once it was hijacked? and the federal government fails us time and time again. let's go, "outfront." i'm "erin burnett." countdown to shutdown. 28 hours to go. feel like deja vu? me too. i feel like bill murray in "the ground hog day." ♪ put your hand in mine >> the government is due to shut down tomorrow. ♪ then put your little hand in mine ♪ >> we're now less than 30 hours away from the government shutting down. ♪ >> only this isn't "ground hog day." this is our reality. this is the eighth time this year that the united states of america has been flirting with a shutdown. remember august when the misguided debt ceiling debacle costed the entire country the top credit rating in the world? these shutdowns aren't about politics, they're about money. democrats and republicans never passed the full budget. this time the government will run out of money tomorrow at midnight unless a bill is passed. what's strange about this shutdown is democrats and republicans have mostly agreed on a deal. but harry reid is holding up a vote until the payroll tax extension passes. we need congress to do three things. one, compromise on the payroll tax. two, pass the funding bill, and three, make a new year's resolution to never have a year like this again. senator, thanks for being with us. it's unbelievable it's been eight times this year we've been close to this situation, and it should embarrass everybody on capitol hill. do you feel that sense of embarrassment and drive to get this fixed? >> erin, thanks for inviting me to be on your show this evening. we need to get this wrapped up. i think we will, but it's about getting the funding bill done, as you mentioned, and also extending the payroll tax holiday. we need to do both. i think we'll get them done. but like you, we should be getting this done sooner and we really have to take a comprehensive approach to the things that will help get our economy going and get on top of the debt and deficit. >> it's just so frustrating. i think we all wish that you guys didn't give us an opportunity to do that. the only way anything seems to get done in washington is when we're a few hours away from a shutdown. that's part of the reason we got downgraded. >> you made a good summary earlier. i'm on the appropriation conversati committee. we're ready to go and we want to see senator reid give us the green light and get the payroll credit done and this keystone pipeline project, a tremendous job creator for the country. these are the kind of things that can get people back to work, reduce our dependence on oil from the middle east. >> like it or not, you got your bill ready to continue funding the government. >> yes, we do. >> but this is not a cr. this is the appropriation work that we've done through committee. >> all right. the democrats gave up that millionaire surtax and you know that they loved that. so to get this done, it's so easy. just get rid of the pipeline for now. >> look, we voted down -- they wanted a tax increase. we voted that down in both the house and the senate. that will hurt job creation and economic activity. we've put forward a whole variety of measures to pay for this payroll tax holiday. so we definitely have compromised. remember, this package is about job creation, and that's exactly what the keystone project does. it doesn't cost the government one penny. $7 billion in private investment that creates thousands of jobs, and increases energy security. >> all of that may be true. but yet it matters to democrats and they gave. and people want to feel the sense of compromise. rand paul came on this show and said look, i would take the pipeline out. i'll vote for it separately and let the payroll go through without it. won't you consider that? >> that's part of what we needed to get that bipartisan plan passed through the house. it had republicans and democrats on the bill. this is a key part of get thing compromise done but moving our country forward. the kind of thing people want us to get done. >> so you're not going to take it out, just to summarize? >> what i'm saying is we are providing a lot of compromise. this is a real opportunity for us to create jobs in this country. that's what we need to do. >> thank you very much, sir. we appreciate it. let's bring in james carville. he's not taking the pipeline out, sir. >> you know what? they're not going to pass it. this is a special interest thing that these guys are doing. it's very controversial. it requires a lot of study. we're talking about bringing some of the nastiest kind of energy that you can imagine. it may or may not be a good thing, but they're trying to force this down at the 11th hour and the democrats aren't going along with it. and you can see what he cares about is not the tax cut for people who are working and trying to raise a family. he cares about this pipeline, which is going to make some big contributors to the republican party awfully happy. we're a long way of being able to decide whether it's a good thing or not. >> i guess that's the point. democrats, you know, the president said he wouldn't give up that millionaire surtax. they gave it up and they loved it. it seems only fair that the republicans would give up the thing they wanted and get this done. >> but everybody that's watching this show saw exactly what they were about. that this was something that their supporters and contribute fors cared about. every time you look at a poll, people blame them. they're not going to shut the government down over this. if they do, they'll end up with 40 senate republicans and theired a vitheir ed advisers are telling them that. the consequences would be unbelievable if they shut down. >> eight times we've gone to the point this year, it's embarrassing and humiliating. do you recall a year like this as bad as -- >> well, we had a shutdown back in the '90s. you know what? it's bad. one of the reasons is, it's really divided and the country is kind of broke and maybe we need an election. and hopefully some of these issues will crystallize. the public has to pick and choose here and hopefully it will prove it in one direction or the other. >> thank you very much, james carville. >> thank you. >> we need some optimism about america. we all get mad at washington, but there's still some amazing things about this country. and google's eric schmidt is going to talk about it. newt gingrich, front runner going into iowa. but the backlash has be gun and it's coming from the conservatives. and a war of wording between john mccain and russian prime minister vladamir putin. with putin calling mccain crazy. and the latest developments in the case of florida's missing mom, michelle parker. her father, brad, comes outfront. 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why do you think that this guy doesn't have what it takes? >> well, first of all, let me thank you for the kind words, although i can't take full credit. it was very much a joint effort writing that editorial. you know, look, i think a pattern you see with gingrich is that the people who are most familiar with him, people who worked for him or worked alongside him or covered him extensively, as a lot of my colleagues did in the '90s are the people least enthusiastic about a gingrich presidential run. he doesn't have the skillset to be the head of the republican party, let alone the commander in chief. >> john avolon, is this something the voters will, at this point, is there still enough time for them to change their minds? if they don't, this is newt gingrich's nomination. >> there is absolutely enough time. you're starting to see these attacks take an effect. his poll numbers are softening a bit. but the headline is the establishment strikes back. the conservative movement is trying to throw themselves in front of the newt bus. here's the point, they know he would be a disastrous nominee for the gop. what's fascinating is even as you're seeing this consolidating attack, george will and many others, it's not necessarily translating to increased support for mitt romney. it's a concerted effort by some of the people who knew him best to say guys, this is a bad idea electorally. >> kevin madden, i'm sure you like this because you work for romney. but here's what the national review said about romney. highly intelligent and disciplined. takes conservative issues. he would make a fine president but has not overcome general voter skepticism. people just aren't passionate about him. >> well, look, the most important thing that governor romney has to do is make the argument to voters, particularly republican voters in these early contests, about the level of accountability that he welcomes from conservatives and even moderate republicans as he seeks to be the nominee for the party. and i think what's most important for him to talk about is the anxiety that they have about the economy and how his expertise and his record as a governor has always been to address a lot of those challenges that he had in massachusetts and the challenges and how he overcame them. >> i just want to play a quick sound bite from rudy giuliani from this morning. here he is. >> there's something wrong when you've been running as long as mitt has and you're at 25% and you don't go much above or much below. 75% of the other republicans are telling you something. >> before i get kevin's reaction, does this open up a window for anyone else, jon huntsman? >> i think that's wishful thinking. but the point is mitt romney is the only guy in politics with the glass ceiling. he has this 25% glass ceiling. so the question is whether that other 75% will coalesce around another candidate. >> it's not an event, it's a process. if you look at the fact that he's been up at 25%, in many ways it's a floor. as many voters go through this consideration of candidates out there, many of them are parked on other candidates right now and that's why we have these contests. he can go out and build upon that 25% and get those voters as we go through all these early contests. so i see that as a challenge, absolutely. but i don't believe that just because 75% are with them, that means they're against romney. they're still waiting to see these candidates hack it out, to listen to their ideas and ultimately as we go through these contests, those voters will make the decision. >> ramesh, why did you write an anti-endorsement? why didn't you pick one of the three that you think have something going for them, jon huntsman, rick santorum? >> i myself think romney is the best candidate of the available alternatives. not all of the editors agree with me on that. but what we do agree on is it would be a very risky choice to give newt gingrich that nomination. >> thank you very much. appreciate all three of you taking the time. >> you're welcome. >> we shall see. ♪ minister today called arizona senator john mccain crazy. that is correct. that's what he said. as a war of words between the two continue to heat up. this time, the verbal sparring had to do with the death of moammar gadhafi and drones. those spy planes like the ones the cia have lost over iran. the ones the u.s. defense secretary says were involved in the former libyan's death. putin was asked about a prediction that mccain made online. one about the prime minister meeting the same fate as gadhafi. apparently putin did not like what he thought mccain said. >> translator: mr. mccain is known to have fought in vietnam. i think he has enough blood of innocent civilians on his hands and he probably can no longer live without these horrible, disgusting scenes when television screens show how gadhafi is killed, all covered in blood. is that democracy? >> but as it turns out, his twitter posts were links to news stories that suggests russia might be facing it's only arab spring. and just tonight, mccain told john king he thinks putin is reacting to the demonstrations there where tens of thousands turned out to protest election results that returned putin's party to power. mccain said, it will be interesting to see what develops during the next demonstration, which is set for later this month. new information about that drone as we continue to cover the story. really amazing turn today. an iranian engineer talks and says they knew about a weakness in the g.p.s. of the drone, which allowed them to land it. a lot of people said iran wasn't capable of this, but on this show you heard they were. and we have an exclusive look at google's new york headquarters. that's coming up, "outfront." my doctor told me calcium is best absorbed in small continuous amounts. only one calcium supplement does that in one daily dose. citracal slow release... continuously releases calcium plus d for the efficient absorption my body needs. citracal. let me get you a free tank of gas -- how's that sound? 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[ horn honks ] hey, we're trying to save here. i came in for this. yeah, fill it up, too. thank you. don't thank me. i'm just the messenger. everyone believes in keeping their promises once a year. but we believe in helping people take steps to keep them every single day. that's why every day we help people across the country get into their first homes. prepare for a comfortable retirement and protect the people and things that matter most. at genworth we believe every day is the right day to take a step toward tomorrow. just after 7:20 on the east. 4:20 on the west. hard to read with these glasses here, but they're kind of stylish. it's time for a story we can't resist. the wellness center in orange vail, california, is closing for the last time. not because the rent is too high, but the customers are. they have grown into a community based collective. that in addition to pot, offers on site yoga and compassion themed events for 40,000 patients. yep, 40,000. on december 6, reportedly at the urging of the largely conservative population, the sacramento county board of supervisors voted 4-1 to ban any land use which violates federal or state law. ie, medicaldispensar dispensaries are banned. but the manager, steven lee, is surprisingly mellow about the whole thing. he's holding a holiday party tomorrow with baked goods and a free gram of pot for every customer. but if you want to partake, you'll need to bring a card with you. a dispensary, not a christmas card. because the free pot offer is only valid to customers. no word on the baked goods, but i'll bet you they'll give you one if you tell them your buds out front sent you. mission, drone. >> it's entirely possible there was a malfunction. >> of all the craziest rule in our government, the craziest of all. >> google's big idea. >> this is madness. >> madness? all this "outfront" in our second half. in louisiana. they came to see us in florida... nice try, they came to hang out with us in alabama... once folks heard mississippi had the welcome sign out, they couldn't wait to get here. this year was great but next year's gonna be even better. and anyone who knows the gulf knows that winter is primetime fun time. the sun's out and the water's beautiful. you can go deep sea fishing for amberjack, grouper and mackerel. our golf courses are open. our bed and breakfast have special rates. and migrating waterfowl from all over make this a bird watcher's paradise. so if you missed it earlier this year, come on down. if you've already been here come on back... to mississippi... florida... louisiana... alabama. the gulf's america's get-a-way spot no matter where you go. so come on down and help make 2012 an even better year for tourism on the gulf. brought to you by bp and all of us who call the gulf home. ♪ [ boy ] looks like our work is done here. i'm heading home. vaaa vrooom! need some help, ma'am? grrrrrrr! 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[ female announcer ] from neutrogena® naturals. we start the second half of our show with stories we care about, where we focus on our own reporting, do the reporting. first, countdown to shutdown. feel like deja vu? the eight time this year, the united states of america has been flirting with a shutdown. senator john hovan, republican from north dakota, told "outfront" he thinks congress will get it done, will avoid a shutdown. but also said despite democrat's move to drop the millionaire surtax, he will not drop the keystone pipeline. number two, sheriff joe arpaio has been accused of discriminating against latinos. an investigation found the sheriff's office targeted latinos, including racial profiling and retaliated against anyone who complained. arpaio, who calls himself america's toughest sheriff, is known for his tough stance on illegal immigrants. number three, a new defense attorney for jerry sandusky said his client may have been teaching boys "how to put soap on their body in the penn state locker room." he offered the explanation in an interview with a channel in a statement obtained by cnn. he said today he was only proposing one scenario for why jerry sandusky may have been in a shower with young boys. number four. missing teen in oregon found this morning. police told "outfront" they found the 15-year-old in the apartment of a young man she met on the internet. she says it was her voice to leave her parents on december 3rd. her family left this statement -- police say they're questioning the 20-year-old man. he's not yet been charged. as you heard on this show, her parents said she met him and interacted with him on the internet. it's been 132 days since the u.s. lost its top credit rating. what are we doing to get it back? the developing drone story continues and we've got developments tonight. iranian officials say they are going to put the drone on display in tehran and allow journalists to come and see them. but this is what is important. in an interview with the christian science monitor, an iranian engineer claimed he knew about a weakness in the drone's gps equipment and used noise jamming technology to force the bird, as he called the drone, down. a lot of experts have been saying iran didn't have this ability, that it needed help from china. google's eric schmidt said iran is more sophisticated than people give them credit for. and u.s. military officials told cnn why the drone was in iran to begin with. previously, officials said the drone was just patrolling the border and it veered off course. a few moments ago, i spoke with the co-founder of the chertoff group, and asked him if it could be true that iran had hacked into the drone and brought it down. >> well, i think the proof in the pudding will be in whether they can put up or shut up. we'll see. secretary panetta stated we'll continue to operate the program along the afghan/iranian border. so they'll have to be able to demonstrate they can do this. >> don't we have the ability, this these things lose touch with us, to just automatically destroy them and why might we not have done that if we have that ability? is it so expensive we didn't want to take the risk? >> this is something that many at the pentagon and frankly up on the hill are going to be looking into. it is an expensive piece of equipment, so the destroy it is a costly decision, but it's possible that there was a malfunction in the protocol. that they lost signal and instead what kicked in was the emergency landing protocol. when you look at the way the iranians have displayed the aircraft, you notice that they hide the underbelly, which does indicate if they were so good at getting control of the aircraft, why couldn't they have landed it without disrupting the undercarriage? so there are a number of signatures that look like they didn't achieve the success they claim. >> what about the technology on this drone? we've been focusing that it's able to evade radar and that's something other countries want to be able to do, particularly china with their new joint strike fighter and people say iran will share this technology with china. is that the best technology this drone has? is there something else iran or china might get off of it? >> it has a number of things that the chinese would very much like to get. there's extremely sophisticated radar evading payment that could be reverse engineered. it has optical senators that can positively identify terrorists from several thousand feet away. it has a number of other we'll call electronic signature sweets. it just depends on how the -- this particular uav was equipped for whatever mission it was on. >> thank you very much, chad. good to talk to you. >> good to talk to you, erin. take care. the use of drones is not just a politically sensitive issue for the united states overseas. hear at home we have a lot of drones flying around. police and other law enforcement want to use the drones. they want to find out if people are doing things they shouldn't be doing. this has some people worried about privacy. so are drones the next big brother? what are they able to see and who's using them? joining us is paul and catherine. good to have both of you with us. let me start with you, paul. they're using drones and soon the faa is going to put out some new rules to say look, now you're only allowed to fly drones in some zones and now we should be able to fly them in more zones. >> yes. >> can we stop it? >> the drones are coming. we're not going to stop it. but americans have gotten used to this already. every time you go into a 7/11 to buy something, you're on video. in the 1950s, maybe that wasn't the case. but there's a lower expectation of privacy that we all have because of all of the surveillance. we have surveillanced a red lights. drones are making it technologically easier. i don't see it as a radical diminishment of our privacy. let's not get carried away like the aclu is. >> catherine, do you share paul's view? after all, i guess we have limited privacy now online. my producer today went online and looked at what television channels were on in his house and he could change them remotely from the office. no one has any privacy. >> if cops were angels, i would be much more comfortable having them float over me watching me. but all of these technologies are subject to abuse. and cops don't have a great record of, you know, don't worry if you're not doing anything wrong, you don't have anything to fear. there's a big difference between putting a picture up on facebook and having a cop watch you when you don't know it. >> but do you think we can stop it? you can have lawsuits all you want, but the more sophisticated these drones are, they could be incredibly far away even on an angle and see what they're going to see. how can you stop them? >> i think the aclu is doing a great service just by saying hey, everybody, freak out about this just a little bit. but i think they could offer a trade. if the comes get to watch us all the time, maybe we should get to have a little bit more rights and protections for when we record the cops or keep our eyes on them. >> the truth is, we will be watching the cops. the drone also be watching the cops and we have our cell phones now. what's happened is, we've gotten used to this. we talked about 1984 and big brother watching but we have adjusted. people under the age of 25, they have lived their entire lives on line and under surveillance. >> that's true. but here's the big but, these drones are going to become, if they are not already, powerful enough to see a lot more than who's on the street stealing a car or who is getting equipment for a bomb. they can see in your home, your bedroom. will can see his own tv. >> i could tap into will's tv if i wanted to. the technology is there. but if you ghetto the point where one of these small helicopters is hovering outside of your bedroom, that's illegal. under current law, you could see the police. the supreme court wouldn't allow evidence to be introduced that way. so we have laws in place that protect privacy of that level. that level of intrusion. but there's technology coming out, they can see through walls. we need new laws to adjust to this stuff. but i think in the end, the aclu's suggested rules here, which is, you know, when they take pictures, throw them away, don't retain them. if we're looking for a serial killer, maybe we would like to know if he walked up the street before the murder. 3,000 people died at the world trade center. surveillance could have been helpful if we could have avoided that tragedy. i think we're willing to give up a little bit to be safer. >> thank you very much. viewers, let us know what you think. reach out on facebook and twitter. this is an issue that matters to all of us. let's check in with anderson. >> keeping them honest at the top of the program. one of the nation's most outspoken lawman, sheriff joe arpaio. his department he heads up in maricopa county in arizona, his department is called out by the justice department for a "pervasive culture of discriminatory bias against latinos." you'll hear somewhat he has to say about those charges tonight. also, florida a&m under fire for hazing. now the governor has recommended the president of the university be suspended. those stories and tonight's "ridicu-list" at the top of the hour. >> last night jason carroll talked to the school president. >> he had the interview with the governor and you'll hear from him. he doesn't have the power to make the president of the university to step down but says he should. we'll look into the prevalence of hazing, not only on this campus but a lot of campuses across the country. >> anderson, thank you. still to come, the father of michelle parker comes outfront as the search continues for her. and eric schmidt opening the doors to google's headquarters for the first time ever. you won't believe what google guys get for free. ♪ ♪ [ male announcer ] everyone deserves the gift of a pain free holiday. ♪ this season, discover aleve. all day pain relief with just two pills. of course, neither do i. solution? 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[ cellphone rings ] thank you. live streaming audio. advanced charts. look at that. all right here. wherever "here" happens to be. mobile trading from td ameritrade. number one in online equity trades. plus get up to $600 when you open an account. we do this at the same time every night. we reach out to our sources around the world and tonight we go to iraq where a ceremony was held to mark the official end of the war. u.s. troops lowered the flag as command that flew over the iraqi capital. arwa damon is in baghdad tonight. what concerns do iraqi civilians have as u.s. troops leave? >> reporter: their concerns are endless. they're worried about the lack of national unity, despite what's said by officials within those who are lead thing country. they're worried about corruption and the lack of basic services. but perhaps still more importantly, they're worried ant security. even though the numbers are down for iraq, this is not a numbers game. and they continue to fear that every single time they leave their homes, they may never see their loved ones again. >> arwa, thank you very much. it's been almost a month since michelle parker was last seen in florida. that was on november 17 when she dropped her 3-year-old twins off with their father. smith and parker were engaged, but they had a falling out which happened on the tv show "people's court." police say smith is the primary suspect, but he has not been charged. "outfront" with us tonight, michelle's dad, brad parker and the family lawyer. thank you for coming on. can you tell us what's going on tonight? >> we're reaching out 25 miles, east to the west of the first command center, which was on orange avenue in oak ridge. there was over 70,000 flyers posted in oak ridge. it was saturated, and we moved up for two weeks. we out out flyers up there. and now we're moving to kissimmee and we'll be down there two weeks and we'll saturate that area. >> what about michelle's twins? there's obviously been a custody battle. where does that stand now? are they still with dale? >> we do have good news on that front. he wanted what was in the best interest of the children, so over two weeks of kind of going back and forth, we're able to iron out an agreement where evonne will get liberal visitation to the children. so we're thankful for his efforts and evonne is beyond happy to be with those children when she gets to see them. >> and matt, obviously last time that we spoke, michelle's phone had been found, her iphone. has there been any other traces of her or anymore information that you have found out of what was on that phone that could help you at this point? >> i believe that detectives have said that there was information on that phone, which is going to be useful towards their investigation. they have not released exact details yet, erin. but i have been informed that there was information that they're going to use. >> brad, what do you think happened here at this point? i mean, i know you're hoping that your daughter is okay. do you think dale had anything to do with her disappearance? are you frustrated that he has not been taken into custody or not charged? >> i'm very frustrated. i mean, michelle dropped the kids off there, and that's the last day she had been seen, in broad daylight. she had a nice hummer. it was a nice hummer and michelle was a pretty girl and she just disappeared. and all the evidence at the orlando police department goes right back to dale. >> we hope that this ends in a good way and we'll talk to you both again soon. >> thank you, erin. >> thank you. thank you for having me on. >> all right, sir, thank you. google is next. everything comes together.t whee where there's magic. and you now understand what nature's been hiding. ♪ at dow we understand the difference between innovation and invention. invention is important. it's the beginning. it's the spark. but innovation is where we actually create value for dow, for society, and for the world. ♪ at dow, we're constantly searching for how to use our fundamental knowledge of chemistry to solve these difficult problems. science is definitive. there is a right answer out there. [ male announcer ] the same 117 elements do the fundamental work of chemistry. ♪ the difference, the one element that is the catalyst for innovation, the one element that changes everything is the human element. ♪ google, a verb, a word, almost everyone on earth, knows. a took an exclusive tour with executive chairman eric schmidt where he opened up about why he thinks america is still the nation to beat. >> america is the best innovator in the world today, and that's going to continue. america has 18 of the top world's research universities. it's still a place of the best innovation. america is the world's innovation center. it's still possible for two people, three people with a graduate student's and so forth to create a brand new company that will change everything in the world today. there's every reason to believe that america can grow very, very successfully with the focus on innovation. >> reporter: there is a reason eric schmidt is so confident about the future of america. even in hard economic times, google is thriving, revenue surged more than 30% last quarter, putting schmidt in a good enough mood to give us a rare glimpse behind the scenes. so this is inside google, second biggest office for google in the world? >> that's right. >> reporter: in manhattan? >> yes, right in downtown manhattan, about 3,000 people, one large building and adjacent building. what's interesting, half and half eye quality engineering and sales and marketing. nobody thought you could build the world's best engineering center in the heart of downtown manhattan but you can. >> reporter: the unique office space spans two buildings and entire city block. >> the old madle, the office and the door would be closed and so forth but this is much better and people are used to it, if they want privacy they put on their headphones and listen to music while programming but they literally stare at screens all day. >> i can tell these are engineered designed desks. free food every 150 feet an incentive to keep people close to their desk. >> the only asset that matters is people in a company like this, keeping them here, keeping them motivated. they work incredibly hard, we give them connections at home and they work pretty much all the time. after all they're trying to change the world so they don't really care. i don't need to know they're at work. we can see the productivity and know whether they're making progress or not. >> you can watch it in real time. >> and we do. >> reporter: people get worried, china and india are churning out indian engineers. >> we'd much rather have them working for news america. >> reporter: google is doing everything it can to hire the best and the brightest, with 60 offices in 30 countries. what countries would you say right now are the least open to what you do? >> the most shocking country of all is north korea. north korea is very difficult to operate in but it's a country where there's so little conversation and so few people peering into it that people really do believe that their leader really is god-like, even as people are starving in the streets, and sometime in the next few years, north korea will open up to, it's the last one. >> and then a country like china, do you feel that you have the opportunities you need in china? it's amazing when you look there, it's not youtube, it's youcue. it's they've had the biggest growing market in the world. >> in there's a chinese equivalent of every american firm, a facebook equivalent, twitter equivalent, google equivalent which are doing well. the chinese laws make it difficult for american companies to enter china and operate. you have to operate through joint venture and subject to who are den russ censorship laws, after five years of trying to make this work we decided to move to the other china, you know, they love to say one country, two systems. well we prefer the open system of hong kong. there is a firewall called the great firewall literally, which blocks content they don't like between hong kong and the mainland, forcing them to do the censorship. we just could not abide by their rules. >> is this really going to be the century for china, china's century prize? >> china is the world's manufacturer. they do it very well. they do not yet have all of the advanced society functions that they need, independent judiciary, the kind of political dynamic and creativity, the kind of advanced universities that are needed to do what we've been able to do in the united states. there's an open question as to how long it will take them to get there. >> i met a little boy in china this summer, his name was bill, they named him after bill gates. we had sort of done this question as to whether the next bill gates or steve jobs would be born in china, or in the united states. part of that's luck but part of that really isn't luck. where do you think the next one of those people will be born? >> i think that the next one of those people will be born in america, and will be a successful american entrepreneur, because it's not just the person. it's the system that they're part of. innovators create millions of jobs in america. we need to create them and we also need to welcome them from other countries when they want to come and relocate to america. >> we're still not doing that to the level we need to be, are we? >> of all the crazy rules in our government, the craziest of all, bar none, is that we take the smartest people in the world, we bring them to america, we give them ph.d.s in technical sciences and we kick them out to go found great companies outside of america. this is madness. >> reporter: more than 31,000 people work for google and new york is the company's second largest office, after its sprawling headquarters in mountain view, california. here the motif is classic new york city, hallways with fake subway grades, conference rooms that look like a meat locker and razor scooters to get from one end to the other. huddle rooms designed after city apartments are there to make people feel at home. woman's apartment. >> yes. >> bra hanging from the bed and a cat, really? and a cat? privacy is always an option, schmidt says the best ideas come from people working together in extremely close proximity. what's the future for google? i'm just, i mean you've got the google tv, you've got the phones, you've got the search, but you also have windfarms, cancer diagnostics, clean power, your finger is in a lot of pies, could be a sign of strength or a lack of direction? which is it? >> of course both. one of our strengths is our lack of direction. we actually let people invent new things and see how far they go and if they work wonderfully, then we will continue them and if they don't work so well, we'll try something new. google is the largest systematic innovator at scale i know of. we try to bring out new things and seef