he is also a senior adviser to mckinsey. he is an economic adviser to the congressional budget office and a director of the phoenix companies of hartford, connecticut. he is co-chair of the financial reform task force and a member of the swan lake group of academics working on financial reform issues. previously, martin was the chairman of the council of economic advisers under president clinton. to his left as carl camden, president and ceo of caylee services. -- kelly services. he is also on that companies board. kelly is a fortune 500 company headquartered in troy, michigan. he has an undergraduate degree in psychology and speech, a graduate degree and a doctorate from ohio state in communications. he also was an associate professor in the communications department at cleveland state university. university.

she has been at mckinsey since 1996. she has a ph.d.applied economics from stanford and also an undergraduate degree with class distinction from northwestern university. james and susan, please come up, and the floor is yours. thank you. [applause] >> good afternoon. i would like to thank the national press club for hosting us today, and i would also like to thank the ced for convening this event, this wonderful event, and i would like to thank all of you for taking time out of your busy days to come and hear what we have to say and discussed what i think is the most important issue in the american economy at the moment, which is the issue of jobs. the issue is, to put it simply, that there are not enough of them, and if trends continue as they are, there will not be enough of them in the future. i think this is a pretty fundamental issue. we are all aware of the specifics -- statistics the department of labour put out in the last couple of weeks. we could debate whether that is a blip or a trend, but what is largely up for debate at th

he is also a senior adviser to mckinsey. he is an economic adviser to the congressional budget office and a director of the phoenix companies of hartford, connecticut. he is co-chair of the financial reform task force and a member of the swan lake group of academics working on financial reform issues. previously, martin was the chairman of the council of economic advisers under president clinton. to his left as carl camden, president and ceo of caylee services. he is also on that companies board. kelly is of fortune five company -- fortune 500 company headquartered in troy, michigan. he has an undergraduate degree in psychology and speech, a graduate degree and a doctorate from ohio state in communications. he also was an associate professor in the communications department at cleveland state university. in 2007 he joined prominent business, labor, and public policy leaders as a founding member of the better health care together a coalition which urges fundamental reform of the american health-care system. he is on the board

she is senior writer at mckinsey institute. limit turned it over to zanny. >> it is a pleasure to be here and to moderate such a distinguished panel. you have an unfailing ability to come up with catchy phrases. the u.s. needs high skill, high sure, high speed. we have a lot to cover and not very much time. there's so much to talk about. i am going to start with andy. from your perspective, how you react to this report? does it accurately depict the challenge facing american workers? >> this report is an important road map and it comes at a pretty important historical moment. i like to say this is not our fathers or grandfathers economy. i think something revolutionary is happening differently. i believe history will say this is the third economic revolution in world history. as opposed to what 300-year transition, we are having a 30- year massive transformation with an enormous amount of creative destruction. what we now know is the economy works differently. the markets work differently. business cycles work differently. we a

one critique i would have of the analysis, however, in the mckinsey report is the notion of a jobless recovery as applied to now in some way compared to 2001. it makes the argument that there has been a secular change in business cycles that it takes longer and longer to recover. 2001, there is no question that is true. it is almost two full years from the end of the recession before we generate any jobs in 2001. that is, in my mind, totally different than the business cycle we had just gone through. if you ask how long it will take to get back to where we started, yes, by that measure, it looks like it will take a long time. there is a major difference between down somewhat and remaining stagnant and plunging the most you have ever plunge in 75 years and working your way out of it adding 2 million jobs over 15 months. that is not a jobless recovery. and in my view, that is an incorrect definition. in 1991 and in 2001, both were mild recessions. the 2007 recession which began in the end of 2007 is intensively deep. let us not confuse the rebuilding with what is stagnant. in the rebuil

we are in mid process and mckinsey global institute is to do similar things for all major economies in the world with a sense of structural evolution. frankly, what i am trying to do is reintroduce the idea of a structural change which is a long-term journey rather than a cyclical event overtime is part of the policy discussion. not to the exclusion of crisis recovery but in addition. i suspect the effects are large and getting larger. what i said in the book if you look at those distributional effects for the first 50 years of the 100 year pattern, and more recovery, not much unemployment in the advanced countries, a declining prices and stuff like labor-intensive manufacture products. huge amounts of growth, accelerated growth and poverty reduction in much of the rest of the world. so i suspect at this point* where a lot of things are changing with the cumulative effect of growth we're at a different point* to pay attention to the distribution and structural aspects. >> thank you. always been fascinated by medicine work, if you look, you will look to countries like canada and the uni

so if mckinsey is right about this, then the underscoring of obamacare is roughly equivalent to the cost of the iraq and afghanistan war combined. so here we have a situation, that's the total cost, not just the overrun. the overrun from obamacare is iraq and afghanistan. so here we are dealing with numbers that seriously underestimate the interest cost will we will pay going forward. underestimate the amount of growth there for the budget problem in the world we can't afford the entitlement we have and another entitlement that is underestimated by the cost of the iraq and afghanistan war. so i'm afraid you asked me about the markets, you can check, i hope they stay with what i just said. but probably not. thank you. >> you know, that's actually an interesting question you way to put that at the end. the market sees what is coming but doesn't want to seem to price it in. the market knows something people are -- >> [inaudible] >> i don't think the markets are different than washington. i mean, if we thought that this was going to happen, if we really thought that this was going to be a pr

the mckinsey global institute have agreed to collaborate and try to do similar things for all the major economies of the world so we have a sense of the structural evolution. and, frankly, what i'm trying to do is reintroduce the idea that the sort of structural change with a long-term journey rather than a cyclical event gets to be part, overtime gets to be part of the policy discussion, not the exclusion of cyclical things and crisis recovery and so on. i suspect the effects are large, and they are getting larger. if what i said in the book is if you look at the distributional effects of globalization for the first 50 years of this 100 year pattern, it's been pretty benign. more recovery, not much unemployment, the advanced countries, trend growth rates of 2.5% in real terms, declining prices of a lot of stuff like labor intensive manufacture products. and huge amounts of growth accelerating growth, and reduction in much of the rest of the world. so it's hard to worry about that. so i suspect at this point that i described where lots of things are changing because of the size of effec

the mckinsey global institute is a great collaboration to try to do similar things for all the major economies in the world. structural revolution. and frankly, what i am trying to do is read introduce the idea that the structural change is a long-term journey rather than a civil event that is to be part, over time is to be part of the policy discussion, not to the exclusion of cyclical things, a crisis recovery and so on. in addition. i suspect the effects of large and are getting larger. if what i said in the book, if you look at the distributional effects of globalization for the first 50 years of this 100 year pattern, convergences pretty benign. not much unemployment in the advanced countries. term growth rates. declining prices, stuff like labor-intensive manufacturing. huge amounts of growth and accelerating growth. the rest of the world. so it's hard to worry about that then the effective growth, at a different point where we might want to pay a little more attention to the distribution as structural. >> yes, sir. okay. either one. yes. >> thank you. fascinated by madison. if

mckinsey put out an analysis of a survey that they did with employers. i actually would challenge callers to find this study from mckinsey because i called them and asked for the survey, the actual questionnaire, because no other study has found this level of data. other independent analysis of the law has never found data like this. it is all based on its survey of employers. we do not know what the questions are. i simply asked for the survey itself. when a respected paper, a media outlet, covers a poll, you get to access the survey. it is a complicated series of decisions, and i have not been able to find the study. host: one last call for our guest, florida. peter is an independent. good morning. caller: good morning. we have no problem spending money on it nation-building. we have given iraq universal health care. why is that not good enough for us? maybe we should send all of our sick over there. that is coming out of the military budget, i guess. guest: there is a challenge with the budgeting that we do in washington. i really think this is an imp

another recent study by a consulting group, mckinsey and company, calls another one of the president's guarantees into question. their study analyzed the impact of the health care law and employer-sponsored benefits. prior to the health care law, america's employers were the backbone of our nation's health care system. they provided $165 million americans with coverage. the mckinsey study found that 30% of employers would definitely or probably stop offering their employees health insurance after 2014. during the health care debate, supporters of the law insisted that the law builds on the principle of employer-sponsored coverage. the president even repeatedly promised if you like your plan, you can keep it. again, an empty promise. according to the study and others that came before it, employees will be stripped of their plans that they like and dumped onto the new law's health care exchanges. now, i realize there is disagreement surrounding this study, so let's just appeal to common logic. the more you know about the law, the more you conclude it just doesn't make sense for employers

so if mckinsey is right about this, then the underscoring of obamacare is roughly equivalent to the cost of the iraq and afghanistan war combined. so here we have a situation, that's the total cost, not just the overrun. the overrun from obamacare is iraq and afghanistan. so here we are dealing with numbers that seriously underestimate the interest cost will we will pay going forward. underestimate the amount of growth there for the budget problem in the world we can't afford the entitlement we have and another entitlement that is underestimated by the cost of the iraq and afghanistan war. so i'm afraid you asked me about the markets, you can check, i hope they stay with what i just said. but probably not. thank you. >> you know, that's actually an interesting question you way to put that at the end. the market sees what is coming but doesn't want to seem to price it in. the market knows something people are -- >> [inaudible] >> i don't think the markets are different than washington. i mean, if we thought that this was going to happen, if we really thought that this was going to be a pr

mckinsey, and also senior fellow at the brookings institute, so he has a wealth of knowledge in both policy arena and the academic arena. why don't we start off with martin, and then we can go onto tom cooley. >> thank you. this microphone is on. i'm going to make some comments on dodd-frank. these are not comments on michael, who i think has done a terrific job, get a terrific job, and at treasury, and working on some of these very difficult issues. so i've got a few concerns about dodd-frank, but i do think we should all be grateful for the job that michael did. when dodd-frank past i was pleased that an important step forward have been made in making the u.s. financial sector safer. in particular, while placing the fed in charge of monitoring was not miss a show in my first choice, i thought it was a better thing to have the fed -- the fred -- the fed monitor all major financial institutions. that was an improvement over the previous system we had in which aig, bear stearns and others were regulated by institutions that really didn't have the ability to control or recognize the po

i want to go to cnn david mckinsey live in the city of tripoli been what does nato say happened to thisporter: we don't know exactly how this went down, brooke, but what we do know is that the last contact with the fire scout, i have to say you talked about the libyan state tv footage, it's not the first time they said they've shot down. it's the fifth time they've said they shot down an apache helicopter. we do know it was launched or took off from a u.s. navy vessel. it is a u.s. navy fire squadron. we do know that the american military is doing 70% of the surveillance at least in the campaign. brooke? >> do you know, david, how much nato is using unmanned aircraft? do we know if they're all american or else? >> reporter: well, as i just said so much of the intelligence gathering of the surveillance is being handled by the u.s. military. when the white house had to put forward that explanation of the u.s.'s involvement in this. they did say after that first section where u.s. planes were heavily involved in striking targets, that's not dropped off and we're seeing a great deal of supp

tyson is also a senior adviser to the mckinsey global institute. with that, let me turn it over. >> is a pleasure to be here and moderate such a distinguished panel discussing such a terrific report. i love the quality of the analysis but also you have an unfailing ability to come up with catchy phrases. the u.s. needs high scale, high chair, and high speed. we are focused on the latter, high-speed because lots of cover -- lots to cover and not very much time. [laughter] where shall we start? andy, i'll start with you. i want to say you have spent a lifetime looking at the labor market but that may be an exaggeration. how do you react to this report and does it accurately pe project the challenges of the american worker? >> this is an important road map that comes at an historical moment. i would like to say this is not our father or grandfather is economy. is this something fundamental happening differently? i would say something revolutionary is happening differently. i happen to believe that history will say this is the third economic revolution

. >> yes, i am also mostly mckinsey says larger businesses and they are very low at the moment, so they are not facing -- they are concerned about a lot of things including future taxes, regulation, all that kind of stuff, but i don't think that they are borrowing costs are of a particular concern for them. i am aware of its -- it's harder to get a reading on small business and one reads conflicting stories about it. i think there are small businesses who would like to expand the or having difficulty getting funds. there's a couple of reasons if you're talking about small businesses or start-ups that is because traditionally the have relied on the family and friends and equity in parnes which they don't have to say that is a fallout from the crisis. >> for the larger businesses there are some that would like to expand five think many don't want to expand because they don't have to demand. not so much because the banks can't lend to them as the premium has gone up. i even hear the baker giver does have become rather more cautious so they're looking over their shoulders of the bank's sayi

i was reading a summary put together by the mckinsey institute which is very passionate, middle of theoad, business advisory entity going through the impacts of the obama health care law. it is important to start to understand what the impacts are going to be. they will not be able to choose the doctors that they want, costs are going to go up, you are not going to have a high- quality coverage, a lot will change, and people will probably not like it. a couple years from now when people will really understand what a nifty policy promised in that bill. host: today, the 11th circuit court of appeals will be taking up the case. this is the issue that was brought up. the oral arguments take place this morning, but we will get a feed of that posted on our website after 3:45 eastern time this afternoon. you could check it out at c- span.org. it is happening today. the audio will be released today and we will be posting it on her web site this afternoon. mary is joining us from alabama. good morning. caller: good morning. yes, i was calling in about the debt ceiling and how they always try to

. >> yes, i am also mostly mckinsey says larger businesses and they are very low at the moment, so they are not facing -- they are concerned about a lot of things including future taxes, regulation, all that kind of stuff, but i don't think that they are borrowing costs are of a particular concern for them. i am aware of its -- it's harder to get a reading on small business and one reads conflicting stories about it. i think there are small businesses who would like to expand the or having difficulty getting funds. there's a couple of reasons if you're talking about small businesses or start-ups that is because traditionally the have relied on the family and friends and equity in parnes which they don't have to say that is a fallout from the crisis. >> for the larger businesses there are some that would like to expand five think many don't want to expand because they don't have to demand. not so much because the banks can't lend to them as the premium has gone up. i even hear the baker giver does have become rather more cautious so they're looking over their shoulders of the bank's sayi

the mckinsey report, noting the health care law will increase medical costs, noting in their survey that a significant percentage will definitely or probably drop coverage or pursue alternatives to employer-based insurance. i'm wondering what the white house responses? >> we saw that report, and i could say that is starkly at odds with the experts from the congressional budget office, the rand corp., the urban institute, and with history. history has shown the reform has motivated in addition, such as the reform in massachusetts. the number of individuals in massachusetts has increased. we are confident the affordable care effort will strengthen our existing -- existing employer- based system going forward. we disagree with those conclusions. [laughter] >> let me continue with jake. >> de take issue that the requirements of the law will increase costs for companies? >> we believe it will reduce costs overall. it is one of the reasons the president pursued insurance reform because he wanted to address the burden the cost of replacing the individuals and businesses. yes, we disagree with t