Transcripts For CSPAN Key Capitol Hill Hearings 20240622

Million families that are using these vouchers. I think the variability is a reflection of the fact that somehow the agencies are smaller, they have less of a case load, it may be easier for them to stay on top of these things. Host we talked about the Obama Administration requesting 220 million for the housing choice program. How has that been received on capitol hill . What is the politics surrounding that budget request . Guest that would be a large amount of money that this program has had in a while. The number of families that have been served by the program was cut down significantly by the sequester and is only just now getting back up to the number that it had been. The idea of spending more money i think within the broader context, a lot of antipoverty programs are a hard sell in washington right now, and this is one of them. The Section Eight Program in particular has the stigma attached that a lot of the people that benefit from this are just receiving government handouts, they dont have to do any work to get it. It is not like the Welfare Program where you can stay on indefinitely. Has been a lot of concern about who are the people who action get to use this program. This is not a popular program, i think that is true of a lot of antipoverty programs and general. 18 million, 19 million says that the sounds about right. I dont know they will get 21 million. Host do people and a movie out a going to shelters . Do know the breakdown of people who move off from the program . Guest i dont know the statistical breakdown. A fair number will maybe they get a second job or a little more income to where they are no longer qualifying for. A lot of people may be moving cities entirely. If you have a housing voucher and chicago and you want to move to las vegas, you cannot just a cup your voucher just pick up your voucher and move. The voucher is attached to the city. To the extent that people are moving around, they may be leaving the program because they are moving to another community, not particularly because theyre doing better off. I think a lot of people will look at this program not necessarily as a way to get people to better housing the future but a safety net for people who otherwise would have no options. We have to get these people housed, that is the primary thing that these agencies are worried about. Host emily badger is with the Washington Post. You can follow her on twitter. Thank you for your help this morning. That will do it for this morning on the washington journal. We will now go live to the state department where secretary kerry is releasing the graphics and persons report trafficking persons report. We are live at the state department is monday morning as secretary of state john kerry is expected to release the 2015 Human Trafficking report. It assesses government efforts around the world to combat modern slavery. This is the 50th year that the trafficking in persons report has been compiled. They are eight men and women whose efforts have made a Lasting Impact on the fight against global slavery. The names will be released in this event. We understand it will be a couple of minutes before this gets started. While we wait, a look at senator ted cruz in the senate. Host explained his criticism that came up yesterday and where this came from. Has this been a long simmering between ted cruz and Mitch Mcconnell . Guest yes, dan to you briefly. Crews is cruz is essentially running against republicans in washington. He is trying to showcase himself. The conservative leading the charge against what he calls the washington cartel. They have been fighting over strategy over the budget conference in 2015 to the bud Government Shutdown in two dozen 13. There was a shut up fight in 2014. There was a fight over immigration last year. Our numerous tactical battles and this is just the latest example of that. Ted cruz ratcheted it out to a new level on friday when he Iqs Mcconnell are flying during his floor speech over mcconnell strategy to move the Exportimport Bank. To take a step back, this all started at the end of may when the senate was trying to pass a major trade bill. There were three senators who were holding out their vote on that trade bill. Mcconnell needed to get that vote to pass the fasttrack bill. What he promised those senators was a vote. The debate is over exactly what he promised. Cruz says that as part of that promise, mcconnell looked him in the eye and promised he would not move the Exportimport Bank on his own. We will leave this washington journal segment. You can see the rest of it on her website, cspan. Org. Be will go back to the state Department Live where secretary of state john kerry has made his way into the room. [applause] good morning, ladies and gentlemen. My name is sarah and i have the enormous privilege of serving as the under secretary of state for civilian security, democracy and human rights. I would like to thank you for joining us to mark the release of the 2015 trafficking in persons or tip report. And to honor our heroes, eight Extraordinary People on the front lines of combating modern slavery. Before we begin, i would like to recognize many in the audience advocates and advocates. Community levers and Community Leaders and caregivers who are also on the front lines of combating these crimes. Presenting trafficking an our communities. Prosecuting the perpetrators,. Protecting the survivors. Your work receives our deepest gratitude and respect. Thank you. Acknowledging gear work is essential because there is a fourth p and combating trafficking and that is partnership. The complex forces that enable trafficking must be addressed with a comprehensive approach that draws on all elements of Civil Society and that reaches from the local community to the national, and even international, levels of debate and action. Here in the United States, we are mobilizing an approach by mobilizing every level of our government to partner with Civil Society, the private sector, faith groups, and local officials to combat Human Trafficking and all of its forms. Every year become we commit substantial resources in improving Data Collection and research on data networks, Building Public awareness, and integrating trusting concerns into our ongoing foreign assistance and diplomatic engagements. The department of state place a leading role in this effort and in every region of the world our embassies work handinhand with foreign governments and ngos to encourage more robust and sustained efforts to combat Human Trafficking. We help foreign governments analyze laws develop trainings, and partnerships with their own Civil Society organizations. At the state, under the secretaries leadership, the trafficking in Persons Office is the heart of this work. It supports engagement by our embassies leads policy formation and conducts yearround analysis across 188 countries and territories globally. It does not just identified problems. Th dedicated staff and partners with governments on problem solving, connect traffickings concerns with other goals, and engage Frontline Service providers. Through the analytic rigor and focus on results, the tip office makes an enormous contribution and this office has greatly benefited from the acting director of the tip office last november. I would like to make sure that we recognize the extraordinary work of the tip office. Please join me in recognizing their dedication. Those of you who work with the tip office, please stand up. [applause] looking across 188 countries the tip report assesses the effectiveness of National Laws in prohibiting and punishing trafficking, and it evaluates government actions to prosecute suspects and protect victims. This report serves as an important guide for the road ahead and combating modern slavery around the world. The tip Office Partners with ngos and International Organizations around the world through grants to make recommendations from the report a reality. On the day to day basis, that means managing 150 million. For example, the tip office combats Human Trafficking by funding offices in jordan, indonesia, and the democratic republic of congo. It helps governments conduct antitrafficking balls. It builds capacity in malaysia and brazil to combat traffickers. The tip office supported editorship by the association of Southeast Asian nations to increase regional coordination on investigating and prosecuting Human Trafficking cases. Though the report highlights many areas where we must redouble our efforts to address this challenge, it also take stock of the significant progress we have made. Over the past 15 years, 160 states are now party to the antitrafficking keystone, the u. N. Palermo protocol. Many countries have passed laws and establish specialized Law Enforcement unit, victims centers. Globally, human job again has moved from a rarely discussed issue to become an international priority. Now, i have a great honor of a juicy a man who has consistently paste values at the core of our Foreign Policy considerations. He is no to all of us for his long career in protecting the portable and has many roles as activist, prosecutor, soldier, senator, and now statesman. The audible secretary of audible secretary of state john kerry. [applause] secretary kerry thank you. Thank you very much. Sara, thank you very much. Thank you all for being here this morning and witnessing me on one crutch in public. If my doctor sees that, i am in serious trouble. I not supposed to do that until next week, but i could not resist. I really can think of no better way to start this week than with such a gathering of really remarkable people, all of whom are determined to make a difference in a cause that really counts. Im very honored to be here, particularly happy to see from capitol hill my friend and former colleague, senator amy klobuchar, and representative chris smith, who has been such a longtime champion on these issues. Both of them are two champions in this fight. Im delighted to see the first ladys chief of staff, thank you for being with us. Also, i want to recognize jeff zucker, the head of cnn. Cnn has made a special cause of the accountability reports as i travel around the world. Jeff, im very appreciative to cnn for their commitment to this cause. Ttheir members of the diplomatic corps here, and that is absolutely vital to us because International Cooperation is the key to our being able to have an impact and make progress, and we are. There are leaders from Civil Society here. They are all of them bolstering networks that are built around the world to fight back increasingly creating sophisticated strategies. That is the only way we will succeed in this battle. It is a battle against money. It is a battle against evil. It is quite remarkable that in the year 2015, we face a modern version of slavery. Something we actually fought a civil war over here in this country. It is vital for us to push back against this. Im particular grateful to the entire trafficking in persons team who stood up a few moments ago. Im grateful to carry johnstone who has been the acting director. It is really a task that is brought together by every division, every office, every mission of the entire state department. This report is the product of really an entire yearlong effort. These holes will leave here today and will begin next years report. It is a constant process of following up with the employees of our diplomatic posts around the world, gathering facts information, and helping to lay it out. This report is important because it really is one of the best means that we have, as individuals, to speak up for adults and children who back any effective platform whatsoever through which they are able to speak for themselves. Because of its credibility, this report is also a source of domination and inspiration to activists on every single continent who are striving to end the scourge of modern slavery. I want to emphasize, as i did last month when we issued a report on our human rights observations around the world, the purpose of this document is not to scold name, and shame. It is to enlighten and energize, and most importantly, to empower people. By issuing it, we want to bring to the publics attention the fold nature and scope of a 150 billion Illicit Trafficking industry. It is an industry. Pick up todays new york times. The front page, a story about a young cambodian boy promised a job in thailand, goes across the border, and finds himself held by armed men, and ultimately he is pressed into service and three years at sea, shackled by his neck to the boat so he cannot escape and take off when they are around other boats. If that is not slavery and a prison i do not know what is. We want to provide evidence and facts that will help people who are already striving to achieve reforms to alleviate suffering hold people accountable. We want to provide a strong incentive for governments, at every level, to do all they can to prosecute trafficking, and shield at risk populations. In conveying these messages, let me acknowledge that even here in the United States, we americans need to listen and improved. Like every nation, we have a responsibility to do better, a better job of protecting those who live within our own borders whose passports are taken away from them, who are in for labor porpo purposes or sex trafficking. This morning, we are honored to welcome, as has become a tradition, truly remarkable human beings. Eight people who have this thing was themselves in the quest to stop trafficking. I might add that where they live, many people do the so at great personal risk. They have traveled from the baltics, south America Africa to be with us today. Our cthey are courageous individuals who enhanced to extend Legal Protections for the affordable, educate the public and andend the low some practice of child sex tourism. Thank you for being here and thank you for helping to reinforce what these heroes are doing. If there is a single theme that connects the divers work of these heroes, it is the conviction that there is nothing inevitable about trafficking in human beings. It is a choice. That conviction is where the process of change really begins. With the realization that just because certain abuse has taken place in the past does not mean that we have to tolerate that abuse in the future, or that we can afford to ever our eyes of attendant we just do not know what is going on. Instead, we need to each be asking ourselves, what if that victim of trafficking was somebody we knew . What if it was a neighbor . Or still worse, as a nightmare what if it were a son, daughter, relative . The more we ask these questions the more each of us will understand that not only is this a fight that we have to attempt not only to be have a responsibility to bring every aspect of our institution, our government, together in order to push back and educate and make people aware of this, but it is a fight that we absolutely have to win. It is a modern day human rights challenge of enormous proportions. We always need to draw strength from the fact that momentum in human rights work is a very powerful force. When criminals in one city are reves arrested for using children the commercial sex trade believe me, pressure on authorities to make arrests builds. When country aid becomes known for its success in putting human traffickers in jail, the leaders in country b are encouraged to compete. Authorities will have a good reason to look at other industries, and consumers will have cause to question the origins of the Global Supply chains of what they have chosen to buy, what is placed before them in stores or online. I do not have the tell us audience that traffickers are both ruthless and relentless. And know how to exploit the hopes of those desperate to escape poverty, or to find shelter from disaster, or strife. Traffickers prey upon the most notable. Most afvulnerable. They make false promises and transport their victims across borders to labor where the language is unknown and where there are no means of escape. If the victims rebel, the traffic is use violence traffickers use violence. That is why this tip report needs to be read as a call to action. Governments need to strengthen and enforce the laws they have on the books, prosecutors must take pride in turning todays traffickers into tomorrows prisoners. The private sector also needs to be a part of this effort by blowing the whistle on companies that use labor that is under age, underpaid, and under coercion. Investigative journalists can continue to assist by shining thise spotlight as reuters, new york times, cnn and others have. Advocacy groups, faith leaders and others should continue to intensify the pressure for bold action so that together we will continue to win battles in the fight that will surely last for some time to come. We have to be true to the principle that although money may be used for many things, we must never allow a price tag to be attached to the heart, soul, and freedom of a fellow human being. A few years ago, i guess actually true be told, 40 years ago, when i was a prosecutor in boston, i launched one of the very first violence against women divisions in the district attorneys office. We were determined at that time that people should not be victimized twice. Once by the crime, and then again by the system. We even prosecuted a man for raping a woman who was a prostitute, a case that no one thought we could win, but we did because no means no. I guess well means against will and in those situations force is never acceptable. Today, secretary of state, i look around, and im deeply inspired by the efforts being made in america and the countries on every continent to push back against the bullies. Im inspired by the leadership we have seen from our commanderinchief, from congress, from Civil Society from the religious community and from our many overseas partners. I welcome president obamas nomination of assistant u. S. Attorney susan cost such to serve susan kosich to serve as the next or actor of the tip office, and im inspired each day by our own diplomats and staff, and especially the dedicated carry johnstone and her team over here, who i asked now to come up. Enjoy me so we can honor individually and collectively the answer trafficking heroes that we have amongst us this morning. First, i asked miss Betty Pedraza from columbia to stand. I do not know if we have anyone to translate. I am not absolutely fluent in spanish. She obviously speaks spanish. Today, we recognize your steadfast efforts to restore the rights of adults and children who have been victimized by Human Trafficking. Your commitment to health survivors, and your relentless advocacy for victim care. Congratulations and thank you so much for what you have done. [applause] secretary kerry from latvia, we recognize your Relentless Campaign to enhance the legal understanding of Human Trafficking in latvia and throughout the european union. Your dedication to assisting victims at your excellence in providing Legal Services to the survivors of modern slavery are extraordinary. Thank you very very much. [applause] kerry, a person from a guess madagascar, and she has launched the National Union of social rights. Your advocacy for improvements in your countrys if the trafficking laws and your extraordinary efforts to protect victims, thank you so much. [applause] secretary kerry next, a person from south sudan. We recognize your work in caring for and protecting children who are vulnerable to trafficking. Your steadfast commitment to the right of every girl and boy to an education and your persistent engagement to increase justice for survivors of modern slavery. Congratulations, and thank you. [applause] secretary kerry a person from uganda is here. We thank you for your leadership role in your countrys in Human Trafficking task force, your sustained efforts to increase awareness of trafficking, and your unwavering support for the victims. Thank you so much, and congratulations. [applause] secretary kerry now from the United Kingdom we recognize he is a barrister and your Landmark Initiative to develop and advance the rule of law trafficking in the United Kingdom and brought. Your support for victims, and unparalleled achievement in providing Legal Services to those who have endured and survived modern slavery. Thank you so much. [applause] secretary kerry an to home from the United States, mr. Tony maddux. We congratulate you on your advocate the on behalf of desk advocacy on behalf of victims and education to ensuring the survivors stories are heard. Congratulations, and well done. [applause] secretary kerry and finally from iraq, we honor you for your efforts on behalf of the religious minority in Northern Iraq to insist that the world can heed to the horse they face and your commitment to helping victims in saving lives. We congratulate you by you to say a few words about your work and about the situation that now exist in iraq. Ms. Hongassan . Ms. Hassan thank you very much mr. Secretary for this opportunity for me to be here. It is a great honor for me to be here today. Thank you for all the heroes for the extraordinary work and those. Thank you very much. Ladies and gentlemen, i will talk briefly about what women the minority in iraq, have been subjected. On august 3, 2014, the terrorist isis organization assaulted attacked the problems of and seize control of the province within hours, and they killed men and women and children, and they also captured more than 5000 innocent civilians, mostly from women and children, and the forced women into a marriage and sold them on the market, slave market, for many times over and also subjected women to the worst and most heinous acts of rape and forced. Since that day, i have dedicated myself to the women who are captured. Luckily, i managed with some friends to liberate hundreds of girls with the support of the government of kurdistan. Their liberation requires support, especially that they are present in dangerous areas. Theose women continue to live in camps under very difficult psychological conditions. One of the survivors talk to me told me her surgtory and now she is a displaced person in christian. Said that people were pointing fingers at her and say that she was repeatedly raped and was sold repeatedly by the members of this terrorist organization. What happens to those girls cannot be described or understood. They managed to flee daish, but they could not survive what happened to them. They have been raped and tortured and also were humiliated and also what their religion. They managed to escape their capturerer, but they needed psychological health, support and also to raise Public Awareness about what happened to them. That is why i am asking for help in the liberation of more than 3000 women who are still being captured by isis and are being raped and sold every day. The yazidis are not the only victims. All people are being exported around the world in the 21st century. There are millions of women, men, and children who are being subjected illegal trafficking. My fellow heroes, whom i appear he to represent, you have dedicated your lives to fight this awful crime, and they work incessantly to fight this serious problem and they are working to provide shelter and food to their victims and they also make sure that there is good the oh understanding about what trafficking means. We have to have more regular laws and pressure government so they can double their efforts and coordination with ngos. Without your efforts, more people would have been slavery today. We are all able to make a difference. It is a to us to help our sisters and brothers in their fight for freedom. Thank you for your attention to the issue in the problem of the yazidis and all those in slavery. We hope together that we would have a Human Society that can enjoy peace and harmony and also where everybody thank you for listening to me. Thank you. [applause] thank you for those moving and inspiring words. Thank you to secretary kerry and thank you to all of those who came here today. A special thanks to our euros this year who motivate our hereooes this year. As to the survivors who improve this report, it is an honor to represent the Trafficking Office as acting director. I want to salute the professionalism of those i am proud to have as colleagues for their dedication to help the government do its best to address this issue, for the hours that have gone into this years reports, any efforts to continue to elevate Human Trafficking into ever y conversation. Thank you for everything you do to help make and say lavery modern slavery a thing of the past. This years report explores ways in which each one of us is connected to Human Trafficking through Global Supply chains that deliver goods and services we use. In agricultural fields, on fishing boats, and construction zones, factories hotels, individuals in every country shoulder incredible risk in their attempts to secure decent work. Those who fall prey to unscrupulous recruiters and sex traffickers w often have nowhere to turn for help. As to those individuals fleeing more abuse who put their lives into the hands of intermediaries, and ship captains and may exploit their vulnerability, 2014 marked a record year in which 60 Million People were displaced. Not all of these are victims of Human Trafficking, but many faced great risk. There is work to be done. Government must take action to protect victims punish perpetrators, and prevent crimes. The private sector must recognize its ability to recognize how business is done. We all have a role to create a Global Market is where markets are for people who are free from exploitation. We hope the report inspires new partnerships and revitalize efforts to itunes jogging. This report is a call to action. It is a call for height awareness so that none can turn a blind eye. He called to do whatever businesses or to make hours a World Without modern slavery. So many people dedicate their time intellect and resources to raise awareness of this crime health victims become survivors. Thank you all for your hard work and for coming here today. We now invite you to collect your copy of the report from the staff out in the hallway. Thank you. [applause] [captions Copyright National cable satellite corp. 2015] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] announcer if you missed any of this briefing, you can see it at www. Cspan. Org. And live picture of u. S. Capitol. The house general speeches at noon, and both eyes will be in for legislative work at 2 00. The house takes up 17 bills today. Recorded votes will happen at 6 30 eastern. The senate will work at the highway and mass transit monday bill. During yesterdays session lawmakers blocked an amendment seeking to kill the Affordable Care act. You can see the house fly on cspan and the senate on cspan2. The white house continues to press its case for the Iran Nuclear Agreement tomorrow when secretary kerry and secretary mozinoiz returned to capitol hill. Hill has been keeping track of houston members are lining up on the agreement. Congress has allotted 50 days some and as of july 23, five democrats are in support of the pact including Bernie Sanders and 13 are leaning in favor of the agreement. Among republicans, 22 are definite nos. 28 republican senators are leaning no. You can check it out at thehil l. Com. Tonight, fcc Michael Orielly on key issues before the fcc, like net neutrality. Secretary oreilly when it is presented, that document should be made available to the public and that is an opportunity to allow people to home in on issues. Right now we have people who raise concerns, but they often do not know what is he performed, so they are doing rifle shot in scattered structures. That is problematic. I would rather people target exactly where they would like to fixes and not spend time on things that do not need attention. Announcer tonight on cspan2. And now jason furman. He spoke friday. This is just under an hour. Mr. Kepler thank you, everybody. Thanks for coming out today, actually on a beautiful washington summer friday afternoon. My name is jim kepler. Im Senior Vice President for policy at third way. Our goal today for those in the room, and those watching at home, is to make us better consumers of Economic News and economic reports. In essence, to be our own blog. To help us achieve that mission, we are fortunate to have with us jason furman. Jason, early in his first term president obama said that he made being a nerd cool. Well, peter was cool, jason furman is ice. He is chairman of the president s council of economic advisors. Hes been serving president obama since day one as a senior economic advisor. He helped steer the nation out of the great recession. He also served under president bill clinton, which means, between the two president s jason is responsible at least partly for about 30 million private sector jobs. He has a ph. D. From harvard. A long pedigree of books and articles on economics. Hes a father of three and a brandnew father, three weeks. His son felix. And he was also the subject last year of the best Washington Post profile i have ever read. Im just going to give you a couple of highlights. One is he can juggle six flaming torches at once. Number two, he unsuccessfully argued to his wife that chopping wood failed the comparative economic advantages benefits test. And he is far less successful than his College Freshman roommate, matt damon. So, with that, jason, thank you for joining us today. Jason is going to lead off with a presentation. Then ill ask questions. Then youll ask questions. So, jason, lead us off. Help make us better economic consumers. Mr. Furman great. Jim, thanks so much for organizing it. Thanks for everyone here in the room and for the people watching this at home. Im going to take you through some slides that have 10 tips, although it pretty much boils down to one really important tip that ill be giving you. This is a set of slides, which if theyre of interest to you, a little bit later this afternoon, theyll be up on the website of the council of economic advisors. So if you just google the council of economic advisors look for our speeches. This will be up there. The presentation that im going to give you. In terms of Economic Data, i have been following Economic Data carefully for the last 20 years. And it began when i worked at a staff economist at the council of economic advisors in 1996. And one of the great things about the council of economic advisors is were responsible for conveying all of the Economic Data to the president. So the statistical agencies wi advance, just for us to see. And we spend a couple hours, and we analyze them. And we put that in a memo, which goes to the president the evening before the data so he can understand whats happening in the economy. For a particular significant release, like the jobs numbers which ill spend a lot of time on today, and often g. D. P. Well brief him, the president , in person as well. We also share those data with the secretary of the treasury and the chair of the federal and the chair of the Federal Reserve to make sure that they have the information they need to understand whats going to be happening the next day in markets and the economy. Whats great about this is it gives you a real opportunity to think hard, but you also think without the noise of everyone else. You know, anyone who gets the data, the jobs numbers, g. D. P. They come out at 8 30 a. M. Theres instantly tons of tweets, tons of analysis, tons of peoples opinions. And thats great, and i recommend looking at all that and aggregating it. But its something to just locking yourself in a room and trying to digest it yourself unbiased, uninterrupted by the other people that are taking a look at those data, too. Then you test what you think against it. Sometimes you find things other people didnt. Sometimes the wisdom of crowds comes up with an insight that you wouldnt have had. The biggest tip i have, and its underlying and youll see a pattern in the 10 different tips i have is to never get too exercised and too excited about any one piece of Economic Data. The economy is a big complicated thing. It bounces around a lot, from month to month and quarter to quarter. Any given statistic we have only captures one aspect of the economy. It doesnt capture the entire economy. And the statistics we have are imperfect. They depend on limited samples. There are sampling errors. They depend on complicated statistical adjustment algorithms to make sure you know, every december people spent a lot more on consumer goods. That doesnt mean the economy grew a lot in september. That means that yet again christmas happened in december. So theres statistical errors seasonal adjustment errors parts of the economy, and then just longerterm trends. So really, everything i have to say boils down to this. Theres one bias i see in the newspapers. It tends to be really good and really informative and i learn a lot about it. The only bias i would say it has, it has a tendency to get too excited. Oh this was a great month the economy is zooming ahead oh, this month was terrible we must be collapsing oh, this month we cant tell whats going on. And the truth is sometimes the economy does turn on a dime and you want to be attentive to that. But more often than not, you know, trends continue and its better to look at a lot of pieces of data and look at it over a longer period of time. So thats the big meta piece of advice i have here. Let me now go through a number of specific ways that this manifests itself and specific examples. In the course of this, ill tell you some of the numbers that you know, i most like to look at, not just in the jobs report, but in g. D. P. And Economic Data, more generally. The first thing is, some numbers bounce around a lot more than other numbers. Every month, we have two different versions of the number of jobs added to the economy. One is the number of jobs added by employers. The other is the number of people whose employment went up or down. The blue one is what employers tell the bureau of labor statistics. The red line is what individuals tell the bureau of labor statistics. Theres some conceptual differences in terms of people who are selfemployed or multiple jobs holders, but for the most part, these two numbers should be the same. If you look at that red one, you see it bounces around all over the place. In october of last year, it said that employment went up by 800,000. You would have thought that was the most phenomenal month ever. Then this march, you would have thought the economy was collapsing. Employment went down by 500,000. Both of those months, if you had thought either of those things you probably would have been wrong, because youre relying on a survey that sampled 60,000 households and has a decent amount of error and volatility in it. The reason that the markets in the newspapers concentrate on whats called the establishment number, or the Payroll Survey, is because there, youre surveying nearly 600,000 work sites that employ millions of workers. That also has some error associated with it, but the error is a lot smaller. So those two months i showed you know, october certainly was probably a better month than march, 200,000 rather than 100,000, but not the same dramatic differences. Thats the first lesson, is when you have a choice, choose things that are less volatile, things that are less volatile, often things that rely on a larger sample size. The second piece of advice i have is just to look over longer periods of time. So those blue bars are the Establishment Survey or Payroll Survey jobs. That tells you the number of jobs added each month. There you see, once again, march looks really bad. But then, you know, may looks pretty good. And, you know, it bounces around from month to month. I spend some time looking at those blue bars. I try to spend a lot of time looking at that red dotted line. And that red dotted line is the average over the last 12 months. If you look at that average over the last 12 months lately, what it tells you is the pace of job growth has picked up a bit. 240,000 jobs per month on average, for the last 12 months, as opposed to 217,000 before that. The 217,000 is a little bit higher than earlier, but it broadly conveys a picture of stability. And thats an accurate picture, because some months you go way up, some months you go way down, but it roughly has averaged out to this pace of a bit over 200,000 jobs a month. The red line, when youre at a real turning point in the economy, is going to lag a little bit. Youre not going to pick things up as quickly when you look at a 12month moving average, but generally, looking over a longer period of time is going to get you a little bit less excited about each monthtomonth blip and a little bit more focused on the trend in the economy. This tip also applies or it especially applies with Something Like Unemployment Insurance claims. Here, every week we find out how many people made an initial claim of Unemployment Insurance. This is actually administrative data. This isnt based on a survey. This isnt based on a guess. This is based on, if you apply for Unemployment Insurance, that has to get reported, and we count the number of people that applied. The states do. They tell the department of labor. It adds it up and reports it. Its great, because you get it every week. Every week you can have a new piece of information about the economy. The problem is two weeks ago you would have panicked, because it jumped up to about 300,000. This week, you would have uncorked the champagne, when it fell to the lowest its been since 1973, 255,000. You know, both of those numbers are probably too extreme, and, again, if you look at here people tend to look at a fourweek moving average. Its much smoother than that red line, which zigzags a lot from week to week. When confronted with noisy data, one thing you can do is look to better data with larger samples. Another thing you can do is look over longer periods of time. But a third thing you can do is find different measures of the same concept and combine them. This is something youre increasingly seeing being done in comments of Federal Reserve officials. They talk about this in the context of labor market indicators, investment banks and analysis analysts do it which is they take indices that combine a number of different majors. There are other a dozen measures of wages and compensation. Theyre all slightly conceptually different, but they also all embody different errors and different quirks. This shows three of them compensation per hour, the average hourly earnings, and the employment cost index. Theyre all bouncing around in different ways. Theres a statistical technique called principle components analysis, which says imagine that some underlying component is moving all three of these and lets try to estimate it. Its exactly just as simple as a weighted average of the three, but it uses statistics to find out which weights you should put on the three. That black line there is probably a better measure of wage growth than any one of those three underlying series are. If you take a lot of different series, looking at the same thing, and you average them together or, if you have a statistical package at your fingertips, do a fancier average and call it the first principle component. If you look there, youll see wage growth went down. Wage growth lately, the tentative signs, the pickup of wage growth, you see in that black line that a number of people have referred to lately. Another place where i really like combining data is when it comes to the g. D. P. Statistics. And a littleknown fact is when the g. D. P. Numbers come out, they always report or not always but they eventually report two different numbers. One is gross domestic product. And that adds up how much everyone bought in a given quarter. How much consumers bought, how much businesses bought, in terms of plants and equipment, how much the government bought. And if you look at that, for the First Quarter of this year, it said the economy contracted, 0. 2 . The other thing the statisticians do is they add up all the income in the First Quarter, how much wages were how much profits were, a few other concepts as well. And that grew 1. 9 . Turns out, when you go through the arithmetic, those two are the same exact thing. They are two different ways of measuring the economy. And the simplest way to think about that is imagine we dont trade and imagine people cant save their income. Then everything you make in a given quarter, youre going to spend in a given quarter. So income has to equal spending. You go through something a little bit fancier and it turns out that is still true. So one way of measuring the exact same thing was 0. 2 . Another was 1. 9 . Well, which of those two is better, g. D. P. Or g. D. I. . Turns out the answer is an average of them. Here, doing it 50 50, which would tell you 1. 9 is much better than using either one of those numbers individually. Its a much more accurate reading of how the Economic Data will eventually be revised. Its a much more predictive of whats going to happen in the economy Going Forward. And its just, if you could pick one number for growth, you would pick the average of the two. The good news i have for all of you is right now, if you want the average of the two, you need to add them together and divide by two. Starting next week, the bureau of economic analysis, with the g. D. P. Numbers, are going to for the first time ever, Start Publishing that as a regular thing. It wont be in the headline. It will be toward the bottom of the release. But i know ill be turning to that first before i look back up at the headline, because that will be the depth measure of how much the economy grew that quarter. Theres another thing you can do with noise. As i said, you can look over a longer period. You can find the best data to look at. You can combine different measures. But the other thing is every measure of the economy tells you some different facet of the economy. And so it can be good to look at a number of different ones. This First Quarter, g. D. P. Fell by 0. 2 . Appropriately colored red in this graph. But employment rose by 2. 2 , which was quite a strong increase in employment. Income went up 1. 9 . Consumer spending went up 2. 1 and Industrial Production was 0. 0 . Theres a lot of other indicators, but these are five particular ones to look at. So if you just saw g. D. P. , youd be more nervous about the economy in the First Quarter than if you take in the full context and the full set of data that one might choose to look at. One of the reasons why were so concerned about data and why you dont want to overreact to any one piece of data and you want to put everything in context is that the data we get is revised a lot. And the reason its revised a lot is its all based on surveys. And in the case of g. D. P. , for example, you dont have a the first time they publish it, they dont have a lot of the most recent trade data or inventory data. They only get that as time goes on. The successive revisions to growth, if you look at the Fourth Quarter of 2001, for example, the first estimate was 0. 2 . It was revised up to 1. 7 . The First Quarter of this year went from positive to a big negative to a small negative. And you see that all the time. So if you get really attached to a narrative around that first estimate, 0. 2 , 0. 2 , turns out you might be attached to a narrative that subsequently you need to have a new story to explain that it was actually really good that Fourth Quarter of 2001 and relatively weak that First Quarter of 2015. At least measured in this way. This is probably a little bit obscure for some. But its a neat point, so i thought id share it with you, which is that not all revisions are created equally. If you look at Something Like real durable goods consumption and if you look at the third estimate and the first estimate, those are almost exactly the same. Thats because when the g. D. P. Numbers come out, they have a very good measure on consumer spending. They dont learn much by the time they do the third revision, so they basically publish the same thing. Real health care consumption the first estimate and the third estimate are almost entirely unrelated. Thats because there they use a survey of the Service Sector to figure out Health Spending. And they dont get the results of that survey until after they publish the first estimate. So they use very approximate guesses to do that first estimate of Health Spending. Then they revise it quite a lot for the third one. Thats important, because this year, for example, people or last year, people looked at some of the Health Spending data and constructed a whole narrative of its growing really quickly. That tells you blank. Then two months later, it was revised, and it turned out that that wasnt what the data actually said. We at the council of economic advisors had written something saying dont even look at this. This data is going to be revised and its going to be revised quite a lot. So once we get the data, well tell you what we think. But the first estimate for health isnt worth looking at for real durable goods consumption. Thats just by way of example. It has a sense of whats going to be revised and what is not going to be revised. Part of why data is noisy, all these statistical quirks, these small sample sizes, that you dont get the survey you need on time, that you need to do seasonal adjustment, all these different things, but the economy itself, the underlying truth itself is noisy. Just weird things bounce around from quarter to quarter. The First Quarter of this year for example, we had really bad weather. That temporarily impacted the economy, not in the long run. You can look at the Economic Data and get a better sense of which things are pretty transitory, bounce around a lot, and tend to reverse themselves and which things tend to continue. So within g. D. P. , inventories bounce around. They can be positive. They can be negative. What they are one quarter, you know, if theyre great one quarter, that doesnt mean theyre going to be great the next. It might even mean the opposite. Consumption is, you know, more stable. And one way that we use that at the council of economic advisors is were very focused on the growth rate, not of g. D. P. As a whole, but of consumption plus investment, because those are the two parts of g. D. P. That, in our statistical analysis, we have found are the most stable which means theyre the best predictors of what g. D. P. Is going to be in the next quarter or over the next year. And so if you look there at the blue, thats g. D. P. It was really negative at the beginning of 2014. A lot of that was for the noisy reasons. So if you were looking at the variable we like, the orange one, it wasnt a great quarter, because of the winter, but, you know, it didnt look quite as bad. Then you had this huge rebound in the blue bars, in g. D. P. You didnt get quite as much of a rebound in this other. In general, those orange bars dont bounce around a lot, because theyre giving you more of the signal. The blue bars, which is g. D. P. Are noise. Another great piece of news for all of you, as of next week, this also is going to be added to the release along with the g. D. P. Numbers. Youll be able to look this up yourself and, again, it will be one of the first things that i know ill turn to when i get the data next week. I want to just put, you know, a few more things down on the table for you. And then well open it up to discussion with jim and with all of you. One is that theres a real tradeoff between some data, which can be really up to the moment, you know, the ism manufacturing survey. The Marketing Moves a lot in response to the ism manufacturing survey, or can move a lot. Thats because you get it were going to get it the week after next, the very beginning of august. Well get the number for july. And thats great, because its about as up to the minute as you get in Economic Data. But its really noisy. If you asked me how the economy was doing in july of this year and you ask me that two weeks from now, ill look at the ism manufacturing survey, because that will be the only piece of data i have for july. If you ask me how the economy was doing in july of 2005 or july of 1995, i wouldnt look at this piece of data. Id look at Everything Else we have, which takes longer to compile, but then is ultimately more accurate. At the other extreme, real median household income, the latest data we have for that is 2013. Were going to find out the 2014 number in september of this year. You find out basically more than a year after it elapses. The market could care less about those numbers, because they dont care about the economy a year and a half ago, but if you want to ask, you know, what happened to the typical family in the 1990s, what happened to the typical family in the recession, those are the data youre going to want to use. Theyre less timely, but more complete. Just to put, you know, two more things down on the table, before we open it up, is be careful about longerrun trends. Some people like to look at the Participation Rate or the employment population, for example. Those are useful variables, but they dont just tell you, is the economy going up and down in a business cycle, they also tell you about underlying societal forces like demography, the age of the workforce, whether women are participating. So the example i have here is if you look at the fraction of the population that was working, you would have thought 2009 was a better year than 1955. If you look at the labor force Participation Rate, you would have thought 2009 was a better year than 1995. Thats why, when we want to compare those two years, you know, we use the Unemployment Rate. 1955 is quite low. Then in 2009, we were in the great recession, and the Unemployment Rate was very high. I would do the same thing now as well. When we go month to month, a lot of people are looking at lfpr. Those are important variables. They help fill out the big picture, but theres a reason why the Unemployment Rate is the headline. Thats more comparable over time because its less subject to some of these other bigger, broader demographic trends. And, finally, and this is the simplest one, always make sure youre distinguishing between real and nominal data. In 1981, wages rose 8. 6 . In 2014, wages rose 2. 3 . Which one of those years would you rather have been a worker in . The answer is definitely 2014, because the inflation rate was quite low in that year, so you got a real wage boost as opposed to 1981, when the inflation rate was really high, and that cut into your real wages. So this isnt just real wages. Its true of everything. Always make sure youre looking at whether things are adjusted for inflation. I would summarize and be a little bit specific. As i look at the employment situations, well get it two weeks from friday. It will tell us about the months the month of july, so its timely. The establishment jobs number is the first thing to look at. Watch for the revisions we get for may and june, and for the average over the last six months or a year. The Unemployment Rate can rise or fall for good reasons, but its the best thing to look at. When you look at the Participation Rate, it doesnt just tell you did the economy get better or worse, it also tells you, did the population get old or not older. And when youre doing wages make sure you adjust for wages which will be hard to do because you have to wait a week or two for the cpi data. When it comes to g. D. P. , watch for the average of g. D. P. And g. D. I. , and then look at that private domestic final purchases i was showing you, which gives you a little bit more of a signal than the noise, and look over the last four quarters, because weather and all sorts of things jerk the number up and down from quarter to quarter. Thats what i try to do when looking at data. And some advice for all of you. Mr. Kessler thank you. [applause] mr. Kessler that was really terrific. I appreciate you taking the time to put together those tips. And i look forward to seeing that on your website. And for folks who dont do this already, you put out, after the jobs report, a monthly blog that i just think is invaluable. And it usually comes out in the afternoon. Mr. Furman oh, no. We usually get it out by 9 30, 9 40 a. M. Mr. Kessler i usually read it in the afternoon. [laughter] mr. Furman fair enough. Mr. Kessler but i think that what it does is, it cuts through the noise and the clutter, which is what you have talked about here. But i think, just as importantly, is really one of the most its really one of the most understandable while at the same time, deep dive into the economic, employment and wage situation in the country that i read on a monthly basis. So i appreciate the readability of that report. And everybody should take a look at it. Lets start with wages, ok . Because theres definitely a lot of talk about how the middle class needs a raise, but were also seeing some upward trends. One of your later slides, the 2013 numbers, youre definitely seeing some upswing. And one of the frustrations i have, when im looking at Economic Data, they talk about how wages only rose 2 . Well, inflation is under 2 . And i worked in 1981. I dont remember getting an 8. 6 raise. But inflation was Something Like that at that point or even higher. What are you seeing in wages and what do you look at in the wage area . Mr. Furman so, you know, in terms of what data i actually look to, the jobs numbers, when you get those, they also include wages. Those wages are based on a survey of employers. And thats, you know, quite a useful number to look at. But the two important lessons i had three important lessons i had in all of this is, one, look at a couple different measures of wages. Lately, something called the eci, the employment compensation index, is growing more quickly than this other wage measure. Does that mean that is true . Does that mean the other is true . Anytime these things tell different stories, usually its somewhere in between. Thats what i tried to show you with that average. So the totality of it, i think you do see some pickup in nominal wage growth. Not enough pickup. Wed like to see more. In the second, make sure youre adjusting for inflation. If you look at real wages for the last two and a half years, theyve been rising at more than twice the pace that real wages rose over the course of the last economic expansion, from 2001 to 2007. I think you actually have seen real wage growth. Again, wed like to see more. We have a lot of ideas to see more, if you want to talk about policy, but i think you really are seeing real wages growing. Something that i think makes it hard for people to compare is inflation is just generally trended down over time. I mean, partly, lately ideosyncratic things, like a fall in the gasoline, that we cant expect gasoline to always fall in price. But just the overall target or average for inflation has also fallen over time. And so, you know, the nominal wage increase you need for a given increase in purchasing power is different than what it was in the past. Mr. Kessler uhhuh. In a talk that you gave recently, i believe it was at the peterson institute, was that where it was . Mr. Furman yes. Mr. Kessler you talked about productivity and you also talked about total factor productivity. And what that reminded me of the total factor productivity, was in some ways, like the dark matter in the universe, where its both the cause of and the solution to all of the universes mysteries. But can you explain a little bit what youre seeing in productivity and what total factor productivity is . Mr. Furman so productivity, and especially total factor productivity, are among the most important things in the economy. Labor productivity is how much output you get for one hour of labor input. And the reasons why you can get more output for a given amount of input is your workers can be better educated. Your workers can have more Capital Machinery at their disposal. Or, because you combine labor and capital better, because you have better technology, better ways of managing your inventory, what have you. That last thing is called total factor productivity. And its the most exciting thing you can have in the economy, because it says, just for a fixed amount of labor or a fixed amount of capital, youre getting more and more stuff out of it. If you want to understand our fiscal situation, you need to know what productivity growth is going to be in the future. If you want to understand why wages have stagnated since the 1970s, you need to understand why productivity growth has been slower since the 1970s. If you want to have a recipe for a faster Income Growth Going Forward, theres a lot of things you need. But one of them is faster productivity. So this is essential to Everything Everything in the economy. In terms of measurement, some of the issues were talking about its just about the noisiest economic variable you have because the enumerator has output, the denominator has hours. Both of those has errors. When you divide one by the other, the errors get even bigger. So i like to look at productivity over periods of you know, 10 years, 15 years sometimes even longer. I never look at the quarterly numbers on it, because they just bounce you know, they make you dizzy. They bounce around all over the place. So try to discern longer trends. Statistically, theres evidence that if you want to predict productivity in the future, the best thing is not to look at the last year or two. Those pick up a lot of noise. Its to really smooth that noise out, look over the last 10 years, 15 years. And that gives you a sense of what the potential of the economy Going Forward is. Mr. Kessler we had about 30 years of very, very high productivity growth after world war ii. It declines for maybe about two decades. Then it rebounds a little bit. Is there a predictive nature to productivity . Is that period after world war ii a unique period that is never to be repeated again, unless we have world war iii and then we have a nice aftermath after that . Im not rooting for world war iii, just to be clear. Mr. Furman predicting productivity involves predicting what inventions people are going to come up with in the future, that they havent come up with yet. If i knew the answer, i would invent those things and wouldnt be sitting here talking about Economic Data. So i have a certain amount of humility in answering your question. I dont think anyone knows the answer to it. I think the end of world war ii, those decades were partly a special period as the Global Economy came back together after this terrible collapse, as we figured out how to commercialize a lot of the innovations, like the jet engine that we developed for fighting the war. But i think other things could be reproduced. That was a period of tremendous infrastructure investment. Very high levels of Public Investment and basic research. Theres no reason why we cant do that again. If we did that again, we would certainly get higher productivity growth as a result. Mr. Kessler i am going to ask one more question, and then we will turn it over to the audience. Get ready to raise your hand and asked questions. Go over to that microphone and ask questions. So again, looking backwards, from 1950 to 2000, u. S. Economic growth averaged 3. 7 , and then from 2001 through the First Quarter of 2015, it averaged 1. 9 . Are there things besides you know, again, you noted you cannot predict the inventions that will come in the future but are there factors demographically that say there is a limit to the growth that a country like the u. S. Can have on a sustained basis . 3. 7 is not a realistic place for us. What are the factors that going that go in to growth, like maybe the Slower Growth is not as bad as what i just pronounced . Mr. Furman right. Maybe i will do one of you. Output equals output per hour times hours. The hours cancel, the output equals output. That, im quite confident, is true. To understand the future of growth, you need to understand the future of output per hour. Output per hour is productivity. Thats what we were just talking about. I think there is a lot to be excited about in terms of productivity with, you know, the internet, cloud computing, mobile devices, advanced materials, personalized medicine, clean energy you name it. Theres also its of really exciting things going on, many of which themselves could increase the pace of productivity. We are not going to get the hours growth we had in the 1950s and 1960s and 1970s again for two reasons. One, people born in 1946 started to enter the workforce in the 1960s and 1970s, and that led to a big bold in hours. To a big bulge in hours. The other things is the percentage of primates women in the workforce went from about a quarter to more than 2 3. You saw a big influx of women. Were definitely not at the ceiling. Theres more room to grow, but nothing like the huge transformation we had. On the hours side, there is a unique, nonrepeatable story. On the thing that is more important the output per hour because that is what we will ultimately get for what we do theres no reason why we could not make choices to do a lot better in the future. Mr. Kessler just to follow up on that, we also have an aging population, so that output per hour is going to have to cover benefits for people who are no longer in the workforce and will never be back in the workforce. Do the future primeage workers have a burden on their hands . Do they need to become even more productive than previous generations . Mr. Furman right. You have to do things going on one is you will be supporting more people and the other is you will be producing more with each hour. To understand the magnitude of the fiscal challenge, we can predict how reasonably well hominy people you will we can predict reasonably well how many people you will be supporting. That is reasonably predictable but you really get a sense as to what that fiscal challenge is, to how much you could produce with your hours in the future of productivity is critical. Mr. Kessler over here. Hi, chairman furman. Thank you for this opportunity. I want to to ask about the physical jobs report and the time series it uses in standardizing the data. I know you want to have a standard data set that goes back years and even decades that you can look at trends over time but are there any trends in the new economy you see thats not being captured by the jobs report, the g. D. P. Report, or these other statistical sources of information . Mr. Furman that is something we have been putting some thought into. I do not have a definitive answer for you. I have a hunch that that all matters, but it probably matters a little bit, and most jobs are still not new economy jobs. But certainly, when you look at Something Like the household survey, they call and ask if you are working or not. For most people, the answer is straightforward yes or no but for some people, if youre doing something parttime, in a sharing economy, you tell the person yes or no. If youre working a sharing economy, you are not necessarily working, and uber is not going to list you as an employee unless you are sitting in their headquarters rather than in traffic. So i think this does present with all the different ways we look at it, a set of challenges. Im just not sure how large those are relative to the overall story we are seeing. Thank you. Its good to see you and thank you to jim for putting in on. I wonder if we can connect a couple of bigpicture items that have come up. One, we talked about the challenges and driving productivity. I wonder if you could help us marry that to the extent that these things are connected with another big issue that has arisen with respect to two large of a focus on the short term. Our corporations somehow depressing the amount of capital that may be going into, for example, productivity enhancing types of technologies or other things because of the drive to show better Quarterly Results . How would you look at them . Theres mr. Furman this to do different issues. One is the set of data issues i was talking about. I try not to get to obsessed with a given week, a given month, a given quarter. Try to look at what the longerterm trends are understand where weve come from, where we are going. I try to take a longerterm perspective and understanding what is going on in the economies, because otherwise you will come across as too exuberant or two depressed, depending upon the week. In terms of the Public Policy question, which is at the heart of your question, i think that is a really important discussion to be had. What can you do to make sure incentives are aligned . Im stalking before, and to some degree, this is related to government policy, too. Basic research that is something businesses will underinvested because they do not capture the full benefits. Even if you take the longer effective, a business is still not going to invest in basic research because it benefits everyone. The government is the people that can do it, and thats for thats why funding is so important. We have seen a shift in our Research Portfolio away from basic research and towards more applied research and development, and that is important. That is terrific, too, but it does not make up for some of what you need over the longer run, so i do think a longer run perspective is important. Lets limit questions to those who are already in line because we do have some time constraints. Thank you for arranging this. A terrific hesitation. If i can lower you back to the classroom, your students will be very lucky. One figure you did not mention was the trade and current account deficit. Over time, the industrial structure that you have often is linked to the innovation system, which gets back to that magic figure, productivity growth. Do you think of making more focus on the trade deficit and how should we ourselves think of it over time . Mr. Furman to clarify, my goal here was to give you not an uptodate perspective on where the u. S. Economy is, but just some ideas about how to read numbers can can spin them, combine them. The trade deficit or a similar concept, the current account deficit, is definitely important. It shows up in gdp. Gdp shows up domestically. Mechanically, trade deficit subtracts from gdp. The underlying economics are markup located, so when our economy is doing well, we will draw in more imports. That will cause our trade deficit to go up. Similarly, when our economy weakens, we will buy less from abroad. Our trade deficit with go down, but that was bad news in that case, not good news. Its a little couple catered to understand when the trade deficit is causing the overall economy and when the overall economy is causing the trade deficit. But certainly, as you said, it will also affect the composition. Another thing im quite sure of is that for the world as a whole, the trade balance should at least measured correctly at up to zero. For some to have large surpluses, that means others have deficits. Q certain major countries in the Global Economy, they are committed to macroeconomic Exchange Policies to give them surpluses. The United States is often on the side of that, so it can have an affect on our economy, and thats why our International Diplomacy and arrangements were pushing quite hard on those macroeconomic policies, the current policies, to help redress and reduce some of those global imbalances. I should preface my comment by saying im not an economist. Trying to wrap my brain around this stuff. You reference climate productivity and stagnating wages. Do you have an advice on how a noneconomist should interpret that . Looking at Labor Productivity versus total factor. For some of who does not deal with economics, do you have any advice . Mr. Furman thats a graph i have reproduced a lot, a graph i have used and one that has a very important message. One message people usually do not see that is a really important one is one that jim brought up earlier, which is productivity growth since the 1970s has been slower than productivity growth from the 1940s through the 1970s. Part of why wage growth has slowed is that productivity growth has not slowed. One reason why that does not leap out at you in the grass is that the grass the graph might show a shorter period of time, or more egregiously, someone did not do the graph in logarithms. They give you the same unit of distance as a growth rate. Something keeps going up by the same unit, the growth stays the same. The growth looks straight, but its actually slowing over time. Discussion into a pet peeve of mine. I will stick with it anyway. The second thing is then there is a gap between the productivity and the wages. Thats the result of two things one is an increase in inequality and increasing failure of workers to get the full benefit of what it is they produce. A shift in the overall allocation of income in our society towards capital and away from labor. All of that, to me, at least, is concerning and really important. The other reason those lines average is a set of statistical quirks. For example, the productivity line uses one price index, and the wages line uses a different price index, and they are behaving differently over time. About half of the differences best types of statistical quirks. About half of it is the underlying inequality and set of issues. The reason i draw this to your attention as there are some conservatives who have come out and said, look at all these statistical quirks, so dont Pay Attention to the picture. They are right that there are a bunch of statistical quirks, but even correcting for them, that picture remains. Thats a long way of saying strong productivity growth is part of the story. The failure to properly capture productivity growth is part of the story, and theres a whole bunch of competitions and cycles around the data. Mr. Furman i think about 10 of the difference between those lines is nonwage compensation but a smaller part of the story. And our final question. Thank you for taking a question, and thank you, jim for putting this together. One thing i wanted to ask about is the concept of history and to what extent you think that is playing a more pronounced role in this recovery or not in terms of labor markets and the Unemployment Rate. On the first kind of wrong, do we have Good Measures for that and do we have a good understanding of how that works and two, can policy affect that much . Mr. Furman let me explain that a little bit, for those that do not know. The concept was introduced into the economic literature because europe had a really low Unemployment Rate for decades, and in the 1980s, it went way up and stayed up. So olivia glen shot and Larry Summers advanced an argument that that was the european economies getting stuck in this new bad place and stayed there. There was and still is evidence that the United States labor markets are much more flexible, and that flexibility means you are less likely if you end up in a bad place to get stuck there. When this recession first hit, we had Unemployment Rates we had not seen since the 1980s, and we had sustained longterm unemployment at rates we had not been, you know, in the entire postwar period. So a lot of people, including myself, were nervous. What of this what if this longterm unemployment is here to stay . What if we get stuck . At the time, i was cautiously hopeful that the flexibility of the u. S. Labor market would we mean we could rebound. The Unemployment Rate now is 5. 3 . Thats back to the average of what it was in the previous economic expansion. The longterm economic rate remains elevated relative to what it was before, but even there, it has come down and come down even faster. It seems that is also on track to being in the neighborhood of where it was before the recession. Im feeling decently good about this, but i would never take it i think it is so important to be aggressive in dealing with unemployment is the longer the unemployment lasts, the more likely that somebody loses the skill to have a job, to find a job. Employers do not want to hire them, etc. So what is temporary unemployment becomes permanent unemployment. I think we probably for the most part avoided that, but i do not think it is something we could take for granted in the future and thats why a think we need to be vigorous and dealing with it the cycle. Jim thank you so much. I consider this our a gift. This was really, really, a spectacular lesson of how to look at Economic Data, and i know it will make a difference with me and our offices, and i hope the people here and the people watching at home appreciate the way you broke this down in a very, very simple but very informative way. Thank you so much for taking time out of an incredibly busy day that im sure youve had and joining us today, so thank you. Mr. Furman thank you. [applause] jim thanks, everybody. Have a wonderful weekend. I dont know what our next Capital Markets Initiative Event will be, but we will certainly let you know about it, and we hope you will join us again. We will take you live to the u. S. Floor house with general speeches. Legislative business begins at 2 00 today. 17 bills under consideration including one dealing with the secret service and white house protection. Recorded votes will happen at 6 30 eastern the senate is also in to continue highway and mass transit funding bill after the sunday session. During yesterdays liberations lawmakers seeked to kill the Affordable Care act and they advanced an amendment reauthorizing the Exportimport Bank. You can see the senate live on cspan2 and the house in about 15 minutes at noon eastern here on cspan. And a discussion now on legislation being taken up in the senate today. The Highway Trust Fund which runs out of money at the end of this month. Heres more from this mornings washington journal. Its crunch time for the Highway Trust Fund which loses its funding authorization if congress doesnt act its right. What would be the impact if that funding deadline does hit and congress doesnt take action . Guest its going to mean a crisis so transportation and local governments on friday, the authority for programs that are provided for federal governments the highways, transit and Highway Safety expire, meaning that no new authorization of projects can take place but at the same time, the Highway Trust Fund will essentially run out of money, which means that the federal government will not be in a position to make payments to stage for work already done on highway projects. On work already done on projects. Host at what point would they ing and seeing impacts is that deadline have been . Would it be within days or months . Guest probably within months, though i would contend that they are already seeing impacts. Many states have already canceled projects due to the uncertainty of the federal program. We have no for longtime that this deadline is coming, yet states did not know what the circumstances would be. That means that some have had no choice but cancel projects. The state of georgia, for example, has canceled 750 million worth of projects already. Tennessee, 400 million. Louisiana and other states have said, we cant go forward with projects that we do not know we will have dollars for. Even now, states are already beginning to cut back and people will see the impacts of that in this construction season. Host for viewers who want to know the impact interstate, but right is a good person to talk to about it. He is the director of the American Association of state highway and transportation officials. For folks who are not familiar give us a preview. Guest we provide a variety of Technical Services to the states, but we also advocate for them here in washington dc. Many of the policies under consideration by the congress have a direct effect on the states because they are the primary deliverer of the programs. 41 billion per year to date flows through the federal highway programs. Almost all of those dollars are delivered to the states. Host in viewers want to talk about Highway Trust Fund or give us a sense of what the highways or roads are like where you jive, the phone numbers this morning are 202 7488000 for democrats,. Republicans, 202 7488001. Independents, 202 7458002. Can you take us through what happened with the Highway Trust Fund over the weekend . Where do we stand today and action that Congress Needs to take this week . Guest there are two very different tracks going on between the house of representatives and the senate. The house, two weeks ago past eight short extension that would carry programs through december 18. At the same time, they provided a billion dollars approximately of additional revenue necessary to make payments to states. Their approach is if they have enough time this fall to look at International Tax reform, that would give us the means to authorize funds for the next three years. The senate is now in the process of trying to enact, or pass, a multiyear bill this week. It would be a sixyear bill however it would only contains three years with the funding. They were only able to find about 49 billion of socalled offsets to pay for the transportation program. They would like to go multiyear now and provide that certainty that people involved in this program need to carry work forward. Host do you have a preference on if the sixyear deal moves forward, where the pay comes from . There was talk last week of using some funding from, i believe it was Social Security for those who have warns out against them . That was then taken off the table. There has has been talk of cells from petroleum. As a matter where it comes from . Guest are much of from the beginning has been longterm and sustainable. Frankly, we are beyond that point now. Sustainable means user fees. The Highway Trust Fund has been funded by user fees, but that does not look like it is in the cards. Politically passing a gas tax increase is not on the table at the moment. Given that, we really dont have an opinion. We know this highway spending is important and the Economic Impacts of not doing what the congress is about to do is significant. We dont really have a position at this point. Host why is a federal gas tax increase not on the table . It has not been increased since 1993. Guest entirely politics, john as far as we are concerned. It makes sense. We think it has shown to have the support of citizens. If you look around the country a number of states have increased their own gas taxes and they have not suffered these sort of political consequences that i think many fear here in washington. In fairness, it is not something that has been supported by republican leadership, nor by the administration or many democrats. While i think there is a basic understanding of this is a system in which the user should pay for the benefits they receive, right now, any tax increase, but especially a middleclass tax increase is seen as politically toxic. Host we are taking your calls and questions. The lines for republicans, democrats, and independence ts. We will start with pauline in ohio. Caller good morning. I want to ask i want to ask one question. What is the money going to . What is all the money for streets, our buildings. I get so tired of looking at my street, how broken up it is. The whole country is broken up. Where is the money . That is all i want to know. Either way, just tell me the truth. Guest much of the money that is provided through the federal programs is directed towards what i would call the higher order system the interstate system which everyone in this country is familiar with is one of the primary responsibilities. Another large portion is put towards what we call the national highway system, the 160,000 miles or so of roads that predominantly move interstate commerce. They are the roads and streets there are typically fourlane divided roads. They are ones that provide for connectivity across state lines. When you talk with a federal program, you are really talking about those roads that carry high volume. Often times they carry commerce, meaning truck traffic. There are federal dollars that flow to other purposes, but when you think about the purpose of a federal program there has to be a national perspective. It is really those higher order roadways. Our certainly issues on those higher order roadways. We have structurally deficient bridges and functionally obsolete bridges. There are a lot of needs to be met. When you look at local streets and roads, predominantly those are not once funded through the federal program. Host we are talking up the Highway Trust Fund and the looming deadline on friday to give you a sense of what might happen if that deadline passes. Here is a chart from the Congressional Budget Office talking about the cash flow of the highway accounts of the trust fund. You can see the lighter blue line on top is the outlays and the darker blue line are the receipts. These numbers in the 20 billions of dollars on the left side in the red is the Highway Trust Fund is allowed to expire. Were talking with bud wright of the American Association of state highway and transportation officials about some of the consequences. We want to hear thoughts. Diane is up next in arkansas line for republicans. Good morning. Caller im so glad this is on this morning. I just got off a two week trip going west from arkansas i went through seven states. The roads are horrible. You cannot blame bush for this. It was supposed to be shovel ready when obama came in. Then, he laughed one year later that it wasnt. I dont know how the people in oklahoma and new mexico, how they exist. Its big holes. It jolts your car. Where has the money gone . You cannot blame bush for this. Guest i would say thats the reason we be the certainty of this federal program. Many of the state dots dont feel they can make commitments to longterm projects the ones that would require dollars over more than one year, because of the uncertainty they face now. The last time at the federal level that we had a multiyear reauthorization was 10 years ago. The states really are forced to look at shortterm, relatively routine maintenance products because they cannot be sure what the federal government will be providing as we go forward. If the states would have a blueprint, a roadmap, if you will, of what the next 45 years will hold, then you will see them make a dent in the roadway projects that you are talking about. Host the term shovel ready reminds the of stimulus dollars. What is the status stimulus spending when it comes to highways and transportation . What you think the legacy will be in that area . Guest the Stimulus Program was very successful. One of the misconceptions, with regard to the recovery act is that a huge portion of those dollars went to highway expenditures. They did not. About 47 billion was for transportation. Those dollars were used very effectively. They got out the door quickly, they have all been expended they were on projects that made a difference in the states. Most importantly, they provided for employment opportunities. Not just in building growth and improving roads, but those who were able to get to jobs, the action carry out the business that they carry out on a daily basis. Host was an example of a project that was funded there a viewer might recognize . Guest i cant tell you want to be honest, but it was a lot of what i would call be paving jobs, reconstruction jobs on highways in all of the states. Host massachusetts is up next, and joe. Caller thank you for taking the call. I think people would probably supported if they could be sure that the money would go far. Reconstruction of rid bridges. The problem is it is used for other things. People just dont trust that the government will do what it says it will do. If this is for people to use the roads, that is one thing, but it has been used for other things. That is why i do not support it myself. Host it is a very fair comment. I would contend to that the dollars are being used for the purpose they have been authorized. Highway and transit spending has had to rely on general Fund Subsidies for the last five years. Host transfers at the end of the fiscal year . Guest thats right. We have had to subsidize to the tune of 62 billion over the past five years from the general fund of the treasury. That means that highway spending and transit spending is competing with other government priorities. That makes it very difficult and is one of the reasons why we are in the position that we are in now. Fighting those additional dollars is no easy task. The dollars made available through this program have to be held accountable. One of the things done in the recent authorization of federal programs was to put in place performancebased expectations. That is to say that we will set targets in areas that were identified and federal law for how we will reduce congestion how we will improve safety, how we will improve pavement performance. Those are things that citizens can look at and say, ok, we received text number of dollars, here is what we should expect in return. I think states are ready to stand up and say, if you give us the resources, here are the projects we will deliver and the outcomes you should expect. Host you said the senate is pushing a longerterm deal. The house would be the 34th shortterm funding extension. Expectations for this week . Does the house seem willing to take up a longerterm deal like the Senate Proposed . Guest procedurally, looks like the senate will have to go till Late Wednesday or early thursday to pass this multiyear deal, if they are successful. Certainly the will be close. Given that fact and off the back of the house seems to plan to adjourn on thursday, it seems all certain that there has to be a shortterm roots. As i mentioned earlier, the house is already past a shortterm extension. There has been some discussion though nothing has been officially ruled out yet that is the senate were to proceed, they also would pass a twomonth extension at the same time. That would enable them to take the month of august, and some part of september, and begin to negotiate with the house on what would be a longerterm extension. I think the likely outcome is that we will see a shortterm extension, but whether it be the twomonth version yet to be determined. Host bud wright is with the American Association of state highway and transportation officials. Were talking with the roadways and bridges and this country and the trust fund that the federal government has used for that. John is in pennsylvania, line for independents. Caller good morning. First to straighten out that women who traveled across the country it was not bush or obama. Remember, the republicans made the we will leave the segment. You can see this segment in its entirety on our website cspan. Org. Check the cspan video library. General speeches will begin in the house and later today, members will take up debate on 17 suspension bills and that starts at 2 00 p. M. Eastern. There will be at least one bill dealing with the secret service and white house protection. Recorded votes will happen at 6 30 eastern. Deliberations lawmakers blocked an agreement seeking to kill the Affordable Care act. They advance amendment reauthorizing the Exportimport Bank. You can see the senate live on cspan2. And now live to the floor of the u. S. House, here on cspan. [captioning made possible by the national captioning institute, inc. , in cooperation with the United States house of representatives. Any use of the closedcaptioned coverage of the house proceedings for political or commercial purposes is expressly prohibited by the u. S. House of representatives. ]