assets. we have an ongoing superadvisory process. we have this remarkable exercise in the spring where the federal reserve working together with the fdic simultaneously analyzed all the major portfolios over the largest bank holding companies of the united states accounting for about 2/3 of all the assets of the banking system. we were able to look across banks and examiners and asset classes and combined our usual examination procedures with off sight surveillance done by economists using a wide range of statistical methods. i think we learned a largement in that exercise -- large amount in that exercise.

the confidence in the banking sector rose significantly but we also learned great deal about how to examine banks in a comprehensive way across the entire system. . i think, henry, i think going forward what we really need to know will be how to examine the system as a whole. i think one of the failures of regulatory oversight during the crisis was our -- when i talk about regulators in general, how individual firms and how each individual firm is doing. one of the things we've learned and very challenging for us as we go forward will be that we need to look at the whole system. we need to see how the markets have interact with each other. have interact with each other. we need to businesses are cutting across different portfolios. we need to see the developments in the credit markets before they become problems and that this would be enormous challenge. we are already beginning that process and i look forward to continuing to learn to shore and

more about our financial system as an organic whole route of an collection of on related financial institutions. >> mr. chairman, the governor of the bank of england gave a speech about banks being too vague. i wonder did you read the governor's speech, are you going to give a speech like the governor's speech or are you going to outdo him and lecturing bankers? >> i don't try to copy because he is too clever. i thought that he had some very interesting ideas about the size of those issues. i would say one of the real important, perhaps most important issue the federal reform process has to address is too big to fail which is the topic of a speech. it was unacceptable that the government had to intervene to prevent the failure of major

financial institutions with no choice in order to prevent the collapse of the u.s. economy. in the future it must be possible for banks and other financial institutions that come to the brink of failure and not pay their bills and debt. they must have the freedom to fail. and by doing that, we can create market discipline and the kind of information we need to present crisis like the one we saw before. the question is how to create freedom to fail. i don't think making big smaller is going to do it because banks can still be systemically critical even if they are somewhat smaller. if they are incredibly interconnected with other banks. if they provide critical services in the financial industry or if risks of the various sorts grow across a range of banks. after all the 1930's we didn't have many large failures that we had a small bank failures. a2 address to big to fail the key element, the two key

elements one would be to make sure those banks are very tightly supervised to make sure first of all they are safe and second of all that they don't have an artificial incentive to become large. but critically again i think we need to have an alternative to bailout. we have to have an alternative which is some kind of resolution or special bankruptcy regime which will allow the government to wind down safely failing firm in a way that will stabilize the system that will allow creditors to take losses and predictable and understandable ways but will not lead to a crisis as we saw in september and october. so there are a lot of interesting ideas out there, reducing the size of banks, living wills, chairman volcker is here. he talked about constricting of proprietary trading. many things worth looking at or interesting but i think we will have a real market based financial system until it is safe to let a financial firm failed.

>> henry? >> mr. chairman, if the american economy moves ahead along the moderate economic growth plan as you suggest, against the backdrop would you also -- craughwell the federal reserve respond to further financial speculative activities such as sharp increases in stock prices, commodity prices and the trade would you respond through quantitative restrictive measures or through selective approach? >> you've just introduced the most difficult problem of monetary policy of the decade which is how to deal with the asset bubbles. you've had too big asset bubbles that both resulted in a severe downturn particularly the credit bubble. so clearly we need to begin to address those issues in a seriously. i would like to say we to

carefully evaluate major class of financial assets. it is inherently extraordinarily difficult to know whether an asset is in price with its fundamental value or not. but we are trying and we are looking at various models of valuation for stocks and bonds and other kinds of assets. and for the u.s., again, extraordinarily difficult to tell, but it's not obvious to me in any case that there is a large misalignment currently in the u.s. financial system and we will continue to observe that and i would note your view on that may depend very much on how you think the economy is going to evolves slicing is conditional on the moderate growth going forward. would week response? we use our interest rate tool to try to meet our dual mandate which is full employment and price stability if addressing

major misalignments and financial markets through the use of interest-rate toll would further that goal and i think we would have to think about it very seriously. but as important as that is the problem still a arrives that identifying those misalignments are very difficult and knowing how much to move your interest rate and how to avoid bringing the rest of the economy down remains very, very challenging problems for monetary policy makers. ..

>> we can never say never. we have to keep an open mind and continue to about the way as we go forward. >> now that we have on employment at 10.2% and distinguishing unemployment and cyclical unemployment which you address in your talk today, are you and your research staff no longer looking toward a normal job recovery? you and your research staff now no longer looking forward to a normal job recovery?

>> well, i did discuss that a bit in my remarks, as you pointed out. recently we've seen the interesting phenomenon that firms have come out of recession and aggressive cost cutting mode and in doing so they've actually created gains which are translated in a very short term again i want to emphasize, i'm not saying anything about productivity, it's important for economy. but in the very short-term cost-cutting success is actually a negative mark in that it creates a short-term slower growth. i tried to discuss the aspects in my remarks. i guess my sense is that the increase of productivity that we've seen so far are so large, so strong that i'm a bit skeptical they could be

maintained going forward. i think in some cases you'll see firms that were gaining productivity just by making workers work harder, or by cutting maintenance or other important tasks. we'll find that as demand begins to strengthen bill need to bring more workers back on. so, i don't know the answer by any means, but looking at these patterns i imagine that there will be some moderate job growth going forward that will not see this sort of zero to negative. the issue as i said in my remarks, it you need real gdp growth of about 2.5% or jobs growth about 100,000 per month on payroll just to absorb workers coming into the labor market. so to make it significant progress we would need after growth than that. so even though jobs are likely to be created next year, i'm concerned that the unemployment rate still might remain quite

high at the end of the year. >> mr. chairman, showed large financial agglomerations, which offer a deposit facility within their structure be allowed to engage in proprietary trading. and if your answer is yes, how would you try to limit the structure of this kind of the dignity? >> i think i know where that question came from. [laughter] chairman, the answer is no. next question. [laughter] let me try. let me try. i understand exactly what chairman volker is concerned about in the issues he is raising. i want to raise a couple of, i hope their subtleties and not just mistakes.

first, you know, there's a sense here of, you know, returning to glass-steagall and separating these market-making activities from commercial lending. i think that kind of movement would not be constructive. as we know, plenty of firms got into trouble making regular commercial loans and plenty of firms that into trouble and market-making activities. so the separation of those two things, per se, would not necessarily lead to stability. the question one has to ask is its proprietary trading an important complement to the normal activities of a commercial bank and i think the question is -- i think the answer is maybe to that question. full-fledged proprietary trading arms ban not be essential, but it is true that we let to commercial banks to hedge their positions, for example, to make markets to customers. to lay off risk in a variety of ways. and so it would be difficult to

say with a sharp right line that banks should not be allowed to engage in any kind of proprietary trading in a sense of holding positions that are on their own books as opposed to on a customer's books. now that being said, i do think that supervisors and regulators need to evaluate this on a case-by-case basis. so, for example, if supervisors and regulators look at a large thinking organization, which is due in proprietary trading or has a proprietary trading organization, and they determined that this company is not able to manage the risks associated with that dignity or that it creates other business risks and risk the safety and soundness. or it doesn't have enough capital liquidity to safely engage in those activities. i think then that the supervisors shouldn't be allowed, by law, to insist that the company device itself or

shake its activities. so i do take this idea seriously. i think there'll be circumstances in which a supervisor or regulator would force in his attention to cut back on these kinds of activities. i find it difficult to draw a bright line because of the commentary be between his activities other commercial banking. and customer related activities. thanks. >> mr. chairman, on a dated evening i've come up in fiscal policies. the imf recently published 49 pages on global fiscal policymaking. how critical is it for secretary kittner and congress to get the fiscal house in order so you can get monetary house in order quite >> well, first of all, let me be clear that there is a big difference between connotative easing and the fiscal debt, the

government debt. we engaged in quantitative easing or is called a credit easing because it's been focused at trying to get the credit markets functioning again. we did that for two reasons. first because we hit the zero down and therefore normal interest rate cuts wouldn't achieve the goal anymore. and secondly because of this extraordinary environment, many markets were not functioning properly and we felt ways to get those markets better and we've had some success in doing that. we have already begun a process of phasing out or reducing many of these extraordinary actions. for example, as you look at the portion of our balance sheet related to short-term financial institutions to commercial paper market, and two other kinds of international swaps with foreign central banks and other kinds of short-term lending. that amount has dropped from about $1.5 trillion at the beginning of the year to a

roughly one fifth of that or less today. and we have announced the closing of certain facilities and plant closings going forward. so we've are to take into very substantial steps towards moving towards a more normal type of monetary policy. and as long as the economy proceeds along the path we think you will, we want to continue to move towards more monetary policy functioning. we will move to monetary policy has called for by the state of the economy, independent of the fiscal situation. we are not involved in that. we are involved in looking at the economy, trying to stabilize the economy. i think everyone knows including but treasury and the congress that a kinds of deficits we've seen this year and next year, about 10% of gdp, are not sustainable. but we have to find an exit strategy for fiscal policy that will bring deficits down to a

level, a few percentage points of gdp which will result in a sustainable situation. that, relative to the gross national domestic product doesn't grow indefinitely. that doesn't have to happen this year or next year. it's not going to happen this year or next year. in a recession this deep you're going to have a deep deficit as well because of lost tax revenue and light. it is important for the administration and the congress to begin setting forth a plan, a credible plan, to show how the country will move back towards the state deficit in the medium of return. i think doing that is important for investor confidence, and i think it's well understood, but it doesn't make it any easier to accomplish. >> last question. >> mr. chairman, there's been an extraordinary increase in financial concentration, especially in the last few years as you know. now, to what extent is there a concern about this financial

concentration and have large financial institutions are more or less protected, this put considerable pressure on the situation. and there's every indication that concentration therefore will increase. to what extent will the federal reserve work to limit the concentration or decrease it? >> henry, you are absolutely right that financial concentration has increased and is quite large in some areas, categories. there are two reasons why we care about financial concentration. one is the traditional antitrust issues. it's a competition being hammered by concentration in particular, markets, or categories of firms. i think that maybe true in some particular areas. i don't think that it's globally true in some sense because even though they are very large burns, there's also a lot of competition in many different markets and many different types of products.

the federal reserve, whenever we look at a merger, part of our due diligence process is to look at all of the local areas where the merged institutions provide services, deposit, and other services and to make sure at the level of small cities or counties that the merger does not create undue concentration that would lead to reduced services at higher prices for customers. and so, we are looking at this from a concentration antitrust monopoly point of view. i think it's an issue to some extent, but i don't think it's a major issue. i think the major issue is the second issue which has a party mentioned in your earlier question, henry, has to do with too big to fail. the incentives that firms have to grow too big in order to be quote, too big to fail. my answer, i think, is the same as what i said before which is we need to make sure that too big to fail is a relative of the past and we don't have that

anymore to do that we need tougher regulations for large systemic leak critical firms. we need to strengthen the system overall time i create stronger infrastructure so that the system can stand pressure on firms. we need to make sure that all systemically critical firms are subject to strong consolidated supervision, which looks at all the risks across the company. and most importantly, and i think this is absolutely critical. and if congress looks to do financial regulatory form i hope they put this at the top of the priority list. we need to have some alternative to bankruptcy or bailout. we need to have another way to close firms that have come to the brink of failure without destroying the rest of the system, but in a way that will allow losses to creditors, and will therefore bring back the discipline that will in the future a feeling firm will be allowed to fail. thank you.

[applause] >> thank you very much mr. chairman and thank you henry and thank you matt for your questions. lunch will be served now. just a reminder in terms of future events in the new year, we do have a date with new york fed president, bill dudley, and with the bank of japan governor. and some other commitments that we are looking to nail down specific dates. >> up next on c-span, we go to president barack obama and presidents hu jintao at a press conference in china. "washington journal" begins each

morning at 7:00. this morning, a house panel to investigate the federal government's role in the bank of america/merrill lynch murder of 2008. live coverage from the house oversight committee begins at 10:00 on cspan 3. later in the day, a look at the u.s. response to the h1n1 flu virus. the senate, and security department -- the senate homeland security department will look at the government role. president barack obama continues his asia trip. he met with met withhu jintao and the two leaders spoke about relations between the two countries. topics included all the major issues of the day. this is from china's state-run

television. >> i would like to extend a warm welcome to proceed on his state

visit. welcome to china. i had a very good talk with president barack obama. the two sides hadn't in-depth exchange of views on how to further financial relationship and our major regional and international issues of shared interests. the two sides reached broad, important agreements. the talks were candid, constructive, and very fruitful.

both president barack obama and i believe that the international situation at present continues to undergo profound and complex tensions, there are a growing global challenges and our countries have become more interdependent. in this context, it is necessary to step up international cooperation.

again, this new backdrop, china and the united states share a extensive common interests and broad prospects for cooperation on a series of major issues important to mankind's peace and stability and development.

president barack obama and i spoke about the progress made in the china/u.s. relationship. we both agreed to continue to adopt a strategic and long term objective, increase exchanges and cooperation and work together to achieve comprehensive china-u.s. relationship for the 21st century. we also agreed to take concrete actions to steadily growing partnership between the two countries to meet our common challenges in order to contribute to world peace, stability, and prosperity.

we both believe that maintaining a high level exchanges and x changes at other levels are essenal to the growth of china-u.s. relations. the two sides agreed that the leaders of the two countries will continue to stay in close touch through mutual visits, telephone conversations, correspondence, and meetings.

the two sides spoke of the important role of the china-u.s. strategic and economic relationship in promoting cooperation between the two countries. the two sides will continue to follow through on the outcome of the first round of the china- u.s. strategic and economic values and we will start as early as possible to make preparations for the second round to be held in the summer next year in beijing.

we also exchange views on the current economic and financial situation. we believe that now the world economy has shown some public signs of stabilizing and recovery. the foundation for this recovery is not firmly established. the two sides reiterated that they will continue to increase cooperation in macro and

economic policy. they will continue to have consolidation on equal footing to properly resolved and address the economic and trade frictions in a joint effort to uphold the sound and steady growth of their business ties and trade. i stressed to president obama that under the current circumstances, our two countries need to oppose and reject protectionism in all its manifestations in a stronger stance.

we both positively spoke of the important role of the g-20 summit in tackling the international financial crisis. our two countries will work with other members and comprehensively follow-through on the outcomes of the various summit. will also work together to continuously strengthen the role of the g-20 in global economic governance and advance the reform of international financial systems and improve the global economic governance to ward off future financial or economic crises.

we agreed to extend our cooperation on climate change, energy, and environment. we also agreed to act on the basis of the principal of shared responsibilities and assistance with their respective capabilities to work with other parties concerned to help produce a positive outcomes out of the copenhagen conference. the cooperation of china and the

united states have signed a number of agreements including a way to enhance cooperation on climate change, energy, and in farming. the two sides have also officially launched initiatives of developing a china-u.s. clean energy research group. both president and obama and i said that we're willing to act on the basis of mutual benefit and reciprocity to deepen our

cooperation on counterterrorism, law enforcement, science, technology, aerospace, aviation, and engage in cooperation in space exploration, high-speed railway infrastructure, health and other areas and agreed to work together to continue to promote even greater progress in the growth of military to military ties. we also discussed how to extend people to people in cultural exchanges between the two countries, particularly youth exchanges and we are supportive of the establishment of the

people to people cultural exchange mechanism and we agreed to extend our cooperation in exchanging students. but the bus said -- both of us said we will remain committed to consolidation in preserve -- resolving the korean nuclear issue. china, the u.s., and other parties are concerned. we will work with other parties concerned to continue the process of the korean peninsula

and six-party talks process in a bid to promote stability in northern asia. we both stressed that to uphold the international nuclear non corp. regime and to appropriately resolve the iranian nuclear issue true negotiations is very important to stability in the middle east and in the gulf region. during the talks, i underlined

to president barack obama that given our differences and national conditions, it is only normal that are two sides may disagree on issues important to respect and accommodate each other's core interests and major concerns. president barack obama on various occasions reiterated that the u.s.-side abides by the one china policy and respects china's sovereignty and territorial integrity when it comes to the taiwan question and

other matters. the chinese side appreciates this. the two sides reaffirmed the fundamental principle of respecting each other's sovereignty and territorial integrity. neither side supports any attempt by any force to undermine this principle. we will continue to act in the spirit of equality, mutual respect, and not interfering

with internal affairs and exchange in issues like human rights and religion in order to enhance understanding, reduce differences, and brought in common ground. -- and broaden common ground. ladies and gentlemen, the china-u.s. relationship is very important to preserve and promote the growth of this relationship is a shared responsibility for both china and the united states. the chinese side is willing to work with the u.s. side to ensure the sustained, sound, and steady growth of this relationship. to the greater benefit of the

peoples of our two countries and people throughout the world. thank you. >> we would like to the microphone to president barack obama. >> good afternoon. i want to start by thanking president hu and the chinese people for the warmth and hospitality they have shown myself and our delegation since we arrived. we had a wonderful day in shanghai yesterday and wonderful discussion with the young men and women of china and i am looking forward to further discussions in beijing over the next two days.

we need here at a time when the relationship between the united states and china has never been more important to our collective future. = s. the major challenges of the 21st century from climate change to nuclear proliferation to economic recovery are challenges that touch both our nations and challenges that need our of our nations can solve by acting alone.

that is why the united states welcomes china's efforts in playing a greater role on the world stage, a role in which a growing economy is joined by growing responsibilities. g=that is what president hu andi talked about continuing to build a positive, cooperative, and comprehensive relationship between our nations. as presidentshu takeda, we discussed what was required to sustain this economic recovery so that economic growth is

followed by the creation of new jobs and a lasting prosperity. so far, china's partnership has proved critical in our effort to pull ourselves out of the worst recession in the generations. -- in generations. going forward, we agreed to advance the pledge made at the g-20 in pittsburgh and pursue a strategy of more balanced economic growth, a strategy where america saves more, spends less, reduces our long-term debt, and where china makes

adjustments across a broad range of policies to increase its economy and increase domestic demand. this will lead to increased u.s. exports and jobs on the one hand and higher living standards in china on the other. as president hu decatur, we agree that maintaining open

markets and free flows of markets in both our nations will contribute to our shared prosperity. i was pleased to note the chinese commitment made in past statements to move toward a more market-oriented work exchange rate over time. i emphasized in our discussions but doing so based on economic fundamentals would make an essential contribution to the global re-balancing efforts.

president hu an di also made progress on the issue of climate change. if the two largest consumers and producers of energy, there can be no solutions to this problem without the cooperation of china and the united states. that is what we have agreed to a series of important new initiatives in this area. as president hu indicated, we are creating a joint energy research center and have agreed on renewable energy, cleaner uses of coal, electric vehicles and shale gas.

we also agreed to work toward a successful outcome in copenhagen. our aim their, in support of the prime minister of denmark is trying to achieve, is not a partial accord or a political declaration but rather an accord that covers all the issues in the negotiations and one that has immediate operational effect.

this kind of comprehensive agreement would be an important step forward in the effort to rally the world around a solution to our climate challenge. we agreed that each of us would take significant actions and stand behind these commitments. on the issue of non-corp., we discussed the commitments -- non-corp. -- non-proliferation, we agreed to the verifiable elimination of north korea's

nuclear program. -- nuclear weapons program. we agreed on the portents of resuming the six-party talks as soon as possible. as i said in tokyo, north korea has a choice -- they can continue down a path of confrontation and provocation that has led to less security, less prosperity, and more isolation from the global community or it can become a member of the international community which will give a better life to its people by living up to international obligations and for going nuclear weapons. -- foregoing nuclear weapons.

in the same way, we agreed that the islamic republic of iran must provide assurances that its nuclear program is peaceful and transparent. our two nations and the rest of our partners are unified. i ran as an opportunity to present and demonstrate its peaceful intentions. if it fails to take this opportunity, there will be

consequences. president hu and i also discussed our mutual concerns about the middle east. neither country can or should be used as a base for terrorism, iraq and afghanistan, and we want to meet this goal, including bringing about more peaceful relations in all of south asia. finally, as i did yesterday in shanghai, i spoke to president

hu about america's believes that all men and women possess certain fundamental human rights. we do not believe these principles are unique to america but rather they are universal rights and they should be available to all peoples, to all ethnic and religious minorities. our two countries agreed to continue to move this discussion forward in a human rights dialogue that is scheduled for early next year.

as president hu indicated, the u.s. respects the territorial integrity of time -- china. once again, we have reaffirmed our strong commitment to 81- china policy. -- to wait -- to a one-china policy. we recognize that tibet is part of the people's republic of china, the united states supports the early resumption of dialogue between the chinese government and representatives of the dali lama to resolve any differences that the two sides may have.

we also applaud the steps that the people's republic of china in taiwan have taken to relax tensions and build ties across the taiwan strait. our own policy, based on the u.s.-china communiques are in the best interest of the united states and china.

these are just some of the issues that we discussed. , we also know that the relationship between our two nations goes far beyond any single issue. in this young center, the jobs we do, the prosperity we build, the environment we protect, the security that we seek, all these things are shared. given that interconnection, i do not believe that one country's success must come at the expense of another. that is what the united states

welcomes china is a strong, prosperous, and it successful member of the community of nations. our relationship going forward will not be with disagreement or difficulty. but because of our corporation, both the united states and china will be more prosperous and secure. we have seen was possible when we build upon our mutual interests and engage in quality of mutual respect. i very much look forward to deepening that engagement and understanding during this trip and months and years to come.

>> let's conclude the meeting with the news media. thank you. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2009] >> president barack obama will be in beijing until wednesday for bilateral meetings. he then heads to south korea where he will visit u.s. troops and meet with the south korean president. president barack obama returns to washington on thursday. >> live wednesday, the state opening of the british parliament.

queen elizabeth ii will deliver the government's priorities for the year. a live simulcast from the bbc wednesday morning at 5:00 a.m., eastern, on c-span 2. "washington journal"is next and the house cavils in at 10:30 eastern to work on a number of measures like security. live house coverage on c-span. and coming up in 30 minutes, we will begin a conversation on health care with republican senator tom coburn and the white house policy office. after that, a bid about

president barack obama's trip to china. we'll also talk to a national security reporter. "washington journal"begins now. .

host: if you have called and the c-span program in the last month or so, give others a chance to call. here is the front page of "the washington post" and their story about hunger. one out of six americans felt pangs of hunger in 2008. also a picture from the front page of "washington post" from the streets of beijing, the picture of the president on a t- shirt. the launch of the space shuttle atlantis will be the last shuttle to take astronauts to the space station. from the front page of "the philadelphia inquirer" it says

"u.s. study finds leap in hunger. last year 70 million children, 49 million people, were unable to consistently get enough food to eat. a 3.5% jump over 2007. the largest recorded since the agency began measuring hunger in 1995. here in "usa today" it says "one that of six hungry in america last year -- one out of six hungry in america last year. it confirms that the recession has had an impact on the ability of millions of americans to deal with the most basic of issues,

such as being able to afford to eat. your thoughts on hunger in america? lisa, go ahead. caller: good morning. i work at a shelter for the homeless. i can tell you that i would say that 90% of the clients are either legal aliens or the legal aliens. -- or the legal -- or illegal aliens. those are most of the people at the food banks. host: we have live picture of a food bank from "the washington times." pensacola, florida. curtis, democratic line.

go ahead. caller: first of all, i think you know what i mean, i do not know what the word is. i appreciate c-span putting something relevant on. it concerns the nation. we have lost our humanity. the fact that the food situation, i have a friend of mine that works for a church in the area that averages 200 people to 300 people every week. and they are not deal eagle -- and they are not ill eagle -- and they are not illegals. host: who are the people that come in to the food banks? caller: folks are really

hurting. seems like the country is losing our humanity. it is all about money and me and said of all of us. -- money instead of all of us. i wish that all of these die- hard republicans that think war is the solution to everything, i wish that their sons and daughters would join the army and help these young boys and girls, giving these young kids that stand-up some relief. i wish that these republicans that think it is so wonderful would get their family to sign up. thank you to c-span for doing something relevant to our situation. host: president obama is continuing his asia trip, wrapping up his visit to china with a news conference.

"sounding a theme on major issues," as it says in the associated press. "the two leaders emerged from hours of intense talks, appearing before reporters in beijing. both spoke in bold terms about the growing relationship between the two countries. president obama said that it went beyond any single issue. they emphasized cooperation. differences did remain. the president of china balked at the lviews -- leviews against tires and steel. >> i spoke to president hu about the american relieves --

american believe that all people possess certain fundamental human rights. we believe that these are universal rights that should be available to all people and ethnic and religious minorities. >> [speaking chinese] >> our two countries agreed to move this discussion forward in a human rights dialogue that is scheduled for early next year. host: president obama and president hu earlier today. detroit is next, johnson is on the independent line. good morning. caller: our community has been decimated by unemployment. but i have a curious statement to make regarding the hunger in

our country. the absolute cause of a decent meal has risen tremendously. the food with good nutrients that people ate through the 1960's is astronomical. if you tried tds and organic vegetables -- this is why we have an obesity problem. people are running the fast food places, eating that type of food, that type of food makes you hungrier. the additives that they put in the year, just like that. drink it had used a thirsty. the food that the poor are eating now, it makes them get bigger, it makes them get obese. it adds to the health concerns of the poor.

the cost of health care would not even be so high if they aid to be some food. host: there is a report this morning on mcdonald's, how the sales were slipping through the recession. "the problem is rising unemployment, particularly among men, has slowed." wendy, fort lauderdale. what does the hunger issue look like in your community? go ahead. caller: it is a very multifaceted subjects. you look at it different ways, you have a bunch of people coming. our population in the united states has increased, but our manufacturing base has left.

in terms of hunger, many of the people coming here are from third world countries. the first thing that they do is have a baby. i did that have children. i was working. what time is there to have a child when you are working? i did not have any food ended was not the worst thing in the world. my body looks good. i had some bread and some cold cuts, i would put my lunch in a bag. it is best to not eat a lot of food anyways. i fed my pets first and i did not have a lot of food. host: are you finding that the price of food has risen? >> ipod -- caller: i have noticed that the price of food has really gone up. but i do not see a lot of meat.

it is not good to eat meat. betterton not eat all those hormones. in terms of eating, i'd go to mcdonald's sometimes. i would get a $1 hamburger. i live like that for years. host: republican line, north carolina. asheville, good morning. caller: how are you this morning? i have an argument with the guy from florida who called in, who made a comment about all of these republicans going and to joining the military, fighting in the war. i guess that he does not really understand that most of the military is conservative, they are not liberal. if you want to guess which party these people belong to, it is probably the republican party in the first place.

about the food, one of the big increases in the cost of food was because of a gas prices. if everyone remembers, the price of food went extremely high when the price of gas went up. i have not seen the price of food come down to match the price of gas dropping in half. you did us see the food surcharges taken away. so, now we have these people that are manufacturing and producing our food for us, i do not know if they are getting in on the profits, but someone is still making all this money. host: is there a food that you used to be able to afford and cannot any more? caller: no, i am able to shop

around to the grocery stores in our area in north carolina. excuse me. they have the by one, get one free sales quite often. host: you take advantage of those? caller: absolutely, who would not? host: thank you for the call. "the post" reports this morning that one out of six americans are suffering from hunger. "the crisis has catapulted the number of americans that lack enough food to the highest level. nearly 50 million people, including one at a four children, struggled last year to get enough to eat. at a time when rising poverty and widespread unemployment and other effects of the recession have been well-documented, the report released monday by the

u.s. department of agriculture provides the government's first detailed portrait of the toll that the faltering economy has taken on america's access to food." n.c., charles. go ahead. caller: i think that the problem is the oil, not the food. once the gas came down, the food prices did not. people calling in, african americans have been in the suit lines for a long time. poor whites as well. it is not just illegal immigrants. the problem is that these republicans are always talking

about illegal aliens. this is the richest country in the world. host: charles, you are breaking up there, we have to let you go. thank you for the comments. 49 million americans reporting and lack of food according to "the new york times." "conservatives have attacked the methodology of the survey, saying that it is hard to define what it measures. the questionnaire asks about hunger pangs and skipped meals, but also if people are worried about getting food, ranking the severity of the issue by the number of answers that indicate a problem. the conservative heritage foundation says that these people are really hungry. that it is regrettable that they have to constrain the food they buy but that it is a far cry from a hunger crisis." cleveland, good morning.

caller: how're you doing? host: fine, thanks. caller: the reason you have a problem with it the food shortage and things like that is because the government is out of control, republicans and democrats, wasting trillions and trillions of dollars. we have a $14 trillion gdp, close to $12 trillion in debt, double-digit inflation, we are at 10.2%. all that obama and nancy pelosi want to do is waste more money. this all started with bush. he did the same thing. he went and spent a lot of money. both republicans and democrats do it. you cannot have a big government and a global economy with cheap labor. what are you going to do with that massive debt?

you are going to suck all the energy out of the economy. people are still operating in the global economy, but the lower class is in trouble because they have no access to the global economy, because they are burdened by massive government and the massive debts. once we fix that problem, once we stop pushing it ideology and we get some jobs, maybe things can get better. and host: on the issue of government spending, a report in "roll call" says that "stimulus momentum builds. benches leaders on both sides of the capital are gaining ideas and the momentum for what could be a significant new jobs package next year. president barack obama has called for an economic summit at the white house that could lay the groundwork for a deal on

another stimulus plan. the same time, resistance amongst members appears to be fading. california, democratic line. go ahead. caller: yes, i would just like to write off the bat, this is an american problem. this crosses party lines and it is a moral imperative. the balance is off because the big money and big corporations are sucking the air out of the economy. dan out of anyone. i challenge anyone to show me the margins between middle- class and the wording poor. take that and compare the top 5%.

host: diane, what is the food situation like in santa cruz for the people that needed? caller: it is tough. i will tell you, underneath our bridges, it is fall. any building that has an overhead roof for protection from the rain, it is a project. people are standing around, just like anywhere in the country, holding signs. but if i see them standing there smoking, i have no urge to give them money to buy cigarettes and liquor. man or woman. we used to be a compassionate country. what we are are americans. it is a part of our american country that is hurting. except for the top 5%. everything on down, everyone hurts.

those that are going hungry, it is an american problem. host: thank you for joining us this morning. president obama, more on his trip days in china. he says he is pleased with reduced tensions between china and taiwan. the policy of knowledge is the chinese position that taiwan as a part of its territory. this is the headline in the world news section of " wall street journal." "beijing limits the exposure of obama -- world news section of "the wall street journal." "beijing limits the exposure of obama. the visit, which ends wednesday, is one of the tightly -- one of the most tightly controlled in recent memory, he was given very little opportunity to reach the chinese people."

here is video today from the press conference. now, back to food and cape cod, massachusets. your thoughts? caller: let me turn the sound down. host: yes, please, do not forget to meet your radio or television when you call. caller: i would like to comment on what the woman said earlier, but my main problem -- not my main problem, but one of the things that concerns me, i live in a rural area. i am a hunter. i have a venison that i could share. i go to several churches and places that it said food, they seem to not be able to want to the food, the venice and that i have, which is frozen and

packaged to give out. host: do they give you a reason? caller: i do not know, they said they could not take it because they have no place for it. many of these places have freezers that they could put it in. it comes out of my freezer. i would just like to share it out. i mean, i cannot share everything. but i have a lot. host: do most of these shelters want prepackaged foods? caller: the type of food that is all packaged up. host: there are programs out there that take in game that hunters collect. you'll probably hear something from a caller. thank you for your input. duluth, minnesota. here is dean of the republican line. caller: good morning.

i have a hard time reading those reports that you read. one out of six lack food? they do not talk about the amounts. one to two meals per day? are they severely malnourished? i am looking at a report from the cdc in 2008 ended is in no ways to the report. it does not square. 22 states are experiencing 25% obesity rates. half of the nation, almost. another one-third is 20 to 24% of the city. you cited another call, one out of six had hunger pangs. everyone at some point in their life has experienced a hunger pangs. if it is every day, that is one thing. there is not enough information there. host: a couple of callers

earlier might have been talking about food being less affordable. do you think it might have something to do with that? caller: i remember growing up in 1960 and i remember many days in inner-city minneapolis having to go to school without breakfast. there was not a concern. i am sorry that there wasn't. is there a concern now? there is, but i got along. i am not the exaggerating. i would say the two to three days per week of would go to school without breakfast or without a lunch. host: was that because your folks could not afford it? caller: part of it was that. but here i am today and i am doing ok. and it is not because of ethnicity or what ever. i just do not understand where we are right now. the news people are asking if we

are a starving nation or a nation with too much food. i do not know. it does not square with the things that i hear about obesity. host: here is a related comment that we have received from twitter. "two callers complained about the lack of humanity and compassion. people now expect government to do what they used to do." john, make sure that you -- i am putting you on hold -- make sure that you turn down your television. mute your television and go ahead. are you still there? i hope that i did not lose him. john, louisville? caller: hello? host: wellhead. caller: none of the callers have addressed the issue, many mothers and individuals have

sold their food stamps, 50 cents to the dollar. i have seen this for many years. and mothers to sell their food stamps and as a result the kids have nothing feet and the mother's use the money to buy drugs. second issue, the military has tons of food left over. they throw it into the garbage can. we need to address these issues for the american people to tap into the food bank. host: a headline this morning from "the baltimore sun." "new mammogram guidelines he'll contradiction and confusion. an influential government panel says that women do not need mammograms in their 40's and to discourage teaching breast self exams, decisions that have sparked controversy and

confusion amongst patient advocates. the u.s. prison -- u.s. preventative service task force on preventative medicine said that breast cancer screenings for a woman in her '40's does not save many lives and can do more harm than good. there are a high rate of false positives in younger women, causing mental anguish. ron, baltimore. independent line. caller: thank you for taking my call. i have no solutions, i simply have a statement. host: ok. caller: i hear a lot of your callers examining the semantics and methodologies of the polls that are being taken on this issue. that is fine. in fact, it is necessary.

but i look at the numbers that we spend in iraq and afghanistan. when i think of the billions and billions of dollars that we spend fighting, killing, destroying and nation building across the ocean over there, i think it is nothing short of unforgivable that americans are starving here while we are spending that money there. host: one more call on the subject, monticello in kentucky. james? good morning. caller: how many more are going to go hungry when this new health care passes? if they cannot afford to eat, how can they afford health care? host: on that comment we will move into our health care segment. senator tom colburn joins us for half an hour. later, linda douglass.

first a radio news update from c-span radio. >> is 728 eastern time. -- 7:28 eastern time. eric holder and others are going to announce a crackdown on financial fraud, ranging from executives that illegally profited on wall street to bad actors targeting middle-class families with fraud schemes. as the president continues to consider strategy for the war in afghanistan, britain's foreign secretary said that a political solution should include having senior taliban commanders in government. they said that most taliban fighters were not committed to global jihad and could be persuaded to stop fighting. britain has the largest international contingent in afghanistan after the united states. more on the recent election in

the 23rd district of new york. doug hoffman has unconceeded after learning that he trailed by over 5000 votes. mr. owens was sworn in in 2006. officials are still counting over 10,000 absentee ballots. those are some of the headlines on c-span radio. host: live on wednesday, the state opening of british parliament. queen elizabeth travels to the house of lords to deliver the government's priorities for the coming year. they live simulcast of the bbc. >> "washington journal" continues. host: oklahoma senator and medical doctor, ob/gyn, senator tom coburn joins us for the next

half-hour. the prohibition of funds for abortion as clarified in the law, is that likely to survive in the senate version? guest: i do not know. i do not think that many people are looking at that right now. we have not seen the text of the bill yet. i do not think that it is out in front. that is a significant thing that will probably be voted on, but i do nothing that anyone is looking at that right now. host: when are you likely to get a look at the bill? of guest: i did not know. it is not printed or written yet. late this week would probably be the soonest. host: of the two versions that came out of the various committees, what are the biggest versions that concern you on the senate side? guest: that is a great question.

number one, the thing that concerns me the most is how we will divide the loyalty of physicians in this country away from the patients and towards government enterprise. think about it, if you are sitting in a doctor's office the last thing you want is a physician making a decision about health care or what you might need of health care based not on your needs but a government parameter. i think that is the most dangerous aspect of what we are attempting to accomplish. host: here is an article about you and senator barrasso, both medical doctors in the senate. in this article you are quoted as saying that your concern about the government's is interfering with the art of practicing medicine. explain that a little further. guest: there is no question that

the biggest problem we have with health care is cost. that is what keeps people from having access. we need to do some things that drive the costs way down. one out of every $3 that we spend on health care does not prevent people from getting sick. we have been issued. my worry is that when you introduce a third party, of which we already have, they are called insurance parties -- insurance companies. they are already rationing under medicare to some extent. once we insert that into the doctor/patient or provider patient relationship, what you are doing is lessening the impact of 40% of what we do right. that is what i call the art of medicine, which is a combination of not just physical signs and symptoms, not just their

history, but the synergistic interaction between a physician that knows a patient, the situation, and calling on their experience, which is not in a textbook, but the years of experience either with this patient or with others, saying that what they are seeing is different from what they are evaluating and that they and therefore need to be cautious. cookbook medicine works about 80% of the time for 80% of the people. the rest of the time is a disaster. here we are having best practices, for example under the house bill, when you are outside or over 90% in terms of cost of care, you get cut 5% the next year. is the doctor going to order the test because you kneneed it?

or is it going to be a monetary decision? we throw away the science and the art for the accounting. host: so, your concerns are wider than the health care, but also to the cost in the country. you said that your mission was to frame the debate in terms of the fiscal ruin of the country. what did you mean by that? guest: look at what we have done with a history of medicare, what it was supposed to cost, we are 5000 times over that. medicare has a similar numbers. in other words, we cannot predict the costs. looking at the house bill, it is like $270 billion in 2010. , you are talking about $150 billion per year.

the differential will create another 75 year unemployment liability, like we have in medicare and medicaid right now. translate that into something that means something to people. everyone that is 25 years of age and younger in this country over the next 20 years, they and their children will each be responsible for $1 million in debt every year. if you have to pay interest on that much debt at 6%, that is $70,000, how are you going to educate your children and raise a family? you will not be able to. the danger is that we all want to fix health care, but the question is if the government is the best model to do that. or is there another that will not with the children an inherent risk?

host: you mentioned the cost of medicine going down, that seems to be a priority of the obama administration. seems that a lot of people can agree on that, why was it not approached initially from that standpoint? guest: i do not know. if we really do incentivize the management of chronic disease, really working to drive down costs, defensive medicine, anywhere from 4% to 6%. host: that would be the insurance that you pay? guest: the tests that i ordered that i never need it? that is the 4%. i am ordering tests that you do not need, that i do not need, but i need them to protect myself should i get into a court of law. as long as we have that

adversarial system out there, what we are doing is wasting a lot of money. and not without some harm to patients by doing tests they do not need. host: your calls on health care and more, scott is calling from the republican line. caller: i am glad that you guys are talking about the cost on the health care side. we have heard the campaign rhetoric from the left that we are going to have these savings, saving his money through the health record. i do not know if you saw the article from "the new york times" yesterday's showing that a study has already discovered that there will not be a savings as initially thought. they are saying this is impossible to quantify, that maybe five years down the road they could term in that, but they have actually found that

there is little to no difference. hospitals that did not have the health records or were not up to date, they found very little difference showing that the system that we have as far as the practice of medicine is really not the problem other than outside forces of regulation, the legal side. i would like your comment on that. host: -- guest: he is talking about automated i.t. health records. ultimately there will be some savings, but it will not be to the degree -- the real savings come -- i have an acquaintance of mine, he recently stopped taking all insurance, medicare, and medicaid. what happened is that the price of the charges patients has gone

down, he has fewer employees, and he is practicing better medicine. he is not on this we'll to hurry up and see more patients -- on this wheel to hurry up and see more patients, he is not playing the game. i read a letter from a constituent this morning that made a great point. go to any hospital and look at the parking lot at 10:00 at night for their employees. then look at the same parking lot at 9:00 in the morning. what you see are twice as many people at 9:00 in the morning. what is the difference in the care during the night as opposed to the day? none. but the administrative overhead that has been demanded by the insurance industry and the government that has created this bureaucracy within hospitals -- look at the hospitals that are

the most profitable, they have the least bureaucracy. the biggest difference between caregiver and patient, have we have done it is a copy of the bureaucracy of government. the points on outside regulation, i think that they are very assisting. host: democratic line, joanne. deer valley. sorry, theo, independent line. north carolina. caller: thank you for taking my call. i have a couple of things that might be outside of the normal conversation. it will address the normal conversation once it is said. it is my experience, and i saw this on a ctalk show, the post did not understand what congressman winner was saying on

one of these talk shows about a plan. so, for me, i think i have often pointed in my life the exact moment of the health-care industry changed for me. what i tried to introduce that into the conversation, most people look at me as if to say i do not understand, what does that have to do with anything? what is is medical codeine. my doctor, for years he charged $25 when i went in. when people set up a system his staff would change. he had 100 things or more on a list. he would ask all my weight was doing. that was a way consultation. suddenly my cost to go to the doctor went from $25 to $250 overnight. he knew that i had no insurance,

used to write nc on top of the chart and the staff would get angry at him for doing that because they said there is nothing on the charge that says nc. host: what does that stand for? guest: no charge. caller: guest. -- guest: yes. caller: so i did some investigating. you need a staff of six people to run the medical coating part of insurance. how much of that, in itself, add to the problem? looking for reform? i think that is a perfect place to start. host: he makes a great point. -- thank you. guest: he makes a great point. medicare created s system. they are the ones to get the

money from the system. theo makes a great point. other than procedures, what we should be doing is considering paying doctors based on medical timing, rather than a coded diagnosis. what we are taught in medical school, if you listen to a patient, they will tell you what is wrong. i have personally experienced this, like on a monday morning when i am seeing patients, we get in such a big rush that we do not listen welland enough. what happens when we do that is we order a test to cover where we did not listen. everybody can relate to their training. if we will spend the time with patients and to do the discerning questioning that we need to do, often we can come to a diagnosis with very few tests. but it takes time. we have created a system that

says do not take time with a patient, get on this treadmill. fill out all of these forms and collect the money. host: if medicare is at the root of a problem, how would you and do that? does it take legislation, mandating that doctors spend more time with their patients? coastal winnie are incentives. how do you incentivize great care? we have a shortage of primary- care doctors in this country. why? because medicare centsets the ce standards. i have a family practice doctor and a specialist. what is happening is med school students are saying that they can spend three to four years in

residency and the difference would be a few years. because medicare has under-paid primary care. now what happens is primary care is seeing 30 to 40 patients every day, so they can pay the overhead and their staff. they are on this circular wheel and we need to get them off. i think with the obama administration is interested in payment reform as well. host: he has mentioned your name and number of times. how has that relationship been maintained over the first 10 months? guest: we speak occasionally, i write written notes -- we exchange them, we are both very busy. it is a tough job, i do not care who you are. host: what have you said specifically regarding health care?

guest: i think of their position is that they know what they want and they know where they are going. when he addressed congress a couple of months ago, i think if he had admitted that he had not led that well on the issue, that he wanted to get something in the middle of the issue of, i think he would have hit a home run and i think we would have had health care by now. but i do not think of that will happen, i do not think of the forces on the other side will allow that. host: do you think that the timeline was too ambitious? guest: politically in washington people think that time lines are important, but we have school teachers in oklahoma that our faith to thousand dollars per month for a child to be in the state health plan. insurance is out of reach for many people, and once you did

they find all these ways to not pay. we need reform, but it needs to be in the middle. host: the rising cost of health care is on the front page of "the new york times" this morning. "actions contrasting with agreements to shave $8 billion per year. the drug trend is a distinctly at odds with the consumer price index, which has fallen over last year by 1.3%." guest: the drug industry is going to pay for that one way or the other. they are going to make their money, they are either going to do that by costing medicare less or charging everyone else more. it is called a subsidy. we are already subsidizing to the tune of $13 trillion. we are now subsidizing whatever

deal we cut with the administration by increasing prices for nam -- for name-brand drugs. kind of like pushing in, it is going to go out somewhere else. my thought is that real transparency as to what things cost and what their outcomes are -- you are seeing a trend. physicians are moving away from prescribing brand-name drugs. part of the deal, as discussed with the administration, because they know that they have a responsibility to lower costs. there are certain people i cannot take a generic drug. we get lost in that. that is part of the commission and effectiveness panel. it takes away the closeness of the practitioner. they could get their hands on a patient and we have a group

saying that it has to be generic fella half of what about the adverse reaction that was had -- pass to be generic? what about the adverse reaction that they had to be -- that they had six years ago. now you have to explain what your doing everybody. instead of watching for the best interests of the patient. host: joanne, deer valley. go ahead. caller: you cut me off. host: sorry about that. you are on now. caller: mr. coburn? guest: good morning. caller: how many federal employees are there, exactly? guest: i could not give you the exact number. caller: ally of days if i say millions? guest: you would not be.

caller: my question is, of is their insurance, and yours, paid for with federal tax dollars? guest: a portion of mine and the bears are paid for. caller: can you tell me what portion? guest: i do not know. i think it is around 60%. it varies based on the plan that you have. host: -- caller: why are you so concerned about what portion goes to the people in you are not concerned about what percentage of that goes to you? guest: the percentage is about the same at the federal level as most private employers in terms of the portion they take out of your insurance. i think there is 1% to 2%

differential. host: we had an e-mail this morning asking if you could reflect on how tort reform does not reflect on the people and the judiciary. guest: easy, first of all we do not want to mandate for reform. we want to incentivize it. where you see it happening, they had a 39% decrease in malpractice insurance. they put an absolute cap, $300,000 on non-economic damages. what has happened is you have seen their malpractice insurance godown, and other states have lost the doctors to them. doctors would rather practice in a less likely environment. the number is, just so that we

know, this is not about challenging an independent third party. this is about control. these are frivolous cases. no. 2, of the 20% to go to trial, less than 3%, out for the plaintiff. you are at 97% in terms of foundation. of the 3% that win, only 40% goes to them. we are not saying get rid of the third branch of government, we are saying put some limits on that where you have the incentive to do what is right, not play the game of how much we can get out of the insurance company and get something less than a true problem. having experienced that attempted extortion --

host: you have personally? guest: yes. winds up costing you a ton of money personally. and if you choose to settle for a small amount, it goes on your record that your a bad doctor, number one. no. 2, it creates an incentive to continue. host: would you feel comfortable sharing how much with us? host: -- guest: it cost me over $100,000 in lost practice time. host: go ahead, ron. republican line. caller: don, not ron. host: i apologize. guest: good morning, don. caller: i have a couple of questions that have not been brought up. the democrats say that they're going to say this money? show me the money first. i do not trust them.

can anyone that signs yes to this, can we make them responsible for the difference? guest: that is a great question. no one in their right mind, looking at the history of congress, would agree that we would cut $500 billion out of medicare in the next 10 years. it just will not happen. the senior lobby is so powerful they will not let it happen. to say that it will not cost anything and that you are going to do this, kind of like saying we're going to cut physicians'. everyone knows that will not happen, but we can get money somewhere else for saving and over here. we are not blind to cut medicare to that degree. if we did, the savings should be saved in medicare.

medicare is on the tail end of its life in terms of cash flow. so, if we were to get efficiencies, which we could do by eliminating fraud -- yesterday i think it was $47 billion -- that is half of what is really out there in terms of fraud. closer to 25% of everything that we spend in medicare gets a defrauded. we should be extending the life, rather than creating another program that will create a similar economic and budgetary problem. host: the cover story of " business week" is that fraudulent billing accounts for 3% of total health spending. "the bureau indicates that the estimates could be low, losses

contributed to fraud from spurious medicare claims and kickbacks." guest: we had a hearing years ago and they admitted to 67% fraud. gao was at the same hearing and they said was at least 82% fraud. so, what we know is that it is a significant problem, because the sick -- system is designed as easy to defraud. what we do is we pay anyone that has medicare rather than having an active system before certifying is a legitimate system. host: let's hear from morristown, tenn.. good morning.

caller: i believe it was thomas jefferson that summed it up easily. a government that is big enough to give you everything that you need is also big enough to take everything that you own. i believe that is what is going on with this government. why can they not just in sure the people that do not have insurance now? why do they have to take over 1/6 of the economy? this is just a power grab. it has got nothing to do with looking out for the people. host: do you agree with her assessment? guest: i think that the approach that we are taking is to prescriptive. in essence, if you take a 46 million that are uninsured and you take out the illegal immigrants, take out those that are eligible for s-chip, and you

take than 9 million people the 10 million people that have been, and they have chosen not to buy health insurance, what you wind up with is 8 million or 9 million americans that really need our help. host: your comments on ama coding, is it not medicare that forced ama coding? that is the question in this tweet. guest: mam? i do not know who that is? ama has the rights for the coading. the government says that nothing gets paid until medicare is approved.

there has to be a number that goes along with that. i think that that is crazy. i think that what we should do is list how much time spent with a patient. if you spend this much time, your time is worth at this. i think that we get better value that way. doctors would not worry about rushing out of the exam room to see the next person because they know they'll only get so much time. host: senator tom coburn, thank you for joining us this morning. .

crushing families and businesses and governments. premiums have doubled, out of pocket costs have tripled. this is preventing workers from innovating. is rising costs that are exactly the target of health care reform. there are many measures inside both the house and senate bill which are very effective cost affected -- cost containment measures. the cost-containment measures in this bill could lower

expenditures for employers by $3,000. so there are many cost- containment measures. host: as the senate gets ready to release its own version of the bill, what are your concerns come from the senate? what would you like to see kept in the house version passed the senate developed their legislation? guest: let's be clear, both of these bills are very similar, based on laura ling cost, making sure -- lowering costs, making sure everyone is covered, and that it does not add to the deficit. these are the component that are already in the house bill and will be in the senate bill as well.

host: linda douglass is here to talk about the debate over health care on capitol hill. republicans, 202-737-0001. democrats, 202-737-0002. independents, 202-628-0205. are you concerned about the pace of debate and a timetable for getting things done? guest: honestly, this has gone at a remarkable pace. members have been working on this issue for a couple of years, but the president has been working with his team, starting full-time around in march. we have now passed the house. it is getting ready to come to the senate. remember, it has been 70 years since health care attempts were made. comers' after congress has tried to do this and has never predict congress after congress has

tried to do this -- congress after congress has tried to do this and has never come this close. host: here is a bill on the democratic line -- bill on the democratic line. caller: i do not know if you have an opinion here, and i really wanted to speak to the senator, but he is the only senator holding up a bill for the veterans, and a considerable portion of his opposition has to do with health care. he is a hypocrite because he always says he is for the troops. how much and to the veterans have to pay for the wheelchair's they have?

he said the price of their bills are too much. host: you are referring to his amendment to the veterans bill? linda douglass, any thoughts on that? guest: it is not exactly part of health insurance, but they make a good point. it is unfortunate that a single senator is holding up benefits for our veterans, who obviously sacrificed so much for our country. we also want to make sure that veterans will absolutely get the best health care in the country. this is an important priority for this president, and the bill should not be held up, he is right. host: next phone call from

casey. caller: earlier but you did a story on breast cancer. with this panel, deciding where we are quick to put resources, is this which would meet -- but we should be doing? guest: this is a board that makes recommendations about which preventive services would be covered for free. all they do is create a floor for with preventive services are covered for free. right now many insurance companies do not cover any screening at all. one of our goals is making sure that mammograms, colonoscopy is, will be covered -- colonoscopies, will be covered.

again, what kinds of preventive services need to be covered for free, and absolutely, preventive services will be part of any kind of legislation we come up with. host: this morning in the abc news poll talking about deep divisions in health care. another question in health care, if the system has changed, do you think the following will increase, decrease, or remain the same? in the category of individual cost, 50% believe it will increase. does this change the strategy at all? you have a seeming majority of people out there who believe their health care costs will

rise, even with legislation. guest: first of all, their health care costs are going to go down. if we employ the cost- containment measures in the bill, you will be spending $3,000 less on health insurance. this is money that could be going to wages, creating jobs, in a bidding. right now is being spent wastefully on an expensive health care. what is happening in the country is people are being subjected to massive disinformation campaigns. i do not know if you saw the story in the "washington post." they are looking for an economist who can come up with some predetermined conclusions that will make the case that health insurance reform is bad for you. unfortunately for them, this plan was leaked to the

newspaper, but they wanted to find and economist that would reach their preordained conclusion and then see if they could find some other economists to agree. the point is, there are bogus insurance company studies out there which have been disowned by the people who put them together. this study did not exactly measure up to any kind of measure of objectivity or accuracy. this plan lowers cost. host: does the administration agree with the senate tax on so- called cadillac plans? at a certain level of health care coverage, there would be a tax on that, not only to reduce the cost of the bill, but also to reduce health services. guest: this is a tax on health insurance companies who offer

cadillac plans, gold-plated plans, plans that are expensive. the kind that drive up the cost of health care for all americans. this is all about the very high and plants, putting a tax on the insurance company to see if they cannot be more efficient in the services they offer. there is no reason for these plans to be excessively expensive. right now there are so many americans who are uninsured in this country. people who have health insurance are paying for their care. there is $1,000 in tax or inch toward americans to pay for those who do not have insurance -- insured americans to pay for those who do not have insurance.

there is going to be a lot of competition. economists are saying, the competition that will exist in the market, when you have more affordable options, that is going to place downward pressure on premium prices for everyone. i suppose a company could say we want to continue over paying for health insurance, but it will be in the interest of everyone to make sure the insurance companies are held accountable. we are going to be able to see what the insurance companies are spending with your premium money. one of the tenets of health reform is transparency. you will be able to see how much of your money is being spent on care for you, compared to marketing, advertising, overhead. host: next phone call is and

then the on the republican line. -- linda on the republican line. caller: i am a republi but i voted for president obama. he ran on change, particularly in health care. now it seems he is letting change not happen. what i mean by that is there is the eighth time to work together. whenever you are working together, you need two partners. if one is not willing to work, i do not understand why the white house has this megaphone. for him not to use that megaphone to improve this country and give us the change we voted for, and it the other side does not want to work with you, call them out on it.

host: your thoughts? guest: the president has always believed it is important to change the way we do business in washington. paralysis is not good for the country. it each side goes to their respective corners and only cares about defeating the other side, decisions are not made, policies are not enacted that are good for america. what the president has always said is he has an open door to members of the other party who want to work with us on the issues that are good for the american people. many republicans are interested in hearing from their constituents and they are getting crushed by rising costs, being subject to unfair insurance practices. if is unfortunate that many in the other party just want to continue the way things are with rising costs and unfair

insurance company practices. host: riverside, california. dianne, go ahead. caller: i wanted to make a couple of things known. first of all, i totally reject senator coburn and everything he says. secondly, president obama did run on change, and he said. he promised -- as you said. he promised we could have the same health care that congress has. the last point i want to make is, the antitrust law that insurance companies have a path on. either this is the best kept

secret in american history or the 1947 roswell landing is real and we have an alien stashed somewhere. they are sitting in their rooms with their cigars dividing up the country, let's pay for this, let's not pay for this. host: any thoughts, linda douglass? guest: she is certainly right about giving consumers power in the insurance market. it is about making sure the customer has power against the insurance companies. you will be able to see how they are operating, be able to make informed choices about how they are operating. most markets in the country right now are dominated by just a few insurance companies. the idea is to have more

questions available made to people. the caller is right, that is a concern, and that is exactly what this legislation aims to solve. host: we wanted to get your opinion on whether or not the administration's -- the administration's opinion about whether or not that language should be included in the bill? guest: the goal is health insurance reform. it is not a bill designed to change the status quo on abortion or anything else. the point is to reform the health insurance system. he said he will continue to work with those who are concerned, to try to strike the right balance. what you do not want to do is alter the status quo. host: knoxville, tennessee. william. caller: i have a couple of questions.

on the deal with the abortion amendment, i am sure you are not old enough to remember the days when they had the back alley abortion clinics, and with this bill, that is where women could be forced back to. when i was growing up, your doctor care about their patients and put them before profit. as the government thought about maybe offering some kind of tax incentive to doctors to care for uninsured come up for people -- , poor people, perhaps as a percentage of their practice? as the obama administration perhaps look at some kind of tax incentive so that doctors can get back to taking care of poor

and uninsured people? guest: you saw that the american medical association supports the bill that was passed by the house of representatives. the goal here is to make sure we do not have the number of uninsured people we have in the country that we do today. the goal is to bring everyone into the system and make sure they are not locked out of insurance company rules, make sure that you can afford it, make sure that you have affordable health insurance. that is exactly the goal of this health care legislation. host: rebecca from york, pennsylvania.

go ahead with your question. guest: i am a huge fan of barack obama. i campaigned long and hard for him. when we look at cost containment, the cost of defensive medicine, why are we not looking at the cost of defensive medicine and tort reform in upcoming legislation? even the congressional budget office said there would be cost savings. even when they looked at those cost savings, they only look at the tip of the iceberg. if we look at the entire set of defensive medicine -- first of all, we cannot completely analyze it -- but we know that's changes would save all lot of money. why are they not looking at cost containment? guest: in answer to your

question about the medical malpractice issue, the president has made it clear there is an issue here that must be addressed. he has certainly heard from doctors who say they practice defensive medicine. on the other hand, you want to protect patients from errors. 100,000 people in this country die every year from medical errors. one thing that president obama has done on his own is in progress on -- around the country to evaluate what kind of dispute resolutions can work. the administration is already taking a look at what kind of dispute resolutions can work so that you will not have doctors practicing defensive medicine but you can make sure that patients are protected as well. host: when the president returned from asia, what can you tell us about his plans to work with the senate on moving their legislation through? guest: the president had been

working with the senate and house, having meetings, his team is on the hill listening to concerns and suggestions. we are optimistic the senate is going to move ahead. they spent many months and weeks poring over the details of this legislation. they are hearing from their constituents that they want change, and we are expecting them to move forward a bill. host: linda douglass, thank you for being with us. in a moment, we will turn to the president's trip to china, and more broadly u.s.-china relations. our next guest will be james fallows of the nationalatlanticl corresponden.

live coverage begins at 10:00 eastern. later in the day, a look at the u.s. response to the h1n1 flu virus. the senate homeland security committee will also examine the distribution of the vaccine by federal and local governments. live coverage at 2:30 eastern. >> this thanksgiving, "american icons." a series on the three iconic homes, the bridges of government. friday, the white house. inside america's most famous

home. and saturday, the capitaol. "american icons" 3 memorable night. host: james fallow, a correspondent for the atlantic national -- "in the atlantic national" magazine is with us. as the present round of his trip, what are your thoughts on how it has gone? guest: as well as can be expected. i put it that way because the nation with china are so complicated.

i think it is always a matter, and has been, about managing both sides. host: are the challenges greater than they were before? guest: nobody really expected china to play a role in the international rescue, for example, or putting pressure on iran. now china is a bigger power and there is more expectation. also, there are new areas to be done with. most of all, the financial and environmental issues, which together will make the world's difference. host: this is the front page from yesterday's "wall street journal" -- some tough words from the administration.

how has china's role, essentially as a banker, changed with the u.s.? guest: china was purely a poor country looking for access to the u.s.. for a large part, and mostly is. they still heavily on the u.s. -- they still rely heavily on the u.s. at the same time, they have roughly $2 trillion in u.s. assets, so is it a more complicated to tuition and it was 15 years ago. host: is there a sense that they hold that over the u.s.? guest: from a chinese perspective, it is a bit more complicated. over here, it is assumed that we are in a struggle and household about to be foreclosed on by the bank. it is more like the situation --

the standard joke here is you owe the dollar -- the bank a dollar, you are in trouble, you owe the bank $1 million, the bank is in trouble. there is a shared dependency more than there is this powerful surge. imbalances on both sides is proper for both countries. host: we are going to put the numbers on the screen for james fallows, talking about chinese relations. a cartoon this morning in the "washington post." they also write in their editorial that it is necessary that mr. obama pragmatically seeks cooperation but it is also important to remember that its

government continues to oppress freedom of expression, religious practice, and minority rights. speak to that comment, and also, in the light of iran. guest: from the chinese perspective, they would make no connection between what they view as their own internal issues, the ones that are most flashpoint for the u.s., tibet and surrounding areas. host: these are the uighurs? guest: correct. china would not identify any internal matters in dealing with iranians on their nuclear matters. i think the larger conjunction to just -- suggests that the

matter does not go over that way. the chinese would be talking about liberties for their own people as well as our views, on our domestic responsibilities. host: the bush administration had the same use them? guest: it is a dramatic change. in dealing with china, it is more of a smooth transition. there are areas where the u.s. and china need to work together. host: let's hear from callers. potomac, maryland. go ahead. caller: i was calling to say that every day we read americans are falling more and

more into poverty because manufacturing has gone to china. why would our elected officials engage in policy like that? who actually benefits from this? you can take is the consumer, but i say it is all for the taxpayer. another thing, why do we have separate policies for cuba? they are also communist but we are propping up a regime that is a brutal against their own people. guest: on the economic relationship between china and the united states -- i just returned living in china for

three years. i tried to trace where all the money came to, and when, with these products. when you paid $1,000 for a computer, where did that money go to? on the one hand, it seems a lot of former peasants in china were moved the out of poverty, moving from $100 a year to $100 a month. american designers, corporate brand owners, stockowners, the past, have taken most of the profit from these things. let's say you have a laptop computer that cost $1,000. perhaps $100 of that state in china, at most. the rest goes to intel, computer

companies, whatever. there is a polarization of our income distribution that is a serious problem, and it would or would not be a problem with china. in addition to the very small number in extremely rich people and the huge number of their report people -- the very poor people, it has probably created a class of salaried people who were not there a few years before. and they can afford other kinds of goods and are starting to buy chinese-made cars, chinese-made bicycles, apartments. host: chattanooga. carlos?

savannah, georgia? joe is on the republican line. caller: my question is what is the unemployment rate in china versus the unemployment rate in the u.s.? where is the balance between what we are sending and what we are receiving if china has a $2 trillion surplus in our country. what are we doing that we cannot offer something to china? guest: those are good questions. i think the unemployment rate is difficult to compare. earlier this year when the slowdown of world purchases occurred, i was in china, and within the chairman and i was staying, something like 5 million jobs were lost time and

lost tens of millions of jobs earlier this year. it is almost impossible to calculate the employment rate because so many people are the casual worker, the migrant parker. what you can say is a lot of people there are pork in the way that it has not been the case in the western century. the larger point about how they poor country can have all this surplus and sending things back and forth, the simplest way to put it is, the chinese government had decided when it gets that one doesn't dollars for the computer and have that money, it only spends half of it internally on its own people, and the other half, it is deliberately spent overseas. the chinese central government essentially controls the dollar earnings at these companies has and decides to put them into

treasury notes, the new york stock exchange. that has been part of their strategy, building export jobs, something that the u.s. is trying to get them to change, because it creates these distortions. host: what is the population? guest: about 100 million. nobody really knows. host: seabrook, new hampshire. mark and the democratic line. -- on the democratic line. caller: i wanted to talk about the industrial revolution happening in china. the british created employers. the china would not have that. does that make their industrial

revolution vulnerable? can that be used as a diplomatic leverage? guest: i think you have placed yourself in the minds of the chinese leadership. american or european officials will say there are too many workplace deaths, too much pollution. they will say, this is the way it was in manchester, england in 1940, this is the way it was in bits per. we -- in pittsburgh, we are falling behind. back then, there was spare capacity for what we were doing. the scale of china is so vast, it does not have that 50-year persiacushion.

they are short many resources, especially water. host: with the time of one out of the climate change negotiations in copenhagen? guest: if you assume the role of chinese leadership is maintaining domestic order, and number two, keeping the economy growing, then they will be looking for ways to accommodate the rest of the world consistent with those two things. unfortunately, the u.s. is in a weak position because we did not pass any climate change legislation before this. host: what are the chinese military goals? guest: in the foreseeable future, to mount a credible threat on taiwan. china has historically been

aggressive about areas along its borders. i think the focus of chinese military is hoping in the long run to have a successful force that can take taiwan, and a half to. host: sam in florida. caller: good morning. we did the same thing to the japanese prior to world war ii where we were the greatest consumer of their products, and when we stopped buying, they blame us for their labs in the economy -- lapse in the economy. if we quit being such a consumer, when they want to expand their rear for resources,

like you were talking about? i was just wondering how much pressure they could honestly take? guest: it is certainly true nations of all kinds react to having resources cut off. in a time when world war ii was inevitable but the u.s. had not entered, the world was cutting off oil supplies to japan. from their point of view, that forced them into war. if there was an effort to cut off resources to china, that would be taken as a declaration of war. the real question from their point of view, the most hostile question from them that is walking in supplies of the atolls in africa, for example. they have relationships and

australia. -- of metals in africa, for example. it is an understandable part, getting the fodder for their economy, but you are right. if they were actually cutting things of, any nation would see that as a threat. host: here is the editorial in the "financial times" -- also this morning, and editorial piece in the " financial times" about china's on and off romance. he writes the chinese have not been accustomed to being the strong member in this party.

guest: the reason the chinese have not become accustomed to being a stronger partner is because they are not. the nation is marked the poor people with a strong manufacturing base. if you spend any time outside of the city's, you understand the country is full of peasants who could not have electricity or plumbing. the economy had been maximized for exports. to think of it as a stronger power in the world economy is diluted. guest: will the olympics have any lasting effect? -- host: will the olympics have any lasting effect? guest: i think it was important that china saw it as a success.

if it was seen as a failure, there would have been repulsed of the unpleasantness. host: tony on the democratic line. caller: good morning. i am cuban and we left after suffering under castro. it seems what south america is doing nowadays with china, we encouraged this since president nixon. everything started with china since nixon was in power.

obama has nothing to do with this. everything was done from other presidents. china is saying, like fidel castro, that they are saying. -- changing. host: thank you. talk about that in regard to the president. guest: certainly, richard nixon made the opening. gerald ford went further. jimmy carter had the first real beginnings. than 30 years since then, -- then 30 years since then, the economy has more or less take enough. -- taken off.

the comparison to cuba is an interesting one. we tried to call them off, thinking that we did not want to have anything to do with them. however, both are communist regimes. china does not seem, internally, like the old soviet union. there are part of it who are at a controlled, people are locked up every day, and there are parts that look like hyper- capitalism. it is a dead -- a very diverse place. host: i do not know if you were able to see either of the president's come up there were -- comments, but there were some important questions. >> so far china has proved critical in helping us to pull ourselves out of the worst recession in generations.

we agree to advance the pledge made at the g-8 in pittsburgh and pursue a prodigy of more balanced economic growth. a strategy where america saves more, spend less, reduces long- term debt, and where china makes adjustments across a broad range of policies to rebalance its economy and spur domestic demand. host: and james fallows, what did you hear in those remarks? guest: what is remarkable that is how anyone would disagree with what he said, chinese or american. at the heart of the problem is, the u.s. and china have pursued policies together that has been to each of their benefits. china has over invested, over imported. the u.s. has over consumed and over borrowed to have a higher mark -- living standard youhere.

the imbalance has started to catch up with us. that each country has to adjust its economy, and essentially that is what the president was saying. host: what is the role of china in that? guest: there is an emergency firefighter role and the rebuilding role. in october of last year when the house was falling down, the chinese had so much discretionary money in dollar assets. there was always a fear that if things got bad, the chinese would run away in a fire sale. that would have been the great depression. that did not happen. there was coordination among the chinese and western financial powers. the next stage was china finding ways to boost its own economy to find a way to deal with these kinds of thousands of people who were laid off there were criticisms of that, whether or

not it was creating too much productive infrastructure, but in the short term, they got their economy going again. host: next phone call from jane. caller: thank you for your test. god bless you. i have some comments and a question. -- thank you for your test. don't you think we should have a blueprint, a respected of which party is in power, for our economy? my comment is, i know this for the fact because i am part of a group that tracks with china is doing. what they are doing right now is, they now may reap -- very soon they are going -- very soon we are going to stop buying made

in china, and they will be looking to africa. i wondered if there is anything we can do to lower the cost of production so that we can compete with china. we have toys made in america and we go to the same market. i assure you countries around the world would prefer made in america and then made in china. host: thank you. your comments? guest: it is not possible for us to have these 10-year plants, as the chinese to, but it would be possible to do what we did in the 1950's, 1960's, having long term development plans. i wish it were possible to do something like that now.

there are certain things that cannot be lowered in terms of cost competition. some people are working for $100 a month. you are not going to compete with that labor costs anywhere in the developed world. but different kinds of products taking the advantage of the skills we have around the world, that is less in a lot of emphasis toward what you are saying. host: if you want to learn more, james fallows is on twitter. what are you talking about right now? guest: right now, obama's trip to china. host: next phone call. william on the republican in line. caller: good morning. you are touching upon a lot of things with china. i do not know if this is in context to what you were talking about, but mr. fuller in his

book "critical past" -- guest: i am familiar with it. caller: he says in 1953 u.s. jobs started shipping jobs out of the country with taxpayer money. i have called in in the past, talking about this book, foreign aid, and it never seems to get any feedback. guest: i think there was some role in that period to the extent that we were trying to set up economic growth in poor countries, it probably had a role in shifting some jobs. the main factor that shifted jobs over the last generation was simply the enormous cost differential. if you have peasants making $100

a year and they have a chance to make $100 a month in the factories in china, they will go for that chance, and there is simply no way to compete with that, with western wage scales. the way companies deal with that is using low-cost manufacturing to develop new products, brand, so there is more about coming into the u.s. entities and how we divide and share it here becomes our problem. host: not necessarily an export, but the "york times" -- "new york times" writes about how there are more chinese exchange students come to the u.s. host: i believe is really good for the u.s. that the students come here, whether they stay or go. if they stay, we get extra talent from around the world.

if they go back, and we have people who are familiar with american practices, brand, institutions, that is a huge plus to do business with them. host: not only sending them here to do engineering and scientific work, but also to get a so- called liberal arts education. guest: chinese universities are great at math, not so great at qualities. it is sort of accentuated by communist controls, doing critical thinking. host: west palm beach, florida. marker on the democrat line -- marked on the democrat line. -- mark on the democrat line. caller: people talk about how

we aren't coming down the general populace in the way that education would not reach a certain level. at any rate, we are subsidizing, taking away the genius of china, in some ways, by focusing more on this rogue learning schedule. there were several issues on wanted to touch on. it is true, nixon had an almost free labor force in china, and the inequality produced by communism coming getting rid of intellectuals, and we had things like led by paul who were invented in this country that go right over to china because they can be manufactured cheaply, but if you want to buy a seven what

led by paul -- 7 watt led lightbulb, it is more expensive here than in china. so we are not seen the cost benefits. a country like china has an indigenous medicine system, going back 5000 years, can provide coverage extensively. of course, there are not the nine western medicine as well. there is no big pharma saying that you have to pay a lot of money for this stuff, so they are, perhaps, taking better care of their people than we are. guest: i think it is interesting -- you were mentioning that richard nixon was talking about those labor pools. my understanding that he was --

was that he was looking to awaken everyone to be slipping cover of communism, but also wanted to reduce tension, strategically. you mentioned the health system in china. you are right there is a lot of research in indigenous medicine. if anything, people are more unhappy with their health system. all of these maoist doctors are gone now. if you go to the hospital, now you have to bring a wad of cash. there are a few aspects of the government plan, but it is as much of a patchwork that the american system is. host: we have used the chinese use the term "strategic compliance." what does that mean? guest: insurance is between the two that neither views the other

as an enemy. they may have differences on political values, but basically are pushing in the same direction rather than undermining each other. host: there is an op-ed in the "wall street journal" from a former labor secretary, and he writes --

guest: agree with the main point. you have in china and some glass of people who were instantly rich. i think the note richest man -- he invented a battery power car. it is more that they are moving ahead quickly than the mass is moving down. in the last two generations coming in the u.s. we have seen stagnation of the metal. in china, almost everyone has been moving up, but the people at the top are rocketing up. if things become stagnant in china, that might be a problem. host: this battery inventor,

what is his net worth, what with his tax rate be in china? guest: the question of tax rates, declared in come -- no sane person can go into that. i think probably in the $6 billion, $7 billion range. that might be peanuts for american, but he is a material science guy who was working on cell phone batteries and decided that he could build a car around that. host: next phone call on the independent line. mike from california. caller: the president is saying we should save more and spend less, but the policy is, the government has accelerated the spending of george bush. if the government can persuade the chinese to stop buying power u.s. treasurys, our interest

rates will skyrocket. if we think we had a problem before, try servicing debt without chinese capital. guest: i think the answer is a short-term results long-term issue. last year there was a short-term emergency for which the keynesian answer was to get spending power in people's hands. once that emergency has passed, the u.s. needs to save more and spend less, and the reverse for china. they need to find a way to been to more of their products. there is an emergency to deal with, and then there is the longer-term corrective. host: robert on the republican line. please mute your television. caller: i think you should be a

politician, sir. guest: i do not know if that is a complement or insult, but i am waiting to hear more. caller: well, you have the part of telling half truths. host: us an example? what are you concerned about? caller: there was someone who tried to get you to comment on the jobs going to try not. you commented that they make much less -- less money there, which is true. american companies go over there to make money. you talk about all the money that these companies create that is supposed to help this country. the fact is, the way the tax system is set up, the money

that the company's makeover of there, they do not pay taxes on, unless they bring it back here. in does not take a nuclear scientist to know that they are not going to bring the money back here. guest: i actually published a book recently which goes into this in some detail. the heart of the point is, on taxes, -- again, you have this computer which cost 100 -- $1,000. you are right, that those taxes are paid to the u.s.. the other part is for retailers in the u.s., fedex, other members of the u.s. economy. there are other members of distribution which i do not have time to talk about, but buy my book if you want the full pitch. host: deborah from indiana.

caller: the u.s. needs to declare its independence. . guest: the point of having to relations is the hope that they will make it less necessary to

have military connections of any sort with the rest of the world. host: we have not talked much about the role of chinese currency and the u.s. dollar could what is china doing in relation -- guest: we have been talking about these imbalances, where china is overproducing and over sitting, and the suppression of the value of the renminbi is essentially the way that has been done. the chinese many factory sells something to the u.s. and the government seizes those dollars and cents half of that back to the u.s. for investment. that is something that will have to be changed. host: 0 with the united states like china to do? guest: like them to let the currency rise more quickly than it has been. host: china has changed its one- child policy, correct, over the past couple of years? guest: there are probably more loopholes now. it's still prevails, but if two

only children marry, they can have more children. people can buy their way out of it in certain circumstances. i think the idea is that otherwise he would have a disappearance of families. if you went from eight to four to two to one -- host: one more call, california, stephanie. caller: good morning, c-span. i was calling in reference to the imbalance in the trade and american corporations going out and starting businesses over in china with taxpayer money. i think that if the american taxpayer is paying, then the money coming back for the corporations should be taxed by congress. i also wanted to mention that -- isn't it true that the bush

tax cuts for the last eight years, $1.80 trillion went to the very top, and within our trade as it be a lot better if we did not indulge in the steps of practices? guest: in the bush era tax cuts, i posed those of the time for the reason you are saying -- i opposed to those at the time for the reason you are saying. the idea that jobs in china are greeted by u.s. tax subsidies -- i have been to 100-plus factors and a ton and i've not seen even one board there was any kind of -- 100-plus factories in china and i've not seen one with a was any type of u.s. tax subsidy. all of the ones who've done it have done it for their own corporate reasons. host: james fallows, thanks for joining us this morning. guest: my pleasure, thank you. host: we will turn our attention

to the of speech by fed chairman ben bernanke. first, and is a bit from c-span -- a news update from c-span rid of. >> the labor department says that wholesale prices rose less than expected in october, this after falling in the month of september. congress is in session today, with the house in at 10:30 and the senate in an hour, where republican senator john thune introduces a bill barring the treasury secretary from spending remaining tarp funds. he says that the funds should be used to pay down the federal that it more and million-dollar bonuses this morning. the former top attorney at bank of america testified this morning on the decision to pay bonuses to the merrill lynch employees. he appears before congress for the first time. live coverage of the giving begins at an hour on c-span radio. the house intelligence committee holds a closed briefing today with officials from the fbi, defense department, and national

counter-terrorism center on the shootings last week at fort hood. this as two newspapers report that the army plans to conduct an internal investigation about whether it missed warning signs about the accused major nidal hasan and. finally, a report by the group transparency international lists afghanistan and iraq as among the world's most corrupt countries, falling just behind somalia, which they say is still the worst. also on the the report, the most principled countries around the globe. they say they are singapore, denmark, and new zealand. those are the latest headlines on cnn reported -- c-span radio. host: we are joined on the phone by luca di leo, a special correspondent for dow jones news writers. fed chairman ben bernanke spoke yesterday and talked about the

likelihood that we will see a jobless recovery in the coming years. tell us a little bit more about that. guest: yes, hi. well, bernanke gave a mixed assessment of the economy, because on the one hand, he said that he expects economic growth to continue in 2010, but at the same time, he expects it to be moderate, and especially his warning about a weak labor market with the high unemployment rate and tight bank lending conditions as significant headwind. host: you also write that in a rare move, the fed chief made several remarks on the u.s. dollar, which has fallen in value recently. why is this a rare and what comments did he make? guest: it is rare because traditionally is up to the treasury to talk about those policies. central bankers in general or forgot to talk about the currency, even in -- central

bankers in general prefer not to talk about the currency, even in other parts of the world. be made the remark to the effect that he sees the underlying strength in the u.s. economy as supporting the dollar, and therefore he sees the dollar going forward possibly not losing too much of value because of this underlying strength. host: last week, senate banking committee chairman chris dodd that proposed legislation that would radically reduce the role of the federal reserve. did the fed share talk about financial wheat-regulation at all? -- reregulation at all? guest: the comments by the fed deputy chairman, which came right after bernanke's remarks, were more interesting in that respect. he said better supervision and regulation is the best way to ensure financial stability, and he said that he believes that

the fed should be able to retain its emergency lending powers that helped it save companies during the financial crisis. host: what is the reason behind the rise in gold prices? we also see the value of the dollar fall. what is behind the rise in gold prices? guest: well, the rise in gold prices is largely due to investors looking into safe investments, safe-haven flows. so-called safe haven flows. they see the dollar as a safe investment. at the same time, they see that with interest rates remaining low in general, and emerging economies expected to expand sharply, commodity prices in general are going up. host: luca di leo, a special correspondent for dow jones

newswires, thanks for joining us this morning. we are by to ask our viewers to us your thoughts about the fed chairman's comments. we will put the phone lines on the screen. we will take your tweets at twitter.com. >> the best thing we can say about the labor market right now is that it may be getting worse more slowly. declines in payroll employment over the last four months have averaged about 2 20,000 per month, compared to 5 for tests 60,000 per month over the past year. -- 560,000 per month over the past year. claims still have not fallen to ranges consistent with rising implemented given the weakness in the labor market, the natural

question is whether we might be in for a jobless recovery, in which output is growing but employment fails to increase. productivity is defined as output per hour of work. thus, essentially by definition, a jobless recovery in which output is growing but hours at work are not, must be a time of productivity growth. with the jobless recovery that followed in 1990, 1991, 2001 recession, productivity growth was quite strong. it may seem paradoxical that productivity growth, which over the long term is the most important source of increases in wages and living standards, can have adverse consequences for employment in the short term. but when the demand for goods and services is going slowly, that may be the case. host: the fed share saying we may be in for a jobless recovery. we want to get an idea from you what it looks like, what looks like in your area.

here is the headline reporting on the speech yesterday by the fed chairman ben bernanke -- "continuing unemployment is predicted by fed chief." this is a headline in "the new york times" business section. republican line, go ahead. caller: good day. how are you? host: fine, thanks. caller: why can we not use our north america and south america and canada and create the jobs over in the south america's, where it is cheaper for labor than china, and almost create just the market -- oh, gosh -- host: we will let you go there. gary on the democrats' line. caller: hi, there.

i want to comment on china -- host: you are talking about what james fallows was speaking about a few minutes ago? caller: well, yes, if i possibly could. i have a small pension in social security but the $900 comes back to and it is wonderful, but it goes to the head honchos within the companies that he mentioned to us rank-and-file people who lost their jobs, we don't get it. people are getting richer but the poor people are getting poorer. thank you. host: solomon, independent line. what is the job market like in your area? but you think the jobless recovery,? h-- what do you think of the jobless recovery, it? caller: the rate is like 10.2%. it is hard to find anything

livable on. as the fed chairman said the other day, a jobless recovery -- to me, that is something that starts like any industry or something that we can invest in education for that industry -- seems like a new industry or something that we can invest in education for the industry, satellite systems, and the power grid, something. host: to use it as the government's top, to jump-start the industry are those industries? -- do you see it as the government's job, to jump-start that industry or those industries? caller: like broadband access -- you could employed hundreds of thousands of people running cable lines through a state with little access to the internet. that could employ maintenance technicians and engineers and architects and just the normal cable guy who looks up. -- who coaxed it up. host: what the job market looks like in your region.

here is a column on the speech yesterday. "bernanke between the lines -- we are in for the mother of all job as recoveries. the federal reserve has been dragging into doing -- quantitative easing, anyone -- is easy to forget that it has only two very simple medics, price stability and full employment. reading between the lines of the speech, it is clear that the fed will utterly fail on the second part for years to come. in other words, we're in for the mother of all job as recoveries. the best thing that bernanke could say about the unemployment situation is that it may be getting worse more slowly. give the fed chief this, however -- he is remarkably consistent. that is not a knock on the guy. nobody wants a bipolar central banker but the more he makes the same point again and again, the more it is clear u.s. workers are doomed for a good long while." kansas city, democrats line, go ahead.

caller: i felt like that -- i remember the stock market is to be down and now things -- and now is going up. it has been up for a while it quite frankly, i think that a lot of these corporate people to not want to hire people. since i've been in key united states and able to work, they always higher at christmastime and the holiday season. they are not going to hire this holiday season. it makes me feel like this is just an attempt to try to keep unemployment high and make a political statement. next november -- i don't think these corporations will have to deal with tax increases on them. host: are you currently working? caller: no, i am retired. i retired a few years ago. health insurance for me and my

wife is $900 a month. you attack on -- you tack on medication we have to pay for, and it is around 212 $4, $1,300 a month but i do not know how much longer in my life are going to be able to hold onto health insurance if something does not change. host: new york city next. caller: okay, my statement would be this -- we need to take our nations and we need to combine them and actually make a source that we can export and put the company is in white south america and tax those companies -- in like to set america and texas companies become a leading nation in exporting and compete with china.

host: washington, d.c., next up. philip, independent life, what are your thoughts? caller: i wanted to talk about the problems with the dollar. it may be an understatement, but i think the low federate -and the deposits china holds with the dollar gives them access to power to control the currency. that may be the reason for this low employment, to where you have a weak dollar and then you have companies going elsewhere and actually creating jobs actually making more money, because they are dealing with foreign currencies that are -- caller: ho -- host: the fletcher raised concerns about the fall of the u.s. dollar in the speech yesterday. >> when financial stresses were

announced, a flight to the deepest the " capital markets result in a marked increase in the dollar. financial market functioning has improved and a global economic activity has stabilized, and the saban flows have abated and the dollar accordingly -- these safe haven flows have abated and the dollar quickly retraced its gain. changes in the value of the dollar will continue to form the policy to guard against risk to the dual benefits to foster maximum employment and price stability. our commitment to the dual objectives come together with the underlying strengths of the u.s. economy, will help ensure that the dollar is strong and a source of global financial stability. host: a lead headline in "the new york times" this morning -- "gm shows signs of recovery despite new loss. general motors' very survival

was in doubt this year but is showing signs of life. it said that while it is losing money, it had stabilized enough that it could take an important symbolic step and begin returning some of the $50 billion of the federal government provided to give it a second chance." we are asking you about a jobless recovery, it by ben bernanke. here is sam on the democrats' line in germantown, maryland. caller: the main, i would like to make is that when you look at goods and services, the dollar is always follow the goods and services being acquired and consumed. no. 2 is that we are now in a global market, the larger the united states by itself. -- no longer the united states by itself. what you are paying for partially is to even the playing field. you see the economy hurting us

in the but at this point because we are paying for those who really cannot -- who do not have globally -- gordon brown said the same thing, that there is a price for globalization. when you open up your borders and trade opens up and everything else opens up, you have to pay for it. when germany open up their doors, inflation wept up -- inflation went up. it is a lot of that type of stuff that i see happening today but i use a lot of information on c-span to reflect stuff in my own life and manage my own stuff. it is very informative to me. i just want to share this thought with you. host: thanks for doing that, sen. mary, it the screen says that you are currently unemployed. caller: i have been unemployed for a year and a half. i would love to have a job. i am looking everywhere for a job. i finally found one store and

the mall two weeks ago and was offering a job. it was for six hours a week, which would be $40 a week. i don't know who it would expect to live on that. in my opinion, we of just gotten to be where there is too many people in america now to support this work force. i think the real solution would be to -- for the government to lower the retirement age and put the young people to work better on unemployment -- young people to work that are on unemployment, and older people could get more on unemployment money into social security. there is just too many people. how can they produce jobs when there is really nothing to do? host: mary, what were you doing before you got off, became unemployed? caller: i worked for a company

for nine years, i was a credit coordinator for a large concrete pretty mixed company. as a matter of fact, 70% of the people in my office were let go because construction is down to nothing here. i keep in contact with those people. not one single person has found a full-time job in the year and a half. host: thanks for sharing your story with us this morning. this is from "the morning call a" audit pennsylvania. "president obama goes to allentown, a place known for its blue-collar character and industrial struggles. the white house announced the daylong visit monday night but has not released details but obama is expected to make multiple local stops. he was last year on april 20 when he dropped by in the

closing hours of the 2008 primary election. it is the first trip by a sitting president since 2004 when george w. bush visited both allentown and could stand in the heat of the 2004 campaign. it will come after a december 1 forum on jobs and economic growth at the white house." let's say good morning to -- i don't have your name, and that is o.k. but if you want to be anonymous, that is ok. caller: yes. host: make sure you turn down your television or radio. caller: personally, i think that the job recovery think is just like a smoke screen. americans really have been set up, if we understand that it. the powers are exploiting the

poor. we have been conditioned to be consumers and and the producers. -- to be consumers and not producers. once they move from nation to nation, the whole gang to exploit the people of the country and use them for their labor, and they move to the next country and to the same thing. that is why we in america cannot understand why we don't have jobs, because we are outsourcing jobs because it supports the whole agenda. host: are you currently working? caller: no, not right now. i just say that that is my most people are unemployed -- that is why most people are unemployed. just think about this -- isn't it ironic that all of these companies are laying people off at the same thing once again --

host: here is somebody who has been working the same job for a long time, senator robert byrd of west virginia. "senator robert byrd said to break the record as longest serving lawmaker. when he entered congress in 1953, harry truman was president, sputnik's what was it for years and the future, and more than two dozen of his senate colleagues had not been board. on wednesday, he will set a record for congressional longevity a market 20,734 days in office, surpassing record holder carl hayden, a democrat from arizona robert byrd, the only senator elected to nine full terms, spent six years in the house before coming to the senate in 1959." here we go to florida, jim on the democrats' line.

caller: that you for your time here. i wanted to, as far as the jobless recovery is concerned. -- wanted to make a comment as far as the jobless recovery is concerned. the statement is in that. jobless recovery does not make sense to me. the majority of our people seem to be falling into the lower middle class status because of the educational process, which pushes everybody through and really does not teach to the talents. we are falling into a third world countries that is because of that. -- third world countries status because of that. host: president obama has visited factories in india but here is an article in "it -- visited factories in indiana. here is an article in "the wall street journal." "two defectors will open here in indiana before the ban -- of

the two new factories will open here in indiana before the end of the year. the turnaround is helping to resuscitate the region where unemployment reached 20%, making it a favorite destination of president barack obama as he pushed for an economic stimulus dollars." good morning to trulls on our republican line. -- to charles on our republican libne. caller: the biggest industry in the and it's this would be taking care of all people like myself. that is one statement. the next event is that rich people have a harder time trying to keep their money than poor people have trying to make money. so expect problems, because that is going to be the main issue.

the rich are trying to keep money and the poor are trying to make money in this situation. host: more of your calls coming up as we switch topics and hear from the national security reporter from "the washington times." bill gertz will talk about national security issues and the obama administration and take your calls, too, after this. >> this morning, a house panel investigates the federal government's role in the bank of america merrill lynch merger of 2008. live coverage from the house oversight committee begins at 10:00 eastern on c-span3. later in the day, a look at the u.s. response to the h1n1 flu virus.

the senate homeland security committee will also examine the distribution of the vaccine by federal and local governments. live coverage at 2:30 eastern, also on c-span3. >> c-span's 2010 studentcam contest this year to $50,000 in prizes for middle and high school students and the top prize is $5,000. discreet a five-to-a-minute video on one of our countries strengths or the challenges the country is facing. winning entries will be shown on c-span. grab a camera and get started. >> "washington journal" continues. host: bill gertz joins us, the national security reporter for "the washington times." "the wall street journal" and other papers reporting of the

army starting its own investigation into the four rich shootings and weather officials failed to heed in the -- and weather officials failed to look into troubling behavior. "be army is preparing an internal probe into the fort hood shootings that will focus on whether military personnel should have done more to sound alarms about the suspect and the rampage, major nidal hasan." what do you hope will come out of all this? guest: i think what we are going to find out is that the army dropped the ball, a part of the problem is the issue of political correctness, and unwillingness to look at some of these huge red flags that were coming out. not one, but two counterterrorism task forces had information indicating that the suspect was in contact with an al qaeda player.

there were e-mail exchanges, according to the reports, the army dismissed this as some have just involved with his normal research at the psychiatric council. host: this is an issue that goes back a number of years, obviously. guest: obviously, yeah. and it is a problem of trying to deal with what is clearly the problem of radical islam. there is a war going on. the islamist few of the united states -- the islamists in view of the united states as their main enemy and there is reluctance on our leadership to acknowledge that fact they are recruiting people within government, within the military, to carry out what appears to be a home grown or self-radicalized terrorist. host: bill gertz is with us until 10:00 eastern to talk about national security issues.

you can reach us at twitter and also e-mail us if you like. reports this morning about, among national security issues, the nuclear plant in iran. the iaea reports that tehran could be building and added covert installation. this is a ratcheting up of the language of the iaea. guest: yes, they have taken a realistic view that the iranians are not cooperating. this is a huge national security problem. it is something that i have highlighted, that we had an intelligence estimate that came out in december of 2007 which had the remarkable statement that iran had halted its nuclear program. now we find out that that same year they discovered this first nuclear facility that was obviously too small to be for

the use of the civilian nuclear power reactor, and by all indications, its military location at a basis for a nuclear weapons program. host: bill gertz's book "the failure factory" it is out in paperback. back to your statement about the initial statement in to dozen 7 about iran stopping developing a nuclear program -- why was there yzc8 months ago? guest: well, the intelligence community basically got it wrong. it was based on the bias of some leading intelligence analysts, whose argument was that they accepted the. propaganda that this whole program was nothing more -- accepted the iranian propaganda that this was nothing more than energy program, when it was a

covert nuclear weapons program. host: and the administration moving detainees from guantanamo to this facility in thomson, illinois -- a picture in "the wall street journal" on monday. the president's made comments in 2006 about how he would treat detainees. >> the vast majority of the folks at guantanamo, a suspect, are there for a reason, and i think there are a lot of dangerous people. particularly dangerous are people like khalid sheik mohammed. ironically, those are the guys who are going to get real military procedures, because they are going to be charged by the government but let me just respond to a couple points that have been made by the other side. you will hear opponents of the amendment say that it will give all kinds of rights to terrorist mastermind like khalid sheik mohammed. i want to repeat, that is not true.

the irony of the underlying bill as it is written is that someone like khalid sheik mohammed is going to get basically full military trial, with all the bells and whistles. he is going to have counsel, will be able to present evidence, to her but the government's case, because the feeling is that he is guilty of a war crime that might violate some of our arguments and the geneva convention. i think that is good that we are going to provide him with some procedure and process. i think we will convict him and i think he will become brought to justice. host: what has changed now? the administration is planning to try it khalid sheik mohammed in new york. guest: clearly this is a shift in emphasis in the war on terrorism from more of a book is on military with military tribunals to a more law- enforcement approach to encountering terrorism, and they want to put these people on trial in a court of law.

you know, i've mixed feelings about it. on the one hand, it does create security problems for new york city. on the other, this may be a good propaganda move in terms of if they release some of the information that khalid sheik mohammed, among the four, actually revealed, it to be used to discredit the al qaeda movement by showing that here is someone who was in custody and basically turned against that group. host: bill gertz is with us until 10:00. rick on our independent line. caller: if you look through the history of mankind, you will see that all great empires fall from their imperialist it actions. you can look at basically this whole equalization, whole new world order environment, and when you look at 9/11, that was

a response from basically saudi arabia, dealing with our imperialist motives in the middle east. after 9/11, at the neoconservatives and the republicans talked about osama bin but it 20 to create islamic terrorism in this -- osama bin laden wanting to create islamic terrorism in this country but the only threat we have as americans comes from within -- a handful of politicians and billionaires who created this whole environment of imperialism. guest: well, you know, it is an interesting perspective. i don't necessarily agree with that. i think the united states has universal values and ideals. the president was just in china, although he was not very forceful in talking about them, he did mention that some of the ideals of freedom and democracy

of the u.s. are universal. i think that is an important element that is important to the president to promote that, especially in a still-communist nation like the people's republic of china. host: to you think our economic situation has compromised our ability to talk about national security issues with china? guest: not really. they are holding some $800 billion in debt, a big national security issue. but you know, the economy is bad. it is not systemically going to collapse at i think things are going to turn around. host: what about military officials testified on capitol about climate change as a national security issue? do you agree with that? guest: not really. i think it is overstated. the president in china mention that the scourge of climate change. i don't see any scourged. the oceans are not boiling but

there are changes and there are questions about whether those of the results of man-made activities. i'm kind of a skeptic on the whole global warming issue. host: democrats line, rogers, arkansas. caller: i want to know if we have enough military to protect our borders from other countries, and to be still have -- and do we still have a missile defense bill that is still in place? guest: certainly we have enough troops to protect our border. the reality of the situation is that we have a relatively friendly nations on both of our major borders, and two motions on either side. we are very well protected. the issue of immigration is obviously a hot-button issue and one that is being debated vigorously right now. certainly there are those who feel that more should be done. on the missile defense question,

yes, we still have a good rudimentary missile defense system. it is not something that could knock out a large number of missiles. we have approximately between 30 and 40 interceptors' deployed at two sites, one in alaska and one in california. these are aimed primarily at countering a north korean missile. we were going to get a third site in poland and the czech republic. the obama administration, in order to an arms control favor with the russians, canceled the program and is moving to a less robust system of missile defenses. host: back to emigration. the subtitle of your books -- "how an unelected bureaucrats are undermining u.s. security." give us a sense of where the bureaucrats are causing issues with immigration, be it legal or illegal. guest: i don't necessarily address the immigration issue. my focus is on the other

national security issues like the pentagon and developing policies that are contrary to what the elected leaders want. i document a number of cases. i think that the national intelligence estimate on iran was one clear example where intelligence bureaucrats were given control over it and were basically poking their fingers in the eye of the policy- makers, saying, " if you think you can take military action against iran for this program, we are going to come out and say that there is no nuclear weapons program in iran." that is the kind of thing i tried to highlight. host: does that the credibility to the reality of the iraq invasion that we did not find weapons of mass destruction and the cia reports were not accurate? guest: yes, this is the fault of intelligence bureaucrats not checking, making major assumptions that turned out to be wrong without having a hard, cold intelligence acts on the

ground to be able to verify their assumption street ho host: more broadly, how you change that? guest: my view is that it has to come from congress. there is not a good solid opposition right now for the republicans are pretty much in disarray. i would coat to some contract with america-style program, saying here is what we believe, and slowly and methodically working to get the policies implemented. the bureaucracy is so strong in the executive branch that the solution has to come from congress. host: your book came out during the bush administration. guest: absolutely. this is not a partisan issue. the obama administration has recognized this in the form of czars, clearly an effort to circumvent the bureaucracy and get things done. host: republican line.

caller: i have a question -- on the terrorist act that took place in fort hood, texas, i'm kind of concerned -- i was shocked to know that a muslim could reach the rank like this guy did in our military. my concern is now -- high- ranking muslims -- are they able to absolute take over some kind of firepower and inflicted more damage than what he actually did? guest: very good question. there are not a large number of moslems in the armed forces. there might be something about 8000. they encourage this as part of the diversity program. what has been lacking is an understanding that a lot of muslims can easily be radicalized.

i'm not trying to distained muslims -- disdain muslims. certainly, this is a great religion. but there are radicals who are basically trying to advocate that they are the true muslims and they are the extremists who are at war with the united states. i think that this investigation has to look at the questions of how do you screen out these people, what kinda conditions do you make, is there something that should make this person more loyal to the united states? my view, based on the reporting, is that nidal hasan should never have been allowed in the armed forces. he was allowed to describe himself as a soldier of allah rather than of the united states of america. host: they are trying to recruit folks who can speak various languages, whether it is arabic languages orc urdu or something

like that, and a half hour to try to retain those folks in the military. -- and they have got to try to retain those books and the military. guest: well, that is one issue, but learning the language does not require someone to be of a particular religious faith but i think the bigger issue is this notion of political correctness and a trustee, which has been allowed to drop national security occurred -- political correctness and diversity, which has been allowed to trump national-security efforts. caller: banks to c-span. you have a great program, but i wonder sometimes if you try to bring accommodators that are not -- bring on commentators that are not really, truly a relative in any possible way they have . i liked bill gertz to clarify -- he says the "islamists."

my son serves in iraq, served four years and is back in new york b. when you come as a commentator represent a sector of the united states of america, with an opportunity to call him and islamist in a corrective -- derogatory way, what is an islamist to you? if this man who did the shooting in fort hood was attached to that al qaeda upper to, why is it that he was not arrested -- and allocate up to, why is it that he was not arrested? -- if this man who did the shooting at a fort hood was attached to an al qaeda cooperative, why is it that he was not arrested? host: banks. we will get a response.

guest: an islamist to me is a radicalized muslim, someone who believes in jihad, or holy war, follows islamist sharia law that convinces them to carry out terrorist suicide bombings for the radical ideology. as far as nidal hasan, the investigations are underway. i did it is clear that there is enough evidence that the sky -- i think it is clear that there is enough evidence that this guy is a problem and someone drop the ball, and what it was the pentagon or fbi, that will be sorted out. host: your paper this morning "latin druglords find allies in african islamists. in western north africa, al qaeda-related groups are increasingly involved in

transporting parts to europe." what more can you tell us about the story? guest: well, it is an interesting story, making the nexus between what we have been seeing in the privacy and that part of the world and whether these people -- what we've been seeing with piracy in that prpart of the world and whether these people are involved with terrorists. is clear to me that there is a connection. the radical islamist taliban is raising money through drug- trafficking and i think the same thing is happening in the part of africa as well. the uncovered areas of the world are where the terrorists are going and doing trading and fund raising and planning for future attacks. host: john on the democrats' line. caller: good morning. i heard you mention earlier that you thought that there was a problem with political correctness in some evaluations

that they made it a want to ask you a question -- many times i hear the term "political correctness," and it seems that whenever the term is used to describe something, it comes in a derogative sense court negative the feedback or something happening as a result of politically correctt. it seems that if something is correct, it should not have an negative connotation. guest: my own view is that political correctness when it comes to national security is dangerous. there is no place for it. the idea that we should allow radical muslims to have a place in our military is wrong. if that was the case as it relates to nidal hasan, that is the kind of thing that has to be stopped. but political correctness, i mean that the politically

expedient you that you can allow something and it will not matter when it comes to national security. that sounds a little vague but it is basically what my understanding is. host: how can a military service never be assured that his or her reporting on sunday like -- member be assured that his or her reporting on somebody like hasan would not come back to harm him? guest: very difficult. i identified two people in the pentagon, one of whom was a muslim, and the other guy was an expert on islamic law and was arguing that this is a real problem, that we need to better define the threat posed by islamic extremists, and he ran up against this aid to the deputy defense secretary and in the ensuing political battle, the muslim aide stayed in place

and stephen kaufman was fired. that is the kind of problem that is going on now. caller: i would like to ask the gentlemen one thing. he made a statement of there is only 8000 muslims in u.s. forces. how many did it take to do this last job to kill all of these people? those muslims should be just like president roosevelt did with world war ii. he took every japanese and put them in prison camps until the war was over. he got them out of our here, just like we should do with muslims. just wrap them all up -- not all muslims are terrorists, but all the terrorists are muslims. thank you very much, and i would like an answer to that.

guest: some people argue for that. i am not in favor of that. this is not comparable to baltimore ii. -- two baltimore ii. they had large, -- to world war ii. they had large, conventional forces. the war on terrorism is not against a nation state. if you can find ways to declare the terrorists un-islamic he basically win. that is the kind of thing that needs to be done, the way to win the war on terrorism. host: back to this facility in illinois that the administration is proposing for some detainees from guantanamo, a tweeter points out that some conservatives are supporting the transfer to preserve national security, like grover norquist and bob barr.

the founder of the american conservative union, grover norquist, president of americans for tax reform, and former congressman bob barr, saying that it makes sense, with taxpayers already invested $1.45 million in the facility. what is your view in terms of the national security issues involved in bringing these people to the united states? guest: you know, i have to a bed, i don't have a good solution for this. -- i have to admit, i don't have a good solution for this but i have not been in favor of the guantanamo facility. this is a very difficult thing to do in our system of government. we are a system of laws try to keep them outside the legal system. it is a difficult thing to do. i don't know what the solution is. i realize when the former guantanamo that there is no good solution -- they form to

guantanamo that there is no good solution. some officials in the bush administration argued that why not treat these people as spies? in wartime, spies are shot. that is how you deal with them. again, i don't know what the solution is. it is a difficult problem. host: grand isle, louisiana, grant on the independence line. caller: you are no more reporter that you are an opinion pusher. you are a great example of why people are moving from the mainstream media in droves and going to alternative sites like the internet. i could go on for hours for as long as you've been talking, all the statements and actors you have made it -- all the misstatements and half-truths you have made. i would be happy to focus on two specifically perm. when it takes a back route check

to get a license to drive at bundy, you are telling us that someone can rise to the ranks the way that i did it for good without -- that i did at fort hood without being caught. that is insane. and you talked about it being intelligence failure with 9/11. that is true, why don't you name one person who was held accountable for that? there were given medals instead. guest: i don't really have a response to that caller. he has his own opinion and i will leave and. -- be it at that. host: next question -- next culpaller. caller: i questioned about pakistan having troops for india.

[unintelligible] guest: very difficult problem. obviously, pakistan is growing more important in the war on terrorism, especially if you really want to get at al qaeda. a lot of the key al qaeda people are in pakistan. the us has tried to retard to reorient the pakistani military away from its basically -- to reorient the pakistani military away but the nature of the standoff between india and pakistan is such that it is not easy to do. host: on afghanistan, reports that the president has discounted some of the options that have been presented to him already. what direction do you see him going in? guest: i think is going to be very difficult for him to not respond to most of the requests

from the commander general stanley mcchrystal. he wants more troops and says that this commission you wanted me to do, and if you want me to do this mission, -- this is the mission you want me to do, and if you want me to do this mission, this is what i neede. the whole issue of counterterrorism versus counterinsurgency -- mcchrystal was a counter terrorist leader, went after al qaeda people in iraq and was very successful. counterinsurgency in many ways involves nation-building. we are in this process of building up the national armed forces of afghanistan. that is the current strategy. he says that if you want me to do that, i need 40,000 troops. if you want me to a lesser mission, counterterrorism, there will be less of troops -- part. -- lesser number of troops. host: republican line, go ahead.

caller: i have of you on the national security, -- have a few on national security, what the president has visited the white house 22 times since january, but it general running the war on terror -- [unintelligible] that is what is wrong with the president's national security policy. he figures that it was bush's war and he does not want to do it. telling their people not to use the word "terrorist" or "muslim extremist." when you have chris matthews from "hardball," saying something about "what is wrong with nidal hasan, was it against the law firm on