guest: that links to my story, i might add. that is going to be the argument for the campaign trail. whether that is the presidential campaign trail or also remember that in the 2016 or also remember in the 2016 map, we are looking at the republicans seeking to hold the senate on somewhat unfavorable territory, states were either obama one or either states are more favorable to democrats in a lot of cases. so that will be one thing where it will be interesting to see how it plays out. that is why the republicans will be arguing so much that it is the democrats who control this deal. the have been no republican senators coming out in support of the agreement. in fact, my understanding, at least according to the "portland press herald" up in maine, she may be the only? on the republican side -- the only question mark on the

republican side. host: -- caller: yes, good morning. host: let me pronounce it for you. niels lesniewski. caller: ok. thank you. therelad that you are up following the best and what is real news -- news reporting. we don't get much of that anymore. a lot of yelling on the radio. why is itpoint is -- that nobody mentions the 100 to 200 nuclear weapons that israel has had since -- has been working on and perfecting since the 1950's? this is a, you know, a

well-known point all over the world that we don't seem to discuss it. host: i am going to jump in because we are going to be short on time. thanks very much for the call. guest: that is another area where people who are supportive of -- i guess, people who are skeptics of israel's intentions in this whole matter have been raising the issue of the unknown exactly but often perceived to be the case situation with the israel and nuclear firepower. and i think that is another thing where you will continue to hear that, but it always gets very tricky around here whether people are for or against the iran deal. is right. it is something people on

capitol hill do not talk about at all. viewersd one of our says, forget the technical requirements. if the senate is not allowed to vote, the deal will never be seen as legitimate by many. guest: that is an interesting point that i think we are going to hear some of, as well. beyond the technical requirements and what i said rather about senator cotton. but there will be an vote in the senate. closer vote and it may not get to 60 votes paid but the solution to that is to change the rules -- get to 60 votes. but the solution to that is to change the rules. the senate could change. mitch mcconnell has had no interest in doing that, particularly for legislation, but that is an internal matter in the senate and this is something that has -- the 60 vote threshold is customary these days and it is something that everyone sort of around here comes to expect. host: a busy fall as lawmakers return next week, and my guess

is we will be talking to you often. niels lesniewski, we appreciate your time. guest: thank you. host: word from ""politico -- "politico" that donald trump will sign the plant. this following a meeting taking place this morning in new york. in a news conference that we will be carrying live here on c-span at 2:00 eastern time, 11:00 for those of you on the west coast. thank you very much for being with us for this thursday edition of the "washington journal." coming up next, a look at the economic outlook and what to expect in terms of the economy and workplace. from the u.s. chamber of commerce beginning shortly. thanks for being with us. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> it is a pleasure to see you here all today. it has been kind of a slow summer, at least if you have been watching the economy.

the last couple weeks have been exciting and the stock market, but the stock market gyrations notwithstanding, the economy is still here and still kind of chugging along and i think will continue to do so. today, i want to make basically three point. i want to talk briefly on where we are going in the current economy and what i think we should expect over the next year or so. and then i want to talk of -- about placing this entire economic recovery in perspective perspectiveit is -- because it is hard to look at the academy and think, well, things aren't that bad -- at the economy and think, well, things aren't that bad, it is stable. and there is nothing, domestically at least, that would flash recession lights. we are looking at continued growth. we are expecting continued growth, possibly even a teeny bit of improvement over the second half of the year. and on into next year.

but there are real fundamental problems in part because this has been such a subpar recovery. , in a biblical sense, is supposed to have a few fat years to stock up so that when you hit the lien times and a recession, you can -- lean times and a recession, you can kind of punch through that. so, i don't think we have prepared ourselves well. , on the i want to talk third thing, a little bit about what we could do differently. what i think we should do differently. to correct both the immediate situation and the more fundamental situation about where we placed this recovery and what we need to do -- place this recovery and what we need to do to be better prepared for the next recession. i think gdp is going to continue to grow. we saw a bounce back in the second quarter that was largely

different -- driven by -- that was largely driven by inventories and by state and local government spending. two things that are not going to continue. so, the drivers that pushed us are real, but they are not going to be there in all likelihood through the rest of the year. and what that means is that we the secondbump in quarter, if you average the first in the second quarter, .6% up and 3.7% upcoming you get at right about 2.1%, which is the average we have been growing at since we came out of recession in the middle of 2009. so we are pretty much dead on the average. the second half of the year we think could be a little bit better. 2.7%, 2.8% on average. and about that going into the

first part of next year. and beyond that, so much could happen it is hard -- it is hard to say where we would be. we are not really stressing this wouldy, so, you know, we normally get recessions about every six to seven years, but those recessions generally follow a more normal economic cycle where you come out of the recession's fairly hot, you recover the lost ground, you start to go into an actual expansion where you are moving above your long-run potential. and that can cause stresses, cuc inflation go up, use in -- you see inflation go up, you see wages go up, use the interest rates go up. that having been said, when you are growing very slowly, you run the risk that outside shocks could be more problematic. so something like china having problems. china is important in the world economy.

they are not particularly important for u.s. gdp growth per se. they are important because they cost growth around the world, which we feed off of and sell into. so i'm not trying to say that china has no impact on the u.s., but it doesn't have a huge direct impact on the u.s. but when you are only growing at 2.1%, any slowdown is problematic. and the reason i am like this about the short run is that when you look at the factors that give us our economic growth, they are pretty solid. consumption is 2/3 of the economy. you see a situation where consumption is driven by income, wealth, confidence, and by availability of credit. on all accounts, we are seeing improvement. income growth is -- i don't think i have that in there, but income growth has been picking up modestly. wealth has been improving dramatically. we saw $15 trillion of wealth

lost during the economic downturn and we have recovered all of that and more, so we are now setting new highs for household net worth. that is a positive. we are seeing a more confident consumer. we are seeing a consumer that has better availability to credit. not like they had before the economic downturn because the dodd frank bill is still impending on the bill of credit, but it is getting better than it was in 2008, 2009, 2010. so we are seeing some modest improvement that should continue to drive consumption four. investment, we have seen some ups and downs, but we are studying to see improvements as of late. industrial production is growing relatively positively. it is not strong, but it is moving up. we are looking at capacities that are gradually kind of a bumping against that 80 limits. when we see that about 80, we

tend to see a bit more investment, so we are edging up into that range. and that is a positive. we have seen some inventory a chelation of late, which well it is not likely to continue at the pace it has, i think the last two quarters were the strongest two quarters we have ever seen for inventory accumulation. with the slow demand in the economy, it is likely that some of that was unwanted. but we are still saying the need for continued modest investment. and so if you have 70% of your economy in consumption growing at 3%, 3.5 percent, and you have another 10% to 15% growing somewhere in the neighborhood of 6%, 7%, you have a decent pace for an economy. the problem is that as you go on to other factors, the next big factor for the economy would likely be the international sector. that would be trade. and it would be an particular

net exports. and there, we are not looking really good. ,hey require a good price point so your dollar, the dollar evaluation relative to foreign currencies is important because that is your price point. and then it is how much income is being generated abroad. on both those fronts, we are not moving in the right direction. our dollar is strong and likely to get stronger, especially when the fed actually moves, which i think they will in september. i still think they are probably putting themselves in a box that they can get out of and therefore going to have to find a really good reason not to move and i don't think there is one out there just yet. so i think that the fed will move and that will strengthen the dollar a little bit more. and as a result, we are going to see it harder and harder to sell abroad into weakening economies with a bad price point, if you will. so i don't think you are going

to see much help on gdp. you are going to see that expert subtracted little bit of growth subtract aexports little bit of growth. if you're a looking at 3% growth in 70% of your economy, that gives you about two percentage points of gdp growth. if you stay in about 6% growth, that gives you another six or seven. so you are up to about 2.7, 2.8. but then when you see the international side, it is going to subtract a couple of tenths, pushing you down to that 2.5 and that is what i think we will kind of bounce around over the next year or so. what is that going to do for the labor market? well, the labor market has really, in some senses, recovered. and in other senses, not recovered in we have seen the total number of jobs at its prior peak. that is good. we have seen the unemployment

rate as measured by the -- by the normal unemployment rate has dropped down to, in the neighborhood of 5.3%. see 200,000,ll 210,000 jobs, something like that. and that is good. but it is really not great because that number doesn't mean exactly what it did a few years ago because we had this huge amount of underemployment. if you look at the unemployment rate and then you look at the onion -- underemployment rate, you have seen that number come down, but not as much as it should. so we have an underemployment situation where we have people that are working part-time for thenomic reasons that -- economic reason being that they can't find a full-time job. and that number is down, but it is not down to where it should be. this is kind of the story of our economy. it is good, it is ok, it is just

not as good as it should be. we still have a significant amount of people that are not looking for work, don't have worked, and aren't looking for work. and that is not back down anywhere near normal levels could you look at the civilian participation -- levels. you look at the civilian participant ration -- rates, and that is down to almost a 40 year low port -- low. about half of it is due to the aging baby boomers. but that means half of it is due to something else, and we really don't know what appeared we do know that it is not good for the economy -- what. we do know that it is not good for the economy. and it means there is not as much purchasing power in the economy. is really interesting the way that people have just ignored the statistics because if you look at the participation rate parched by age group, the

older age groups, the old guys like me that are hanging on, you know, that have changed themselves -- chained themselves to the desk, we have increased our participation. we are a low participating age core. i think our average is 16% of the 64 plus year old people. now it is up a couple of percentage points. so we are working longer. the drop is occurring in the younger age groups. the age groups that are still and should still be in the workforce. and that can't be explained by demographics. so you would have expected about half the drop in the participation rate because of the aging baby boom, and we have seen twice the drop that should be there. and that means that the data -- potential that should be there is not. you look at the unemployment population ratio,. bottom out. the last year -- ratio, here it

bottomed out. you would expect that number would get back to at least halfway between the bottom and where it was prior to the economic downturn. so we are still a ways from a we should be, but we are at least moving in the right direction. we have seen some decent job creation, but this is number of jobs. this is not number of jobs deflated by the size of the economy. in other words, when your economy as $17 trillion, you have a lot more jobs in terms of numbers then when the economy was $10 trillion. and this number doesn't take account of that. when you deflated by those numbers, these numbers do not look as strong as they were -- deflategate by those numbers, these numbers do not look a strong as they were. there is a lot of talk that wages and productivity have separated, that they are not moving in tandem as we expect them. and that is really not true. if you adjust the numbers are you are wheezing -- using wages

and productivity for the same width in the economy -- you look at the same group and use the same inflation adjustment, you get numbers that look very, very, very much similar. part of the problem with wage growth is that we haven't seen the productivity growth and we haven't seen the stresses in the labor market. when we talk about the labor market tightening and the labor market operating and closer to capacity, it is not anywhere near its normal level of capacity. and that is why wages aren't going up. it is kind of like hitting a speeding ticket and the officer says, you were speeding. you have this thing in front of you, called a speedometer. when it says 70 in a 50 zone, you better expect to see a red like. in this particular case, we have a speedometer out there on the speedometer is wages paid that kind of tells you -- wages. and that kind of tells you when the wages go up.

when you are not seeing wages go up -- because you are really not going that fast. that is why wages aren't going that up. if we have more of those particle -- people participating, there would be more injection in the labor market and we would see wages go up to we haven't seen -- go up. we haven't seen inflation as a problem, and that is a good thing. when you talk about the fed moving and you look at the economy, you say, ok, let's say they agree with me. and i think they do. then in a stable, not spectacular, but stable. inflation is relatively low. you don't have to move because of inflation. and the growth rate isn't really saying you have to slow down. why would the fed in this instance want to raise interest rates?

it is because they have been so abnormally low. they are not really talking about a policy that is tightening, they are talking about a policy that is only normally lose. only normally accommodative. they are really not talking about a policy that remotely resembles tightening monetary policy. in fact, the real issue, the elephant in the room for voluntary policy -- monetary policy, is what you do with the assets the fed has on its books? they are talking about normalizing -- or moving in the direction of normalizing their interest rate policy. so this is such a tiny baby step in the right direction, but i think it will be tough for the fed, even with the gyrations in the world economy and the fluctuations of the stock market, to sell another delay. i think that their credibility at this point is on the line and i think that is what stanley fischer said when he spoke at the jackson hole conference and when he spoke on cnbc the other day.

is that, you know, their credibility is really on the line. and i think that as a result, they are more likely than not to move this in september. i think i'm in a minority at that. many pupils that they will put the closure -- the raising off, but i don't think so. if they are going to get there at all, if they are going to move at all, it is not likely in the next month or two months or three or five or even six months that there is going to be a whole lot greater hesitancy in the case for raising than right now. in terms of the economy, not too bad. i think they are going to move. it will cost some -- cause some gyrations, but in this particular case, i don't think it is going to fundamentally affect the growth rate of the u.s. economy. where do you put this economy in historical perspective? and why do what to do that? you want to do that because,

one, you want to see -- it has been a really boeing summer. that is the most important factor. the second most important factor is if you are trying to gauge monetary policy, then you have to compare it to something else. so when you look at what is happening in -- in this particular recovery versus prior recovery, you really get a picture of -- of not very good performance. came out inst september 1% of the people were dissatisfied with the direction saidconomy -- came out and 71% of the people were dissatisfied with the direction the economy has been going. why the concern? well, look at how we have been growing for six years. if you look at what has been happening in terms of our real gdp, it has average to .1%. was 2.8%.overy

and that is real growth. so our real growth is half of what we saw prior to 1981. and it is well below what we saw in the immediate -- in the immediate administration. if you look at productivity growth, it is what percent. 1% productivity growth. that is less than half of what it was. in fact, the only one that it isn't less than half of is the recession and recovery that occurred back in 1974 and 1975. that is really abysmal performance. you look at real total compensation growth and, again, very, very low. compared to all the prior ones. and if you look at, you know, income, real disposable income per capita, that also at the very, very low levels. so relatively speaking, we should be expecting and getting better, and we are not.

and that weighs on people. people feel it to cap the number can'tple feel it if they put it into numbers. how quickly did we get back to our prior level of employment? this time around, 59 months. the longest on record before this was 39, and that was the bush jobless recovery. we sent -- set a new standard for jobless recovery. you look at how long it takes an economy to get back to potential , and in the bush economy it was something like 13 months. the averages of all the recoveries, 11 and a half months. and this time around, we are 72, 73 months into a recovery. six years. middle 2009 2 middle 2015. and we are not they -- there yet. if you look at that in chart form -- and the thing i want to

say, too, about the jobs, we are critic 152,000 jobs per month on average. if you deflate that by the size of the economy, by how many jobs are in the economy total, you see that we have about .11% of the job market. .11% of the job market each month is how fast we are growing. in the prior recessions, bush was very low. if you looked -- before that, that is, you know, this is by half the lowest number. so even the accounting of 200,000 jobs a month now is not where we should be if you compare it to any of the prior recoveries and deflated for the size of the economy. instead i made about getting back to productivity, this is the coefficient that looks at the relative imbalance, the relative skewness of whatever

number you are running through it. in this case, income. the whole talk about income equality being the primary -- inequality being the primary problem for our economy, that is not true. this administration has not done anything at all with regards to income inequality. inequality.ct you can see that the coefficients have grown, and on average, through time. they tend to grow more through economic expansions could -- because the contractions it's the rich harder. and so what is happening in this particular expansion is you would think with a relatively low growth rate that the balance -- the thing that would balance gini terms of the

coefficient is that the incomes would be more equal, and they are not. the point that i wanted to make her was a chart we look at the chartun -- here was a that we look at the long run growth rate and where we are. the way it is supposed to work is you drop below your potential in bad years, and then you catch up very quickly and pass your potential, grow above it for a while, create stresses in the economy, which tipped the economy over into the next recession. around, weular time have repealed the law of economic gravity. we have killed the business cycle. there is no cycle. we are growing, but we never grew fast enough to catch back up. in fact, the lines do get close to together, but they only get closer together because we are pulling down the red line.

not because we are pulling up the blue line. not because we are growing fast enough, but because we are pulling down our long-run potential. it is like doing chin-ups by pulling the bar down to your chain. -- chin. and they said that he assumed that if we grow -- that if we assume that we grow at a prescribed rate, then we will close the gdp gap to its long-run average, which is negative. so the long run average is negative. that we would close to our long-run average. another way of saying that is that we never get back to potential. in fact, they propose that over the ten-year forecast, they never get back to potential, which means over a 15 year span from the middle of 2009 until somewhere in 2025, when we don't ever get back enrich potential. you can't have a cycle if you don't get back to the beginning.

it is kind of in the definition of the word. business cycle. and what we have had is no business cycle. we have not closed our potential. it is a fairly damning criticism of any economy and it is really problematic. estimateshat cbo's are being ratcheted down year after year after year after year. and that is what is bending that redline down. when you put in a book of the actual is still below these levels of potential. but it looks like it is less because we are comparing it to the bottom line. we have changed the scale. it is like me trying to lose weight and every time i go in and i get weight i say i must be losing weight because i changed the scale from pounds to kilograms. and i don't weigh as much in kilograms as i do and pounds. at least that is what the numbers say. the point here is the following.

the economy is growing. but it is not growing the way it should. and people feel it. einstein's definition of insanity, which you have all heard, is doing the same thing over and over again and expecting a different result. and that is where we have been. we have been doing the same sort of policies over and over again, heavy under regulation, heavy on government control. we have crippled the flow of credit in the financial markets to make them safer, but by making them safer we have made them less useful. we have nationalized the health care system. we have imposed numerous regulations, from epa and osha, and all of these things are causing the economy to slow. that is my opinion. i cannot prove that they are causing the economy to slow. what i can say is they are there

and the economy is slowing. that doesn't necessarily mean causality, but it means suspect. it means it is something that should be looked into. and we are really not looking into that. we have a whole host of priorities out there. we look at tax reform, immigration reform, entitlement reform, we are not doing because of the administration, the congress, a combination of both, whatever. but these are things we all know we should be doing and we should at least be talking about how to move ford on those and we are not. -- move forward on those and we are not. so as a result, we are stable but unspectacular. beginning, wehe get recessions about every six to seven years. we are six years into this recovery. you don't die of old age. recoveries don't die of old age. it is usually something that crops up that is exacerbated by old age.

and so in this particular case, when you have an economy that is past middle age, it is more susceptible to problems around the world. a flea bitebe just on an elephant. if our economy was growing at 4.5% or 3.5%. you say, that is crazy. 3.5% is out of the picture. it is out of the picture now, but it wasn't for any of the prior recoveries. susceptible to the inevitable and the inevitable is that it some point, something will cause another recession hit when we haven't -- another recession. when we haven't addressed the long run problems and the short run antidotes to address that imminent recession, we are going to be in a bad way when it hits. and it will hit. we won't have fiscal policy at

our disposal because we still have huge debt levels. yes, the deficits have come down. they have come down to almost where they were in the last administration. almost. on average, they are still well above where they were in the last administration. so we haven't really reloaded the fiscal gun and the monetary policy gun we are exiting over -- you know -- they like and the liken theor the fed -- analogy for the fed like reloading begun. this is like taking a .22 on an elephant gun -- hunt. if you were to raise interest rates 2% over the next year and a half, you would not reload the gun. because you wouldn't be addressing the $4 trillion with of excess assets that are on the federal reserve books. $2 billion.y are

prior to the economic behavior in this program, the number of reserves on the books was $2 billion. now we have $3.5 trillion. so the fact of the matter is we have a long way to go to reload the gun and it would be a good idea to get our house in order during these "fat years" so we can address -- when they come. well we have failed to get back to long-run potential, we really haven't repealed the business cycle, nor have we repealed the probability that at some point in the not-too-distant future -- maybe not in the next year or two, but certainly in the not-too-distant future -- we will have to it once again deal with an economic downturn. thank you. just leave your money and, randy. it'll be fat again later and we can save up. i started my -- [indiscernible]

-- i started my career in the labor area. working up in baltimore representing the united mine workers. it was during the whole big strike when the united mine workers were not quite recognizing that their time had come to recognize they were shrinking and to do something. that, i would like to think it is a reason i have taken an interest in this. it is interesting how it came up in the late 1800s with capitalism. it was very unbridled. and how certain individuals fought over -- well, a disagreement over which mcguire saw it differently over establishing labor, but it is

certainly appropriate that we celebrate labor day and workers unions in the united states what two-year and perhaps more often. it is not just barbecues and beer. look, if there weren't employers, there wouldn't be employees. so we are all in this together. i'm not saying there should be an employer day, but i think it is fair to recognize that employers have a role and and part of the -- in part of the emphasis i like to make every time we do this press conference is people should focus on what employers are doing. which i a fact sheet, see many of you have, in terms of the kind of salaries and benefits employees provide. employees spend $9.3 trillion on total compensation, including $1.8 trillion on unemployed benefits in 2014.

2013, 169 million americans received their health insurance through employer-based coverage. they spent 6.3 9 billion dollars in health insurance. -- $6.39 billion in health insurance. defined contributions plans -- [indiscernible] -- over three quarters of employees -- and this is all bls data, not chamber data -- received paid vacation time. i highlight that because this administration always seems to be hammering the fact that no one seems to have education time. we need a new executive order and we expect a new executive order coming out of this administration soon on paint,. but if you look at the data, paid time off is a well recognized benefit. fortunately, i believe in

september, the less will be -- on the health insurance side, i want to re-emphasize that this is -- this is health insurance voluntarily provided by employers. this is all pre-aca. who knows what is going to happen, if that data will go up under the aca or not. is, given that, i think it -- it is surprising -- we were talking about some polling and how people are looking at the -- at the -- how the country is doing. and they are fairly pessimistic. a couple of recent polls came out and how employees use themselves in the workplace. 41% of those surveyed said they

were completely satisfied with their job and in additional 41% somewhat satisfied. 85% were completely satisfied or somewhat satisfied with their employment. only 3% were completely dissatisfied. and that was 2014. in a poll last week, 57% stated they were completely satisfied with the modification time they received, and 20% somewhat satisfied. only 9%, somewhat dissatisfied. 52% said they were completely satisfied with the amount of work that is required and 29% somewhat satisfied. 45% were completely satisfied with the recognition they receive that work and 31% were somewhat satisfied. i guess -- [indiscernible] -- everybody wants to earn more money, but 33% were completely satisfied with the amount of money they earned, and 33% or somewhat satisfied. satisfied.ewhat

improved in the last decade. the percentage of workers completely satisfied with the health benefits and vacation time has increased the most since 2005, each rise at least 10 percentage points. so, i think this is a reflection of sometimes despite the pessimism in the economy that marty went through, employees generally feel pretty good about themselves and they feel pretty good about their employers. i think that, in fact, is good news. on this labor day, we will see the labor unions dismiss that kind of data again. why do they do that? it is because it is contrary to their message of organizing, which is that, no, employers are bad guys and you need us to protect them. if you look carefully, employee, you will see that things haven't changed that much since the to protects and --

you from the employer if you know you are doing. on this so much except for, again, a recent these in the "post" this morning talking about a poll that came out how unions are going up in the images of the public, up to something like 57% -- i want to get this right -- 80% of adults approve of labor unions. the commentator went on and said only 6.7 of employees the larger labor unions. the difference must be due to unions -- by employers. again, we are coming back to, well, we had this pull out there. it says something like 55% approve of unions and we only have 6.7% of the workforce being organized, so that gap must be due to employers smashing of unions. first of all, if you look at the poll itself, which just came out things have a way

of rolling on forever -- it is only 37% of people wanting unions that more power. and the survey did not mention the fact that unions can require the payment of union dues at the threat of you lose your job. beatingnothing about corruption or losing flexibility with your job, etc. the point is this is just a grossly generalize poll that will be used to point to this gap, and therefore, point to the fact that it must be employers responsible for that gap. there is a lot more to the story than that. and the fact that the writer left out 37% of individuals didn't want unions to have more power is telling. the general of satisfaction or image of unions in the workplace as a necessary

part of the fact work -- of the fabric of this country, and really so, doesn't translate into i want more unions. whyre is many reasons why -- -- there has been a decline in union membership. the biggest one is the fact that a lot of benefits that unions used to benefit -- bargain for are not provided by the government. aca is on the books. osha protections. probably the biggest reason is that employers have stepped up since the 1940's and treat their employees a lot better than they used to. all this sort of goes towards explaining why there is a decline in union membership from the 1950's, which about one third of the private sector was organized to what it is now, which is 6.7%. i think we are still going to hear about stories of --

employers are the bad guys, so therefore, we need to have -- need to strengthen our labor laws. i am not going to go through and detail each case. and why we think that was a bad case. i want to talk a little more generically about how i view, based on conversations with my labor relations committee, as greg on -- what is going on in the labor department right now. as a justification for a lot of the things going on, a buildup of the unions in the sense that -- that the arguments made that as union membership declined since the 1950's, income inequality has increased, so therefore if you reverse that membership, income inequality

will be lessened. and -- and generally there is this image of -- income inequality increases in the 1950's, union membership decreases in the 1950's, so we've reverse that, everything will be happy. and that justifies changing our labor laws. of course, no one wants income inequality. the solution to that is change our labor laws. the other part is under current -- the traditional employer-employee relationship where someone works for a company for 30 years, put on a tie when they go to work or puts on whatever uniform they go to work, and then they retire is the way to go. we don't like this new modern workplace where there is independent contractors, outsourcing, and we, as enforcers of the labor laws, are going to use our labor laws to

-- to make sure that employees -- make sure that workers, individuals do what they ought to do, which is doing unions, contest independent contractor classifications, etc. but basically the old model -- we are going to do everything we can to make sure that that stays in place. itok, when i was really -- occurred to me -- maybe it was 15 years ago. i used to put a tie on and go to work. dad, i see you are putting a tie on, so i guess that is the chain for the man so he can control he when you go to work. -- control you when you go to work. the fact is, there is a little bit to that. put a tie on and some of us are into that traditional relationship with and that is how -- relationship. and that is how we decided to lead our life.

and other people have decided to go a different route. where they are more entrepreneurial and they want to be an independent contractor. they like the flexibility of being their own boss, not having to go to work at nine or whatever it is. they will decide when to go to work and how to make a living. this other alternative seems to been a furious to those in this -- seems to be nefarious to those in this administration no matter what. i will tell you that practitioners who are out there in the field dealing with the agencies at this point see a market shift with -- with the obama administration, -- [indiscernible] -- whether it is trying to force employers to be joint employers, a lot going onng by this agency. which is people ought to be back into that traditional

relationship. quantify, but to i think it is just a general undercurrent that the chamber is going to be trying to get a better feel on this. ok, i want to spend a little -- i want to spend a little time on debunking this issue. it is so ludicrous -- this data on unions. this is straight out of the paper that came out at the department of labor. history has shown that there is a correlation between a healthy middle class and a robust labor movement. according to data, the median weekly earnings for union members last year were $200 a week more than nonunion members. that is not pocket change. that is the difference between paying the bills and worrying whether low lights will go out. -- the lights will go out. as the number of workers choosing to be represented by unions increases, the share of

income going to the wealthiest 10% declined. but as union membership has steadily fallen in recent decades, they share of income going to the top 10% has steadily climbed. it doesn't use the word causation, but the implication is there. let me first just talk about the money. it is too bad that the department of labor didn't read the fine print, which goes a desert with a touch about -- which goes on to say, the comparisons are on a broad level and do not control for many factors that could be important in its planning learning differences. it goes on to say, such as, the distribution of union members and nonunion members by occupation, age, geographic region. it doesn't control for cost-of-living increases. etc., etc. the point being that these times -- kinds of comparisons have

long been rejected. it is a nice soundbite, but it really means nothing in terms of its membership in a union leads to the fact that you're going to get a $200 raise. it is grossly misleading. bls says it doesn't control for all these other factors. and lastly, the idea that there is a inverse relationship between union membership to climb and income inequality is like saying my investment in the stock market cause the decline of the stock market. it did happen about the same time, there certainly isn't any causality. if you can accept that sort of argument, you might as well argue that the decline of the union movement was responsible for the increase of minorities and females in the workplace because that increase and better jobs, numbers and quality jobs over the same time there was a decline -- not that the two are

related at all, but if you are going to go down that road and make some off handed connection, you can make those. it is important because this administration in -- in a month here is going to have a big conference, summit, no doubt. across the street. this will be one of the big things. and that will, in turn, justify a lot of stuff we are seeing an aggressive national labor board on the attack on sort of the traditional employer-employee relationships. again, it is much more subtle. you will see a lot of the templates for that in a memorandum issued by the current wage administrator, which in effect redefines who is an independent contractor, but it doesn't been a very subtle way, in a way that plaintiffs will no doubt take advantage of an attacking these kinds of nontraditional working relationships. it is all based on a book and how bad they

are. but this isn't about enforcing our laws. this is where we want to go, let's enforce the laws to get there. ofis a means justify the end philosophy, which if you have , we have in this area not seen before. even compared to the clinton administration. let me just quickly talk about -- there is a lot of -- obviously, a big is that just cannot a few days ago. a major case. it only cannot a few days ago. we are trying to sort out the real practical implications of it. obviously, it makes it a lot easier for the unions to organize employees for work for different employers. more tellingly, how that could lap into other -- lap over into other areas.

as plaintiff lawyers take the theory and move it into other areas of employment law, and we are already seeing that in some areas already. in thats a long ways -- case, the team still has to organize the workers. they still might vote against the teamsters, as they did in the volta lake in case, by the way. -- old wagon -- we can even get involved in challenging the court of appeals, there is a long way to go. we seeion agenda routinely through other parts. that requiresicy a disclosure for -- [indiscernible] -- the closure will obviously by unions.

so-called blacklisting regulation that we disseminate massive comments on is clearly theven by the fact -- -- sure on the employees to i don't think there is any sort of doubt what is driving that. time -- there was a 60 day period. not like the government under, just like the government contractors we as a simple extension. it was denied. we're hustling to get a comment done tomorrow by midnight, or friday at midnight.

and we will get them done and they will be very, very good. but, what the heck? why couldn't they give the community a little bit more time to figure out what the implication is of this huge deal. well, because i think they don't care. look, i want to shift just quickly -- i know we will get some other people here. in terms of a health care agenda, looking at basically three areas. one is repeal of the cadillac tax. we are working on the unions with that. or at least we were before my comments. on -- the issue of small group market reform. and the issue of the employer mandate for employee coverage. all of these seem to have some momentum. it is not just pie in the sky legislation that we are working on. these have good, sometimes

bipartisan support. and whether it is in reconciliation or some other vehicle, whoimmigration, i'm not green to present we are going to get something been meaningfully this year. there is a reauthorization coming up september 30. -- [indiscernible] -- lisa for certain kind -- v says for certain -- visas for certain kinds of doctors in rural areas. we are revising and updating our argument in support of immigration reform. get on the website and take a look at it. we have put a lot of work into it and i don't think it has gotten the attention it deserves. and last thing, we are concerned , of course, about the regulation, and particular with small business. the -- [indiscernible] days.very busy these

and -- -- re -- >> [no audio] >> mr. johnson, besides the obvious bottom-line of the ruling, was there anything particular as you have read the opinion -- anything new or anyone against any clues to what is going to be happening to the mcdonald's ruling? i justhnson: i think -- -- i -- when brian fares came out -- right after that, my

research -- if you look in the board manual, they note that employers and employees alike are protected from unfair labor practices and have an impartial form. we don't see the board living up to that, but -- and i doubt anybody does, and i think the unions don't seem as impartial. but i thought that was a little ironic. admitted- the majority they backed away from there being a requirement of direct thisol of employees to direct or potential control, even though it is not exercised. and what does that lead you going down into the future. our conceited the fact that those employees were pretty indebted into the workforce of the, as we call it, the putative employer. and so were that case will go will be retained in the facts.

limited to those kind of facts. i think that -- that -- that would be great. uncertainty is what is driving -- we have already gotten calls. you said franchisees, but this is much broader than that with other employers we work with because we don't want to get dragged into this. it is a difficult call because, like i said, we are a long ways to even getting to the court of appeals. the very uncertainty of implications of the case is what is devon concern. i think the shift, which the majority acknowledges, by the way. but that is hard to summarize since i think -- i believe the entire decision goes on between 80 pages. that that is -- my thoughts on it. >> quick question for marty. i am curious about the labor participation rate.

it is something we have heard a bit about over the years, especially when they were trying to do emergency unemployment compensation. i'm just wondering if you have any thoughts on white is that no one seems to be able to figure out what these folks are is that no one can figure out what these folks are doing, other than not you talkedcluding -- a little bit about those who have aged out. i'm curious about the other set of folks. randy i am curious if this all plays into the immigration argument that we need immigrant workers to come in and fill some jobs that americans don't want to do. >> with regards to the labor participation rate we have a lot of data on the cohorts, and so we can see which group is actually expanding their participation, which groups are contracting. it is the younger groups that are actually contracting and the older group is expanding, but the older group has a much lower average.

their average participation has ane from 16 to 18%, and it is the people in the other cohorts is 60 dropping 258%. 58%. it is still a situation where as the cohort ages it will track the -- drop the overall participation rate. you can look and see how many people have moved from this cohort to that cohort. how many people stayed working. by doing that you can very easily translate how much of the due to agings population and how much is due to something else. we don't really asked the ,uestion really too much, well ok, if you are up. you are not participating anymore, you are not looking for work, why? we do when we look at the marginally attached workers. some of them say i am not looking for work because i can't find it. so they get lumped into that discouraged worker category.

but the overall general drop in participation we don't ask a whole lot of follow-up questions. most economists expected, right, left, conservative and liberal, most economists expected that as the economy got up to speed that you would see reentry of the people that dropped out for other than age reasons. so the guys that just got old, the women that just got old and left the workforce, they probably stay out what they have left. but the other people there were no longer dissipating, there was a common belief that at least some of those would reenter the workforce. and that would actually cause a bump up in the unemployment rate as they got back in and started looking for work, reported that they were looking for work and had not found work yet and therefore were unemployed. that never happened. mystery is this kind of as to whether these people just

dropped out and stayed out, whether they dropped out and the market passed them by because their skill levels were such, but if they started looking for work again they should be back into that statistic. but if they look around and did not officially start looking for work so the system is extorted they didn't, then they are not going to be in there. but certainly that is something we should be looking at in greater detail because we have not seen any of the reentry. the other reason for that is that the economy never got going to the point where you would reentry. see that in other words, people get into the unemployment aria or they get into the not a planet where they are not looking for work so they are not counted as participating. when the economy speeds up it is kind of like that old till the tiltawhirl. it starts to draw some of these

people. well, that never happened. our economy never got going fast enough to really start to create the kind of poll that would push push thoset would people out of sitting on the sidelines and actually looking for work. you would've thought that with some of the longer term unemployment extensions ran out that those people would have started coming back in, then you look at the dynamics and you say ok, if they moved over there and the economy starts to pass them by their skill levels are to erode. then they collect unemployment for a year, or in some cases over a year, so that they are out of the workforce for that long, then even a slowly moving economy tends to pass them by. as a result when it is not growing and generating so many new jobs they just lose their reentry point. it is a situation where it could be any one of a number of factors. i have not seen a whole lot written on that, but many of us that forecast on a macro level expected to see some return of

those workers of the economy developed momentum. part of the problem is a never really developed the momentum we would have expected to have caused that reentry. >> and just envelope or dissipation rate it does hurt us to say that there is a surplus of workers, why do we need evidence? the fact is that those kind of -- i think marty sliced and diced how public hated it can be > a local dissipation rate doesn't really tell you about the availability of workers or their skills. neither does a high unemployment rate. you know, 10%. you can have employers with certain sorted is -- certain shortages in certain parts of the country. and unemployment is unable to accommodate that. i think marty alluded to the long-term demographics, we have an aging workforce, and immigration is going to have to be part of the solution to that.

can from american city business journals. this is for randy. ruling, joint employer the collection's rule, do you will the unionization rate go up, and if so by how much? that,m glad you asked because i don't think so. again, it is changing the rules of the road but not changing the product that is being offered to workers. ambush,in terms of the one of the ironies was that when employers were seeing the bucket past, employers are preparing ahead of time to anticipate a union organizer showing up, even though they may never show up. but because they know that if they do they will have only a very abbreviated time to stay there case -- which is protected under the taft-hartley act, they

do have a right. and beingating that, prepared, that may never even happen. a lot of these workplaces are not being prepared for the possibility of an organizing campaign, and even if employers -- even as a unit comes in with a more abbreviated time, the work is laid had that rolled up and changed. and in terms of the broader , i think that would probably be counterproductive in the long run. the more fundamental issue is -- in the chattanooga case it was clear. chattanooga volkswagen said we're going to stand back. we are to let the union do whatever they want -- well, not whatever they want, but we will keep her mouth shut. the union had a full chance to state their case and of course the union still lost.

there is a fundamental problem with what the unions are selling , whether it is because employers fulfill a lot of need again,loyees or because the majors of federal laws that are already in place. have hearingso with people on the hill who objected to their payment of the dues. the way they got beat up by the unions was a very distressing story. sometimes i would bring these guys and i would have them stay at my house because they did not have any money, it was disgusting. people i think i understand that about unions, that that kind of stuff can happen. corruption is a problem. there are 100 convictions reported by dol, and you can't shake a stick without running into some story about a union boss who does something or other. if you shake it as the computer i'm nota button -- saying employers are pure, but

if you're going to join an organization and pay dues with the threat of losing her job if you don't join the organization you are going to look at these kinds of things and say why do i want to do that? i think in today's day and age people are changing and they want to have a more direct relationship with her boss and not have the union be the interface. it is very difficult to quantify , and i think it is the case, and i think an interesting factor might be that because of the union decline in membership, frankly there are less moms and dads in the unions that tell their kids you have to join the union. might grandfather was a member of the railroad union. there may be a long-term sort of issue. it's nobody's fault, it's just part of the way things are working out. lots of lawyers and lots of consultants will make money off of what they're doing over there

, and the next white house will come in and change things or now ont 10 years from think they will be at a certain level where maybe 6.7% is about that level. certain industries that are heavy industries where the union movement is embedded, it won't be below that level but i don't see it going up. >> high. i am marked with investment news. i'm wondering, randy, if you can elaborate a little bit about the cadillac tax. what are the chances that congress will do something this fall, and what are the chances

that the cadillac tax will be put aside because republicans want to repeal whole thing, the whole obamacare law dr. -- the whole obamacare law? >> of course the chamber opposed it to begin with. but there is no unscrambling the omelette, and it is the law of the land. i think there is a growing realization that a repeal is not going to happen. but there is room to improve it in conservative ways. i think if you look at many of the republican proposals as of late they recognize that and they are lining up with certain pockets. some people might say oh yeah, they are returning all the tough issues to the states. that is where i have taken a poke.

there are targeted changes. some include the cadillac tax, some include the tax on employer mandates. you probablytax -- know this. i'm going to college republican version, but it has 81 sponsors of the democratic version. as i understand it hillary clinton is thinking about endorsing the idea. think big thinkers in the republican camp, there is some concern about it as you well know. reform is seen as a way to hold down costs, and if you're going to repeal the cadillac tax it is a corollary that you have to reduce the exemption for health care under our tax laws. a problem inurse

an of itself in very controversial. normally we wouldn't characterize an issue like this. i think that makes the are r versus degustation very confusing. take a look at the numbers on we are going to do more coming up in september. >> high, brian mahoney with politico. randy, that you are expecting an executive order. i was wondering if you could elaborate on that and if you are expecting any other executive orders in the work -- but -- on workplace policy. with theld start to letter a and moved to the z.

the president has an executive order requiring general contractors to get paid leave. i can't remember what the amount is now. i think we're going to see that come out. why not? i think it would be unconstitutional just like the one on blacklisting is, but you have to go to court. that cost a lot of money. and a lot of these contractors of course already provide paid leave. the point about these mandates is not to leave the amount itself, but how it is enforced and how the executive order provides that should be overlaid to the existing leave policy. that is why the family medical act is much longer than three pages. i worked on that on capitol hill. most of it deals with how paid leave policy proposed by the federal government interplay is with the leave provided by the employer, and then how that is

enforced through private causes of action, damages. i just ask when these things come up, don't just focus on the leave. look at the rest of the bill. that is what we have to do when we get called about to be supports mirror not? it is the whole rest of the bill. the whole rest of the bill takes up three times as much pages. i would betcoming in the next 10 months there will be more. that concludes today's breathing. thank you very much for coming. have a great holiday weekend. [captions copyright national cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. visit ncicap.org] >> you can watch all of those discussions online at

c-span.org. we take you live to the heritage foundation in new york during on your screen is armor british defense. liam fox talking about his opposition to the iranian nuclear agreement. he has been speaking for about 10 minutes. live coverage here on c-span. sec. fox: we are told that the steel had to be accepted because there was no other deal available. i simply don't believe this to be true. iran came to the table because the sanctions were becoming an enormous burden, economically and beginning to threaten political stability. maintaining sanctions until such time as iran is willing to accept a proper deal more suitable to the p5+1 was certainly an option. it was simply not the option that was chosen. that a stepare told back of sanctions is a solution to any flaws that might be contained within the agreement. again, this mary's -- merits at

least extreme skepticism. once iranian assets are unfrozen and sanctions lifted, iran will be able to make very rapid progress in updating their aging and perception in both civil and military field. will the effect of any subsequent sanctions be diminished, but western governments will face increased pressure from their own domestic and industrial interests once contracts have been signed, product -- projects have been started and are put at risk. we know that and the iranians know that. those who don't believe all this are just being cynical. maybe there will be genuine political change in iran by the time the tenure -- 10 year deadline has passed. many -- may be any change will make iran into a constructive partner.

maybe iran will offer free and open access. maybe they will be completely honest and transparent with us. maybe they will follow their own religious scripture and state developing a nuclear weapon is acceptable. maybe they will not use their own frozen assets to probe -- fund terrorism and the region with a have in the past. won't improve their economy with the sale of oil and pursue a nuclear weapon with updated centrifuges. the hallmark of western security policy in recent years has been a triumph of wishful making over critical analysis. to makekers have a duty decisions based on how the world really is, not on how you would like the world to be. wishful thinking is not a great approach to life.

it is a dangerous foreign policy and it is potentially catastrophic. us whohope that those of , whothese reservations believe that this is doubly putting a difficult problem down the line, let us hope that we are wrong, that i wouldn't put much money on it. they do. -- thank you. [applause] >> thank you very much for your terrific remarks. i would like to open the floor for questions. if i may take the liberty of the first question, it is regarding the perception of the iran deal in the united kingdom. the obama administration has then the question -- impression that outside of

washington, and perhaps outside israel, there is almost no opposition to the iran deal. what is the situation on the ground in london at the moment? i understand that david cameron is a strong supporter, i understand that there are a number of mps who are opposed to the deal. is there any prospect of a parliamentary debate taking place in the house of commons on the iran agreement in september in september? sec. fox: it's really unusual. i was speaking to his excellent and there is a great deal of anxiety in the united kingdom and other european countries as well above the steel. it is quite wrong to portray it as having the full support across the political spectrum before the deal was actually announced there was a debate in

and a large number of my colleagues spoke very forcefully about the potential problems in my create. because of the parliamentary timetable and the time the agreement came out we have had very little opportunity to discuss it, but i would find it very unlikely that there would be no parliamentary debate on the subject. if the debate does not occur in government i am encouraging it to happen on the backbench timetable. parliamentary timetable is not a fairly covered by the executive. there is a high likelihood of such a debate. again, i just make the point that i opened with. it is extremely disappointing that this whole issue, that had so much coverage in the british media, where on arriving in the it is debated, it is

virtually absent from debate in the u.k.. that is something i want to help put right. first question from the audience. gentleman on the right. >> thank you very much. my question is this issue if you compare it in the usa and the european union, do you find any negotiationin this to think iran singularly outsmarted all the other five players? and the last thing as if you could say what were the other options other than negotiations to settle this issue? thanks.

is. fox: i think there discord over the agreements politically in europe. i take it is perhaps less partisan than it seems to be in the united states, which brings in a greater focus here. iranians -- the let's put it this way. look at the agreement itself, compared to our initial demands, and iran's initial demands, and see what it ends up being closer to. that to me says that the iranians actually managed to get a great deal of what they wanted. i'm not sure that we got what we wanted, because i go back to the point. our original aim was that iran would never be able to develop a nuclear weapon. we now have a suspended period of 10 years. there is nothing to ensure that with the money to have gained from the sale of oil and gas and getting back into the global

simply, that they won't turn around and say all right. we have done the tenure suspension. now we are going to get the weapon. at that point we have left ourselves with no recourse except the reimplementation of sanctions, which by that point will probably be much less of a threat than they are today. that is what worries me. got think that they have more than we have, frankly, from this particular negotiation. your third point. what were the other options. option washe other to continue with sanctions until iran was willing to accept an agreement that we thought was much more full proof in terms of our original aims to stop them getting a nuclear weapons capability. somehow, in the summer of 2015, except that we had to

that wen agreement thought was below expectations -- that we had to accept it right now rather than continue with sanctions and see if we could not get a better deal from the later on, why now? why did it have to be right now? why did we accept the deal that was well below what we initially asked for jack i think the answer is that this was about politics more than it was about security. that is generally in the longer term not a good way to set your priorities. hi. i want to compliment you about saying it is about politics. i was at an unclassified briefing about the iran deal that included people from the u.n. and we were talking about how the mainstream media has cap information away from the general public, and even more so in the u.k..

it was declassified a few years ago by the dia that iran did play a role in the longer he bombing, and if people knew that they might be against this deal. but i have heard is that the mainstream media refuses to report that because they are embarrassed. i don't know if i heard is correct, but what i would like to know is if in the u.k. they're are not even having this dialogue. at least america we have this dialogue. i have just been told this bill is going to be pushed through. the issue is, who is monitoring the enrichment? andle need to be educated people just can't understand this because of the complexity. any comments you have, and i believe you said, it is the mainstream media not reporting it, not educating people. it is politics. well, it was very kindly mentioned the book that i wrote. part of the problem is that

contemporary politics and political discussion often have very little historical context. you would be hard-pressed to hear anyone talking about iran pre-1979. it did not have any history. what i wanted to set up with iran has a very sophisticated diplomatic capability. it always has. it is been well known for running rings around opponents over time. iran has a very long record of involvement in all sorts of terror groups and proxies in the region and beyond. -- make sure you get a copy of it. i do think we need to educate our public much more about these issues. of like it to when i was still practicing medicine.

my wife would say when i still had a real job. you don't sibley walken, look at the blood tests, and make a diagnosis. he wants to see the patient. you want to ask about their past history. you want to know some context. too much about politics is discussed in two dimensions rather than three. i think we need to put that right. it is one of the duties of politicians to educate as well as make policy. >> thank you so much and thank you for that excellent talk. somein the united states proponents of the deal have been making quite a lot of the -- essentially no gradual way to address iran's essential cheating. what is your take? would you flesh out a little

provision is not particularly effective in bringing iran into compliance with the terms of the agreement? sec. fox: i think you put it very well. what has happened in the agreement is that iran gets all the rewards immediately. we are left with fewer and fewer potential sanctions should they not stick by the agreement. they get the unfreezing of the assets and the lifting of sanctions very early on in the process. after that, when they have access to the money, when they got access to western contract and capabilities, to be able to bring their economy back up to shape and to repair their damaged intersection -- infrastructure, what sanctions are we going to be able to apply? if we are able to apply them, how effectively be? we have the second problem was i also mentioned, which is that

once these sanctions are lifted, once you've got western companies going into iran and doing business, it will be more difficult for democratic government in the west to reapply sanctions even if they are justified. i think we are making this very difficult for ourselves. we are loading this deal very side andn the iranian leaving ourselves with too few levers should iran go back to its old behavior of trying to manage like the agreement and describe in ano un-transparent way. i think that is really quite different. rewarded for the limitations of the deal -- implementation of the deal and

they have a graduated process. that would've been a much more sensible approach and giving away everything at the outset. we hope that they will change. could identify their institutional affiliation, that would be great. with regards to the 24 days, one of the things that has been updated not too much attention is the fact that 24 days, which the administration's of is enough time, only if the iaea only gives the iaea access.

there is no deadline for that. in other words all iran has to time untilag out the from thes any concern iaea about any nuclear facility. if you go for years. go for years. thing i think we should pay attention to is it is not a signed agreement. just the other day the president said we should not ring this agreement to the parliament because if you bring it to the parliament i would have to sign it. if i cited that would give it a force iran does not want to have. sec. fox: thank you. i think this is, as they say in the news, a developing story.

i think as debate becomes more substantial -- not about the big picture but about the details -- i think there will be greater public anxiety about this deal. which is why we need to start a genuine public debate, not about iran is bad, the west is good, it actually focus on what it says and what the applications of it will be. how it would operate under the , notadverse circumstances the most optimal circumstances. that is something we need to get into. the point you make are externally valid. -- are extremely valid. cynthia, i am a writing fellow at the middle east forum. safe -- i have a very personal interest in having it safe because i fled egypt for

my life in 2011. if we did not have america i would have perished. i have been looking at this whole situation from the perspective of the iranians and from islamic jurist prudent -- jurisprudence that i had to study for 12 years because it was the law of my country, not because i appeared to it in any way. i'm not muslim. according to islamic jurisprudence this treaty ,atisfies every single law which is the jurist prudent -- jurisprudence of treaties. according to that jurisprudence this so-called treaty is a temporary truce, and the limitation of it is 10 years. after the 10 years and muslim toer is obligated, according sharia law, a violent attack and waging war against the nation -- either the nation that they have the treaty with or its allies.

that is what it explicitly says, or else the muslim ruler would it not be legitimate anymore. i don't think the iranians, if it satisfies every law, i don't think they would sacrifice their rules to satisfies the united states or the west. is, is this taken into consideration of the political discourse in europe, or in the united states of america, how the iranians are looking at it and the implications of it if iran does in fact act upon its promise of death to america and death to israel and starts to act upon it, are the repercussions put into consideration? will not even attempt to get into issues of

iranian jurisprudence. i might as well try to talks what healy. swahili. but i think what it very clear that the mindset of the west in coming to this agreement with -- chances are iran will change in that time. chances are they will become much more liberal. the regime will be fundamentally altered. i don't know what guarantees anyone believe there are but that will happen -- that that will happen, and yet this whole agreement is predicated on that agreement. i can see circumstances in which the successor to how many -- how amani is actually more

fundamentalist then he is. i don't think there is anything that suggests that his successor will be more liberal and more pro-western. i think this is a dangerous gamble. i think that to try to guess what the world will look like, what any country or regime will look like in a decades time, and then base your security policy really placing too much value on hope over experience. >> what about israel? a threat to israel? sec. fox: clearly iran as a nuclear threat poses a potentially -- as a nuclear state poses a potentially existential threat, that i think we need to understand the potential implications for

global security as a whole. while it is extremely important, and i am a great supporter of the state of israel, it is of great importance to see the threat it poses to israel in particular, we should understand the applications far more widely of iran being able to get nuclear capability. it is not something about iran getting nuclear capability and the threat it causes to in zero -- two israel. it is what it would trigger. in no time at all you are in an arms race were saudi wants to get a nuclear weapon. egypt might want to get one. turkey might want to get one. surely after all that we did at the end of the cold war to try to prevent proliferation, and all the medicines that were put in place in the former soviet republics to try to stop that, we don't want to leave to the next generation a new nuclear arms race in the world's most unstable region. as i didfirst to say

at the beginning, any agreement that actually stop iran from getting a nuclear weapon, genuinely stop them, is to be welcomed. i just don't believe in my heart that this agreement gives us anything like guarantees that we need. sad to not be supporting it, that i think you have to be realistic and politics. as i said, wishful thinking is not a good basis for national security or the security of our allies. >> high. andrew overton. though i don't send it i worked at the bridge empathy. it iough i don't sound worked at the british embassy. i just wanted to push back on a couple points about sanctions, i believe you said that they will only be lifted after iaea

verification. , thehen on snap back secretary has been very clear that he would snap back sanctions if iran cheats. that theme, you mentioned the alternative would be more sanctions to get iran back to the negotiating table. do you really think china, russia, the other five will sign up to that, to more sanctions? or do you think that even they will return to the negotiating table? sec. fox: high point was we did not have to have an agreement to now. iran was becoming more compliant . we had an option to continue with the sanctions until such time iran was willing to agree to something more to our liking but we decided not to do that. i will leave that open for debate as to why that occurred.

i think that if you look at the that there often is an sanctions are being applied, in the timescale ahead i think i made the two points. one is that, will sanctions have equal impact once iran has had a lifting of the restrictions and the unfreezing of its financial assets, will sanctions be as effective in the future? and secondly will western and other governments be willing to reapply sanctions when they have large financial vested interest that they don't have as the -- at the present time. democratic governments come under pressure that the chinese government and others don't come under. when you have a large industrial interest able to make profits upm an open up -- opened

iran, there will be a lot of pressure on western governments not to close it down again. i think this idea that the snap backs have been very quickly or , we have to question that. i don't believe it to be true. >> just a follow-up. it is very hard to imagine the russians and the chinese supporting the reimposition of the sanctions against iran, not least with the russians andlying weapons to tehran a very close relationship between moscow and tehran. the whole snapback idea seems to be illusory. sec. fox: i think it has been overplayed. i do think there is a real danger that some of the players who are required to make sanctions bite would be a lot more unwilling in the future than they have been in the past.

the point i was making to the gentleman from the british embassy was that the western governments will have different pressures applied to them because of their commercial interests. it is not as easy and it is not as clear as if being portrayed. >> to questions. two questions. >> high. -- hi. given the influence of weapons sales progression to tehran, how likely do you think it is that israelis may strike in order to prevent an aggressive nuclear program? at the moment i don't. i don't think it is likely. but you can never rule anything out. if you added stability into an already unstable region, who

knows what the final outcomes and applications will be. it is impossible to say, but i think it would be unwise for whether there out might be a potential military response at some point by israel against what they perceive as an increasing risk to their national security. yes sir. thank you for your speech. pew showlls from q >> that americans don't approve of this treaty. british polls show they are a bit more to the ethic for this treaty. why is it that approval for this treaty, for these polls is not out in the media? sec. fox: well fortunately one of the things i am never answering for is the behavior of the media. it is interesting however.

first of all it is interesting that there is a discrepancy between the two, and that the american population are less inclined to support the deal than the british population. i have not seen these polls but i have no reason to doubt what you say. what is the difference between the two? there has been more debate about it in the united states and that to me sounds like the more people know about it the less they like it. opinion in the united kingdom is to open up the debate. trying to get articles into the british press on this issue is extremely difficult. of course the of session in of session in europe is the migrant crisis and not iran. but it does need to be debated in greater detail. one of the reasons i'm here is to try to get agencies

like heritage to open up in the united kingdom. it is extremely important that we do so. it is crowded out by other events in the middle east but it does not diminish its importance. just because people don't want to hear something does not mean politicians don't want to hear it -- and say it. >> could you comment on the migrant crisis? and how that is directly related to the crisis in the middle east particularly syria? could you address how europe as responding to this crisis? first of all i would differentiate between economic migrants who are coming from all over the region to try to get and better living

.onditions by being in europe those poor souls are fleeing one of the most cruel and vicious organizations, isis, that we have seen in our world for a very long time. it is pitiful to watch them trying to bring their children not just to a place where they can get money but where they can be safe. act in our failure to syria is coming home to roost. we need to set up a saison. there needs to be a secure zone in syria where people can live without fear of the headings and crucifixion and cruelty and getting ripe and the other gangs that we have seen --

rape. to see an international coalition with a protected element inside of syria. otherwise the flow will continue. there is no point in sibley say we are not going to allow people to cross our borders. we need to deal with the cause of the problem and not simply the symptoms of the problem. the more ite wait will cost in terms of suffering. >> -- sec. fox: just let me add this one thought. not acting is a policy. not acting is a choice. not acting brings its own and you have to wait it consummate the of action against the cuts of in action. the cost ofple inaction is rising too high. >> the house of commons is

actiond to debate against isis in syria. -- could you comment on how you ?ee that debate moving first of all, there has been for reasons i don't , a response tod chemical weapons in syria and isis. it seems to me absurd that we toe set except that it is ok carry out a military strike against isis and iraq but not against isis in syria. it is either a threat to national security or not, it is a threat you have to deal with it. the idea that what is in effect

should be an obstruction to us dealing with what we perceive as the biggest threat to our security for generations just leaves me speechless. what we require to do is something else also. that is to recognize that the battle against isis is not simply a battle to be fought on the ground against a military force. this is an ideological battle. we need to understand the scale of the challenge we face. in the cold war we understood that we had to utilize not just our military capability against the soviet union, not the military capability, that our moral case for our own superiority. i described in my book a discussion that i had and i said

why was it that in the cold war we were willing to use the word better, that capitalism was better? that freedom was better? that democracy was better than the alternative? i happen to -- believe that religious tolerance is better. i believe that taken -- treated women as equal citizens is better than treating them as second class. i believe the values we have are better than those put forward by the as lists. .- islamists and when i said this the answer i got was this. i don't think we can say better, just different. if we only believe that what we stand for a different than the alternatives and not better, we ourselves will not have the moral courage to do what we believe is right and we will not have the moral authority to do so.

it is time in the west that we start using different and start using better. we have to start seeing the information revolution not as a threat to our security but an opportunity for us to propagate those values that have made us what we are. countries like the united states, australia, canada, we are not who we are by accident. we are who we are by design because of the decisions we had taken. because of the decisions of our forebears and the consequent as they have had. it is time to get back into the values and arguments. this is something that requires a fight by our society, not just our military.

>> thank you very much for bringing us up to date. this seems to me like a peace at any price. the price we pay is for our future, and as you said for our values. it seems to me that what we really need is to go back to peace from strength. i think we need a lesson in history. 1979 the hostages were released. the political side was very liberal and was just going on and going along. the iranians will move out when they think they have a better deal. they work sure. they-- worked sure -- weren't sure. what did they let them go? right at the inauguration. they weren't sure what ronald

reagan would do as the cowboy. that is when we got peace through strength. that is what we need today. we need these through strength. in addition to that i have another concern. is this going to give them full ?he dramatic authority armie going to have limitations? armie going to give them back our embassy here to -- are we going to give them back our embassy? that is in a very crucial location. 1979s been vacant since except when it was used by the state department and rented out. that is a concern to me. is ajust across the bridge all the otherfrom embassies on embassy row. that would be a perfect setting for a little mischief. i don't know whether anyone has ever brought that up.

i guess that the aim normalization with relations to iran. not a bad thing. my point is to give all these things at the beginning of the process before there have been -- before they have shown that they are willing to implement , seems ament itself touch naive. [indiscernible] west, as ihe described it, the policy where wishful thinking trumps critical what we is in spades have done with russia. russia launched a cyber attack on estonia. we did not do anything.

they invaded georgia, they're still there. our response is minimal. the last time we were here in senatorsn one of u.s. said to me i am really worried utin present -- qiagen --p is misreading the singles from the west. he acts, we don't respond. what is difficult to read about that. [indiscernible] >> high. thank you again for your remarks. moving forward it seems that the democrats in the u.s. are going to filibuster and the deal will be of limited. what are the steps moving forward for people who don't toieve that this is going

lead to iran obtaining a nuclear weapon? what are the steps moving forward? thank you. sec. fox: it looks and the agreement will go ahead. stuck, once it is excepted, we will be stuck. what i think we will have to do, the best we can do is to ensure that the rights of access of the iaea are fully upheld and set the stalling techniques that have been described that we have seen in the past by iran are not allowed to buy them extra time. even a year is not an accurate figure. i think it is much more like seven or eight months. there are so many risks in all of this process. i genuinely find it hard to believe -- to be optimistic

about it, and i think we are going to be implemented -- limited in what levers we have to pull. when this was brought out in the house of commons the foreign secretary, my friend looked hammond, said he thought it had the chance to be a historical agreement. and the back bench in the house of commons said with all due respect, history will determine whether it is a historic agreement. a generic lesson for all politicians in that one. thank you. a follow-up on the issue of refugees. from syria were not called by a -- caused by isis but caused by assad. the action that you propose be used to remove a

thought from power? sec. fox: i am not going to go into the complexities of iran -- of syria except to say this. it has been the movement devices that has caused, in recent movement ofmassive refugees. you are quite right that this is already causing a great deal of instability, and this is instability upon instability. it is not just the number of refugees coming to europe. i was recently in turkey. no one seems to be mentioning receivedturks potentially 2 million people crossing the border is refugees which is a huge problem any country. again, we know what isis are capable of. we have seen what they have been

doing. we have seen their animal behavior towards their fellow human beings in the name of so-called religion. and at some point we have to raise our game. if you're airstrike's -- a few airstrikes on ice is in iraq is not going to be enough because it is not giving the civilian population the security they require. -- and in iraq, we were able to achieve no-fly zones. we were able to achieve zones of safety so that people could live without fear in their own country. we are going to have to do something similar again. i know we don't want to do it and i know the public's opinion may not be in favor of doing it, but if we only want to have the policies that are already accepted by the public, why don't we just give up and let the pollsters run the country? politics iab