On Capital & The Capitol - David Wessel
David Wessel
Author
09/26/2013
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305
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Description
Journalist David Wessel is economics editor of The Wall Street Journal and writes the newspaper’s weekly “Capital” column. His book, “In Fed We Trust: Ben Bernanke’s War on the Great Panic,” was a New York Times notable book in 2009. Wessel has shared two Pulitzer prizes, one for a series on the persistence of racism in Boston (Boston Globe, 1983) and the other for a series on corporate wrong-doing (The Wall Street Journal, 2002). He frequently appears on National Public Radio and WETA’s Washington Week. A 1975 graduate of Haverford College, Wessel is also the co-author of “Prosperity,” a 1998 book on the American middle class.
Learn more at http://enthompson.unl.edu/
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- [00:00:42.500]>> GOOD EVENING.
- [00:00:44.200]THANKS FOR BEING HERE.
- [00:00:45.400]I'M HONORED TO WELCOME YOU TO THE OPENING LECTURE OF THE
- [00:00:49.166]2013-2014 SEASON OF THE IAN THOMPSON FORUM ON WORLD ISSUES.
- [00:00:53.266]FOR MORE THAN 20 YEARS, THE UNIVERSITY PARTNERED WITH THE
- [00:00:57.500]COOPER FOUNDATION AND THE LEAD CENTER OF PERFORMING ARTS TO
- [00:01:01.166]BRING THOUGHTFUL SPEAKERS TO ENGAGE THE UNIVERSITY OF
- [00:01:04.132]NEBRASKA COMMUNITY AND THE GENERAL PUBLIC ON IMPORTANT
- [00:01:07.166]ISSUES THAT AFFECT ALL OF US ON THIS CONTEMPORARY WORLD.
- [00:01:11.300]THIS LECTURE SERIES IS NAMED BY AFTER IAN JACK THOMPSON.
- [00:01:22.567]WE'RE GRATEFUL FOR TO THE THOMPSON FAMILY AND THE COOPER
- [00:01:26.066]FOUNDATION FOR THE ONGOING SUPPORT.
- [00:01:28.066]IT'S ALSO THE ANNUAL LEWIS E.
- [00:01:30.400]HARRIS LECTURE ON PUBLIC POLICY AND IS CO-SPONSORED WITH THE
- [00:01:34.133]COLLEGE OF BUSINESS AND ADMINISTRATION.
- [00:01:36.600]THE LECTURE ON PUBLIC POLICY WAS EXAMINED TO LOOK AT MAJOR PUBLIC
- [00:01:41.000]POLICY ISSUES AND PROVIDE A SPECIAL OPPORTUNITY FOR
- [00:01:44.400]STUDENTS, THE BUSINESS COMMUNITY, AND THE ACADEMIC
- [00:01:47.467]COMMUNITY IN NEBRASKA.
- [00:01:48.767]THE HARRIS LECTURE WAS ENDOWED BY THE SMITH KLEIN CORPORATION
- [00:01:53.834]AND THE CHAIRMAN, THE LATE LEWIS E. HARRIS ONE OF THE WORLD'S
- [00:01:58.567]LEADING INDEPENDENT SCIENTIFIC TESTING
- [00:02:02.133]AND RESEARCH LABORATORIES.
- [00:02:03.066]WE'RE INDEBTED TO THE HARRIS FAMILY FOR
- [00:02:07.633]THEIR CONTINUING SUPPORT.
- [00:02:08.699]WE HAVE THE HONOR TO HEAR FROM MR. DAVID WESSEL.
- [00:02:12.667]HE'S THE ECONOMIC EDITOR OF "THE WALL STREET JOURNAL" AND WRITES
- [00:02:16.000]THE CAPITAL COLUMN, A LOOK AT THE ECONOMY AND
- [00:02:20.934]LIVING STANDARDS AROUND THE WORLD.
- [00:02:22.200]HIS BOOK, "IN FED WE TRUST," BEN BERNANKE'S WAR ON THE GREAT
- [00:02:27.934]PANIC WAS A NOTABLE BOOK IN 2009.
- [00:02:30.400]HE SHARED TWO PULITZER PRIZES, ONE FOR THE PERSISTENCE OF
- [00:02:34.467]RACISM IN BOSTON PUBLISHED IN "THE BOSTON GLOBE" IN 1983, AND
- [00:02:38.166]THE OTHER FOR A SERIES OF CORPORATE WRONGDOING PUBLISHED
- [00:02:41.467]IN "THE WALL STREET JOURNAL" IN 2002.
- [00:02:47.967]HE APPEARS ON WASHINGTON WEEK.
- [00:02:52.600]A GRADUATE OF HAVERFORD COLLEGE, THE CO-AUTHOR OF PROSPERITY, THE
- [00:02:59.300]1998 BOOK ON THE AMERICAN MIDDLE CLASS AND WAS AN AD HOC FELLOW
- [00:03:05.066]AND BUSINESS JOURNALISM IN 1980/1981.
- [00:03:09.000]IN 2009 HE WAS AWARDED A DOCTRINE OF HUMANE
- [00:03:14.367]LETTERS BY EUREKA COLLEGE.
- [00:03:15.700]TONIGHT'S LECTURE IS ENTITLED ON CAPITOL AND THE CAPITAL.
- [00:03:19.500]PLEASE WELCOME MR. DAVID RUSSELL.
- [00:03:40.633]>> THANK YOU VERY MUCH.
- [00:03:42.233]I HAD SOMEONE TELL ME YOU'RE SUPPOSED TO SING OPERA.
- [00:03:46.800]IT'S YOUR GOOD FORTUNE YOU'RE NOT GOING TO
- [00:03:51.000]HEAR MY SINGING VOICE.
- [00:03:52.333]I'M AFRAID I COME HERE TONIGHT WITH A LITTLE BIT OF BAD NEWS.
- [00:03:54.834]I'M SURE THAT HERE IN LINCOLN, NEBRASKA, THINGS IN WASHINGTON
- [00:03:58.467]LOOK PRETTY MESSED UP.
- [00:04:03.800]I'M HERE TO TELL YOU IF YOU WORK IN WASHINGTON AND
- [00:04:07.333]SEE IT UP CLOSE, IT LOOKS EVEN WORSE.
- [00:04:09.133]AND THAT'S THE KIND OF DISTURBING MESSAGE TO
- [00:04:13.400]COME OUT HERE TO TELL.
- [00:04:14.633]I TOLD A GROUP OF STUDENTS EARLIER THAT IT WAS NICE TO COME
- [00:04:17.000]TO A PLACE, THOUGH, THAT HAD A FOOTBALL TEAM WITH
- [00:04:20.666]A WINNING SEASON.
- [00:04:21.666]I -- THE WASHINGTON REDSKINS ARE 0-3 SO FAR.
- [00:04:31.266]OUR STAR QUARTERBACK SEEMS TO BE NOT SUCH A STAR.
- [00:04:33.900]I LIKE THE PLACE AT 3-1.
- [00:04:35.767]I NOTICE YOU DIDN'T SHOW ANY MERCY WITH
- [00:04:40.467]SOUTH DAKOTA THE OTHER DAY.
- [00:04:50.633]I'M IN THE BUSINESS OF TELLING STORIES.
- [00:04:52.834]I THINK HUMANITY IN DAYS WHEN PEOPLE WERE HUNTING AND TAKING
- [00:04:58.000]THE MEAT HOME HAVE LONG COMMUNICATED THROUGH STORIES,
- [00:05:01.333]HAVE INSPIRED THEIR CHILDREN THROUGH STORIES, HAVE DRAWN
- [00:05:05.834]INSPIRATION FROM STORIES THAT THEIR GRANDFATHERS AND
- [00:05:11.066]GRANDMOTHERS TOLD THEM.
- [00:05:15.467]SO I LOOK AT MYSELF AS A MODERN STORY TELLER AND FORTUNATELY I
- [00:05:19.867]DON'T HAVE TO DO IT IN 140 CHARACTERS TONIGHT.
- [00:05:22.500]I'M LEARNING.
- [00:05:23.367]YOU CAN SAY A LOT IN 140 CHARACTERS.
- [00:05:25.967]AND WHAT I WANT TO TALK A ABOUT A LITTLE BIT IS TO TELL YOU THE
- [00:05:30.266]STORY ABOUT THE AMERICAN ECONOMY IN THE LAST FIVE YEARS.
- [00:05:35.934]AND I HOPE YOU APPRECIATE WHAT AN EXTRAORDINARY
- [00:05:40.567]FIVE YEARS IT HAS BEEN.
- [00:05:41.900]WE ARE LIVING IN THE YET TO BE WRITTEN PAGES OF THE ECONOMIC
- [00:05:47.767]TEXTBOOKS THAT WILL BE WRITTEN A DECADE FROM NOW.
- [00:05:50.500]WHAT HAS GONE ON IN THE LAST FIVE YEARS IS BOTH UNPRECEDENTED
- [00:05:56.800]AND TO A LARGE EXTENT, WAS UNPREDICTED.
- [00:06:02.300]IT WAS A SURPRISE.
- [00:06:03.934]ABOUT THE ONLY THING THAT ALL OF THE ECONOMISTS IN THE WORLD
- [00:06:07.667]AGREED ON, AND YOU KNOW THEY DON'T TEND TO AGREE ON VERY
- [00:06:11.734]MUCH, WAS THAT WE WOULD NEVER HAVE TO CONFRONT THE THREAT OF
- [00:06:15.200]ANOTHER GREAT DEPRESSION, BECAUSE WE WERE SO SMART -- WE
- [00:06:19.367]THE ECONOMIST, SO SMART THAT WE FIGURED THAT OUT.
- [00:06:27.533]YET, FIVE YEARS AGO ALMOST TO THE DAY, WE WERE STARING IN THE
- [00:06:31.900]ABILLS OF SOMETHING THAT LOOKED LIKE THE GREAT DEPRESSION 2.0.
- [00:06:36.200]YOU MAY REMEMBER IN THE BEGINNING OF 2008, WE DISCOVERED
- [00:06:39.467]THAT HOUSING PRICES DON'T ALWAYS GO UP.
- [00:06:42.567]THAT WAS ACTUALLY A REVELATION.
- [00:06:44.934]WE HAD THOUGHT -- AND WE HAD BEEN TOLD BY PEOPLE AS WISE OR
- [00:06:48.567]AT LEAST SEEMING TO BE AS WISE AS ALAN GREENSPAN THAT SURE
- [00:06:53.700]HOUSING PRICES IN ONE COMMUNITY MIGHT GO DOWN,
- [00:06:57.834]BUT ACROSS THE UNITED STATES?
- [00:06:59.100]NO, THE ENTIRE UNITED STATES HOUSING PRICES WOULDN'T GO DOWN.
- [00:07:02.200]WE LEARNED IN 2008 THAT AN ENTIRE HOUSE OF CARDS HAD BEEN
- [00:07:14.233]BUILT ON THE ASSUMPTION THAT HOUSE PRICES WON'T FALL.
- [00:07:17.033]IT DID.
- [00:07:18.033]AND IT PULLED DOWN THE WHOLE HOUSE OF CARDS.
- [00:07:21.900]BEAR STEARNS, AN INVESTMENT BANK HAD A SHOTGUN WEDDING TO J.P.
- [00:07:26.266]MORGAN WITH THE TAXPAYERS OF THE UNITED STATES
- [00:07:29.300]PUTTING $29 BILLION AT RISK.
- [00:07:30.633]THE FEDERAL RESERVE USED POWERS TO LEND TO ALMOST ANYBODY IN
- [00:07:35.667]CIRCUMSTANCES THAT IT DEEMS UNUSUAL AND EXIGENT, THOSE ARE
- [00:07:39.667]THE WORDS OF THE LAW, THAT THEY HAVEN'T USED SINCE
- [00:07:45.233]THE GREAT DEPRESSION.
- [00:07:46.433]THE GOVERNMENT NATIONALIZED FANNIE MAE AND FREDDIE MAC.
- [00:07:50.800]AND IN 2008, LEHMAN BROTHERS WENT TO BANKRUPTCY SENDING SHOCK
- [00:07:56.000]WAVES ACROSS THE GLOBE AND AIG WAS EFFECTIVELY
- [00:08:00.567]TAKEN OVER BY THE TAXPAYERS.
- [00:08:02.734]MONEY MARKET, MUTUAL FUNDS, THE DOLLAR A SHARE FUNDS WERE UNABLE
- [00:08:07.633]TO MEET THE DEMANDS OF THEIR PEOPLE.
- [00:08:11.767]WHAT FOLLOWED WAS THE CLOSEST BRUSH WE HAD WITH THE GREAT
- [00:08:16.100]DEPRESSION SINCE THE DAY ITSELF IN 1929.
- [00:08:18.300]SO, ON ONE HAND YOU CAN SAY, MY GOSH, HOW DID WE GET TO THE
- [00:08:21.734]POINT WHERE WE COULD MAKE SO MANY BAD DECISIONS AND SO MANY
- [00:08:25.400]PEOPLE COULD MAKE SO MANY BAD DECISIONS?
- [00:08:27.800]THE REGULATORS COULDN'T MIX SO MUCH.
- [00:08:31.767]THE RISK MANAGEMENT COMMITTEES AT THE BANKS COULD HAVE BEEN
- [00:08:35.033]MORE RISK AND LITTLE MANAGEMENT.
- [00:08:36.799]THE RATING AGENCIES COULD HAVE BEEN SO BLIND OR TO THE EXTENT
- [00:08:41.400]THAT IT DIDN'T SHOUT LONG ENOUGH.
- [00:08:45.900]PEOPLE ASKED THE QUESTIONS TEN, 15, 20 YEARS.
- [00:08:49.934]WHY DID WE HAVE THE GREAT DEPRESSION.
- [00:08:51.967]WHY DID WE HAVE THE CIVIL WAR.
- [00:08:53.433]BUT ON THE OTHER HAND, THERE'S A -- YOU CAN TAKE SOME
- [00:08:58.900]ENCOURAGEMENT THAT THINGS WERE DONE, UNPOPULAR THINGS.
- [00:09:05.633]WE DIDN'T HAVE ANOTHER GREAT DEPRESSION, BEN BERNANKE OF THE
- [00:09:09.033]FEDERAL RESERVE WHO BY COMPLETE COINCIDENCE WHO HAD BEEN A
- [00:09:11.800]STUDENT OF THE GREAT DEPRESSION DIDN'T REPEAT THE MISTAKES THAT
- [00:09:14.467]THE PREDECESSORS HAD MADE.
- [00:09:16.400]HE CUT INTEREST RATES, HE FLOODED THE MARKETS WITH CREDIT.
- [00:09:19.600]CONGRESS WITH A LITTLE HESITATION, ACTUALLY LITTLE MORE
- [00:09:23.200]THAN A LITTLE PUT $700 MILLION AT RISK IN THE BANKING SYSTEM TO
- [00:09:26.934]KEEP THE ECONOMY GOING.
- [00:09:34.000]WE AVOIDED WHAT MIGHT HAVE BEEN.
- [00:09:42.867]ONE OF MY FAVORITE PEOPLE, UNFORTUNATELY HE'S LEFT OFFICE,
- [00:09:47.066]BARNEY FRANK.
- [00:09:48.400]THERE'S NOBODY WHO HAD MORE GOOD LINES THAN BARNEY FRANK.
- [00:09:51.633]WE MISS HIM.
- [00:09:52.934]BARNEY FRANK SAID TO A HEARING OF ECONOMISTS -- I ENVY YOU
- [00:09:56.300]GUYS, YOU HAVE AVAILABLE TO YOU THE COUNTERFACTUAL.
- [00:09:58.667]YOU CAN SAY THAT IF THIS DIDN'T HAPPEN,
- [00:10:02.200]THEN THAT WOULDN'T HAVE HAPPENED.
- [00:10:03.033]THAT DOESN'T WORK FOR POLITICIANS.
- [00:10:05.100]NOBODY EVER GOT RE-ELECTED WITH A BUMPER STICKER THAT READS, "IT
- [00:10:11.200]WOULD HAVE BEEN WORSE IF NOT FOR ME."
- [00:10:13.433]BUT THAT'S BASICALLY WHAT BEN BERNANKE AND HANK PAULSON AND
- [00:10:19.033]TIM GEITHNER HAD TO SAY -- IT COULD HAVE BEEN WORSE.
- [00:10:21.166]AND WE DO HAVE A LITTLE BIT OF ADVANTAGE WITH
- [00:10:25.834]THE BENEFIT OF HINDSIGHT.
- [00:10:26.500]IT COULD HAVE BEEN WORSE.
- [00:10:27.166]IT COULD HAVE BEEN EUROPE.
- [00:10:36.300]I MEAN IN SPAIN, THE UNEMPLOYMENT IS OVER 50%.
- [00:10:40.066]SPAIN ISN'T THE WEAKEST LINK IN EUROPE.
- [00:10:42.233]IF YOU LOOK BACK FIVE YEARS LATER, YOU LOOK WHERE YOU ARE
- [00:10:45.400]TODAY, WHAT DO YOU SEE?
- [00:10:46.567]WELL, THE STOCK MARKET IS AT NEW HIGHS.
- [00:10:58.066]THEY'VE BEEN FORCED, CAJOLED, DEPENDING ON WHICH BANKS YOU
- [00:11:02.266]TALK ABOUT TO HAVE STRONGER FOOTING SO THEY'RE ABLE TO
- [00:11:05.767]WITHSTAND ANOTHER FINANCIAL TSUNAMI.
- [00:11:07.367]WE HAVE CHANGED SOME OF THE RULES THAT STOOD IN
- [00:11:11.567]THE WAY IN 2008.
- [00:11:12.200]WE HAVEN'T TESTED THEM.
- [00:11:13.633]BUT WE NOW HAVE RULES IN PLACE THAT ALLOW LAWS IN PLACE TO
- [00:11:17.500]ALLOW THE GOVERNMENT TO TAKE OVER A LEHMAN BROTHERS OR AN AIG
- [00:11:21.667]IN A SOMEWHAT MORE ORDERLY FASHION, ALTHOUGH HOPEFULLY WE
- [00:11:24.867]WON'T HAVE TO TEST THAT BECAUSE I'M NOT CONVINCED
- [00:11:28.000]THEY COULD DO IT.
- [00:11:28.834]BUT AT LEAST THEY HAVE THE POWER.
- [00:11:30.133]THE AUTO INDUSTRY, WHICH WILL PROVE TO BE THE MOST EXPENSIVE
- [00:11:33.734]BAILOUT IN THE END, YOU KNOW, ALL OF THE MONEY THAT WE PUT
- [00:11:37.133]INTO THE BANKS HAS COME BACK.
- [00:11:38.834]SOME BANKS STILL HAVE MONEY.
- [00:11:40.033]BUT THE BANKS THAT HAVE PUT THEIR MONEY -- BROUGHT THEIR
- [00:11:42.867]MONEY -- PAID BACK THEIR MONEY, MORE THAN COVERED THE BANKS THAT
- [00:11:45.834]HAVE THEM PAID BACK.
- [00:11:47.100]THE GOVERNMENT IS OUT OF AIG AT A PROFIT.
- [00:11:51.333]FANNIE MAE AND FREDDIE MAC, THE MORTGAGE GIANTS ARE MAKING MONEY
- [00:11:54.000]AGAIN, MAKING SO MUCH MONEY PEOPLE ARE RETHINKING WHETHER WE
- [00:11:56.934]SHOULD REFORM THEM AT ALL.
- [00:11:58.567]THE MOST EXPENSIVE PART OF THE BAILOUT WILL BE
- [00:12:03.033]THE AUTO INDUSTRY.
- [00:12:04.300]BUT PUT THE WHOLE THING TOGETHER AND THE CONGRESSIONAL BUDGET
- [00:12:06.867]OFFICE TELLS US OF THAT ORIGINAL $700 BILLION, MUCH OF WHICH WAS
- [00:12:12.700]NEVER SPENT, THE NET COST OF THE TAXPAYER
- [00:12:17.700]THEY ESTIMATE WILL BE $21 BILLION.
- [00:12:18.400]THAT'S A LOT OF MONEY.
- [00:12:19.633]BUT IT'S A LOT LESS THAN WE THOUGHT AT THIS POINT IN 2008.
- [00:12:24.667]SO SHOULD WE CELEBRATE?
- [00:12:26.300]WELL, MAYBE A LITTLE BIT.
- [00:12:29.800]BUT WHAT ABOUT MAIN STREET I HOPE YOU APPRECIATE WHAT YOU
- [00:12:39.266]HAVE HERE, THE UNEMPLOYMENT RATE IN NEBRASKA.
- [00:12:42.000]WILL NEVER GET THAT LOW IN MUCH OF THE REST OF THE COUNTRY.
- [00:12:44.967]UNEMPLOYMENT NATIONALLY IS 7.3%?
- [00:12:47.867]WHAT DOES THAT MEAN?
- [00:12:49.166]THAT MEANS THERE ARE MORE THAN 11 MILLION AMERICANS OUT OF WORK
- [00:12:51.767]AND STILL SAY THEY'RE LOOKING.
- [00:12:53.533]AND IT MEANS THAT 3 MILLION OF THEM, 3 MILLION, HAVE BEEN
- [00:12:57.000]LOOKING FOR WORK FOR A FULL YEAR OR MORE.
- [00:13:00.800]AND ARE STILL LOOKING AND CAN'T FIND IT.
- [00:13:04.233]THE MEDIAN INCOME OF AMERICAN HOUSE HOLDS, THE INCOME OF THE
- [00:13:07.767]HOUSE HOLD OF THE STATISTICAL MIDDLE OF THE MIDDLE, IN 2012
- [00:13:14.300]WAS 8% BELOW WHERE IT WAS IN 2007 AND IS LOWER
- [00:13:21.333]THAN IT WAS IN 199.
- [00:13:21.967]WAGES ARE NOT GOING UP.
- [00:13:24.533]SO ON ONE HAND, WALL STREET IS DOING BERT.
- [00:13:27.633]THE BANKS ARE STRONGER.
- [00:13:42.533]WE'VE HAD GROWTH FOR FOUR YEARS NOW.
- [00:13:44.533]THE PER PERSON IN THE UNITED STATES HAS
- [00:13:49.567]ONLY RECENTLY RETURNED.
- [00:13:51.033]ONE IN SIX OF THE PEOPLE WITH A MORTGAGE INDUSTRIAL A LOAN
- [00:13:54.533]THAT'S BIGGER THAN THE VALUE OF THE HOUSE.
- [00:13:55.867]ONE IN SIX.
- [00:13:56.633]THAT'S A LOT OF PEOPLE.
- [00:13:58.233]I CONSIDER THE JOB INCOMPLETE.
- [00:13:59.700]WE AVOIDED A SECOND GREAT DEPRESSION.
- [00:14:02.066]THAT'S A GOOD THING.
- [00:14:03.467]WE HAVE REBUILT OUR FINANCIAL SYSTEM.
- [00:14:05.600]AND THAT IS A GOOD THING.
- [00:14:09.000]AND WE HAVE NOT BROUGHT MAIN STREET BACK TO WHERE IT WAS AND
- [00:14:12.233]WE HAVE NOT PUT IT ON A STRONGER COURSE.
- [00:14:15.333]AND I THINK THAT EXPLAINS A WHOLE LOT OF WHY THERE'S SO MUCH
- [00:14:19.567]ANTIPATHY TOWARDS WASHINGTON, SO MUCH
- [00:14:23.033]SUSPICION TOWARDS THE BANKS.
- [00:14:24.300]THEY'RE GETTING THEIR BONUSES AND MY KID IS GRADUATING FROM
- [00:14:26.400]COLLEGE AND CAN'T GET A JOB AND IS MOVING BACK WITH ME AND I
- [00:14:29.467]CAN'T REFINANCE MY MORTGAGE.
- [00:14:30.633]BY THE WAY, THE COMPANY IS CONSULTING BACK ON MY 401(k).
- [00:14:34.800]SO WHEN BEN BERNANKE SAYS, HE SAT ON A PARK BENCH IN DYLAN,
- [00:14:40.000]SOUTH CAROLINA WHERE HE GREW UP OUTSIDE WHERE HIS DAD AND HIS
- [00:14:43.200]UNCLE USED TO RUN A DRUGSTORE, AND IT WAS LUCKY
- [00:14:52.000]HE WAS ON MAIN STREET.
- [00:14:53.233]IT WOULD HAVE BEEN TERRIBLE TV IF HE SAID WALL STREET.
- [00:14:54.900]A LOT OF TOWNS HAVE WALL STREET.
- [00:14:56.633]HE TOLD THE INTERVIEWER FOR 60 MINUTES,
- [00:15:00.467]I DID NOT SET OUT TO SAVE WALL STREET.
- [00:15:03.467]I SET OUT TO SAVE MAIN STREET.
- [00:15:10.533]IN ORDER TO SAVE MAIN STREET, I HAD TO SAVE WALL STREET.
- [00:15:13.367]I THINK THAT'S THE TRUE STATEMENT OF HIS INTENT.
- [00:15:16.367]TWICE AS LONG OF THE ATTENTION SPAN OF THE AVERAGE AMERICAN.
- [00:15:19.533]AND PEOPLE DON'T BELIEVE HIM.
- [00:15:21.500]AND YOU KNOW WHAT?
- [00:15:22.567]WE SHOULD BE ANGRY.
- [00:15:23.834]WE SHOULD BE ANGRY THAT TOO MANY OF THE PEOPLE ON WALL STREET
- [00:15:28.266]HAVE FORGOTTEN THAT THEY'VE GOTTEN BAILED OUT.
- [00:15:30.734]THAT THE ENTIRE FINANCIAL SYSTEM OF THE UNITED STATES WAS ABOUT
- [00:15:33.767]TO TUMBLE OVER THE CLIFF AND THEY WERE BAILED OUT BY THE
- [00:15:37.100]TAXPAYERS OF THE UNITED STATES.
- [00:15:38.400]WE SHOULD BE ANGRY THEY'RE PAY BONUSES AGAIN ON WALL STREET AND
- [00:15:43.433]ORDINARY WORKERS ARE NOT GETTING A RAISE.
- [00:15:45.633]WE SHOULD BE ANGRY THAT OUR CONGRESS IS SPENDING VALUABLE
- [00:15:53.033]TIME TODAY ARGUING OVER THAT GREAT QUESTION -- SHOULD WE KEEP
- [00:15:58.300]THE GOVERNMENT OPEN FROM NOVEMBER 15 OR SHOULD WE KEEP
- [00:16:01.900]THEM OPEN UNTIL DECEMBER 15?
- [00:16:05.000]THAT IS LITERALLY WHAT THEY'RE DEBATING IN THE CONGRESS OF THE
- [00:16:08.367]UNITED STATES TODAY.
- [00:16:15.667]WHY ARE SO MANY HOME OPENERS ARE UNDERWATER.
- [00:16:19.834]WHY DIDN'T WE GET A BETTER RESULT?
- [00:16:21.667]I CAN TELL YOU WHY WE DIDN'T GET A WORSE RESULT, THE TAXPAYERS IN
- [00:16:25.200]THE FEDERAL RESERVE RAN TO THE RESCUE.
- [00:16:27.367]WE TURNED OUT THE HAVE A PRETTY RESILIENT ECONOMY.
- [00:16:30.767]WHY DIDN'T WE HAVE A BETTER RESULT.
- [00:16:32.467]AND I THINK THERE ARE AT LEAST THREE ANSWERS.
- [00:16:35.467]ONE IS IT TURNS OUT THAT FINANCIAL CRISES ARE LIKE A
- [00:16:41.066]CHRONIC DISEASE.
- [00:16:43.066]IT'S NOT LIKE YOU HAVE AN ACUTE ATTACK OF SOME INFECTIOUS
- [00:16:47.700]DISEASE THAT GIVE YOU ANTIBIOTICS AND IN A COUPLE OF
- [00:16:51.266]DAYS YOU'RE WALKING AROUND.
- [00:16:53.133]IT'S LIKE CORONARY ARTERY DISEASE.
- [00:16:55.734]IT TAKES A LONG TIME BEFORE YOU GET TO FEEL LIKE YOURSELF AGAIN
- [00:16:58.600]AND YOU HAVE TO TAKE CARE OF YOURSELF IF YOU WANT TO BE AS
- [00:17:01.633]STRONG AS YOU WERE BEFORE AND NOT AT RISK.
- [00:17:05.333]SO WE HAVE BEEN WORKING THROUGH THIS CHRONIC DISEASE.
- [00:17:12.200]WE'VE DONE SOME THINGS THAT HAVE MADE THINGS BETTER.
- [00:17:14.567]I LIKE THE CHRONIC DISEASE REPORT.
- [00:17:16.767]TIM GEITHNER'S GREATEST INSPIRATION WHEN HE TOOK OVER
- [00:17:20.633]TELL US HE WAS GOING TO PUT THE BANKS THROUGH A STRESS TEST.
- [00:17:23.733]HE WAS GOING TO PUT CITY BANK ON A TREADMILL AND RUN THEM UNTIL
- [00:17:27.099]THEY PASSED OUT AND THEY'D GO UNDER.
- [00:17:29.500]IT WAS A PRETTY SUCCESSFUL STRATEGY IN THE END.
- [00:17:32.700]WE'RE STILL LIKE THE CARDIAC PATIENT.
- [00:17:34.800]THAT'S ONE THING.
- [00:17:36.033]THE SECOND THING IS WE HAD SOME BAD LUCK.
- [00:17:38.100]I MEAN, WHO WOULD HAVE THOUGHT THAT OUR RECOVERY IN THE
- [00:17:41.100]FINANCIAL CRISIS COULD HAVE COINCIDED WITH EUROPE'S
- [00:17:48.633]SOVEREIGN DEBT CRISIS AND WHETHER EUROPE WANTED TO
- [00:17:51.967]CONTINUE TO HAVE A COLLEGE CURRENCY.
- [00:17:53.633]WHO COULD HAVE PREDICTED A TSUNAMI THAT WOULD
- [00:17:58.700]DISRUPT THE SUPPLY CHAIN.
- [00:17:59.934]AND FRANKLY WHO WOULD HAVE EXPECTED IN CONGRESS OF 2011 IN
- [00:18:02.266]THE CONGRESS OF THE UNITED STATES FOR THE FIRST TIME WOULD
- [00:18:04.467]LEAD WALL STREET TO BELIEVE MAYBE THEY WOULDN'T RAISE THE
- [00:18:06.900]DEBT CEILING IN TIME TO PREVENT THE GOVERNMENT
- [00:18:09.367]FROM RUNNING OUT OF CASH.
- [00:18:10.066]SO WE HAD SOME BAD LUCK.
- [00:18:15.800]THE THIRD THING IS WE HAD LESS THAN
- [00:18:18.800]THE BEST POSSIBLE ECONOMIC POLICY.
- [00:18:24.467]THE BAD THING IS IT PUT THE PEDAL TO THE FLOOR AND DOING
- [00:18:27.734]EVERYTHING HE CAN TO TRY TO GET THE ECONOMY MOVING FASTER.
- [00:18:30.934]TURNS OUT THERE'S A LIMIT TO WHAT YOU CAN DO.
- [00:18:34.367]INTEREST RATES AT ZERO SINCE 2008 AND GOING TO BE AT ZERO FOR
- [00:18:38.700]ANOTHER COUPLE OF YEARS.
- [00:18:40.033]THAT'S AN EXAMPLE OF ANYTHING THAT'S NOT IN ANY TEXTBOOK.
- [00:18:43.400]THEY PRINTED $3 TRILLION TO BUY BONDS.
- [00:18:45.767]THAT'S ALSO NOT IN THE TEXTBOOK.
- [00:18:47.333]AND THEY KEPT THE ECONOMY FROM SLOWING BUT GROWING AT A
- [00:18:55.967]PAINFULLY SLOW RATE.
- [00:18:57.266]EVERY YEAR ABOUT THIS TIME, THEY SAID AS BEN BERNANKE DID
- [00:19:01.533]THE OTHER DAY, WE WERE OVERLY OPTIMISTIC.
- [00:19:07.800]THEY HAVEN'T BEEN GETTING MUCH HELP FROM CONGRESS
- [00:19:10.066]AND THE PRESIDENT.
- [00:19:11.333]SO, I WROTE A BOOK ABOUT THE FEDERAL BUDGET AND THE DEFICIT.
- [00:19:14.834]I BELIEVE IT'S A PROBLEM.
- [00:19:16.033]AISLE TALK ABOUT THAT IN A MINUTE.
- [00:19:17.600]BUT RIGHT NOW, THE DEFICIT IS NOT A PROBLEM.
- [00:19:19.734]IN FACT, THE DEFICIT IS REALLY COMING DOWN TOO FAST.
- [00:19:27.767]THE GOVERNMENT IS PULLING OUT OF THE ECONOMY, SHRINKING THE
- [00:19:32.200]EXPENSES, RAISING TAXES, FASTER THAN THE ECONOMY CAN EXPAND.
- [00:19:36.467]A BIZARRE SITUATION WHERE THE FED IS PUTTING THE FOOT ON THE
- [00:19:40.233]GAS PEDAL ALL THE WAY TO THE FLOOR,
- [00:19:44.300]RELUCTANT TO LIFT IT UP A LITTLE BIT.
- [00:19:45.667]AND THE CONGRESS IS, A, TAPPING ON THE BRAKES, WHICH IS POORLY
- [00:19:49.100]TIMED, AND, B, CREATING UNBELIEVABLE AMOUNTS OF
- [00:19:52.433]UNCERTAINTY ABOUT WHAT THE FUTURE LOOKS LIKE.
- [00:19:59.500]BEN BERNANKE AND OTHER PEOPLE TOLD CONGRESS YOU
- [00:20:04.400]GUYS GOT THIS EXACTLY BACKWARDS.
- [00:20:05.667]THIS IS NOT THE TIME TO BE DOING SHARP CUTS IN SPENDING.
- [00:20:09.967]THIS IS NOT THE TIME TO BE MINDLESS SHARP CUTS IN SPENDING
- [00:20:13.867]THROUGHOUT THE BOARD.
- [00:20:20.233]THIS IS THE ECONOMY TO HELP THE GOVERNMENT PROVIDE.
- [00:20:22.934]WE LEARNED THAT WHEN GOVERNMENT DOESN'T PROVIDE HELP,
- [00:20:27.767]BAD THINGS HAPPEN.
- [00:20:29.100]AT THE SAME TIME, DEALING WITH A REALLY SEVERE AND DANGEROUS LONG
- [00:20:32.500]TERM DEFICIT PROBLEMS, THE ONE THAT WILL HAUNT OUR KIDS AND
- [00:20:35.900]GRANDCHILDREN UNLESS WE DO SOMETHING ABOUT IT.
- [00:20:44.400]IF YOU LOOK AT WHAT'S HAPPENING IN CONGRESS RIGHT NOW, THEY ARE
- [00:20:48.667]HAVING A WONDERFUL ENTERTAINING EPISODE OF THE FISCAL FOLLIES.
- [00:20:53.166]THEY ARE AS I SAID, THE FEDERAL FISCAL YEAR ENDS ON
- [00:20:56.467]SEPTEMBER 30, A NEW ONE BEGINS ON OCTOBER 1.
- [00:20:58.433]AND THEY HAVEN'T AGREED TO APPROPRIATE THE MONEY
- [00:21:00.600]TO KEEP IT GOING.
- [00:21:11.066]THEY'RE TALKING ABOUT 1/3 OF THE FEDERAL SPENDING.
- [00:21:14.734]THE MONEY THAT GOES TO PAY FOR PAPER CLIPS, TO KEEP THE AIR
- [00:21:19.266]TRAFFIC CONTROL SYSTEM WORKING, THE STUFF THAT'S APPROPRIATED
- [00:21:22.567]ANNUALLY, THE STUFF THAT IS A SHRINKING SHARE OF THE BUDGET
- [00:21:25.934]AND A SHRINKING SHARE OF THE ECONOMY.
- [00:21:28.100]AND THEY'RE NOT TALKING ABOUT THE 2/3 OF FEDERAL SPENDING THAT
- [00:21:32.533]GOES OUT THE DOOR EVERY YEAR -- EVERY YEAR --
- [00:21:36.700]WITHOUT A VOTE OF CONGRESS.
- [00:21:45.633]WE'RE TALKING ABOUT MEDICAID, MEDICARE,
- [00:21:50.900]THE FARM REPORT AND THE FEDERAL DEBT.
- [00:21:52.000]THAT SPENDING IS GROWING FASTER THAN THE REVENUES.
- [00:21:54.400]SO IF YOU DREW A LINE, YOU SHOW ONE LINE ANNUALLY APPROPRIATED
- [00:21:59.066]SPENDING GRADUALLY COMING DOWN.
- [00:22:00.533]AND ANOTHER LINE, HEALTH CARE, SOCIAL SECURITY
- [00:22:04.233]INTEREST GOING UP.
- [00:22:05.200]ALL OF THE YAMMERING IN WASHINGTON IS ABOUT
- [00:22:07.300]THAT DECLINING LINE.
- [00:22:08.700]AND NONE OF THAT IS ABOUT THE REAL LONG TERM
- [00:22:12.800]FISCAL PROBLEMS OF THE COUNTRY.
- [00:22:14.500]NOW, THIS IS A PRETTY SERIOUS PROBLEM.
- [00:22:19.500]WE HAVE BEEN LULLED INTO A KIND OF COMPLACENCY
- [00:22:23.333]ABOUT THE DEFICIT.
- [00:22:24.667]WE HAVE HAD THE GOOD FORTUNE TO BE ABLE TO BORROW INCREDIBLE
- [00:22:27.333]SUMS OF MONEY FROM ABROAD AT EXTRAORDINARILY
- [00:22:30.800]LOW INTEREST RATES.
- [00:22:34.400]YOU KNOW, MY DAD BOUGHT A HOUSE IN 1956 AND
- [00:22:39.533]HE HAD A 4.25% MORTGAGE.
- [00:22:40.767]I REMEMBER WHEN I BOUGHT MY FIRST HOUSE, I THINK IT WAS IN
- [00:22:42.867]THE -- IN THE HIGH INTEREST RATES OF THE 1980s,
- [00:22:47.066]I HAD A DOUBLE DIGIT MORTGAGE.
- [00:22:48.433]I THOUGHT I WOULD NEVER, NEVER HAVE A 4.25% MORTGAGE.
- [00:22:52.900]I REFINANCED AT 3.75%.
- [00:22:55.867]RIGHT?
- [00:22:57.133]SO WE ARE AT THIS BIZARRE MOMENT WHERE THE SUBPRIME BORROWER.
- [00:23:13.700]BUT THE 7.28%.
- [00:23:15.900]HISTORICALLY LOW RATES.
- [00:23:16.834]YOU HAVE TO ASK YOURSELF TWO QUESTIONS.
- [00:23:19.066]WELL, ONE IS OBVIOUS.
- [00:23:20.767]NO WONDER THERE'S NO PRESSURE FOR THEM TO
- [00:23:23.633]DO ANYTHING ON THE BUDGET.
- [00:23:24.767]I MEAN, IF PEOPLE ARE WILLING TO LEND YOU MONEY,
- [00:23:27.967]IT'S HARD TO TIGHTEN YOUR BELT.
- [00:23:29.000]YOU CAN TELL ALL OF THE STORIES YOU WANT.
- [00:23:31.367]I'VE DONE MY SHARE OF HOW WE'RE ENDANGERING MY CLUB'S FUTURE.
- [00:23:38.734]DO I CUT SOCIAL SECURITY AND RAISE TAXES MORE AND PUT MY
- [00:23:41.734]REELECTION AT RISK?
- [00:23:43.000]OR DO I KICK THE CAN DOWN THE ROAD TOMORROW AND SURPRISING
- [00:23:48.700]NUMBER OPTING FOR THE SECOND.
- [00:23:50.333]WHY IS IT THAT WE CAN BORROW SO MUCH MONEY?
- [00:23:52.700]WHAT IS THAT ALL ABOUT?
- [00:23:53.667]I THINK THE ANSWER IS PRETTY SIMPLE.
- [00:23:55.533]YOU'RE IN CHINA.
- [00:23:56.567]YOU'RE SITTING ON $3 TRILLION.
- [00:24:11.533]YOU SAY I DON'T THINK WASHINGTON IS SERIOUS ABOUT GETTING THEIR
- [00:24:15.033]MONEY TOGETHER.
- [00:24:15.967]WE SHOULD PUT THE MONEY SOMEWHERE ELSE.
- [00:24:17.767]THEY SAY HERE'S THE CHOICES.
- [00:24:19.033]WE HAVE A LOT OF MONEY, MOST OF THE MARKETS IN
- [00:24:22.533]THE WORLD ARE TOO SMALL.
- [00:24:23.867]WE CAN BUY UP SOME FARM LAND IN THE UKRAINE AND BUY SOME OIL
- [00:24:26.767]PRODUCTION FIELDS IN NIGERIA AND STUFF LIKE THAT.
- [00:24:29.967]BUT FOR OUR FINANCIAL INVESTMENTS,
- [00:24:33.500]WHAT ARE THE CHOICES, JAPAN?
- [00:24:35.033]A SHRINKING SOCIETY, DECLINING POPULATION.
- [00:24:37.734]THEY'RE ROLLING THE DICE TO SEE IF THEY CAN GET THE ECONOMY
- [00:24:40.333]GOING AND PART OF THE STRATEGY IS CHEAPEN THE CURRENCY, MAKE
- [00:24:44.066]THE YEN WORTH LESS EVERY YEAR.
- [00:24:45.734]THAT'S NOT GREAT FOR THE CHINESE CHINESE.
- [00:24:50.633]EUROPE -- EUROPE CAN'T DECIDE IF THEY WANT TO HAVE A CURRENCY.
- [00:24:53.400]WITH ALL OF THE DISCORD AND POLARIZATION IN THE UNITED
- [00:24:55.800]STATES, MOST AMERICANS WITH THE EXCEPTION OF A FEW PEOPLE IN
- [00:24:58.900]NORTHEASTERN COLORADO AND A FEW PEOPLE IN TEXAS STILL WANT TO
- [00:25:02.700]USE THE U.S. DOLLAR AS THEIR CURRENCY.
- [00:25:17.266]THE UNITED STATES IS THE WORLD'S TALLEST MIDGET.
- [00:25:24.400]IF THAT COULD GO ON FOREVER, WE COULD BROTHER THE MONEY AT 2.7%
- [00:25:30.734]FOREVER, EVERYTHING WOULD BE FINE.
- [00:25:43.000]NOT GOING GO ON FOREVER.
- [00:25:44.633]THE CHINESE PEOPLE DESPITE THE REMARKABLE GROWTH ARE POORER
- [00:25:47.400]THAN WHAT WE ARE, ARE NOT GOING TO CONTINUE TO DENY THEMSELVES A
- [00:25:50.800]RISING STANDARD OF LIVING SO THEY CAN PUT THEIR MONEY IN THE
- [00:25:53.934]BANK WHERE THANKS TO THEIR GOVERNMENT THEY GET HARDLY ANY
- [00:25:57.767]INTEREST SO THE GOVERNMENT CAN SEND IT BACK TO US SO WE CAN
- [00:26:01.133]HAVE LOW-COST MORTGAGES.
- [00:26:03.000]THAT'S NOT A GOOD RUN STRATEGY.
- [00:26:04.934]BUT THE SECOND PROBLEM IS THAT OUR DEBT IS GROWING FASTER
- [00:26:09.967]THAN OUR ECONOMY.
- [00:26:11.533]AND THAT'S AN MATHEMATICAL RECIPE FOR DISASTER.
- [00:26:27.533]WE HAD TRILLION DOLLAR DEFICITS FOR FOUR YEARS IN THE WORST OF
- [00:26:30.967]OUR DEPRESSION AND NOTHING SEEMED TO BE GOING WRONG.
- [00:26:33.066]BUT HERE'S ONE WAY TO THINK ABOUT IT.
- [00:26:43.000]TODAY THE FEDERAL GOVERNMENT SPENDS 6% OF
- [00:26:44.700]THE BUDGET ON INTEREST.
- [00:26:47.533]$220 MILLION.
- [00:26:49.266]$220 BILLION ON INTEREST.
- [00:26:51.266]ABOUT HALF OF WHICH IS PAID OVERSEAS TO FOREIGNERS,
- [00:26:54.266]PARTICULARLY IN ASIA.
- [00:27:00.066]PRESIDENT OBAMA'S BUDGET SAYS IF THE ECONOMY PERFORMS AS WELL AS
- [00:27:03.133]HE HOPES OVER THE NEXT DECADE, AND PRESIDENT OF THE UNITED
- [00:27:08.400]STATES NO MATTER WHAT PARTY ALWAYS THINKS THE ECONOMY IS
- [00:27:11.767]GOING TO DO GREAT IN THE NEXT DECADE.
- [00:27:18.834]AND IF CONGRESS SPENT EVERY BIT OF IT IN TAXES, EVEN IF THEY
- [00:27:22.900]DID, INTEREST WILL ACCOUNT FOR 14% OF ALL FEDERAL SPENDING.
- [00:27:27.400]IN 2023.
- [00:27:34.967]WE ARE AT RISK OF HAVING AIRCRAFT CARRIERS, DRONE, RUNS A
- [00:27:41.400]GIANT HEALTH AND RETIREMENT FUND, MAINLY FOR OLD PEOPLE, AND
- [00:27:44.734]PAYS INTEREST TO OUR CREDITOR, HALF OF WHOM ARE OVERSEAS.
- [00:27:49.266]AND EVERYTHING ELSE WILL GET SQUEEZED OUT.
- [00:28:00.233]THAT EVERYTHING ELSE IS ABSOLUTELY EVERYTHING THAT COULD
- [00:28:02.633]BE AN INVESTMENT IN OUR FUTURE, EDUCATION,
- [00:28:08.800]MEDICAL RESEARCH, INFRASTRUCTURE.
- [00:28:10.934]BROADBAND SUBSTANCE.
- [00:28:12.233]ANYTHING THAT YOU THINK MIGHT MAKE IT BETTER FOR OUR KIDS AND
- [00:28:15.200]GRANDCHILDREN, THAT'S WHAT'S GETTING SQUEEZED.
- [00:28:18.100]THAT'S WHAT THEY'RE DOING RIGHT NOW.
- [00:28:19.567]ALL OF THE VENOM THAT THE REBE UNS HAVE ON GOVERNMENT AND SIZE
- [00:28:23.533]OF GOVERNMENT HAS BEEN CONCENTRATED ON 1/3 OF
- [00:28:26.834]FEDERAL SPENDING.
- [00:28:28.000]SOME OF THAT STUFF IS UNNECESSARY AND THE PRESIDENT IS
- [00:28:30.066]MAKING A HUGE MISTAKE BY TELLING US THAT THE WORLD WOULD END IF
- [00:28:34.033]WE HAD THE SEQUESTER.
- [00:28:35.367]WE HAD THE SEQUESTER, THE ACROSS THE BOARD SPENDING CUTS AND MOST
- [00:28:39.367]PEOPLE WHO DIDN'T WORK FOR THE FEDERAL GOVERNMENT
- [00:28:42.100]DIDN'T NOTICE.
- [00:28:43.233]I OFTEN THOUGHT HE MADE A SERIOUS POLITICAL MISTAKE.
- [00:28:44.867]WHAT HE SHOULD HAVE DONE IS FOUND WAY TO CONCENTRATE ALL OF
- [00:28:47.967]THE SPENDING CUTS ON THE AIRPORT SECURITY GUARDS SO THE LINE
- [00:28:57.734]WOULD HAVE BEEN IN TERMABLE.
- [00:29:03.233]IT'S NOT AN ACCIDENT THAT THE AIR TRAFFIC CONTROLLERS WERE
- [00:29:07.500]QUICKLY EXEMPT FROM THE SEQUESTER.
- [00:29:09.533]THERE'S A LOT OF SPENDING THERE.
- [00:29:11.567]THERE'S PROBABLY BELT TIGHTENING THAT'S TAKING PLACE BECAUSE OF
- [00:29:16.233]THIS ATTEMPT TO CONTROL GOVERNMENT SPENDING.
- [00:29:19.000]BUT IT'S NOT ADDRESSING WHERE THE REAL SPENDING PROBLEMS ARE,
- [00:29:22.467]PARTICULARLY IN HEALTH CARE.
- [00:29:26.400]IN 1960, 10% OF FEDERAL SPENDING WENT TO HEALTH CARE, BEFORE
- [00:29:30.333]MEDICARE AND MEDICAID WERE SIGNED INTO LAW
- [00:29:34.166]BY LYNN DON JOHNSON.
- [00:29:34.633]TODAY IS 25%.
- [00:29:35.700]IN TEN YEAR, THE CONGRESSIONAL BUDGET OFFICE
- [00:29:38.233]TELLS US IT WILL BE 33%.
- [00:29:39.633]THAT'S EVEN WITH THE SLOWDOWN IN HEALTH CARE COSTS AND EVEN WITH
- [00:29:42.867]THE CHANGES THAT CONGRESS HAS PUT IN PLACE.
- [00:29:45.800]SOME IN OBAMA CARE, SOME IN DEFICIT REDUCTION PROGRAMS.
- [00:29:51.133]SO WE -- WE ARE GOING THROUGH THIS CHARADE IN WASHINGTON
- [00:29:54.900]DEALING WITH SOMETHING THAT ISN'T THE PROBLEM NO TORED
- [00:29:57.300]CREATE A LOT OF NOISE SO THAT WE DON'T -- THEY DON'T WANT
- [00:30:00.033]TO DEAL WITH THE PROBLEM.
- [00:30:00.934]AND IT'S INCREDIBLY DEPRESSING.
- [00:30:04.066]I MEAN, TODAY, YOU PROBABLY DIDN'T NOTICE, BUT TODAY IS THE
- [00:30:08.500]96th ANNIVERSARY OF THE ORIGINAL DEBT CEILING.
- [00:30:14.633]IN 1917, THE FEDERAL GOVERNMENT WAS FILING A LOT OF
- [00:30:19.467]MONEY TO FINANCE WORLD WAR I.
- [00:30:21.100]UNTIL THIS POINT, CONGRESS HAD TO APPROVE EVERY SINGLE BOND
- [00:30:24.266]ISSUE THAT THE TREASURY DID.
- [00:30:25.500]TO MAKE THINGS EASIER, THEY THOUGHT, THEY PUT A LIMIT ON
- [00:30:28.900]FEDERAL BORROWING AND THEY ALLOWED THE TREASURY MORE
- [00:30:32.300]FLEXIBILITY ABOUT WHEN TO BORROW AND HOW MUCH AT TWO
- [00:30:35.066]YEARS AND HOW MUCH AT FIVE YEARS AND SO FORTH.
- [00:30:38.200]BUT THAT DEBT CEILING HAS BECOME A KIND OF CONVENIENT LEVER FOR
- [00:30:43.100]ONE PARTY TO USE AGAINST THE PARTY OF THE PRESIDENT.
- [00:30:46.133]THIS IS A BIPARTISAN SIN.
- [00:30:50.000]BARACK OBAMA VOTED AGAINST RAISING THE DEBT CEILING WHEN
- [00:30:53.200]GEORGE BUSH WAS PRESIDENT.
- [00:30:54.667]BUT WE HAVE NOW GOT ON THE THE POINT WHERE THEY ARE USING THE
- [00:31:00.767]DEBT CEILING NOT TO FORCE CHANGES IN ECONOMIC POLICY THAT
- [00:31:03.834]ARE RELATED TO DEBT AND DEFICIT, BUT BASICALLY TO SCORE POINTS
- [00:31:07.967]AGAINST THE PRESIDENT.
- [00:31:10.734]SO THE MOVE TO ATTACH TO THE DEBT CEILING SOME PROVISIONS
- [00:31:14.800]THAT WILL DEFUND OR DEFER OBAMA CARE ARE A WAY TO STICK
- [00:31:18.467]IT TO PRESIDENT OBAMA.
- [00:31:20.867]YOU CAN HAVE YOUR VIEWS AND I SUSPECT A FEW OF YOU DO
- [00:31:25.633]ON THE KEYSTONE PIPELINE.
- [00:31:27.000]I WAS THINKING OF TAKING A VOTE HERE ON THE KEYSTONE PIPELINE.
- [00:31:30.200]I WAS TOLD IT MIGHT BE DIVISIVE SO I DECIDED NOT DO IT.
- [00:31:33.500]BUT THE REPUBLICANS ARE THINKING OF ATTACHING THE KEYSTONE
- [00:31:37.333]PIPELINE FORCING THE APPROVAL OF THE KEYSTONE PIPELINE
- [00:31:40.467]TO THE DEBT CEILING, RIGHT?
- [00:31:41.867]NOW IT'S JUST -- THAT'S JUST A STUNT.
- [00:31:44.500]THAT IS NOT DEALING WITH RISING HEALTH CARE COSTS.
- [00:31:49.133]THAT'S NOT DEALING WITH A PATENT SYSTEM THAT ISN'T EQUIPPED
- [00:31:52.433]FOR THE 21st CENTURY.
- [00:31:53.734]THAT'S NOT DEALING WITH HOW DO WE MAKE THE K THROUGH 12 SCHOOLS
- [00:31:57.800]BETTER SO OUR KIDS ARE ABLE TO COMPETE WITH THE CHINESE.
- [00:32:01.700]THAT IS NOT DEALING WITH THE FACT THAT WE HAVE MADE PROMISES
- [00:32:05.100]TO PAY BENEFITS FOR DECADES TO COME THAT ARE GREATER FOR THE
- [00:32:09.233]TAXES THAT THE CURRENT TAX CODE BRINGS IN.
- [00:32:11.000]SO THEY AREN'T DEALING WITH ANY OF THE REAL PROBLEMS.
- [00:32:15.467]AND I -- I -- AS YOU CAN TELL, IT'S STARTING TO MAKE ME ANGRY.
- [00:32:21.000]EVERY ONCE IN A WHILE I REMEMBER -- I THINK I'M ANGRY.
- [00:32:25.734]YOU OUGHT TO DO SOMETHING ANT THIS.
- [00:32:27.633]I THINK I'M LUCKY, I WORK FOR "THE WALL STREET JOURNAL."
- [00:32:31.133]I CAN WRITE A COLUMN.
- [00:32:32.133]I FEEL BETTER FOR A DAY.
- [00:32:33.934]BUT IT DIDN'T HAVE ANY INFLUENCE.
- [00:32:35.400]SO I THOUGHT I'D COME OUT HERE AND TALK TO YOU.
- [00:32:37.300]SO THERE'S A REASON FOR THAT.
- [00:32:38.767]I GET TO THAT IN AN END.
- [00:32:41.934]I HOPE YOU HAVE SOME QUESTIONS.
- [00:32:43.734]I HOPE YOU HAVE QUESTIONS BECAUSE I ENJOY ANSWERING THEM.
- [00:32:48.900]THE PEOPLE WE ELECT TO CONGRESS ARE THE MOST PART NOT IDIOTS.
- [00:32:56.233]THERE'S A FEW.
- [00:32:58.033]AND THEY'RE NOT BAD PEOPLE FOR THE MOST PART, THERE'S A FEW.
- [00:33:01.633]AND NOT ALL OF THEM HAVE SOLD OUT TO CAMPAIGN CONTRIBUTIONS.
- [00:33:06.200]ALTHOUGH SOME HAVE.
- [00:33:07.467]SO AND THE PRESIDENT -- HE SEEMS LIKE A SMART GUY,
- [00:33:11.233]WELL INTENTIONED.
- [00:33:12.066]CAN CERTAINLY GIVE A GREAT SPEECH.
- [00:33:14.467]SO HOW DO WE GET TO THIS POINT.
- [00:33:16.667]WHAT'S WRONG?
- [00:33:17.100]WHAT'S BROKEN?
- [00:33:19.200]WASHINGTON?
- [00:33:19.967]WHY DOES IT LOOK SO BAD.
- [00:33:21.300]THE FIRST THING I ALWAYS SAY IS EVERYBODY THINKS THINGS ARE
- [00:33:26.867]WORSE NOW THAN IN THE GOOD OLD DAYS.
- [00:33:29.066]I RECALL THERE WERE SOME PRETTY BAD OLD DAYS IN WASHINGTON.
- [00:33:34.633]YOU KNOW, IN THE END OF THE 18th CENTURY WHEN OUR FOUNDERS WHO WE
- [00:33:38.667]NOW REVERE FOR BEING THE WONDERFULFULLY THOUGHTFUL PEOPLE
- [00:33:42.567]WHO WROTE THINGS LIKE THE FEDERALIST PAPERS, THEY WERE
- [00:33:45.900]BUSY BUYING NEWSPAPERS TO ACCUSE THE OTHER GUY OF
- [00:33:51.000]ADULTERY AND HAVING DUELS.
- [00:33:52.333]I TOLD THE CLASS THIS MORNING, REMEMBER,
- [00:33:56.166]ALEXANDER HAMILTON DIED IN A DUEL.
- [00:33:57.433]WE HAVEN'T ONE ONE OF THOSE, THOUGH I UNDERSTAND FOX NEWS IS
- [00:34:00.600]TRYING TO SPONSOR ONE.
- [00:34:03.066]BECAUSE THEY FIGURE IT WOULD GET GOOD RATINGS.
- [00:34:05.567]AND RIGHT NOW, YOU COULD PROBABLY GET A GOOD DUEL GOING
- [00:34:08.632]WITH A BUNCH OF REPUBLICANS IF TED CRUZ WAS ON THE OTHER SIDE.
- [00:34:13.734]PARTICULARLY IF THEY DIDN'T GIVE HIM A GUN.
- [00:34:18.500]BUT SO WHAT IS GOING ON HERE?
- [00:34:21.734]WELL, ONE THING IS THAT WE'RE COMPLACENT.
- [00:34:26.266]THE FACT IS THAT WE GOT THROUGH THIS CRISIS.
- [00:34:31.166]CRISES HAVE A WAY OF FORCING PEOPLE TO COMPROMISE AND DO
- [00:34:35.065]THINGS THEY FEEL UNCOMFORTABLE WITH.
- [00:34:36.699]THE CRISIS IS EASE.
- [00:34:38.300]WE'RE COMPLACENT BUT WE'RE SETTLING FOR SOMETHING FAR LESS
- [00:34:41.199]THAN WE DESERVE.
- [00:34:42.467]WE DESERVE LOWER THAN 7.3% UNEMPLOYMENT.
- [00:34:47.166]WE DESERVE MEDIAN INCOME RISING, NOT FALLING.
- [00:34:56.967]WE DESERVE A COUNTRY WHERE KIDS WHO GRADUATE FROM COLLEGE MAY
- [00:35:00.734]HAVE A HOPE TO GO TO COLLEGE THAT PAYS THEM ENOUGH TO PAY
- [00:35:04.000]OFF THEIR STUDENT LOANS.
- [00:35:05.300]WE SHOULDN'T SETTLE FOR THIS, BE UH THE AIR OF CRISIS HAS
- [00:35:08.467]DISSIPATED WHICH IS WHAT ALLOWS THEM TO HAVE THE POLITICAL
- [00:35:11.834]THEATER ON THE OBAMA CARE AND THE KEYSTONE PIPELINE, INSTEAD
- [00:35:15.934]OF DOING SOMETHING SERIOUS.
- [00:35:17.333]THE SECOND THING IS CONGRESS IN A WAY REFLECTS THE POLARIZATION
- [00:35:20.133]OF THE AMERICAN PEOPLE.
- [00:35:31.800]WE'RE WIDELY DIVIDED.
- [00:35:34.133]IT'S AMAZING HOW GAY MARRIAGE HAS CHANGED.
- [00:35:36.734]WE'RE EVENLY DIVIDED.
- [00:35:38.300]CONGRESS REFLECTED THAT POLARIZATION.
- [00:35:40.667]THE WAY WE LIVE NOW, WE TEND TO LIVE MORE THAN WE DID WITH
- [00:35:43.600]PEOPLE WHO HAVE SIMILAR INCOMES AND SIMILAR POLITICAL BELIEFS.
- [00:35:50.133]WE MAY LIVE MORE WITH PEOPLE WHO HAVE RACES AND ETHNICITIES BUT
- [00:35:54.900]OUR CONGRESSIONAL DISTRICTS ARE MUCH MORE HOMOGENEOUS.
- [00:35:57.900]WHEN PEOPLE DISAGREE ABOUT SOMETHING VERY STRONG LIP AND
- [00:36:00.834]THEY FACT P FIGHT A DRAW, YOU GET THE VERY CLOSE ELECTIONS
- [00:36:03.934]LIKE THE ONES WE HAVE HAD.
- [00:36:06.200]AND IT'S HARD TO MOVE ON A COMPROMISE.
- [00:36:08.600]IT'S PARTICULARLY HARD TO MOVE ON A COMPROMISE WHEN BOTH
- [00:36:12.233]PARTIES IN CONGRESS THINK COMPROMISE IS A DIRTY WORD.
- [00:36:15.200]WE HAVE FOUND OURSELVES WITH A VERY STRANGE EVOLUTION OF
- [00:36:18.667]OUR POLITICAL SYSTEM.
- [00:36:24.233]WE HAVE THE WORST OF A PRESIDENTIAL SYSTEM AND A
- [00:36:29.367]PARLIAMENTARY SYSTEM.
- [00:36:31.567]A PARTY WINS, THE PRIME MINISTER HAS A PROGRAM.
- [00:36:34.533]THE LEGISLATURE PASSES IT, IF THEY DON'T PASS IT,
- [00:36:39.533]THEY HAVE ANOTHER ELECTION.
- [00:36:41.266]WE HAVE A DIFFERENT SYSTEM SET UP BY THE FOUNDERS WITH A
- [00:36:44.000]DIVIDED GOVERNMENT.
- [00:36:45.133]AND IT REQUIRES SOME COMMON PURPOSE AND COMPROMISE.
- [00:36:49.100]IT WAS DESIGNED TO FORCE COMPROMISE.
- [00:36:51.533]IT ISN'T WORKING AND WE HAVE EITHER PARTY HAS ENOUGH VOTES,
- [00:36:55.567]PARTICULARLY IN THE SENATE, TO STOP THE OTHER PARTY FROM
- [00:36:57.800]GETTING ITS WAY.
- [00:36:59.867]SO THEY FOUGHT THEMSELVES TO A DRAW.
- [00:37:01.467]SO PART OF IT IS STRUCTURAL.
- [00:37:04.367]IT WILL PASS, WE'LL FIGURE SOMETHING OUT.
- [00:37:08.100]IT WAS INTERESTING THAT THE SENATE HAD A MELTDOWN BEFORE
- [00:37:10.400]THEY FOUND A WAY TO HAVE CONFIRMATION
- [00:37:15.734]VOTES ON APPOINTEES.
- [00:37:16.834]THE BIG CONTROVERSY IN WASHINGTON THAT A NUMBER OF
- [00:37:18.533]SENATORS WOULD STOP SOMEONE COMING FOR A VOTE, NOT VOTE
- [00:37:20.900]AGAINST THEM, BUT STOP A VOTE FROM COMING UP.
- [00:37:24.266]SO WE HAVE THE STRUCTURAL PROBLEM.
- [00:37:26.767]WE HAVE, I THINK, AN UNFORTUNATE SITUATION WITH THE WAY WE DRAW
- [00:37:30.367]CONGRESSIONAL DISTRICTS.
- [00:37:32.533]THE ART AND SCIENCE OF DRAWING CONGRESSIONAL DISTRICTS HAS MADE
- [00:37:36.100]MOST MEMBERS OF CONGRESS SAFE BETS FOR RE-ELECTION.
- [00:37:39.533]IF THEY'RE WORRIED, THEY'RE WORRIED ABOUT A PRIMARY
- [00:37:44.834]CHALLENGE, DEMOCRATS ON THE LEFT.
- [00:37:46.700]REPUBLICANS MUCH MORE FROM THE RIGHT.
- [00:37:49.700]SO THEY DON'T HAVE TO MOVE TO THE CENTER OR COMPROMISE IN
- [00:37:52.967]ORDER TO GET RE-ELECTED, SO THEY DON'T.
- [00:37:55.600]AND IN SOME REASONS, WE HAVE A BIT OF A MISMATCH
- [00:37:59.400]BETWEEN THE TWO PARTIES.
- [00:38:00.734]THE DEMOCRATIC PARTY IS NOW MORE OF WHAT YOU MIGHT CALL A
- [00:38:03.967]PRESIDENTIAL POLICY.
- [00:38:05.266]THEY ARE LOOKING TO GET -- TO HAVE POSITIONS TO APPEAL TO THE
- [00:38:08.600]MOST NUMBER OF PEOPLE SO THEY CAN WIN THE MOST NUMBER OF
- [00:38:13.266]VOTES, PARTICULARLY IN PRESIDENTIAL ELECTIONS.
- [00:38:15.800]THE REPUBLICANS IN CONTRAST ARE LIKE A CONGRESSIONAL PARTY.
- [00:38:19.734]EACH MEMBER IS MORE INTERESTED IN WINNING RE-ELECTION THAN IN
- [00:38:22.867]DOING THINGS THAT WOULD MAKE IT EASY FOR THE REPUBLICANS TO WIN
- [00:38:27.567]BACK THE WHITE HOUSE.
- [00:38:28.767]YOU CAN SEE THAT DYNAMIC CLEARLY NOW IN TWO RESPECTS.
- [00:38:31.967]YOU HAVE A NUMBER OF REPUBLICANS, KARL ROVE, FOR
- [00:38:37.000]INSTANCE, JUD GREG, THE FORMER SENATOR FROM NEW HAMPSHIRE NOW A
- [00:38:41.967]WALL STREET LOBBYIST.
- [00:38:44.066]THEY THINK THE REPUBLICANS ARE NUTS TO DO THE SHOWDOWN.
- [00:38:50.800]JUD GRAY CALLED IT PLAYING RUSSIAN ROULETTE WITH A BULLET
- [00:38:54.567]IN EVERY CHAMBER, A METAPHOR I LOVE AND TENDED
- [00:38:57.967]TO USE OVER AND OVER AGAIN.
- [00:38:59.200]BUT IF YOU'RE AN INDIVIDUAL MEMBER OF CONGRESS AND YOU'RE
- [00:39:01.700]WORRIED ABOUT BEING PRIMARIED BY A TEA PARTY GUY ON YOUR RIGHT OR
- [00:39:04.767]A WOMAN ON YOUR RIGHT, THIS MAY BE A LOGICAL THING.
- [00:39:12.066]204 MEMBERS OF THE HOUSE WERE REELECTED BY MORE THAN
- [00:39:17.066]TEN PERCENTAGE POINTS.
- [00:39:18.333]140 OF THEM WERE RE-ELECTED BY A MARGIN OF MORE THAN 20
- [00:39:23.066]PERCENTAGE POINTS.
- [00:39:24.367]THEY AREN'T LOOKING TO WIN VOTES OF INDEPENDENCE AND DEMOCRATS.
- [00:39:28.133]THEY HAVE ENOUGH OF A VOTE IN THEIR DISTRICT TO GUARANTEE
- [00:39:31.200]ELECTION UNLESS THEY GET A PRIMARY CHALLENGE.
- [00:39:33.533]SO THAT STRUCTURE HAS LED CONGRESS TO BE POLARIZED.
- [00:39:37.633]IT'S AN INTRIGUING EXPERIMENT IN CALIFORNIA WHERE THEY CHANGED
- [00:39:40.867]REDISTRICTING, IT'S DONE BY THE INDEPENDENT COMMISSION, NOT BY
- [00:39:43.834]THE LEGISLATURE ANYMORE.
- [00:39:45.166]AND WHERE THEY DON'T HAVE PARTISAN PRIMARIES, SO YOU CAN
- [00:39:47.700]END UP WITH TWO DEMOCRATS OR TWO REPUBLICANS RUNNING AGAINST EACH
- [00:39:50.467]OTHER IF THEY'RE THE TWO BIGGEST VOTE GETTERS IN THE PRIMARY.
- [00:39:55.633]THAT MAY SOME DAY BEGIN TO CHANGE SOME OF THIS UNHEALTHY
- [00:39:59.533]DYNAMIC, I THINK, WHICH HAS LED THE CONGRESS TO BE
- [00:40:07.600]DYSFUNCTIONAL, RIGHT?
- [00:40:08.934]IT'S TO A POINT THAT NO MATTER WHAT YOUR POLITICS, LIBERAL OR
- [00:40:12.400]CONSERVATIVE, YOU SHOULD BE ANGRY AND DISGUSTED THAT
- [00:40:14.734]CONGRESS CAN'T DO BUSINESS.
- [00:40:15.500]AS YOU CAN TELL, I AM.
- [00:40:18.200]AND THERE'S TWO OTHER ELEMENTS OF THIS.
- [00:40:19.900]ONE IS LEADERSHIP.
- [00:40:22.800]NOW, I'M KIND OF JADED ABOUT COMPLAINING ABOUT
- [00:40:26.633]THE LACK OF LEADERSHIP.
- [00:40:27.967]I IMAGINE THAT SOME "WALL STREET JOURNAL" REPORTER GAVE A SPEECH
- [00:40:30.066]HERE IN 1953 AND COMPLAINED ABOUT THE LACK OF LEADERSHIP
- [00:40:34.433]IN WASHINGTON.
- [00:40:35.433]SO I'M -- I'M QUITE COG ANY ZANNED OF THAT.
- [00:40:37.900]UH BE I THINK WE ARE MISSING SOME OF THOSE UNUSUAL PEOPLE WHO
- [00:40:41.166]CAN KIND OF STAND ABOVE THE FRAY, BLOW THE WHISTLE, AND SAY,
- [00:40:47.867]OKAY, EVERYBODY DONE FIGHTING?
- [00:40:49.300]LET'S GET TOGETHER IN MY OFFICE AND FIGURE OUT HOW
- [00:40:52.200]TO MAKE THIS WORK.
- [00:40:53.500]ARE GIANTS IN THE SENATE, SOME REPUBLICANS, SOME DEMOCRATS.
- [00:40:57.834]PEOPLE LIKE BOB DOLE, GEORGE MITCHELL, DAN ROS COW SKI,
- [00:41:04.867]ROBERT PACKWOOD, TED KENNEDY WHO DILL DEALS WITH
- [00:41:08.266]ORRIN HATCH OF ALL PEOPLE.
- [00:41:09.333]THE PEOPLE WHO HAD THE PERSONAL CHARISMA.
- [00:41:11.934]YOU KNOW THEM IN YOUR LIFE, YOUR SPORTS TEAM, YOUR BUSINESS.
- [00:41:15.533]PEOPLE WHO SOMEHOW EVERYBODY WANTS TO FOLLOW AND WHO GO WALK
- [00:41:18.567]THE PLANK BECAUSE I KNOW THAT WOMAN OR MAN IS CORRECT.
- [00:41:22.333]AND I KNOW THAT PERSON WOULD DO IT FOR ME.
- [00:41:25.166]WE DON'T SEE TO HAVE THAT KIND OF LEADERSHIP.
- [00:41:27.800]I'VE BEEN DISAPPOINTED THAT BARACK OBAMA HASN'T BEEN THAT
- [00:41:30.800]KIND OF LEADER EITHER.
- [00:41:33.000]HE JUST DIDN'T SEEM TO HAVE THE CAPACITY THAT BILL CLINTON OR
- [00:41:37.667]RONALD REAGAN DID, TELL US WE HAD PROBLEMS, PAINT A PICTURE OF
- [00:41:40.800]HOW IT COULD BE BETTER AND SAY EVERYBODY FOLLOW ME.
- [00:41:44.633]GAVE A GREAT SPEECH THEN TURN AROUND AND NO ONE IS FOLLOWING.
- [00:41:48.500]THEN IT COMES TO THE LAST POINT, AND I'M AT THE END,
- [00:41:53.767]SO WRITE THOSE QUESTIONS.
- [00:41:55.467]IT'S YOUR FAULT AND MINE.
- [00:41:58.767]THIS IS A DEMOCRACY.
- [00:42:01.467]AND THERE'S SOMETHING WEIRD ABOUT A COUNTRY IN WHICH THE
- [00:42:05.233]POLLS TELL US THAT ONLY 10% OF THE PEOPLE HAVE
- [00:42:10.400]CONFIDENCE IN CONGRESS.
- [00:42:11.233]WE IN JOURNALISM LOVE THESE POLLS.
- [00:42:13.800]NO MATTER HOW BAD THE MISTRUST OF THE MEDIA,
- [00:42:18.533]WE'RE ALWAYS AHEAD OF CONGRESS.
- [00:42:19.767]SO 10% OF THE PEOPLE SAY THEY HAVE SOME OR A GREAT DEAL OF
- [00:42:24.867]CONFIDENCE IN PEOPLE -- YET WE KEEP RE-ELECTED THESE PEOPLE.
- [00:42:27.800]SO WHAT IS THAT ALL ABOUT?
- [00:42:31.100]I THINK PEOPLE ASK ME OFTEN, WHEN WILL THIS CHANGE?
- [00:42:33.900]WHEN WILL WE GET SOME MORE RATIONAL POLICY
- [00:42:39.700]MAKING IN WASHINGTON?
- [00:42:40.667]WHEN WILL WE DEAL WITH A LONG TERM DEFICIT.
- [00:42:43.700]WHEN WILL WE DO SOMETHING ABOUT CLIMATE CHANGE AND WHEN WILL WE
- [00:42:48.033]DO SOMETHING ABOUT THE EDUCATION SYSTEM SO OUR KIDS
- [00:42:50.900]CAN COMPETE WITH THE CHINESE.
- [00:42:52.567]THERE ARE THREE OPTIONS.
- [00:42:53.600]ONE IS A CRISIS.
- [00:42:54.867]I HOPE WE DON'T HAVE ONE, WE MIGHT.
- [00:42:56.967]ANYBODY WHO PREDICTS A CRISIS IS PROBABLY RIGHT.
- [00:42:59.567]ASK THEM TO PUT A DATE ON IT, THOUGH, BECAUSE NO ONE KNOWS
- [00:43:02.734]WHEN IT'S GOING TO COME.
- [00:43:03.867]I DON'T KNOW WHEN IT IS.
- [00:43:06.867]THE SECOND THING, COULD BE AN OUTBREAK OF LEADERSHIP.
- [00:43:10.133]I DON'T KNOW IF THAT'S MORE OR LESS LIKELY THAN A CRISIS.
- [00:43:13.367]BUT I'M NOT PUTTING A LOT OF MY IRA ON THAT OUTCOME.
- [00:43:16.934]AND THE THIRD THING IS US.
- [00:43:19.734]PEOPLE JUST GET ANGRY ENOUGH TO VOTE FOR PEOPLE WHO DO
- [00:43:22.233]SOMETHING -- ANYTHING, TO GET THE COUNTRY GOING IN
- [00:43:26.767]THE RIGHT DIRECTION.
- [00:43:27.734]SO I'VE BEEN HARD ON WASHINGTON HERE.
- [00:43:31.000]AND I -- UH'M TELLING YOU AS I SAID AT THE BEGINNING,
- [00:43:34.400]IT LOOKS WORSE UP CLOSE.
- [00:43:35.233]IT REALLY DOES.
- [00:43:39.266]BUT, I REMEMBER EVERY DAY THAT THIS IS A RESILIENT COUNTRY AND
- [00:43:45.100]THIS IS THE WORLD'S LARGEST AND OLDEST DEMOCRACY.
- [00:43:50.066]AND WE CAN CHANGE THIS STUFF IF WE WANT TO.
- [00:43:53.567]IT WON'T BE EASY AND THERE'S 100 OBSTACLES IN THE WAY,
- [00:43:58.734]BUT IN THE END, IT'S ON US.
- [00:44:00.166]AND IT'S MOSTLY ON THOSE OF YOU OUT THERE WHO ARE STUDENTS AT
- [00:44:03.033]THE UNIVERSITY OF NEBRASKA.
- [00:44:06.300]YOU KNOW, I'M 60 YEARS OLD, 59, CLOSE ENOUGH TO 60.
- [00:44:13.200]AND AND I AM ALARMED AT THE STATE OF OUR ECONOMY AND THE
- [00:44:17.700]STATE OF OUR POLITICS.
- [00:44:20.166]AND I'M REALLY WORRIED ABOUT THE NEXT DECADE.
- [00:44:25.734]BUT I HAVE THIS INCREDIBLY STRONG FAITH
- [00:44:30.867]IN THE FUTURE OF AMERICA.
- [00:44:31.533]THERE IS ONLY ONE REASON.
- [00:44:32.834]I HAVE TWO KIDS IN THEIR 20s AND THEY AND THEIR FRIENDS ARE
- [00:44:35.900]SMARTER AND MORE ENERGETIC AND MORE COMMITTED THAN MY
- [00:44:40.467]GENERATION WAS AND NO ONE TOLD THEM THAT THEY COULDN'T FIX IT.
- [00:44:44.433]SO I AME NOWHERE MOUSELY CONFIDENT ABOUT
- [00:44:49.433]THE FUTURE OF THIS COUNTRY.
- [00:44:50.533]BUT IT'S UP TO US TO MAKE SURE THAT WE CLAIM THAT.
- [00:44:55.266]THANK YOU VERY MUCH.
- [00:44:59.834]APPLAUSE APPLAUSE PLAUTZ
- [00:45:08.000][ APPLAUSE ]
- [00:45:11.767]>> IF YOU HAVE QUESTIONS, I HOPE YOU DO, PLEASE GET A CARD FROM
- [00:45:15.333]ONE OF THE USHERS.
- [00:45:16.800]WRITE YOUR QUESTION QUICKLY AND GIVE IT BACK TO THE USHERS AND
- [00:45:19.700]THEY WILL BE BROUGHT OVER SO THAT WE CAN ASK THOSE QUESTIONS.
- [00:45:24.000]IN THE MEANTIME, LET ME START WITH A QUESTION THAT COMES FROM
- [00:45:31.467]ONE OF THE STUDENTS IN THE THOMPSON LEARNING COMMUNITY.
- [00:45:34.166]THE UNITED STATES IS ONE OF THE TWO COMPANIES WITH
- [00:45:37.633]A DEBT CEILING.
- [00:45:38.900]WHY ARE WE SO CONCERNED ABOUT A DEBT CEILING WHEN OTHER
- [00:45:41.567]COUNTRIES ARE SPENDING A LARGER PERCENTAGE OF THEIR
- [00:45:45.734]INCOME AS INTEREST.
- [00:45:46.867]HOW DO WE SEE THE DEBT CEILING AS -- I CAN'T EVEN
- [00:45:54.166]READ THE WORDING HERE.
- [00:45:56.767]THE QUESTION IS GOOD ENOUGH.
- [00:45:58.033]>> THE DEBT CEILING, AS I SAID, IS AN HISTORICAL ACCIDENT.
- [00:46:02.233]IT COMES FROM THIS ATTEMPT TO MAKE THE -- MAKE IT EASIER FOR
- [00:46:05.533]THE TREASURY TO BORROW.
- [00:46:07.233]IT'S BEEN CONTENTIOUS IN THE PAST.
- [00:46:10.700]IF YOU EVER WANT TO -- IF YOU WANT TO HAVE A FUND -- BUT I
- [00:46:15.600]REALIZE IT'S GOING SOUND NERDIER THAN I AM.
- [00:46:19.867]IF YOU GOOGLE YOUTUBE, EDWARD DIRKSEN AND THE DEBT CEILING,
- [00:46:24.834]THERE'S A GREAT MEN AND A HALF TV THING THAT WHATEVER DIRKSEN
- [00:46:29.467]DOES, HE'S THE REPUBLICAN OF THE SENATE 100 YEARS AGO.
- [00:46:33.667]HE WAS NOT MADE FOR TV.
- [00:46:34.900]BUT HE TALKED ABOUT THE DEBT CEILING AND IT'S JUST A RIOT.
- [00:46:39.834]AND IT'S WORTH THE MINUTE AND A HALF.
- [00:46:42.467]PROBABLY NOT WORTH 2 1/2.
- [00:46:44.600]SO IT'S -- IT'S STUPID.
- [00:46:47.266]IT'S LIKE SAYING I BOUGHT ALL OF THIS STUFF AT THE STORE AND I
- [00:46:51.600]CHARGE IT TO MY CREDIT CARD.
- [00:46:54.400]BUT NOW I GET THE BILL AND I SAY, WELL, THE BILL ADDS UP TO
- [00:46:58.734]$1200, BUT I WANT TO SET A LIMIT AT $1100.
- [00:47:02.667]IT'S THE THE DEBT OF THE UNITED STATES IS THE RESULT OF BILLS
- [00:47:07.200]PASSED BY CONGRESS TO SPEND MONEY IN EXCESS OF THE REVENUE
- [00:47:11.700]OF THE TAX CODE THAT THEY WROTE.
- [00:47:15.066]SO THERE IS NO REASON TO HAVE A DEBT CEILING.
- [00:47:18.900]AND FOR SOME TIME, CONGRESS WINKED AND NODDED AND RAISED
- [00:47:22.500]IT WHEN NECESSARY.
- [00:47:23.767]AND IT'S NOT EVEN A PROBLEM, FRANKLY, TO HAVE A RISING DEBT,
- [00:47:26.633]AS LONG AS THE DEBT RISES MORE SLOWLY THAN THE OVERALL ECONOMY,
- [00:47:31.300]WE CAN DO OKAY.
- [00:47:33.734]BUT IT'S A LEVER.
- [00:47:34.967]IT'S A LEVER FOR THE PARTY IN CONGRESS, NOT THE ONE OF THE
- [00:47:38.934]PRESIDENT'S, TO FORCE HIM DO THINGS HE DOESN'T WANT.
- [00:47:41.000]THAT WAS KIND OF THE GAME IN WASHINGTON UNTIL 2011 WHEN
- [00:47:45.100]PEOPLE STARTED TO WORRY WHAT IF THEY DON'T DO IT.
- [00:47:49.467]IF THEY DON'T DO IT, THE GOVERNMENT RUNS OUT OF CASH.
- [00:47:52.300]IF THE GOVERNMENT RUNS OUT OF CASH SOMETIME BETWEEN THE END OF
- [00:47:55.266]OCTOBER AND THE END OF NOVEMBER, THEY WON'T HAVE ENOUGH MONEY TO
- [00:47:57.900]PAY SOCIAL SECURITY, MEDICARE, INTEREST ON THE DEBT, THE BIG
- [00:48:00.633]PAYMENT DUE ON NOVEMBER 1.
- [00:48:02.867]I WOULDN'T WORRY ABOUT IT SO MUCH.
- [00:48:06.400]THEY'RE GOING TO DO IT RAISE IN TIME, A LOT OF DRAMA.
- [00:48:09.066]IT'S A COMPLETE DISTRACTION.
- [00:48:11.967]IF THEY WERE USING IT TO GET BETTER POLICY,
- [00:48:16.166]I MIGHT BE OKAY ABOUT IT.
- [00:48:16.667]BUT THEY'RE NOT.
- [00:48:19.000]>> SECOND QUESTION FROM ANOTHER STUDENT, SHOULD A LARGE
- [00:48:21.967]GOVERNMENT INTERVENTION IN THE ECONOMY INVOLVING LARGE AMOUNTS
- [00:48:26.467]OF RESEARCH AND DEVELOPMENT FUNDING AND INFRASTRUCTURE
- [00:48:30.166]EXPANSION SERVE US BETTER THAN CURRENT ECONOMIC
- [00:48:35.734]POLL SICHLT MAYBE?
- [00:48:37.066]I'M CONCERNED ABOUT THIS LARGE GOVERNMENT INTERVENTION THING.
- [00:48:40.567]LAFRRY SUMMERS WHO IS STILL A SMART GUY EVEN IF HE WON'T BE
- [00:48:44.066]CHAIRMAN OF THE FEDERAL RESERVE, HE SAID ONCE THAT GOVERNMENT
- [00:48:51.233]MAKES A LOUSY VENTURE CAPITALIST.
- [00:48:53.867]I THINK HE'S RIGHT ABOUT THAT.
- [00:48:55.266]BUT HE MAKES THE POINT THAT INTEREST RATES ARE
- [00:48:58.900]LOW AND EXTREMELY LOW.
- [00:48:59.767]WITH HAVE A LOT OF UNEMPLOYED PEOPLE.
- [00:49:02.266]THIS IS THE TIME WHEN WE OUGHT TO BORROW A TON OF MONEY AND DO
- [00:49:07.500]EVERY INFRASTRUCTURE PROJECT WE WANTED TO DO FOR THE NEXT 25
- [00:49:10.367]YEARS AND START IT NOW.
- [00:49:11.967]AND IF THE ORIGINAL -- SEE, I THOUGHT THIS WAS A RED STATE.
- [00:49:19.700]I GUESS IT'S A BLUE ISLAND IN A RED STATE.
- [00:49:24.266]AND IF THE ORIGINAL OBAMA STIMULUS HAD BEEN STRUCTURED
- [00:49:28.600]BETTER, WE WOULD NOW BE GETTING THIS KIND OF SLOW ACTING,
- [00:49:33.333]SLOW SPENDING INFRASTRUCTURE SPENDING.
- [00:49:34.600]SO IT WOULD BE BETTER.
- [00:49:36.734]BUT THAT'S NOT GOING TO HAPPEN.
- [00:49:38.533]50 THE FIRST QUESTION FROM THE AUDIENCE IS GROWING ECONOMIC
- [00:49:45.033]DESPAIRTY A CAUSE OR AN EFFECT OF RECENT POLICY?
- [00:49:48.967]I SUSPECT THEY MEAN -- >> I MEAN GROWING INCOME --
- [00:49:52.934]>> RIGHT, I GOT IT.
- [00:49:54.834]WE HAVE HAD FOR SOMETIME A GROWING GAP BETWEEN WINNERS AND
- [00:49:57.867]LOSERS IN OUR ECONOMY.
- [00:49:59.900]AND IT'S GETTING TO KIND OF FRIGHTENING PROPORTIONS.
- [00:50:06.800]I DON'T THINK IT'S THE RESULT OF POLICY.
- [00:50:08.600]I THINK IT'S THE RESULT OF A LOT OF FORCES IN THE ECONOMY ABOUT
- [00:50:11.667]PEOPLE WITH EDUCATION GETTING MORE AND MORE MONEY BECAUSE
- [00:50:17.400]THEIR SKILLS ARE HIGHLY PRIZED.
- [00:50:18.967]PEOPLE WHO HAVE THE LUXURY OF WORKING IN THE GLOBAL LABOR
- [00:50:21.967]MARKET AND HAVE DEMAND FOR THEIR SERVICES BEING AROUND THE WORLD,
- [00:50:27.600]WHETHER IN A MUSICIAN OR A BASEBALL PLAYER,
- [00:50:31.166]YOU CAN GET MORE MONEY.
- [00:50:32.533]THE WAY THE TECHNOLOGY HAS MADE IT HUGE BENEFITS TO BEING THE
- [00:50:36.200]BEST IN YOUR FIELD.
- [00:50:37.567]YOU KNOW, THE NUMBER ONE OR THE NUMBER TWO BASEBALL PLAYER ON
- [00:50:41.233]THE TEAM MAKES A LOT MORE THAN THE NUMBER TEN OR TWENTY
- [00:50:45.867]BASEBALL PLAYER DOES.
- [00:50:47.400]SO I THINK THE ROLE OF POLICY IS TO DECIDE HOW MUCH WE WANT TO
- [00:50:52.900]USE GOVERNMENT, THE TAX CODE, AND OTHER THINGS TO RESTRAIN
- [00:50:57.033]THE MARKET FORCES.
- [00:51:00.133]THAT ARE WIDING IN THE GAP.
- [00:51:10.266]WE CAN TAKE MONEY FROM THE RICH PEOPLE,
- [00:51:13.367]BOOST THE PEOPLE FROM THE BOTTOM.
- [00:51:14.333]IT'S A GOOD POLITICAL DEBATE TO HAVE.
- [00:51:16.500]IT'S ABOUT POLITICAL CHOICES OF THE BEST KIND.
- [00:51:18.367]WE OUGHT TO BE HAVING IT AND THE REPUBLICANS AND
- [00:51:22.300]THE DEMOCRATS DISAGREE ON THAT.
- [00:51:24.133]>> WHAT WOULD REVIVE WALL STREET WITH INCENTIVES TO
- [00:51:29.800]REVITALIZE MAIN STREET?
- [00:51:31.467]>> WELL -- SO I THINK THAT THE -- THE THE BASE -- ONE -- I
- [00:51:38.333]HEAR FROM A LOT OF BANKERS THAT THEY WANT TO MAKE LOANS AND
- [00:51:41.533]THEY'RE HAVING TROUBLE FINDING GOOD CREDIT.
- [00:51:45.066]WHO WANT TO BORROW.
- [00:51:47.400]AND I THINK WHAT THEY'RE SAYING IS THAT THE ECONOMY
- [00:51:50.500]IS NOT VERY GOOD.
- [00:51:51.834]SO THERE ARE A LOT OF PEOPLE WHO I DON'T WANT TO LEND TO BECAUSE
- [00:51:55.400]I'M NOT SURE THEY CAN PAY ME BACK AND WE RAN THAT EXPERIMENT
- [00:52:02.000]IN THE LATE 2000s AND TURNS OUT IF YOU'RE A BANKER AND YOU LEND
- [00:52:05.400]A LOT OF MONEY TO PEOPLE WHO CAN'T PAY YOU BACK,
- [00:52:07.734]I WANT DOESN'T END WELL.
- [00:52:09.033]AND THERE'S A LACK OF CONFIDENCE AMONG BUSINESS AND CONSUMERS.
- [00:52:12.533]PLENTY OF AUTO LOANS GOING ON.
- [00:52:14.300]BUT THERE'S A RELUCTANCE OF BUSINESSES, I THINK,
- [00:52:18.500]A KIND OF HESITATION.
- [00:52:19.767]THE ONE THING THAT WOULD MAKE THE BIGGEST DIFFERENCE IF THE
- [00:52:21.367]ECONOMY WAS STRONGER, I THINK THEY WOULD LEND MORE.
- [00:52:25.400]NOW, SOME BANKERS WILL TELL YOU THAT THE REGULATORS ARE ALL OVER
- [00:52:29.000]THEM AND ALL OF THE DODD-FRANK RULES ARE
- [00:52:34.100]MAKING THINGS MISERABLE.
- [00:52:34.734]I'M NOT TOO SYMPATHETIC.
- [00:52:35.700]I THINK THE REGULATORS ARE PROBABLY MAKING
- [00:52:39.467]THEIR LIVES MISERABLE.
- [00:52:40.233]I THINK WE SCREWED UP REGULATION.
- [00:52:42.567]WE HAVE FAR TOO MANY REGULATORS, WE ENDED UP WITH JUST AS MANY
- [00:52:46.934]AFTER DODD FRANK AND BEFORE.
- [00:52:48.533]BUT THE BANKERS THAT WON'T LEND BECAUSE THEY DON'T HAVE ENOUGH
- [00:52:53.066]CAPITAL IS A LOUSY EXCUSE.
- [00:52:55.333]THEY DON'T NEED MUCH MORE INCENTIVE.
- [00:52:57.633]IT MIGHT BE EASIER WHEN THE INTEREST RATES ARE HIGHER.
- [00:53:00.567]THE MOST IMPORTANT THING, MORE DEMAND, MORE PEOPLE WORKING,
- [00:53:03.767]MORE ECONOMY RUNNING FASTER, YOU MIGHT FIND
- [00:53:09.100]BANKS MORE WILLING TO LEND.
- [00:53:10.467]>> PLEASE COMMENT ON THE EFFECT OF ZERO INTEREST RATES ON THE
- [00:53:12.233]ABILITY OF RETIREMENT PLANS, INSURANCE COMPANIES,
- [00:53:18.000]AND TO MEET THEIR COMMITMENTS?
- [00:53:18.900]IS THERE ANOTHER CRISIS LOOM ING?
- [00:53:22.066]>> COULD BE.
- [00:53:23.000]ON BALANCE, INTEREST RATES ARE ZERO.
- [00:53:26.300]BECAUSE THERE ARE MORE WINNERS AND LOSERS FROM THAT POLICY.
- [00:53:29.000]THE ECONOMY WOULD BE WEAKER IF THE FED RAISED INTEREST RATES
- [00:53:32.000]TO 5% ON FRIDAY.
- [00:53:33.767]BUT THERE ARE UNDOUBTEDLY A LOT OF PRESSURES THAT ARE CREATED.
- [00:53:37.033]IF YOU'RE LIVING ON A FIXED INCOME, YOU PUT YOUR MONEY IN
- [00:53:41.066]CDs, YOU'RE NOT DOING VERY WELL.
- [00:53:43.033]IF YOU PUT YOUR MONEY IN A 401(k) AND IT NIECE THE STOCK
- [00:53:46.400]MARKET AND THE BOND MARKET, YOU PROBABLY ARE
- [00:53:49.133]BENEFITTING FROM THIS.
- [00:53:50.433]IF YOU'RE AN INSURANCE COMPANY AND YOU ARE TRYING TO MATCH YOUR
- [00:53:52.800]LONG-TERM PROMISES WITH THE SHORT-TERM NEED TO INVEST THE
- [00:53:55.867]MONEY, YOU HAVE A BIG PROBLEM.
- [00:53:58.133]SO THERE ARE A LOT OF DISTORTIONS IN THE ECONOMY THAT
- [00:54:01.200]COME FROM HAVING INTEREST RATES AT ZERO FOR FIVE YEARS NOW AND
- [00:54:05.200]PROBABLY ANOTHER COUPLE OF YEARS.
- [00:54:08.367]THE FED JUDGMENT, I THINK THEY'RE RIGHT ABOUT THIS, IS
- [00:54:11.133]THAT THE BENEFITS OUTWEIGH THE COSTS.
- [00:54:13.834]BUT IT'S NOT THAT MUCH COMFORT IF YOU'RE IN THE
- [00:54:16.767]COST SIDE OF THE EQUATION.
- [00:54:18.000]>> IS THERE ANY TRUTH TO THE REPUBLICAN ALLEGATION THAT THE
- [00:54:22.300]AFFORDABLE CARE ACT WILL RUIN OUR ECONOMY AND TAKE AWAY
- [00:54:25.900]PEOPLE'S JOBS.
- [00:54:31.033]>> SO -- THE AFFORDABLE CARE ACT IS A RULE SET
- [00:54:44.900]CONFLICTING INCENTIVES.
- [00:54:46.166]TO BOAR YOU WITH A LITTLE BIT OF LEGISLATIVE DETAIL, THE
- [00:54:50.266]SENATE -- THE HOUSE PASSED THE HEALTH CARE BILL.
- [00:54:52.400]AND THEN IT WENT TO THE SENATE.
- [00:54:57.700]THE IDEA WAS THAT THE SENATE WAS GOING TO PASS A DIFFERENT HEALTH
- [00:55:01.266]CARE BILL AND IT WAS GOING TO CONFERENCE TO
- [00:55:04.934]THE HOUSE AND THE SENATE.
- [00:55:06.066]AND ON THE BIG PIECES OF LEGISLATION, THE CONFERENCE
- [00:55:08.033]COMMITTEE IS IMPORTANT BECAUSE THAT'S WHERE THEY FIX ALL OF THE
- [00:55:10.467]THINGS THAT THEY DIDN'T DO RIGHT, OR AT LEAST SOME OF THEM.
- [00:55:14.233]BECAUSE THE DEMOCRATS LOST THE SEAT IN MASSACHUSETTS, SCOTT
- [00:55:18.834]BROWN WON, THAT SEAT IN MASSACHUSETTS,
- [00:55:22.066]THEY HAD TO PASS A HALF BAKED PIECE OF LEGISLATION.
- [00:55:23.867]SO A GOOD PART OF THE AFFORDABLE CARE ACT PROBLEM IS IT WASN'T
- [00:55:28.500]EVEN WHAT THEY -- IT WASN'T EVEN AS GOOD AS WHAT THE DEMOCRATS
- [00:55:33.567]WANTED AND THAT -- WHAT THEY WANTED MAY HAVE BEEN A PROBLEM.
- [00:55:36.600]DO I THINK IT'S GOING RUIN OUR ECONOMY?
- [00:55:40.000]NO.
- [00:55:40.934]DO I THINK IT WILL COST SOME PEOPLE JOBS?
- [00:55:42.633]IT MAY.
- [00:55:43.867]THERE ARE GREAT INCENTIVES FOR EMPLOYERS TO PLAY AT 50
- [00:55:47.967]EMPLOYEES OR LESS AND HAVE A LOT OF PART-TIME PEOPLE.
- [00:55:53.133]IT'S A PERVERSE INCENTIVE.
- [00:55:54.333]IT MIGHT CHANGE IF CONGRESS WOULD DEAL WITH CHANGING THE
- [00:55:57.200]AFFORDABLE CARE ACT RATHER THAN MAKING A CONFRONTATION.
- [00:56:00.867]BUT IT'S BASICALLY A GIGANTIC EXPERIMENT.
- [00:56:04.934]IT'S AN EXPERIMENT TO THINK ABOUT.
- [00:56:06.600]IS THERE A BETTER WAY TO ORGANIZE OUR HEALTH CARE SYSTEM?
- [00:56:09.567]AND I THINK THERE ARE SOME PARTS OF IT THAT IF THEY WORK, WE MAY
- [00:56:12.667]LOOK BACK ON THIS AND SAY, YOU KNOW, THAT WASN'T AS BAD
- [00:56:17.133]AN IDEA AS WE THOUGHT.
- [00:56:18.533]HEALTH CARE EXCHANGES WHERE COMPANIES COMPETE FOR YOUR
- [00:56:23.800]BUSINESS TO BUY HEALTH INSURANCE AND IT'S TRANSPARENT
- [00:56:29.333]AND AT THE REGULATED MARKET?
- [00:56:30.600]THAT MAY BE A BETTER SOLUTION THAN HAVING YOUR EMPLOYER ASK
- [00:56:36.467]YOU EVERY YEAR TO PAY MORE AND MORE OF THE HEALTH CARE BILL.
- [00:56:40.934]THE PRESCRIPTION DRUG BENEFIT, IT MAY BE A DISASTER AND THE
- [00:56:44.066]ELDERLY PEOPLE WON'T BE ABLE TO SHOP FOR INSURANCE
- [00:56:47.834]ON THE INTERNET.
- [00:56:48.300]IT WAS CRAZY.
- [00:56:50.967]YOU HEAR ABOUT PEOPLE COMPLAINING ABOUT THIS NO?
- [00:56:54.133]NO, IT WORKS.
- [00:56:55.767]THE PRICE KEPT THE COSTS DOWN LOWER THAN ANTICIPATED.
- [00:56:58.633]THE KEY TO OBAMA CARE IS DO THESE EXCHANGES -- I CAN'T
- [00:57:03.967]REMEMBER WHAT THE ONE IN NEBRASKA IS CALLED, GET UP AND
- [00:57:07.700]RUNNING AND DO THEY SUCCEED.
- [00:57:09.333]IF THERE'S A SERIES OF 'ITS DISASTERS,
- [00:57:13.166]THERE'S A CHANCE THERE WILL BE.
- [00:57:14.500]WE REVISIT THE WHOLE THING AND YOU MIGHT NOT LIKE WHAT COMES
- [00:57:17.834]NEXT ANY BETTER THAN OBAMA CARE.
- [00:57:21.233]>> IF CORPORATE CEO'S AND BOARDS ARE EVALUATED AT THE EXPENSE OF
- [00:57:28.800]WORKERS, WHY ARE HOW SHOULD AMERICAN WORKERS EVER AGAIN
- [00:57:31.033]EXPECT TO BE PAID A LIVING WAGE?
- [00:57:33.066]>> WELL, FIRST OF ALL, ONE OF THE PROBLEMS WE HAD IN THE
- [00:57:37.934]CRISIS IS WHATEVER THE INCENTIVES WERE THEY WEREN'T
- [00:57:41.533]SERVING THE SHAREHOLDERS EITHER.
- [00:57:43.433]I MEAN, IF YOU WERE A SHAREHOLDER OF LEHMAN BROTHERS
- [00:57:46.900]OR BEAR STEARNS, YOU DIDN'T THINK THIS WAS
- [00:57:51.867]SUCH A GREAT DEAL.
- [00:57:54.633]SO THEY WERE TAKING RISKS THAT WERE NOT EVEN IN
- [00:57:58.100]THE INTEREST OF THEIR SHAREHOLDERS.
- [00:57:59.433]SO THAT'S THE FIRST THING.
- [00:58:02.233]THE SECOND THING IS, A BUSINESS PAYS WORKERS WHAT IT HAS TO PAY
- [00:58:07.266]THEM TO GET GOOD PEOPLE.
- [00:58:10.900]RIGHT NOW, MANY EMPLOYERS CAN PAY -- DON'T HAVE TO GIVE RAISES
- [00:58:15.834]BECAUSE THERE'S SO MANY PEOPLE LINED UP OUTSIDE THEIR WINDOW.
- [00:58:20.233]WHAT WILL MAKE BUSINESS PAY PEOPLE MORE?
- [00:58:23.166]TWO THINGS.
- [00:58:24.266]LESS UNEMPLOYMENT.
- [00:58:25.300]SO THE DEMAND AND SUPPLY THING IS MORE ON
- [00:58:29.633]THE WORKER'S ADVANTAGE.
- [00:58:30.900]SECONDLY, A BETTER QUALIFIED WORKFORCE SO THAT THEY GET MORE
- [00:58:35.200]PRODUCTIVITY OUT OF THEIR WORKERS IN ORDER TO BE ABLE TO
- [00:58:39.700]JUSTIFY PAYING HIGHER WAGES THAN THEY PAY IN CHINA.
- [00:58:42.967]WE CAN PAY MORE THAN CHINA, BUT WE'RE GOING TO PAY TEN TIMES
- [00:58:46.533]WHAT THE CHINESE WORKER MAKES, WE HAVE TO BE
- [00:58:50.400]TEN TIMES AS PRODUCTIVE.
- [00:58:51.533]THE THIRD THING IS, THERE'S ROOM FOR POLICY HERE.
- [00:58:55.533]UNIONS, LIKE THEM OR NOT, PLAYED A STRONG ROLE IN GIVING WORKERS
- [00:58:59.300]MORE BARGAINING POWER.
- [00:59:00.767]AND UNIONS HAVE BASICALLY EVAPORATED IN
- [00:59:05.133]THE PRIVATE SECTOR.
- [00:59:06.300]WITH THAT HAS COME LESS BARGAINING POWER FOR WORKERS.
- [00:59:09.467]THAT IS A FACT OF LIFE.
- [00:59:14.066]I DON'T THINK IT'S GOING TO CHANGE.
- [00:59:17.133]THAT EXPLAINS ONE REASON WHY COMPANIES GET WAY WITH PAYING
- [00:59:20.467]LESS THAN THEY WOULD HAVE OTHERWISE.
- [00:59:22.233]>> WHAT IMPACT DID LOWERING OF THE U.S. CREDIT RATING HAVE ON
- [00:59:30.400]RECOVERY EFFORTS?
- [00:59:33.367]>> ZERO.
- [00:59:36.834]MOODY'S AND STANDARD & POOR'S, THE GUYS THAT WERE SO SMART THAT
- [00:59:42.066]STUCK TRIPLE A RATINGS ON MORTGAGES THAT HAD NO WAY OF
- [00:59:46.400]PAYING BACK HAVE LOST THEIR CREDIBILITY.
- [00:59:48.066]THE PROBLEM THAT THE UNITED STATES HAS IS NOT
- [00:59:51.600]A CREDIT RATING PROBLEM.
- [00:59:52.834]WE HAVE A CREDIT PROBLEM.
- [00:59:55.200]WE'RE NOT BORROWING ENOUGH MONEY, WE'RE NOT INVESTING
- [00:59:58.467]ENOUGH IN THE FUTURE.
- [01:00:00.033]WE'RE ON AN UNSUSTAINABLE FUTURE.
- [01:00:03.633]I DON'T SPEND 15 MINUTES WORRIED ABOUT THE CREDIT AGENCIES.
- [01:00:07.467]I CAN'T BELIEVE ANYBODY STILL LISTENS TO THEM.
- [01:00:09.967]I FEEL STRONGLY ABOUT THIS ONE.
- [01:00:11.967]>> WILL THERE BE A GOVERNMENT SHUTDOWN ON OCTOBER 1 IN YOUR
- [01:00:15.600]VIEW IS ONE PARTY IN CONGRESS BEING MORE REASONABLE THAN THE
- [01:00:19.500]OTHER IN THE BUDGET DEBT CEILING DEBATE?
- [01:00:26.033]A LEADING QUESTION?
- [01:00:27.200]I SHOULD MAKE THE PERSON STANDING UP AND ASK ME WHO
- [01:00:30.700]HE OR SHE VOTES FOR.
- [01:00:32.600]IT'S DANGEROUS ABOUT A REPORTER TO MAKE PREDICTIONS ABOUT WHAT'S
- [01:00:37.967]GOING TO HAPPEN NEXT WEEK.
- [01:00:39.033]HAPPY TO GIVE YOU A PREDICTION OF WHAT WILL
- [01:00:43.600]HAPPEN TEN YEARS FROM NOW.
- [01:00:45.967]MY BEST GUESS IS NO SHUTDOWN.
- [01:00:48.633]THAT THE REPUBLICAN LEADERSHIP IN CONGRESS BELIEVE AS IS THE
- [01:00:53.800]CONVENTIONAL WISDOM THAT THE SHUTDOWN HURT REPUBLICANS
- [01:00:56.533]MORE THAN DEMOCRATS.
- [01:00:58.033]IF YOU LOOK AT THE SENATE IN THE LAST 24 HOURS, MITCH McCONNELL
- [01:01:02.533]SAID TO TED CRUZ, YOU CAN TALK ALL YOU WANT, BUT REPUBLICANS
- [01:01:05.467]ARE GOING TO VOTE TO GET THE 60 VOTES TO CUT YOU OFF.
- [01:01:10.066]AND HARRY REID HAS BASICALLY SAID, I WANT A SHORTER
- [01:01:13.633]CONTINUING RESOLUTION, THAT IS KEEP THE GOVERNMENT GOING
- [01:01:17.867]UNTIL NOVEMBER 15.
- [01:01:19.133]I'D RATHER RUIN THANKSGIVING THAN RUIN CHRISTMAS, I GUESS.
- [01:01:22.800]BUT HE'S WILLING TO DO IT.
- [01:01:24.500]IF YOU LISTEN CLOSELY TO WHAT HE SAID AT THE LOW LEVEL OF
- [01:01:28.233]SPENDING THAT THE HOUSE WANTS.
- [01:01:30.300]THE SENATE PASSES SOMETHING.
- [01:01:31.500]GOES BACK TO THE HOUSE.
- [01:01:33.066]JOHN BOEHNER HAS A TOUGH CALL.
- [01:01:34.800]HE MAY HAVE TO PASS IT WITH DEMOCRATIC VOTELES TO OFFSET THE
- [01:01:39.033]REPUBLICANS' VOTE AGAINST IT.
- [01:01:40.233]BUT MORE LIKELY THAN NOT, WE DON'T HAVE A SHUTDOWN.
- [01:01:43.500]BUT I COULD BE WRONG ABOUT THAT.
- [01:01:47.734]>> I THINK THERE'S A LOT OF IRRESPONSIBILITY IN CONGRESS
- [01:01:51.300]IN BOTH PARTIES.
- [01:01:53.734]SO I DON'T WANT TO MAKE OUT LIKE ONE PARTY IS TO BLAME.
- [01:01:56.300]BUT THERE'S A WING OF THE REPUBLICAN PARTY IN THE HOUSE
- [01:02:00.900]WHICH GOT ELECTED ON A PLATFORM OF I'M ANGRIER THAN YOU ARE.
- [01:02:06.133]AND THAT IS NOT A VERY GOOD LEGISLATIVE AGENDA.
- [01:02:09.467]SO I THINK THEY ARE AN OBSTACLE THEY DON'T
- [01:02:13.533]BELIEVE IN COMPROMISE.
- [01:02:14.767]THEY BELIEVE THAT THE LONG GAME -- THEY WANT TO SHRINK THE
- [01:02:20.066]SITES OF GOVERNMENT, PERHAPS MORE THAN THE AMERICAN PEOPLE
- [01:02:22.633]WANT TO DO IT.
- [01:02:24.400]THEY ARE WILLING TO TAKE SOME RISKS TO DO IT.
- [01:02:27.333]SO THE GUY WHO HAS THE HARDEST JOB IN WASHINGTON
- [01:02:31.467]REALLY IS JOHN BOEHNER.
- [01:02:32.800]IT'S LIKE BEING THE LEADER OF AP ARMY AND YOU'RE NOT SURE HOW
- [01:02:34.834]MANY OF YOUR TROOPS ARE GOING TO SHOW UP FOR BATTLE.
- [01:02:39.367]SO RIGHT NOW, THAT CONTINGENT IN THE HOUSE IS A BIGGER OBSTACLE
- [01:02:43.166]TO GETTING NORMAL THINGS DONE THAN THE DEMOCRATS
- [01:02:48.000]AT THE MOMENT.
- [01:02:48.967]I DON'T WANT TO GIVE THE DEMOCRATS A PASS.
- [01:02:51.467]>> WHAT IS THE EURO SO HIGH IF IT IS IN SUCH TROUBLE?
- [01:02:58.533]>> THE OTHER THING THAT ECONOMIC REPORTERS HAVE LEARNED NOT TO DO
- [01:03:02.233]WITH IS TRYING TO GO SO FAR TO MAKE IT SEEM THAT YOU COULD
- [01:03:05.734]EXPLAIN THE FINANCIAL MARKET.
- [01:03:07.700]THERE ARE A COUPLE OF POSSIBILITIES HERE.
- [01:03:10.767]ONE IS THAT THIS IS ALL ABOUT TO CHANGE AND ANY DAY NOW, THE EURO
- [01:03:16.033]WILL SINK AND THE DOLLAR WILL SOAR.
- [01:03:18.133]ONE IS THE EUROPEANS ARE RUNNING TOO TIGHT OF A MONETARY POLICY.
- [01:03:21.934]THE WAY MONETARY POLICY AFFECTS CURRENCY RATES IS SIMPLE.
- [01:03:25.500]THERE'S A SUPPLY AND DEMAND OF A CURRENCY.
- [01:03:27.734]THE CENTRAL BANK IS RESPONSIBLE FOR THE SUPPLY.
- [01:03:30.033]THE FED HAS PRINTED A LOT OF DOLLARS THAT
- [01:03:32.934]INCREASES THE SUPPLY.
- [01:03:34.033]THAT WOULD TEND TO LOWER THE PRICE OF THE CURRENCY.
- [01:03:37.367]THE EUROPEAN CENTRAL BANK IS TOO STINGY.
- [01:03:39.533]AND SO THEY ARE NOT PRINTING ENOUGH OF THE
- [01:03:42.166]SUPPLY SO THAT PRICE GOES UP.
- [01:03:44.934]A THIRD POCKET IS THAT THE MARKETS HAVE DECIDED -- THEY
- [01:03:47.433]COULD BE WRITE, THAT EUROPE WILL DO WHATEVER IT
- [01:03:51.934]TAKES TO PROTECT THE EURO.
- [01:03:53.166]YOU HAVE TO REMEMBER THAT THE EURO IS AS MUCH A POLITICAL
- [01:03:56.667]PROJECT AS AN ECONOMIC ONE.
- [01:03:57.967]IT WAS THE PEOPLE OF THE WORLD WAR II GENERATION WHO NEVER
- [01:04:00.934]WANTED TO SEE GERMANY AND FRANCE GO TO WAR AGAIN.
- [01:04:05.000]AND SO IN ORDER TO BIND THOSE NATIONS TOGETHER, THEY CREATED A
- [01:04:10.533]COMMON CURRENCY AND THEIR COMMITMENT TO THAT IS SO STRONG
- [01:04:14.300]THAT THEY WILL DO WHAT IS NECESSARY.
- [01:04:16.567]MIGHT HURT THE GREEKS -- IT'S PAINFUL TO BE A GREEK.
- [01:04:20.000]AS I SAID, 26% UNEMPLOYMENT IN SPAIN, YOU KNOW,
- [01:04:24.100]THE SPANISH AND THE ITALIAN ARE NOT VOTING TO LEAVE THE EURO.
- [01:04:28.266]SO I THINK THERE'S A STRONG POLITICAL COMMITMENT TO THAT
- [01:04:31.633]THAT THE MARKET IS OVERWHELMING THE OBVIOUS
- [01:04:36.333]ECONOMIC PAIN IN THE CURRENCIES.
- [01:04:37.600]THAT SAID, IT WOULDN'T BE A SHOCK TO ME IF ONE OR TWO OF THE
- [01:04:40.233]COUNTRIES FALLS OUT AT ONE POINT, GREECE BEING THE FIRST
- [01:04:44.333]CANDIDATE, MAYBE PORTUGAL.
- [01:04:48.433]>>> HOW MUCH OF THE MIDDLE INCOME STAGNATION HAS TO DO WITH
- [01:04:51.533]NAFTA AND THE BREAKING OF UNIONS?
- [01:04:55.133]>> YONG IT HAS A LOT DO WITH NAFTA.
- [01:04:58.200]I THINK THE BENEFITS OF NAFTA WAS WAY OVEREXAGGERATED.
- [01:05:04.467]TRADE CREATES WINNERS AND LOSERS, CREATES MORE WINNERS
- [01:05:07.600]THAN LOSERS BUT FOR THE LOSERS, IT'S BEEN PAINFUL.
- [01:05:11.934]I THINK THE MIDDLE CLASS IS IN TROUBLE BECAUSE -- LARGELY
- [01:05:15.700]BECAUSE OF THE BIGGER FORCES OF TECHNOLOGY AND GLOBALIZATION
- [01:05:20.900]THAT HAVE ERODED THE WAGES OF THOSE PEOPLE IN THE MIDDLE OF
- [01:05:23.600]THE INCOME DISTRIBUTION.
- [01:05:26.000]THE PEOPLE WHO ARE NOT WAITING ON TABLES OR HOLDING PEOPLE'S
- [01:05:29.500]HANDS AT HOSPITALS AND ARE NOT WORKING HIGHLY SKILLED, HIGHLY
- [01:05:34.667]TRAINED CONCEPTUAL JOBS LIKE DESIGNING WEBSITES OR INVENTING
- [01:05:38.400]NEW CURES FOR CANCER.
- [01:05:39.633]SO ONE OF THE FUNDAMENTAL PROBLEMS WE HAVE IN OUR ECONOMY
- [01:05:42.400]IS HOW DO WE REORGANIZE OURSELVES SO THAT WE CAN HAVE A
- [01:05:46.400]RISING STANDARD OF LIVING FOR THOSE PEOPLE IN THE MIDDLE.
- [01:05:50.734]I WOULD BE OVERJOYED IF YOU HEARD ONE WORD OF
- [01:05:55.834]THAT FROM CONGRESS TODAY.
- [01:05:57.600]TO HIS CREDIT, YOU HEAR THE PRESIDENT TALK ABOUT THAT.
- [01:05:59.934]THE UNIONS ARE A PIECE OF THAT.
- [01:06:01.767]I DON'T THINK THEY'RE A PREDOMINANT PIECE.
- [01:06:03.834]>> WHAT DO YOU THINK OF CUTTING WELFARE FOR POOR PEOPLE?
- [01:06:10.533]>> FIRST OF ALL, WE DID CUT WELFARE FOR POOR PEOPLE.
- [01:06:13.934]THAT'S ONE OF THE THINGS THAT NEWT GINGRICH
- [01:06:18.700]AND BILL CLINTON NEGOTIATED.
- [01:06:20.033]IT WORKED PRETTY WELL WHEN THE ECONOMY WAS STRONG AND WORKED
- [01:06:22.367]PRETTY POORLY WHEN IT DIDN'T I THINK WE NEED
- [01:06:26.600]BETTER WELFARE PROGRAMS.
- [01:06:27.900]WE NEED TO CREATE INCENTIVES FOR PEOPLE TO WORK, AND I THINK WE
- [01:06:30.033]NEED TO CREATE INCENTIVES FOR BUSINESSES TO HIRE PEOPLE WHO
- [01:06:33.734]MAY NOT BE THE WORLD'S MOST ATTRACTIVE PEOPLE.
- [01:06:37.633]BUT THIS IS A RICH COUNTRY.
- [01:06:39.000]I GOT A BIT OF A PROBLEM WITH THE MEMBERS OF CONGRESS WHO
- [01:06:43.166]RECEIVE PERSONALLY LARGE AMOUNTS OF FARM SUBSIDIES AND VOTE FOR A
- [01:06:47.567]FARM BILL TO MAINTAIN THOSE.
- [01:06:49.533]THEN VOTE TO CUT FOOD STAMPS.
- [01:06:54.233][ APPLAUSE ] I HAVE NO DOUBT THAT THERE ARE
- [01:07:00.467]PEOPLE WHO ARE SCAMMING THROUGH IT.
- [01:07:03.333]AND THERE ARE PEOPLE WHO ARE SCAMMING WELFARE.
- [01:07:07.900]WITH 7.3% UNEMPLOYMENT.
- [01:07:10.333]LOTS OF PEOPLE WHO HAVE NOT STOPPED LOOKING FOR WORK, I
- [01:07:13.400]DON'T THINK THIS IS A COUNTRY WHERE WE NEED TO MAKE PEOPLE
- [01:07:18.500]GO HUNGRY TO MAKE THEM VIRT WITHOUT.
- [01:07:27.934]>> LET ME ASK A COUPLE OF QUESTIONS WHICH ARE RELATED.
- [01:07:30.467]IS THERE A LONG-TERM SOLUTION TO THE CONTINUOUS DEFICIT AND DEBT
- [01:07:36.300]FIGHT IN CONGRESS.
- [01:07:37.333]IS IT FEASIBLE TO INFLATE OUR WAY OUT OF DEBT.
- [01:07:41.500]>> THE WAY OUT?
- [01:07:42.500]YES.
- [01:07:43.433]I MEAN, THERE'S BEEN A DOZEN BLUEPRINTS.
- [01:07:47.700]IT'S ALL FIGURE OUT A WAY TO SLOW THE GROWTH OF BENEFIT
- [01:07:51.500]SPENDING, PARTICULARLY ON HEALTH CARE.
- [01:07:53.600]AND INCREASE REVENUES.
- [01:07:57.133]DEPENDING ON YOUR POLITICAL TASTE,
- [01:08:01.767]MORE OF ONE, LESS OF THE OTHER.
- [01:08:03.066]A LITTLE TAX REFORM THAT MADE THE TAX CODE LESS SCREWED UP AND
- [01:08:05.767]MORE EFFICIENT WOULD GO A LONG WAY.
- [01:08:08.033]I THINK WE'LL GET THERE.
- [01:08:09.700]I THINK ONE OF THE TRAGEDIES OF THE OBAMA-BOEHNER RELATIONSHIP
- [01:08:14.633]IS THAT THERE WAS A HARVARD PROFESSOR NAMED FISCHER WHO
- [01:08:18.200]WROTE A BOOK CALLED "GETTING TO YES," A CASE
- [01:08:23.000]STUDY ON HOW TO NEGOTIATE.
- [01:08:24.300]WAITING FOR PERSONS WHO DISSECTS THE OBAMA-BOEHNER NEGOTIATIONS
- [01:08:27.734]AS A CASE STUDY OF GETTING TO KNOW.
- [01:08:31.367]THEY SEEM TO BE UNABLE TO GET TO A PLACE TO GET TO THE OTHER
- [01:08:37.166]GUY'S POSITIONS IN ORDER TO GET TO A COMPROMISE.
- [01:08:39.633]WE'LL GET THERE.
- [01:08:40.332]WE HAVE THE LUXURY OF TIME.
- [01:08:43.867]THE BIG TAX INCREASE LIKE IT OR NOT DID HELP A LITTLE BIT
- [01:08:48.332]IN REDUCING THE DEFICIT.
- [01:08:49.466]AND HEALTH CARE COSTS SLOWED, PERHAPS TEMPORARILY.
- [01:08:52.100]A FEW YEAR WHERE WILLS THE DEFICIT WILL BE COMING DOWN AND
- [01:08:54.433]IT GIVES US THE OPPORTUNITY.
- [01:08:55.767]THE POLITICAL SYSTEM IS THE PROBLEM, AND I'M NOT TOO
- [01:09:00.367]OPTIMISTIC ABOUT THAT.
- [01:09:01.500]I FORGET THE OTHER PART OF THE QUESTION.
- [01:09:04.533]>> CAN WE INFLATE OUR -- >> IT'S COMMONLY THOUGHT THAT
- [01:09:08.332]COUNTRIES THAT CREATE DEBT RUN BIG INFLATION SO WE CAN PAY BACK
- [01:09:12.000]THE DEBT WITH CHEAPER MONEY.
- [01:09:13.934]IT'S AN HISTORICAL FACT.
- [01:09:15.667]IT'S HARDER FOR US BECAUSE A LOT OF OUR DEBT ROLLS OVER AND WE
- [01:09:18.667]HAVE A LOT OF VARIABLE RATE DEBT.
- [01:09:20.265]SO IT WOULD BE HARDER TO DO.
- [01:09:23.966]I THINK IT'S A POSSIBILITY THAT WE'LL GO DOWN THAT ROAD.
- [01:09:26.700]BUT I DON'T THINK IT'S LIKELY.
- [01:09:28.700]I THINK ONE OF THE THINGS THAT FUNDAMENTALLY CHANGELED.
- [01:09:32.200]BUT IT'S AN UNDERSTANDING THAT HYPERINFLATION IS VERY
- [01:09:38.633]DANGEROUS AND CORROSIVE.
- [01:09:40.066]SO PAUL VOLCKER BROKE THE BACK OF INFLATION.
- [01:09:43.033]ALAN GREENSPAN FINISHED THE JOB.
- [01:09:44.399]THERE'S A STRONG COMMITMENT AT THE FEDERAL RESERVE, EVEN AMONG
- [01:09:47.332]THE PEOPLE WHO WORRY A LOT ABOUT UNEMPLOYMENT, NOT TO LET
- [01:09:52.200]INFLATION GET GOING AGAIN.
- [01:09:53.466]AND THERE ARE PEOPLE WHO SAY, WELL, THEY PRINTED ALL OF THIS
- [01:09:55.734]MONEY AND WE'RE GOING GET INFLATION, BUT THEY'VE BEEN
- [01:09:58.600]SAYING THAT FOR FIVE YEARS AND THE INFLATION IS LIKE 1.8% A
- [01:10:03.033]YEAR BELOW THE FED'S TARGET.
- [01:10:06.266]SO I THINK IT'S A RISK BUT NOT A VERY BIG RISK.
- [01:10:09.300]>> WE'LL END WITH THIS QUESTION -- WHAT EFFECT IS
- [01:10:12.834]UNPAID INTERNSHIPS, WHAT EFFECT IS UNPAID INTERNSHIPS HAVING ON
- [01:10:18.200]THE PRICE OF LABOR IN THE UNITED STATES?
- [01:10:22.200]>> UNPAID INTERNSHIPS SEEMS TO BE DIMINISHING THE INCOME OF
- [01:10:26.834]PEOPLE WHO ARE INTERNS.
- [01:10:29.233]I'M PROUD TO SAY THAT "THE WALL STREET JOURNAL" AND LIKE EVERY
- [01:10:32.567]NEWSPAPER, WE'VE HAD BELT TIGHTENING, OUR POLICY IS WE MAY
- [01:10:36.600]HAVE FEWER INTERNS, BUT WE PAY THEM.
- [01:10:38.767]AND THE REASON WE DO THAT -- THE REASON WE DO THAT IS BECAUSE WE
- [01:10:46.266]WEREN'T COMFORTABLE WITH HAVING INTERNSHIPS THAT ONLY THE SONS
- [01:10:51.633]OF DAUGHTERS OF RICH PEOPLE COULD TAKE BECAUSE THE OTHER
- [01:10:54.233]ONES HAD TO GET JOBS.
- [01:10:55.834]THERE'S A BIT OF STRONG PUBLIC REACTION BECAUSE BUSINESS OF
- [01:10:59.967]FREE LABOR AND PRETENDING THAT THIS IS TRAINING
- [01:11:03.567]WHEN IT REALLY ISN'T.
- [01:11:04.633]AND I THINK THE NEEDLE IS MOVING ON THAT ONE.
- [01:11:10.367]I DON'T THINK -- I DON'T THINK FREE LABOR AND INTERNS IS
- [01:11:14.066]LOWERING THE WAGES OF REGULAR WORKING PEOPLE.
- [01:11:16.367]THEY'RE NOT PERMANENT.
- [01:11:19.700]BUT I DO THINK IT'S ONE OF THE GREAT CONSEQUENCES OF THE
- [01:11:23.133]TERRIBLE RECESSION WE HAD.
- [01:11:24.400]THE PEOPLE WHO WILL BEAR THE ECONOMIC SCARS OF THIS ARE TO A
- [01:11:27.834]LARGE EXTENT THOSE PEOPLE WHO HAVE THE MISFORTUNE TO COME OF
- [01:11:30.867]AGE TO ENTER THE WORKFORCE IN THE NEXT COUPLE OF YEARS.
- [01:11:36.767]THE HISTORY OF PAST RECESSION SHOWS THEY'RE
- [01:11:42.300]GETTING OFF TO A SLOWER START.
- [01:11:43.166]THE INTERNSHIP, THE FREE LABOR,
- [01:11:48.967]IS SOMETHING THAT HURTLES THEIR POTENTIAL.
- [01:11:50.066]I UNDERSTAND WHY PEOPLE DO IT.
- [01:11:51.200]I WOULD DO IT TOO IF I DIDN'T HAVE ANOTHER OPTION.
- [01:11:53.633]AND THE INTERNS OF THE WORLD, UNITE.
- [01:11:57.000]THANK YOU VERY MUCH.
- [01:12:00.900][ APPLAUSE ] THANK YOU, THANK YOU.
- [01:12:18.000]LET ME REMIND YOU THAT DAVID WESSEL WILL IF BIN THE LOBBY
- [01:12:23.834]SIGNING BOOKS SO TAKE ADVANTAGE OF THAT OPPORTUNITY AS YOU LEAVE
- [01:12:27.100]AND PLEASE JOIN US FOR THE NEXT E.N. THOMPSON LECTURE COMING UP
- [01:12:32.767]IN A FEW WEEKS.
- [01:12:33.967]THANK YOU VERY MUCH.
- [01:12:34.533]THANK YOU.
- [01:12:34.934][ APPLAUSE ]
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