longer period of time. that's the big meta piece of advice i have here. let me now go through a number of specific ways that this manifests itself and specific examples. in the course of this, i'll tell you some of the numbers that you know, i most like to look at, not just in the jobs report, but in g.d.p. and economic data, more generally.

the first thing is, some numbers bounce around a lot more than other numbers. every month we have two different versions of the number of jobs added to the economy. one is the number of jobs added by employers. the other is the number of people whose employment went up or down. the blue one is what employers tell the bureau of labor statistics. the red line is what individuals tell the bureau of labor statistics. there's some conceptual differences in terms of people who are self-employed or multiple jobs holders, but for the most part, these two numbers should be the same. if you look at that red one, you see it bounces around all over the place. in october of last year, it said that employment went up by 800,000. you would have thought that was the most phenomenal month ever. then this march, you would have thought the economy was collapsing. employment went down by 500,000. both of those months, if you had

thought either of those things, you probably would have been wrong, because you're relying on a survey that sampled 60,000 households and has a decent amount of error and volatility in it. the reason that the markets in the newspapers concentrate on what's called the establishment number, or the payroll survey, is because there, you're surveying nearly 600,000 work sites that employ millions of workers. that also has some error associated with it, but the error is a lot smaller. so those two months i showed you know, october certainly was probably a better month than march, 200,000 rather than 100,000, but not the same dramatic differences. that's the first lesson, is when you have a choice, choose things that are less volatile things that are less volatile, often things that rely on a larger sample size. the second piece of advice i have is just to look over longer periods of time. so those blue bars are the

establishment survey or payroll survey jobs. that tells you the number of jobs added each month. there you see, once again, march looks really bad. but then, you know, may looks pretty good. and, you know, it bounces around from month to month. i spend some time looking at those blue bars. i try to spend a lot of time looking at that red dotted line. and that red dotted line is the average over the last 12 months. if you look at that average over the last 12 months lately, what it tells you is the pace of job growth has picked up a bit. 240,000 jobs per month on average, for the last 12 months, as opposed to 217,000 before that. the 217 is a little bit higher than earlier, but it broadly conveys a picture of stability. and that's an accurate picture because some months you go way up. some months you go way down.

but it roughly has averaged out to this pace of a bit over 200,000 jobs a month. the red line, when you're at a real turning point in the economy, is going to lag a little bit. you're not going to pick things up as quickly when you look at a 12 month moving average. but generally, looking over a longer period of time is going to get you a little bit less excited about each month-to-month blip and a little bit more focused on the trend in the economy. this tip also applies or it especially applies with something like unemployment insurance claims. here, every week we find out how many people made an initial claim of unemployment insurance. this is actually administrative data. this isn't based on a survey. this isn't based on a guess. this is based on, if you apply for unemployment insurance, that has to get reported, and we count the number of people that applied. the states do. they tell the department of

labor. it adds it up and reports it. it's great, because you get it every week. every week you can have a new piece of information about the economy. the problem is, two weeks ago you would have panicked, because it jumped up to about 300,000. this week, you would have uncorked the champagne when it fell to the lowest it's been since 1973. 255,000. you know, both of those numbers are probably too extreme and again, if you look at here, people tend to look at a four-week moving average. it's much smoother than that red line which zigzags a lot from week to week. when confronted with noisy data, one thing you can do is look to better data with larger samples. another thing you can do is look over longer periods of time. but a third thing you can do is find different measures of the same concept, and combine them. this is something you're increasingly seeing being done

in comments of federal reserve officials. they talk about this in the context of labor market indicators. investment banks and analysis, which is they take indices that combine a number of different majors. there are other a dozen measures of wages and compensation. they're all slightly conceptually different but they also all embody different errors and different quirks. this shows three of them. compensation per hour. the average hourly earnings. and the employment cost index. they're all bouncing around in different ways. there's a statistical technique called principle components analysis, which says imagine that some underlying component is moving all three of these and let's try to estimate it. it's exactly just as simple as a weighted average of the three but it uses statistics to find out which weights you should put on the three. that black line there is probably a better measure of

wage growth than any one of those three underlying series. you take a lot of different series, looking at the same thing, and you average them together or, if you have a statistical package at your fingertips do a fancier average and call it the first principle component. if you look there, you'll see wage growth went down. wage growth lately, the tentative signs, the pickup of wage growth, you see in that black line that a number of people have referred to lately. another place where i really like combining data is when it comes to the g.d.p. statistics. and a little-known fact is, when the g.d.p. numbers come out they always report -- or not always, but they eventually report two different numbers. one is gross domestic product. and that adds up how much everyone bought in a given quarter.

how much consumers bought, how much businesses bought, in terms of plans and equipment, how much the government bought. if you look at that, for the first quarter of this year, it said the economy contracted, minus 0.2. the other thing the statisticians do is they add up all the income in the first quarter. how much wages were, how much profits were, a few other concepts as well. and that grew 1.9%. turns out, when you go through the arithmetic, those two are the same exact thing. two different ways of measuring the economy. and the simplest way to think about that is imagine we don't trade and imagine people can't save their income. then everything you make in a given quarter, you're going to spend in a given quarter. so income has to equal spending. you go through something a little bit fancier and it turns out that is still true. so one way of measuring the exact same thing was minus 0.2. another was plus 1.9.

well, which of those two is better g.d.p. or g.d.i.? turns out the answer is an average of them. here, doing it 50/50, which would tell you 0.9 is much better than using either one of those numbers individually. it's a much more accurate reading of how the economic data will eventually be revised. it's a much more predictive of what's going to happen in the economy going forward. and it's just, if you could pick one number for growth, you would pick the average of the two. the good news i have for all of you is right now, if you want the average of the two, you need to add them together and divide by two. starting next week, the bureau of economic analysis with the g.d.p. numbers are going to, for the first time ever, start publishing that as a regular thing. it won't be in the headline. it will be toward the bottom of the release. but i know i'll be turning to

that first before i look back up at the headline, because that will be the depth measure of how much the economy grew that quarter. there's another thing you can do with noise. as i said, you can look over a longer period. you can find the best data to look at. you can combine different measures. but the other thing is, every measure of the economy tells you some different facet of the economy. and so it can be good to look at a number of different ones. this first quarter, g.d.p. fell by 0.2. appropriately colored red in this graph. but employment rose by 2.2 which was quite a strong increase in employment. income went up 1.9. consumer spending went up 2.is. and -- 2.1 and industrial production was 0.0. there's a lot of other indicators, but these are five particular ones to look at. so if you just saw g.d.p., you'd be more nervous about the economy in the first quarter

than if you take in the full context and the full set of data that one might choose to look at. one of the reasons why we're so concerned about data and why you don't want to overreact to any one piece of data and you want to put everything in context is that the data we get is revised a lot. and the reason it's revised a lot is it's all based on surveys. and in the case of g.d.p., for example, you don't have a -- the first time they publish it, they don't have a lot of the most recent trade data or inventory data. they only get that as time goes on. the successive revisions to growth, if you look at the fourth quarter of 2001, for example, the first estimate was 0.2. it was revised up to 1.7. the first quarter of this year

went from positive to a big negative, to a small negative. and you see that all the time. so if you get really attached to a narrative around that first estimate 0.2 0.2 turns out you might be attached to a narrative that subsequently you need to have a new story to explain that it was actually really good that fourth quarter of 2001 and relatively weak that first quarter of 2015. at least measured in this way. this is probably a little bit obscure for some. but it's a neat point so i thought i'd share it with you which is that not all revisions are created equally. if you look at something like real durable goods consumption and if you look at the third estimate those are almost exactly the same. that's because when the g.d.p. numbers come out they have a very good measure on consumer spending. they don't learn much by the time they do the third revision, so they basically publish the same thing. real health care consumption

the first estimate and the third estimate are almost entirely unrelated. that's because there they use a survey of the service sector to figure out health spending. and they don't get the results of that survey until after they publish the first estimate. so they use very approximate guesses to do that first estimate of health spending. then they revise it quite a lot for the third one. that's important, because this year, for example, people -- or last year, people looked at some of the health spending data and constructed a whole narrative of it's growing really quickly. that tells you blank. then two months later, it was revised, and it turned out that that wasn't what the data actually said. we at the council of economic advisors had written something saying don't even look at this. this data is going to be revised and it's going to be revised quite a lot. so once we get the data, we'll tell you what we think. but the first estimate for health isn't worth looking at for real durable goods consumption. that's just by way of example.

it has a sense of what's going to be revised and what is not going to be revised. part of why data is noisy all these statistical quirks, these small sample sizes, that you don't get the survey you need on time, that you need to do seasonal adjustment, all these different things, but the economy itself the underlying truth itself is noisy. just weird things bounce around from quarter to quarter. the first quarter of this year, for example, we had really bad weather. that temporarily impacted the economy, not in the long run. you can look at the economic data and get a better sense of which things are pretty transitory, bounced around a lot, and tend to reverse themselves and which things tend to continue. so within g.d.p., inventories bounce around. they can be positive. they can be negative. what they are one quarter, you know, if they're great one

quarter, that doesn't mean they're going to be great the next. it might even mean the opposite. consumption is, you know, more stable. and one way that we use that at the council of economic advisors is we're very focused on the growth rate, not of g.d.p. as a whole, but of consumption plus investment because those are the two parts of g.d.p. that in our statistical analysis, we have found are the most stable which means they're the best predictors of what g.d.p. is going to be in the next quarter or over the next year. and so if you look there at the blue, that's g.d.p. it was really negative at the beginning of 2014. a lot of that was for the noisy reasons. so if you were looking at the variable we like, the orange one, it wasn't a great quarter because of the winter, but, you know, it didn't look quite as bad. then you had this huge rebound in the blue bars, in g.d.p.

you didn't get quite as much of a rebound in this other. in general those orange bars don't bounce around a lot because they're giving you more of the signal. the blue bars, which is g.d.p. are noise. another great piece of news for all of you, as of next week, this also is going to be added to the release along with the g.d.p. numbers. you'll be able to look this up yourself geand -- and, again it will be one of the first things that i know i'll turn to when i get the data next week. i want to just put, you know, a few more things down on the table for you. and then we'll open it up to discussion with jim and with all of you. one is that there's a real trade-off between some data, which can be really up to the moment, you know the ism manufacturing survey. the marketing moves a lot in response to the ism manufacturing survey, or can move a lot. that's because you get it -- we're going to get it the week after next, the very beginning

of august. we'll get the number for july. and that's great, because it's about as up-to-the-minute as you get in economic data. but it's really noisy. if you asked me how the economy was doing in july of this year, and you ask me that two weeks from now, i'll look at the ism manufacturing survey because that will be the only piece of data i have for july. if you ask me how the economy was doing in july of 2005 or july of 1995, i wouldn't look at this piece of data. i'd look at everything else we have, which takes longer to compile but then is ultimately more accurate. at the other extreme, real median household income, the latest data we have for that is 2013. we're going to find out the 2014 number in september of this year. you find out basically more than a year after it elapses. the market could care less about those numbers, because they

don't care about the economy, a year and a half ago, but if you want to ask, you know, what happened to the typical family in the 90's? what happened to the typical family in the recession? those are the data you're going to want to use. they're less timely but more complete. just to put, you know, two more things down on the table, before we open it up, be careful about longer run trends. some people like to look at the participation rate or the employment population, for example. those are useful variables but they don't just tell you, is the economy going up and down in a business cycle, they also tell you about underlying societal forces like demography, the age of the workforce, whether women are participating. so the example i have here is if you look at the fraction of the population that was working, you would have thought 2009 was a better year than 1955. if you look at the labor force

participation rate, you would have thought 2009 was a better year than 1995. that's why, when we want to compare those two years, you know, we use the unemployment rate. 55 is quite low. then in 2009, we were in the great recession. and the unemployment rate was very high. i would do the same thing now as well. when we go month to month a lot of people are looking at lfpr. those are important variables. they help fill out the big picture but there's a reason why the unemployment rate is the headline. that's more comparable over time, because it's less subject to some of these other bigger, broader demographic trends. and finally, and this is the simplest one, always make sure you're distinguishing between real and nominal data. in 1981, wages rose 8.6%. in 2014, wages rose 2.3%.

which one of those years would you rather have been a worker in? the answer is definitely 2014, because the inflation rate was quite low in that year, so you got a real wage boost as opposed to 1981, when the inflation rate was really high, and that cut into your real wages. so this isn't just real wages. it's true of everything. always make sure you're looking at whether things are adjusted for inflation. to summarize and be a little bit specific as i look at the employment situations, we'll get it two weeks from friday. it will tell us about the months of july -- so it's timely. the establishment jobs number is the first thing to look at. watch for the revisions we get for may and june, and for the average over the last six mungts months or a year. the unemployment rate can rise or fall for good reasons, but

it's the best thing to look at. when you look at the participation rate, it doesn't just tell you, did the economy get better or worse? it also tells you, did the population get old or not older? and when you're doing wages make sure you adjust for wages which will be hard to do because you have to wait a week or two for the cpi data. when it comes to g.d.p., watch for the average of g.d.p. and g.d.i., then look at that private domestic final purchases i was showing you, which gives you a little bit more of a signal than the noise. and look over the last four quarters, because weather and all sorts of things jerk the number up and down from quarter to quarter. that's what i try to do when looking at data. and some advice for all of you. >> thank you. [applause] >> that was really terrific. i appreciate you taking the time to put together those tips. and i look forward to seeing that on your website. and for folks who don't do this already, you put out after the

jobs report, a monthly blog that i just think is invaluable. and it usually comes out in the afternoon. >> oh, no. we usually get it out by 9:30, 9:40 a.m. >> i usually read it in the afternoon. [laughter] >> fair enough. >> but i think that it -- what it does is, it cuts through the noise and the clutter, which is what you have talked about here. but i think, just as importantly, is really one of the most -- it's really one of the most understandable while at the same time, deep dive into the economic employment and wage situation in the country that i read on a monthly basis. so i appreciate the readability of that report. and everybody should take a look at it. let's start with wages. okay? because there's definitely a lot of talk about how the middle

class needs a raise, but we're also seeing some upward trends. one of your later slides, the 2013 numbers, you're definitely seeing some upswing. and one of the frustrations i have, when i'm looking at economic data, they talk about how wages only rose 2%. well inflation is under 2%. and i worked in 1981. i don't remember getting an 8.6% raise. but inflation was something like that at that point or even higher. what are you seeing in wages and what do you look at in the wage area? >> so, you know, in terms of what data i actually look to, the jobs numbers, when you get those, they also include wages. those wages are based on a survey of employers. and that's, you know, quite a useful number to look at. but the two important lessons i

had -- three important lessons i had in all of this is, one, look at a couple different measures of wages. lately, something called the employment compensation index is growing more quickly than this other wage measure. does that mean that is true? does that mean the other is true? anytime these things tell different stories, usually it's somewhere in between. that's what i tried to show you with that average. so the totality of it, i think you do see some pickup in nominal wage growth. not enough. we'd like to see more. in the second, make sewer you're adjust -- make sure you're adjusting for inflation. if you look at real wages for the last two and a half years they've been rising at more than twice the pace that real wages rose over the last economic expansion, from 2001 to 2007. i think you actually have seen real wage growth. again, we'd like to see more. we have a lot of ideas to see more, if you want to talk about policy, but i think you really are seeing real wages growing. something that i think makes it

hard for people to compare is inflation is just generally trended down over time. i mean partly, lately, ideosyncratic things, like a fall in the gasoline, that we can't expect gasoline to always fall in price. but just the overall target or average for inflation has also fallen over time. and so, you know the nominal wage increase you need for a given increase in purchasing power is different than what it was in the past. >> uh-huh. in a talk that you gave recently -- i believe it was at the peterson institute or -- was that where it was? >> yes. >> you talked about productivity and you also talked about total factor productivity. and what that reminded me of the total factor productivity, was in some ways, like the dark matter in the universe, where it's both the cause of and the solution to all of the universe's mysteries. but can you explain a little bit

what you're seeing in productivity and what total factor productivity is? >> so productivity and especially total factor productivity, are among the most important things in the economy. labor productivity is how much output you get for one hour of labor input. and the reasons why you can get more output for a given amount of input is your workers can be better educated. your workers can have more capital machinery at their disposal. or, because you combine labor and capital better, because you have better technology, better ways of managing your inventory what have you. that last thing is called total factor productivity. and it's the most exciting thing you can have in the economy because it says, just for a fixed amount of labor or a fixed amount of capital, you're getting more and more stuff out of it. if you want to understand our fiscal situation, you need to know what productivity growth is

going to be in the future. if you want to understand why wages have stagnated since the 1970's, you need to understand why productivity growth has been slower since the 1970's. if you want to have a recipe for a faster income growth going forward, there's a lot of things you need. but one of them is faster productivity. so this is essential to everything. everything in the economy. in terms of measurement, some of the issues we're talking about it's just about the noisiest economic variable you have. because the enumerator has output. the denominator has hours. both of those has errors. when you divide one by the other, the errors get even bigger. so i like to look at productivity over periods of, you know 10 years, 15 years sometimes even longer. i never look at the quarterly numbers on it, because they just bounce -- you know, they make you dizzy. they bounce around all over the place. so try to discern longer trends. statistically, there's evidence that if you want to predict productivity in the future, the

best thing is not to look at the last year or two. those pick up a lot of noise. it's to really smooth that noise out, look over the last 10 years, 15 years. and that gives you a sense of what the potential of the economy going forward is. >> we had about 30 years of very, very high productivity growth after world war ii. it declines for maybe about two decades. then it rebounds a little bit. is there a predictive nature to productivity? is that period after world war ii a unique period that is never to be repeated again unless we have world war iii and then we have a nice aftermath after that? i'm not rooting for world war iii just to be clear. >> predicting productivity involves predicting what inventions people are going to come up with in the future, that they haven't come up with yet. if i knew the answer i would be inventing those things and wouldn't be sitting here talking about economic data.

so i have a certain amount of humility in answering your question. i don't think anyone knows the answer to it. i think the end of world war ii, that's decades were partly a special period as the global economy came back together after this terrible collapse as we figured out how to commercialize a lot of the innovations, like the jet engine that we developed for fighting the war. but i think other things could be reproduced. that was a period of tremendous infrastructure investment. very high levels of public investment and basic research. there's no reason why we can't do that do that again, and if we did that again, we would certainly get higher productivity as a result. >> am going to ask one more question, and then we will turn it over to the audience. get ready to raise your hand and asked questions. go over to that microphone and ask questions. again, looking backwards from 1950 to 2000, u.s. economic

growth averaged 3.7%, and from 2001 through the first quarter of 2015, it averaged 1.9%. are there things besides -- you know, again, you noted you cannot predict the inventions that will come in the future, but are there factors demographically that say there is a limit to the growth that a country like the u.s. can have on a sustained basis? 3.7% is not a realistic place for us. what are the factors that going to growth? like maybe the slower growth is not as bad as what i just pronounced. mr. furman: right. maybe i will do one of you. output equals output per hour

times hours. the hours cancel the output equals output. that, i'm quite confident, is true. to understand the future of growth, you need to understand the future of output per hour. output per hour is productivity. that's what we were just talking about. i think there is a lot to be excited about in terms of productivity with, you know, the internet, cloud computing, mobile devices, advanced materials, personalized medicine, clean energy -- you name it. there's also its of really exciting things going on, when -- many of which themselves could increase the pace of productivity. we are not going to get the hours growth we had in the 1950's and 1960's and 1970's again 14 of reasons.

one, people born in 1946 started to enter the workforce in the 1960's and 1970's, and that led to a big bold in hours. the other things is the percentage of primates women in the workforce went from about a quarter to more than 2/3. you saw and influx of women into the workforce -- a big influx of women. we're definitely not at the ceiling. there's more room to grow, but nothing like the huge transformation we had. on the hours side, there is a unique, non-repeatable story. on the thing that is more important -- the output per hour because that is what we will ultimately get for what we do -- there's no reason why we could not make choices to do a lot better in the future. >> just to follow-up on that, we also have an aging population so that output per hour is going

to have to cover benefits for people who are no longer in the workforce and will never be back in the workforce. do the future primates workers have a burden on their hands? do they need to become even more productive than previous generations? mr. furman: right. to do things going on -- one is you will be supporting more people and the other is you will be producing more with each hour. we can predict how -- reasonably well hominy people you will -- we can predict reasonably well how many people you will be supporting. that is reasonably predictable but to really get a sense as to what that fiscal challenge is, to how much you could produce with your hours in the future of productivity is critical.

>> over here. >> high, chairman furman. thank you for this opportunity. i want to to ask about the physical jobs report on the timed it uses in standardizing the data. i know you want to have a standard data set that goes back years and even decades that you can look at trends over time but are there any trends in the new economy you see that's not being captured by the jobs report the gdp report, or these other statistical sources of information? mr. furman: that is something we have been putting some thought into. i do not have a definitive answer for you. i have a hunch that that all matters -- that it probably matters a little bit, and most jobs are still not new economy jobs. but certainly, when you look at something like the household survey, they call and ask if you are working or not. for most people, the answer is straightforward -- yes or no -- that for some people, if you're doing something part-time, in a

sharing economy, you tell the person yes or no. if you're working a sharing economy, you are not necessarily working, and uber is not going to list you as an employee unless you are sitting in their headquarters rather than in traffic. so i think this does present with all the different ways we look at it, a set of challenges. i'm just not sure how large those are relative to the overall story we are seeing. >> thank you. >> it's good to see you and thank you to jim for putting in on. i wonder if we can connect a couple of big richer items that have come up. one, we talked about the challenges and driving productivity. i wonder if you could help us marry that to the extent that these things are connected, with another big issue that has

arisen with respect to two large of a focus on the short-term. our corporations somehow depressing the amount of capital that may be going into for example productivity enhancing types of technologies or other things because of the drive to show better quarterly results? how would you look at them? >> there's --mr. furman: this to do different issues. one is the set of data issues i was talking about. i try not to get to obsessed with a given week, a given month, a given quarter. try to look at what the longer-term trends are understand where we've come from, where we are going. i try to take a longer-term perspective and understanding what is going on in the economies, because otherwise you will come across as too exuberant or two depressed

depending upon the week. in terms of the public policy question, which is at the heart of your question, i think that is a really important discussion to be had. what can you do to make sure incentives are aligned? i'm stalking before, and to some degree, this is related to government policy, too. basic research -- that is something businesses will underinvested because they do not capture the full benefits. even if you take the longer effective, a business is still not going to invest in basic research because it benefits everyone. the government is the people that can do it, and that's for -- that's why funding is so important. we have seen a shift in our research portfolio away from basic research and towards more applied research and development, and that is important. that is terrific, too, but it does not make up for some of what you need over the longer run, so i do think a longer run perspective is important.

>> let's limit questions to those who are already in line because we do have some time constraints. >> thank you for arranging this. a terrific hesitation. if i can lower you back to the classroom, your students will be very lucky. one figure you did not mention was the trade and current account deficit. over time, the industrial structure that you have often is linked to the innovation system, which gets back to that magic figure, productivity growth. do you think of making more focus on the trade deficit and how should we ourselves think of it over time? mr. furman: to clarify, my goal here was to give you not an up-to-date perspective on where the u.s. economy is, but just some ideas about how to read numbers can can spin them

combine them. the trade deficit or a similar concept, the current account deficit, is definitely important. it shows up in gdp. gdp shows up domestically. mechanically, trade deficit subtracts from gdp. the underlying economics are markup located, so when our economy is doing well, we will draw in more imports. that will cause our trade deficit to go up. similarly, when our economy weakens, we will buy less from abroad. our trade deficit with go down, but that was bad news in that case, not good news. it's a little couple catered to understand when the trade deficit is causing the overall economy and when the overall economy is causing the trade deficit. but certainly, as you said, it

will also affect the composition. another thing i'm quite sure of is that for the world as a whole, the trade balance should at least measured correctly at up to zero. for some to have large surpluses, that means others have deficits. q certain major countries in the global economy, they are committed to macroeconomic exchange policies to give them surpluses. the united states is often on the side of that, so it can have an affect on our economy, and that's why our international diplomacy and arrangements were pushing quite hard on those macroeconomic policies, the current policies, to help redress and reduce some of those global imbalances. >> i should preface my comment

by saying i'm not an economist. trying to wrap my brain around this stuff. you reference climate productivity and stagnating wages. do you have an advice on how a non-economist should interpret that? looking at labor productivity versus total factor. for some of who does not deal with economics, do you have any advice? mr. furman: that's a graph i have reproduced a lot, a graph i have used and one that has a very important message. one message people usually do not see that is a really important one is one that jim brought up earlier, which is productivity growth since the 1970's has been slower than productivity growth from the 1940's through the 1970's. part of why wage growth has slowed is that productivity growth has not slowed. one reason why that does not leap out at you in the grass is that the grass -- the graph

might show a shorter period of time or more egregiously someone did not do the graph in logarithms. they give you the same unit of distance as a growth rate. something keeps going up by the same unit, the growth stays the same. the growth looks straight, but it's actually slowing over time. discussion into a pet peeve of mine. i will stick with it anyway. the second thing is then there is a gap between the productivity and the wages. that's the result of two things -- one is an increase in inequality and increasing failure of workers to get the full benefit of what it is they produce. a shift in the overall

allocation of income in our society towards capital and away from labor. all of that, to me, at least, is concerning and really important. the other reason those lines average is a set of statistical quirks. for example the productivity line uses one price index, and the wages line uses a different price index, and they are behaving differently over time. about half of the differences best types of statistical quirks. about half of it is the underlying inequality and set of issues. the reason i draw this to your attention as there are some conservatives who have come out and said, "look at all these statistical quirks, so don't pay attention to the picture." they are right that there are a bunch of statistical quirks, but even correcting for them, that picture remains. that's a long way of saying

strong productivity growth is part of the story. the failure to properly capture productivity growth is part of the story, and there's a whole bunch of competitions and cycles around the data. mr. furman: i think about 10% of the difference between those lines is non-wage compensation, but a smaller part of the story. >> and our final question. >> thank you for taking a question and thank you, jim, for putting this together. one thing i wanted to ask about is the concept of history and to what extent you think that is playing a more pronounced role in this recovery or not in terms of labor markets and the unemployment rate. on the first kind of wrong, do we have good measures for that, and do we have a good understanding of how that works

and two, can policy affect that much? mr. furman: let me explain that a little bit, for those that do not know. the concept was introduced into the economic literature because europe had a really low unemployment rate for decades, and in the 1980's, it went way up and stayed up. so olivia glen shot and larry summers advanced an argument that that was the european economies getting stuck in this new bad place and stayed there. there was and still is evidence that the united states labor markets are much more flexible and that flexibility means you are less likely if you end up in a bad place to get stuck there. when this recession first hit

we had unemployment rates we had not seen since the 1980's, and we had sustained long-term unemployment at rates we had not been, you know, in the entire post-war period. so a lot of people, including myself, were nervous. what of this -- what if this long-term unemployment is here to stay? what if we get stuck? at the time, i was cautiously hopeful that the flexibility of the u.s. labor market would we -- mean we could rebound. the unemployment rate now is 5.3%. that's back to the average of what it was in the previous economic expansion. the long-term economic rate remains elevated relative to what it was before, but even there, it has come down and come down even faster. it seems that is also on track to being in the neighborhood of where it was before the

recession. i'm feeling decently good about this, but i would never take it for granted, and one reason why i think it is so important to be aggressive in dealing with unemployment is the longer the unemployment lasts the more likely that somebody loses the skill to have a job, to find a job. employers do not want to hire them etc. so what is temporary unemployment becomes permanent unemployment. i think we probably for the most part avoided that, but i do not think it is something we could take for granted in the future and that's why a think we need to be vigorous and dealing with it the cycle. jim: thank you so much. i consider this our a gift. this was really, really, a spectacular lesson of how to look at economic data, and i know it will make a difference with me and our offices, and i

hope the people here and the people watching at home appreciate the way you broke this down in a very, very simple but very informative way. thank you so much for taking time out of an incredibly busy day that i'm sure you've had and joining us today, so thank you. mr. furman: thank you. [applause] jim: thanks, everybody. have a wonderful weekend. i don't know what our next capital markets initiative event will be, but we will certainly let you know about it, and we hope you will join us again. narrator: the national governors association summer meeting started today and continues this weekend. tomorrow morning at 9:45, the governors talk about drug addiction. in particular, opiates such as prescription painkillers and heroine. in the afternoon, labor secretary tom perez speaks to the governors about how job-training programs can help

grow the economy. at 3:15, another cabinet secretary, head of the department of health and human services, talks to the governors about health care and how to improve care and decrease costs. after she speaks, the meeting closes out with comments by the incoming chairman of the association, governor gary herbert of utah. narrator: c-span gives you the best access to congress. live coverage of the u.s. house, congressional hearings and news conferences, bringing you event that shape public policy and every morning, "washington journal" is live with elected officials, policymakers, and journalists, and your comments by phone, facebook, and twitter. c-span -- created by america's cable companies are brought to you as a public service by your local cable provider.

a reader: the senate is back in session on sunday at 2:00 p.m. eastern, considering amendments to the highway bill, one of which would restart the expert-import bank, and another would reveal the affordable care act. the u.s. senate on sunday, live at 2:00 p.m. eastern on our companion network, c-span2. nasa scientists today unveiled new photographs from the new horizons spacecraft, which recently flew past pluto almost 5 billion miles from earth. from nasa headquarters in washington d.c., this is just over an hour. >> good afternoon. welcome to nasa headquarters in washington. my name is duane brown with the office of communication. research team is back to reveal even more unprecedented images and science that continue to be returned from the new horizons spacecraft following its

historic july 14 flyby pluto. to set the stage for today's briefing, please welcome to the podium astronaut and head of the nasa fund mission directorate where new horizons is one of almost 100 science missions in the directorate's portfolio ladies and gentlemen, dr. john grenz felt. dr. grunsfeld: thank you very much, dewayne. this week has just been a phenomenal week. monday we released the first image from the epic imaging camera on the discovery... the blue marble. this is our first true blue marble of the earth since 1972 when the apollo 17 astronauts took the famous blue marble image of the earth, and it really paints, i think just an incredible picture of our home

planet and how, you know, lucky and precious planet earth's, especially when you compare it to the amazing views we have recently gotten from the dawn spacecraft a somewhat hostile world. we just announced yesterday a couple of discovery of a parallel, a cousin to the solar system of our own solar system with the g-type star much like our sun and an annex a planet that is about 60% bigger diameter than the earth right in the middle of the habitable zone. it is truly amazing the things we are doing, but the images we've been getting in the science we've been getting from pluto has really just been more than amazing and proves definitively a scientific theory

that science never sleeps. if you look at our panel here, they actually look pretty cheery or a group of scientists that have not been sleeping for the past few weeks, but they are here to tell us about the most recent amazing results from the pluto and new horizons mission, and i'm thrilled to be here to hear those results. [applause] mr. brown: so we have before i introduced the panelists for this afternoon at nasa council with this mission and the resulting images follow the accounts on twitter,

facebook, youtube, and other social media accounts. keep the questions coming in. we will try to answer them as quickly as possible. you can follow the conversation and there is still a lot of conversation all over the world at #plutoflyby. again, online, all the information today and in the future can be obtained by going to www.nasa.gov/newhorizons. first up, you will hear from jim green, director of planetary science and nasa headquarters. allen stern, new horizons principal investigator at southwest research institute in boulder, colorado. michael sommers, new horizons

coinvestigator, george mason university, fairfax, virginia. cap field can, new horizons deputy project scientist also at the southwest research institute. at the new horizons investigator at washington university in st. louis. with that, i will turn it over to jim. mr. greene: thank you very much, dwayne. july was very historic with our flyby through the pluto system, and we are 10 days from that and yet, we've only had an opportunity to see about 5% of the data. as many know, we stored that data on board as we flew through the system, and it is just now starting to come back. each and every day, the team has been huddled looking at the data as it comes back, and it's always surprise, and it's a pleasure to be part of that, to look at the data when it comes

in and see the new discoveries that are coming out. today, we're going to talk about the latest data that came out in the last few days. this is a spectacular set of data, but it's also data that was taken on board stored prior to the encounter and its post-encounter after the spacecraft had an opportunity to fly through the pluto system and look back to pluto as it is hurtling away at more than 16 kilometers per second. these are just amazing discoveries so without further reduce, let me turn it over to the principal investigator, allen stern, to start it off. mr. stern: thank you. as jim said, last week the united states explored the farthest frontier ever explored, the pluto system. we can't tell you how happy we are just to be back as a team and tell you what we have been

discovering. we came back last friday and gave a first report about just the first couple of days of data download and the reactions we had to it. now we are 10 days out, seven and 5 million miles from pluto. we've had more time to think about the data set that are on the ground, and equally importantly, we have about three times as much data on the ground now. as jim said, that's not very much of the total data load. we have about 4% or 5% of the total load that. 95% or 96% is still on the spacecraft so we are only scratching the surface, and we have great discoveries to tell you about. we also want to tell you that we have really done the exploration. we are on the other side of pluto. this bumper sticker is inspired by our deputy systems engineer. it says "my other vehicle explored pluto" with a nice picture of pluto in the rearview

mirror. that's how you know. i would like to call up my first graphic, which is just a hauntingly beautiful image of the system. this was made a few days out on approach. as i tell you a little bit about where we are in the mission, just feast your eyes on this -- we've never been to a double planet system before and it's turning out to just really be a scientific wonderland. we have now finished the first phase of downlink, and intensive 10 days in which we set down images and spectra and other data sets just to whet our appetites and tell us the basics about the pluto system, and the discoveries he will be hearing about for myself mike, kathy and bill to report on some of the most important findings we have already made in these few days. we are now moving into a second phase of downlink. it's a little bit different, and i think it's important that

everyone understand that difference. will be transmitting home now a lot of engineering data from the flyby as well as data from our instruments and header data to go with the images and spectra we've already got. for the next couple of months until we reach mid-september, it will only be occasionally that we will have new images on the ground and available to release. starting in september, the spaghetti opens again -- the spigot opens again. the sky will be raining presence with data from the pluto system. it's going to be quite a ride. we are happy about the amount of interest in this mission. we are excited to share it with all of you, and we're going to do some of that right now. we're going to get right into the science. for some of you, if you are seeing a cardiologist, you may want to leave the room. there are some pretty mind blowing discoveries we're going to talk about.