Transcripts For CSPAN Washington This Week 20121022

America where government colleagues the rules makes the rules, where it runs more of our businesses and runs our lives. Or an america where we restore the principles that made the nation that it is. That we bring back the principles of the declaration of independence and recognize god gave us our rights and they include life, liberty, and the pursuit of happiness as we choose. Watch engage as president obama and mitt romney meet in their final debate. Our preivew starts at 7 00 p. M. Eastern followed by the debate at 9 00 and your reaction at 10 30. Back from their annual Party Conferences, members of the british house of commons return for their weekly question time with Prime Minister david cameron. The Prime Minister answered questions on the National Health service, youth unemployment, and britains relationship with the european union. Members paid tribute to labor members who died over the parliament break. Heproblem and im sure they will be addressing it. Order. Questions for the Prime Minister. Number one, mr. Speaker. Thank you, mr. Speaker. [shouting] mr. Speaker, im sure the whole house will wish to join me in paying tribute to the servicemen who tragically have fallen since we last met for Prime Ministers questions. Lance Corporal Dwayne grew a first by john grenadier guards, sergeant and private of the third battalion yorkshire regiment, Sergeant Johnson coops of mechanical engineers, captain james of the royal engineers, and captain manley of the royal marines. Once again we are reminded of the immense danger our armed forces operate n to uphold our safety and our security. Thr families and the whole country should rightly be proud of their heroic service, and we will always remember them. The house im sure will also wish to join me in paying tribute to fiona bill and Nicholas Hughes who were killed brutally murdered in the line of duty on the 18th of september, the whole country has been deeply shocked and saddened by the loss of these two young dedicated exceptional officers. Our thoughts are withe served tt we must also pay tribute to another great character and it is hard to believe he is not sitting in front of me. He was hugely popular across the house. We will always remember him as a dedicated member of the house whose kindness transcended the political divide. We send our sympathies to his wife and family. Mr. Speaker, i had meetings and in addition to my duties, i shall have other meetings later today. Can i associate all honorable members with the tribute to the members of the armed forces and the police who have died in the service of our country and to their families and also how much we will miss mr. Stewart bell and malcolm. Mise work would always pay but this morning baroness grey thompson of the Children Society have revealed that his current plans for universal credit next year will mean that up to 116,000 disabled people in work includes as much as 14 pounds a week . Doesnt say a thing about how this device o Prime Minister always stands up for the wrong people, always stands up for the wrong people when at the same time a standing huge tax cuts to 8000 people and over 1 Million Pounds a year come he is going to penalize some of the bravest and our countr mr. Speaker, let me try and deal with it as fully as i can. The money thats going into disability benefit will not go down under universal credit, it will go up. The overall amount of money will go from 1. 35 Million Pounds last year to 1. 45 Million Pounds in 2015. Under the plan now recipients will lose out unless their circumstances change. All current recipients are fully protected by counterproductive scheme. What were doing and this is important, this is a decision and a choice we made is that future recently and were going to increase the amount we the gift of the most a very disabled children, and there will be a new lower amount for less disabled people. Thats a choice were making. Increasing the overall amount of money, focusing on the most a stable, that i think shows the right values and the right approach. Mac and graduate the government on the early construction of the gross res judicata to bill. Farmers in third world helping companies producers desperately need protection from what i think been described as [inaudible]. Could i ask how quickly come how quickly will it be before the government actually introduced is finally important measure . We are making progress with introducing the measure. As my friends and i think it is an important measure. I think its very important we stand up for farmers, the farmers get a fair deal from supermarkets. I think on occasions there have been unfair practices of things like retrospective discounts that sometimes been proposed and i think this bill will be a major step forward. Mr. Ed miliband. [shouting] mr. Speaker, i joined up runners in paying tribute to the sixtsix servicemen that have did since the house last met. Lance corporal of First Battalion the grenadier guards, sergeant, a third battalion yoshire regiment. Sergeant jonathan coops are the royal electrical and mechanical engineers. Captain James Townley of the corps of royal engineers, and captain karl manley of the royal marines. They all died heroically serving our coury. Fish of the outpost bravery and sacrifice and i condone our condolences goes to the family of friends but i also ined them in paying tribute to the on the on the bill and hughes. To remind us of the dangers work, mr. Speaker, our Police Officers to aid in and day out in the line of duty. Her death is a great loss to the great manchester police, the committee they serve and most of all of course to the families. I also want to thank the Prime Minister for his generous comment about the two lead colleagues we have lost since we last met. Stuart bell was the sun of a mother, a longstanding member of this house. He was passionate about european issues and he served with distinction of the church commissioner. His death was incredibly sudden. His illness dignosed as a matter of days before he died. The condolences of the site of the house under no the whole house gosto his family. And let me just say about Malcolm Wicks, he was one of the deepest thinkers in this house. He was a brilliant minister. I know from my time as Energy Secretary what it really Energy Minister he was pretty was also someone who faced his illness with the utmost bravery. He knew was going to happen to him, but he carried on writing, thinking, talking and, indeed, engaging in he work with the suspect my last conversation was a motion before our Party Conference we talked passionately about politics as he hoisted. Again, our condolences go to his whole family. Mr. Speaker, the unemployment figures today are welcome to click to the fall an youth unemployment. And im sure we all agree that there are too many people still looking for work, the number of people out of work for long period over a year remains suddenly i. And the Prime Minister tells why he believes the Fourth Quarter and unempyment is not yet been matched by the biggest longterm unemployment . I thank him for his generous remarks about those who have fallen, about his Police Officers and also about the colleagues. In terms of the unemployment figures, i think this is a good piece of news that should be properly welcomed and looked at, because basically a number of Different Things are happening. Employment is up b 212,000 this quarter. Unemployment is down by 50,000 this quarter. The claimant count has fallen by 4000. What that means its actually since the election is there are some 170,000 fewer people on out of work benefits. And what is i think what remarkable about the figures is they show there are more women in work and at anytime in our history. Inaction overall level of employment is now above where it was before the crash in 2008. So we still have huge economic challenges toe. We are in a global race. We do need to make a whole set of reforms in our country to education, welfare and help grow the private sector but this is positive news today. In terms of longterm unemployment, it is still too high. I think thats partly because of the big increase in unemployment that took place at the time of the crash, but we nee to do more to do with longterm unemployment, and that is why the work program has helped 693,000 people already. We are prepared to spend up to ,000 pounds on one individual longterm unemployed person to get them back into work so i think we do have the measures in place to tackle this scourge. Ed miliband. Mr. Speaker, notwithstanding that, unemployment, youth unemployment, longterm unemplment and longterm youth unemployment are all higher than when he came t office. On the particular issue about longterm youth unemployment i dont think you ca attrite to the crash happened four years ago because its been steadily rising over the last year or 18 months. And it remains a bit concerned, the number of people out of work r more than year is continuing to rise. Does he agree with me the longer young people remain out of work, the greater the damage not just now to the longterm prospects and the greater damage to our economy . Of course hes right. The longer people out of work the worse for them, the worse for our economy. That is why we have to use contract. That is why webwork programs, the biggest back to work program nce the war. He mentioned the problem of longterm unappointed averages remind them in the last two yearof the last government, longterm unemployed almost double so i think we should hear about that before we get election. In terms of helping young people it is also noticeable that under this government 900,000 people have started apprenticeships, and we are reforming our schools and welfare system so that it pays for people to get those jobs. We face Enormous Economic challenges in this country. Nobody doubts that. We have to we both our economy because the state sector was too big, the private sector was too small. What has happened is 1 million new jobless private sector jobs. Weve got a huge amount more to do but reform welfare, reform our schools, and the private sector and britain can be aware in the global race. I would just say to him on longterm unemployment there are more people out of work for longer than at any time for two decades. That is happening on his watch. I want to point to one group in particular losing their jobs directly. Year ago, he tld me, and ago, there is no reason for there to be fewer frontline Police Officers. Canny now tell the house how my frontline Police Officers have lost their jobs since the election . The percentage of officers on frontline duties has gone up. I think that is the key. Frankly, frankly whoever [shouting] whoever won the last election was going to have to reduce police budget. He was committed to reducing police budget. Weve had to reduce police budget. The reason why we been able to increase the percentage is because we have got the paperwork, weve taken difficult decisions about pay. Weve taken difficult decisions about allowans. What is remarkable is while the percentage of officers on frontline is up, crime is down. I really hoped just for once we would get a straight answer. [shouting] allhe Prime Minister needs to do, all the Prime Minister needs do is take a lead out of the placement book. Because on monday he told the house the truth. He said that are 6778 fewer frontline Police Officers than when he came to power. Why not just i dont think hes going to help you, Prime Minister. [laughter] now maybe the parttime jobs is taken over the home office. Another promise broken. They are not just breaking their promises. Its there conduct as well. [shouting] this is this is [shouting] this is what the mayor of london said. Border. It will just take longer to get the backbenchers who do wish to participate as opposed to shouting and screaming into jubilee fashion because of how to extend the session. The leader of the opposition will be heard and the Prime Minister will be heard. That is the end of it. Mr. Adelle banks. This is what and mayor of london can his new best mate said last at conservative Party Conference. I reckon we need to make it clear that peoples were at the police, they must expect to be arrested. He says he didnt come [inaudible] according to the official police report, and i quote, a man claiming to be the chief [laughter] told them they should know their place and use other of use of language. Can the Prime Minister now tell us to the chief use those words . What the chief whip did and what the chief weapons that were wrong. Right . Am absolutely clear about that. Thats what it important that the chief would apologize. That apology has been accepted by order, order. I said a moment ago the leader of the opposition must and would be heard. The same goes for the Prime Minister. He must and will be heard. The Prime Minister spent what the chief whip said and did is wrong and that is what it is important he apologized and ologized probably. That apology has been accepted by the office conservatives been accepted by the head of the metropolitan police and that is why this government will get on with the big issues of helping britn compete and succeed in the world. Ed miliband. No straight answers on Police Numbers and notraight answers on the chief whip. Just because a pole officers he sid its a real isue. I think it is a real issue of using Police Officers. [shouting] is because a Police Officer has better manners than the chief web chief whip, doesnt mean he should keep his job. On a saturday night abuse a Police Officer ranting and raving, chances are they would be arrested and placed in the back of a police van. And rightly so. And the Prime Minister will be the first to say it was right. But while its a nice in [inaudible] isnt that declares a case it could be, a total double standard . His apology has been acepted by the Police Officer. Its been accepted by the head of the metropolitan police. Its clearly not going to be accepted by the leader of the opposition because he doesnt want to talk about what we need to do this country to get our deficit down becausehes got no plan. He doesnt want to talk about how he builds on a record implement because he has got no plan. He doesnt want to talk about how we reform welfare because he is opposed to welfare cuts. That is the truth. He wants to discuss hese issues because hes got nothing serious to say about the country. Ed miliband. Heres the most ex ord or thin tragic they say that my practice club, and they go around calling people names. Can you believe that . I have to say its good to see the cabinet in a place supporting him in public but in the newspapers what are they saying in private but hes completely under my biggest position is untenable. In other words, that is the reality. Here isthe truth about his government. While everybody else loses their job, the chief whip keeps his but if youre a millionaire you get a tax cut. If you everybody else, you get a tax rise. [shouting] order, order. Order. Im very worried about your health. For shouting in a bizarre manner. Call yourself, man, mr. Ed miliband. Tax cuts are totally out of touch with this government. Its one rule for those of the top and one rule for everybody else. [shouting] now we know, mr. Speaker, he wrote those questions yesterday before unemployment fell. He wasnt listing early. Let me remind you. Employment is up 212,000. Unemployment down 50,000 this quarter. The claim it down 4000. Thats asuccess. Typical. It comes to this house. Hes written out his clever political question. He doesnt care which really happening in our economy. Order. Mr. Glenn davis. Over two weeks ago, mr. Speaker, at edward jones a fiber loopr work doctor when playing with her friends in my constituency, a very white, very well behaved always do. Well my right honorable friend, the Prime Minister join in playing tribute to the truly amazing way in which the people, the police and the mountain rescue teams have come together and committed to the ongoing search . I will certainly join my honorable friend into the. I think the whole country has not only been shocked by these appalling events, but also i think the whole country frankly has been lifted and and crovitz impressed by the response of ofe communy, and everything has done, everybody has done to help the police can help emergency services. We seen a whole Community Come together not just in greece but in action to help this family. I think its a huge credit to everyone involved. The Prime Ministers Energy Summit last year has promised faithfully he would take action to hep people reduce their energy billsut can he tell the house and the country housing going . Weve encourage people to switchhichs one of those ways to get your energy bill down and i can announce which im sure he will welcome is that we will be legislating so that Energy Companies have to get the lowest power to the custom. Something labour didnt do in 13 years even though the leader of the labour party actually couldve done for the other job. Close question. Dr. Julian lewis. I know that my honorable friend will be delighted to know the answer is yes, we are committed to retaining an independent Nuclear Deterrent based on the trident Missile Defense system as why we continue with program to replace the vanguard class submarines including rising initial design contracts with bae systems. That is indeed an excellent answer, mr. Speaker. Given the that, a parttime Nuclear Deterrent would be dangerous seeing de stabilizing. Will the Prime Minister can serve that the british trident successive submarines must and will operate on the basis of continuous absent deterrence because i think my friend is right to raise this issue. One of the key elements of the credibility ofour deterrent has been the fact that it is continuously at sea, something the royal navy takes immense pride in and being able to deliver that without a break over so many years. And having that some of the crew and visit some of the submarines it is incredibly impressive what they do. I pay tribute to them for the service that they provide. Yes, continuous ads he is a key part of our deterrent. And a parliamentary answer to my friends rectum yesterday, the government said and ago, we remain very concerned by continuing reforms of support for the in 22 rebels were killing, maiming and raping in east congo. So why then did the government chief whip authorized the payment a 60 Million Pounds of british taxpayers money, on his very last day of International Development secretary . I want to which the honorable gentleman a happy birthday yesterday. The point is very i saw, i was invited. Is a very important poin [laughr] all right. The very important pointe raises. Im clear, rwanda has been a continues to be a Success Story of a country that has gone from genocide and disaster to being a role model for development and lifting people out of poverty in africa. And im proud of the fact the last government and this government have continued to invest in that success. On an equally clear that we should be very frank and very firm with the president and the rwanda the regime that we do not accept they should be supporting militias in the congo or elsewhere. Ive raised this issue personally with the president by continue to belive that investing in rwandas success is one of those countries in africa additionally you can break the cycle of poverty, you can improve conditions where people. Its something that we were right to do. Today, the unemployment figures show a reduction of 62000 the number of 1624yearolds out of work for three months of august. And the employment is now the highest level since records began in 1971. Im sure the Prime Minister will want to commend the economic policies of this government to the whole house. My friend makes an important point. We have a million new privatesector jobs since the last election. That is more than made up for the job losses in the Public Sector. Theres more we need to do to tackle youth unemployment come to tackle longterm unemployment but the figure something that should be welcomed. My constituents lost his leg in afghanistan. He then lost his disability living allowance. The Prime Minister promised to look after exservicemen and women. What happened . Ive insisted on specific carved up from the new pid for limbless exserviceman. They would look after through the ministry of defense. This house agrees that it can means politics for negative campaigning delivery designed to scare gullible people. A campaign to save our hospital when the hospital is n closing is possibly the worst example ive ever seen. Does my right honorable friend agree me that labours campaign is an absolute disgrace . My honorable friend, my honorable friend is entirely right. Labour mp after labour mp is tripping up the coffee and claim this hospital isnt safe, and they know that is simply not true. The local newspaper is now backing up the fact that this hospital is being invested in by this government because unlike the party oppose, and yet you are over there and you know what, youre going to stay there for a very, very long time. [shouting] and the reason, and the reason [shouting] the reason youre going to stay there, the reason youre going to stay there, is the reason is this countries in the masses because of the borrowing, spending and the debt that you delivered and your answer is more bbq more spending and more debt. So get yourself comfortable. [shouting] why wont the Prime Minister, over here [shouting] why wont the Prime Minister published all the tax emails and other forms of correspondence between himself and his office, and Rebekah Brooks in andy coulson and the News International . Is it because so that we can judge whether they are relevant . Is it because they are too salacious and embarrassing for the Prime Minister . Or is it i wouldnt smoke. When the truth comes out the Prime Minister wont be smiling. Or is it because theres one rule for the Prime Minister and another for the rest of us see . Mr. Speaker, before answering his question i would just like everyone to recall that the honorable member stood up in this house and rent out a whole lot of information that was under embargo and he was not meant to read out. Which turned about me to be untrue and he has never apologized. [shouting] until he apologizes im not going to answer his questions. [shouting] order. I hope the house will have the courtesy to hear him. Employment levels [inaible], not least because of the constitution of under plan. Will he join in welcoming the extension of the new proposal allows . Spent i will certainly join my honorable friend. This is an important announcement because the enterprise allowance just people who become unemployed a chance to set up their own business, their own enterprise under the current rules they have to wait three months before being able to accesthat program. But under our plan still be able to get that from day one of becoming unemployed. I will see many more new businesses started up in our country to build on the record of last year were more businesses were established in britain and india in our recent history. While in opposition to Prime Minister said, and the coal, all too often when questions are put to ministers the answer is putting was meant as a [inaudible] theres a series accountability problem with our political system. So, can the Prime Minister tell us which one of his cabinet ministers is going to take responsibility for the fiasco of the west coast bay line . The transport secretary came to this house and made a very said and gave a very full apology for what happened to ive got to ask, can we ever remember a minister from the Party Opposite ever apologize in for anything . Anyone . None. Order. And returning to the trident issue, how has the Prime Minister look at the Sevier County pressurization defense at the very moment trident replacement has to be paid for . Joint strike fighter, airplanes, frigates, unmanned aircraft, on the vehicles all need paying for the same time. This has to come out of Defense Budget and austeritis with us for sometime yet. With the Prime Minister keep an open mind on how exactly to replace our Nuclear Deterrent . First of all, what i would say to my right honorable friend is a list of things that he goes through are all programs at are fully funded and probably going to be invested in because this government has sorted out that he knows because he played a major role, sorted out and the Defense Budget. What i would say to him, i look at this issue carefully, i dont believe we would save money by adopting some alternative Nuclear Deterrent posture but and also you have a Nuclear Deterrent i think it makes sense to make sure its something that is credible and believable otherwise theres no point in having one at all. There are record levels of support for the british union. And every simple the Prime Minister will now that 7 , only 7 of the popular population of northern on what a United Ireland to that only rises to 32 in 20 years time if asked the question then. Does the Prime Minister of korea that the agreement thahe signed up to this week to ensure that theres a single decisive quest question asked on the scottish and british, that is not up to him and his house to unite [inaudible] and support the union [inaudible] for ever . [laughter] im delighted im delighted to answer the most positive way that i ca to his question. Im very pleased that weve reached an agreement with the Scottish Government to have a single, simple question and irreverent that must be held before the end of 2014 so he can put beyond doubt the future of the united kingdom. And i hope that everyone will vote to keep the uk together, and i know this will cross party support. I hope the poiticians are all parties would agree to share platforms together. I both is your platform within. Maybe i will get my chance. Recently a club in a own in my constituency lost their lives and. The one thing residents learned is it doesnt matter if its an center at our lap dancing club in a beautiful market town, local people of absolutely no weight whatsoever in planning law. With the Prime Minister agree with me [inaudible] that their voice should be heard . I think my honorable friend speaks for many people about the frustration of the Planning System can sometimes deliver but i would make 2. 4 ink wer making some progress. First of all we changed the ws to give planners greater power to alte licenses but i think they can apply to the source of premises she refers to. The second thing is under our plans people can write neighborhood plans which give far greater control to residents about the shape of their british committee. I would encourage her to take up the specific issue with the Department Communities and local govement to see if theres some anything more we can do. Could i thank bothenches for the tribute to the Police Officers who were murdered in manchester recently. On the thing though of policing, there are nearly 7000 Frontline Police that have had disappeared from her system. The Prime Minister promise that wouldnt be the case. Was the Prime Minister by lasse questioned him in this house, give me a straightforward answer, woulhe give a commitment that will be no more of what happened to policing in england and wales . Prejudge the wisdom of the great electric but i wish the honorable gentleman welcome if he is succsful. The point i would make to them is to point out the chief constable of his own force will make to him, and i think said very effectively wind the chief constable said this. They cannot be measured by the number of oficers but by reductions in crime. That is what he said. Crime in manchester is down 12 i think we need to recognize the fact that there are difficult decisions and, frankly, the labour party was committed to even greater cuts in budgets and weve delivered. They key is democrat down on the paperwork, can help to the police out on the beat . Can we help them do the job they do and can we cut crime . The answer in this case is yes, we can. Could i join Prime Minister and later opposition being treated to Malcolm Wicks whoe Memorial Service is the stride. He was aoutstanding local mp. A decent man and a good friend to is there one way we can honor his memory toimprove our National Health system so that more and more people each cancer and dont have their lives so tragically cut short . My honorable friend speaks for the whole house and what he says about Malcolm Wicks. I understand that the offer just to drive malcolm home after the vote, and malcolm referred to your cart i think as they cant come at and that there apparently was a bottle of wine at christmastime. I think wi make sre he lays off the but it is a good arrangement between members. One of the greatest things we can do remember malcolm is ensure the continued success of the Cancer Drugs Fund which is held over 20,000 peoe and make sure people can get the urgent treatment as well as urgent drugs. The secretary of state of education said this weekend that if there were areferendum on britains continued members ship of the e. U. , he would vote to leave. A third of the cabinet agree with them. How would the Prime Minister vote . As i said i dont want an in house referenda because im not happy with us leaving the opinion you. But im not happy with the status quo either. I think with a passenger at this country wants is a new settlement with europe and that settlement being put to thats what well be going in a manifesto and if they do get a ring endorsement from the british people. It last but not least, sir tony. Does by right honorable friend agreed that there was no structural deficit at the top of the boom, as claimed by the shadow chancellor . I think by right honorable friend makes an important point which is in the imf reforms out this week it shows the structural deficit in 2007 at the height of the boom was 5 of our gdp, or actually 73 billion pounds. Now the shadow chanclor said there was a structural deficit, and i think this really demonstrates just how little they have learned. Now mr. Spear, were talking about our plans for the british economy. How were going to compete and succeed. We know their plans for this weekend to go on a giant marched with her trade union people. That is how the leader of the opposition is going to be spinning his we can, the most lucrative sponsored walk in history. Order. You have been watching question time. It airs every wednesday when the house of commons is in session and sunday nights 9 00 p. M. On cspan. Watch any time at cspan. Org were you confined videos and other programs. Where you can find videos and other programs. Watched the president ial debate tomorrow. Next, paul volcker on u. S. And british banking standards and then question time with the Prime Minister of the australia. Then a look at the 2012 campaign in the battleground state of virginia. He said he was the ideal candidate for the tea party. Now he is saying, what, who, me . He is forgetting his own positions. He is betting you will too. I mean, he is changing so much and backtracking and sidestepping, we have to name this condition he is going through. I think its called romnesia. Said the election is a choice between two and americas, where government makes the rules, government is larger and larger, it runs more of our businesses and our lives. Or an america where we restore the principles romnesia. That made the nation that it is. We bring back the principles of the declaration of independence and recognize god gave us our rights and they include life, liberty, and the pursuit of happiness. Watched as president obama and mitt romney meet in their final debate from boca raton, florida. The debate is at 9 00 in your reaction at 10 30 on cspan, c span radio, and cspan. Org. We would expect a lot of stores in california to see growing sales as customers go to their stores instead of buying online. Do not hold your breath. That is not likely to be the case. People buy online for convenience and low prices. Steve delbiano on whether goods sold over the internet should be taxed, on cspan 2. At a Banking Commission last week, former Federal Reserve chairman paul volcker discussed the u. K. Proposal to separate retail banks from Investment Banks. The chairman was asked to discuss the differences between the u. S. And u. K. Banking standards at a Parliamentary Committee meeting made up from members of the house of commons. This is just under two hours. From paul volcker on banking standar standards. This is just getti under way. It is generally agreed you are one of the clearest thinkers in this field of your generation, probably several generations and one of the most experienced practitioners we will take evidence from. Perhaps the most experienced. We are grateful to you from come for coming. Caskey about one aspect of the very interesting thing you provide to us, this is a three page sheet. Section d, item 2 reads, i will read it out, the concept that single commercial banking organizations can maintain total independence in practice or in perception is difficult to sustain. Is that code for a ringfence will not work . I think they tend to be permeable overtime. You do not put two people in the same organization and say they cannot talk to each other. We have never had anything quite so comprehensive, if that is the right word, as a ring fence. We have had its subsidiaries. They rave rules on trans actions. In my experience they tend to break down because of pressures from the institution itself. We used to, it is ironic as we moved away from concentration on traditional banks and other subsidiaries. We would not permit another subsidiary unless we were convinced that a subsidiary would provide support for the interestingbank. You are worried about the bank providing support to the subsidiary. Let me repeat a homily i used to hear from a prominent American Banker. He made a simple point, if the name is on the institution, it will be protected to the extent possible, each part will be protected. If your name is on the door, you will protect it. As i understand the philosophy, that would not happen. He said the ring fence would be permeable over time. Does that mean it is worth a try . It is up to you if you want to try it. I am no great expert on the treasury paper, we will have a ring fence but we will have exceptions. That is where the problem begins. I understand the need for exceptions but that gives the leverage when you have these exceptions, the banks will say, yes, this is awkward and for efficiency reasons, you get the same customer in two parts. It depends on how you to it. Potentially will have the same customer in two parts of the same organization. To think that it is not going to take account of that in dealing with the customer, it seems to be strained. Take account in dealing with that customer seems to be strange. I thoi we can determine the strong sprens in separation . In reading the proposals you make is my reaction is i understand why you want the separation. But for some reason, its not realistic. That opens up the question, what should be separated . And youre on record as saying pulling out as much as the report is proposing would be to amount to another. You describe that as radical and yould explain win would you explain why this. These institutions have customized relationships that have been proud of. I think that implies a responsibility. You do worry about the customer. You schon be, anyway. The proprietary trading activity doesnt develop that relationship. Someone wins. Somebody loses the relationship. I think in part thats where the facts got in trouble. That activity became checkered. Very high levels of compensation which affected the rest of the organization. So take that counter parting stuff out of the organization. Lots of other people in the market can do that the other part is what we tnk is connected. Shouldnt be engaged in proprietary connectivity. That takes care of if Payment System. Its more and more important in a globalized woorld. It has to be done quickly, safely, thats what t big banks do. Nobody else in the United States or in the uk is equally committed to making it medium sized. Eat before the crisis or during the crisis. The importance to protect people with their money and give them a safe place to put it. Those are all public functions. Theyre all protected every place. When push comes to shove, they get double. You shouldnt do that when people are just engaged in trading for their own account. Without any public responsibilities as i see it. Thats the heart of the matter. Im very pleased you would come in at this ime. I think we suffer from a major confusion that you can help us sort out. In the u. S. Theyre returning following the advice. And we have in the independent Banking Commission a halfway house. And it should go the whole way. This is a completely wrong characterization that i think of what youre saying, youre saying they cant a wide rapg of functions that can be alongside the Payment System. Then there are another type of transactions that shouldnt be there at all. They should go off right to a separate institution. And in terms of scope you allow a larger scope to remain in. In terms of separation, when it happens, it happens in a much mo radical way than being proposed here. Woef we hav touddle twine between the two. In the noncommercial banking part of the organization you can list all the functions. But the heart of the functions there are trading this a broader sense. Whether its customer trading or pure speculation. This is between the Customer Relationship and impersonal relationship. That let it and left special trading outside the organization. I will sim simplify that. You people understood better what these alternatives are. If you have in the model a Company Whose directors are and nonere directors of the group, but group on the or hand is responsible for everything going wrong. If something goes seriously wrong in the end, this separation wont pve effective. You have in this Second Company that has the more sophisticated products . It has a separate board it wont be confined there. And the grub directors cannot ignore what they are doing. I am certainly saying sna. My imagination could be crypt or something. You seem to visualize an organization, a holding company. He can do this. I dont know what it means to have an independent board subsidiary to another board. They decide how to allocate nothing in the law says you have to put more capital in there. Then you can put that in the lot. It is all kind of wobbly. If we are worried about the other part of the organization, theyre going to think about how they can use the strength of the bank. It is human nature, i think. I am not saying it is impossible. You can try it. Im not saying its impossible. You can try it. Its sort of going on. Okay. In your next commission you said the internal of the dominant International Banks has changed dramatically. They will have essentially techal misjudgments by well meaning people. How much is a failure within the banking world. How would you characterize the changing in culture . How would you karkizehe changes, and is it possibl in your opinion to get the tooth paste back in the tub ive been accused of that. And e of the thingsry ebb t big new york bank at that point, bun of the biggest banks in the United States. Things Vice President changed. Not in major terms of the bank. Should be working for the bank as a whole. For the customer they shouldnt be seeking big rewards in themselves. Contrast that to what goes on themselves. Trendous part of the conversation not just in bonuses. Compared to what they would have been 20 or 25 years ago. No what kind of climate does that create . They get to elaborate a little bit. People who criticize this rule, they are sure to speculative access. Infa, a lot of things are at the heart of the banking crisis. Why did that go wild . I would argue that the kpep sags practices crept in into trading parts of the bank. So the lending offices said, how can hay make a lot of money and get a big bonus . Over simplifying a little bit. Its true. The chairman of the citi bank. The biggest bank. A couple of trillion dollar banks. He said to me, we put these two different kinds of organizations together and it different work. And its a cultural problem. You didnt just regular rate the losses. It created a tension in the bank is that very healthy. Very open about it. I think hes right. Are you saying that the approach that breaks apart those cultures perhaps for bankers might put the toothpaste back in the tube . I think its entirely practical. You can take out the pro pry tear trading. The possiblies, hedge funds and equity funds. It was basically pro pry tear trading, too. And we have not mentioned two with words, conflict of interest either. But those ak at this timetivities inperfectly involve major con flicks of interest. Wrour not going to avoid all of the conflicts of interest. You have customers who compete where each other and different activities have different conflicts of interest. You have rules to moderate them. When youre conducting an organization, youre not paying any attention to the customer. Whatever youre doing, these are conflicts. W can you run the business completely insulated from the trading books youre writing . My biggest concern is the whole thing. You balanced most of the question. There seems to be a major bank failurevery ten years or so. Yes. Sometimes the same bank. Sometimes the same bank. That was the failure and so on and so forth. That was on the scale of 2008. But major issues. Whattics it so difficult for regulators to foresee what is going to come . Things are going well. The economy is slooifing. The banks are making money. And you suspect some weaknesses developing. You go to the bank an say i dont think youll have enough capital. I think you lay off the activity. He says, i know more about banking tan you do. We havent had a serious loss for four years. You think youre going to tell us what to do. Im going to the congress nan. I will tell the regulator to get off my bank. This has bothered at that point, nobody. They have a lot of lempbl when things go bad. Its engraved in my mind, personally. Shortly after i became chairman of the Federal Reserve board. I within the to chicago. With the reserve bank there and other people. I i would ask the chairman, at that point you coul not branch them in icago. In the state of illinois. But these were big nks. The biggest in the United States. Build upon basically borrowed money for the basic deposit couldnt be that big. So i thought, well, im going to talk to him. Nobody is talking to them. I think you people have undercapitalized. So i said, who are you . There was no law. There was noegulation that governed how much capital we had. One of the banks went bust. Relying upon regulatory discretion, which you have to do a lot, but its a structural problem what im saying is absolutely agreed. Youre looking for structural changes. Were putting the board somewhere a little differently. Theyre worried about the same thing i am. This is removed from the basic function. Were on Common Ground. Its just a sengs of how we do it. Auchk. Theres been a loss of discipline and the natural and ethical has been ignored. That takes us into the field of culture and ethics. Is it a place for culture and ethics in banking. What is it . Some would say you can put your finger in it, and theres nothing of substance there. These go hand in hand. In the case of the banking, its a simple proposition. You have customers that we dont have over a period of time. You have the kmirs that say with you and are profitable. Youre not going to say youre going to sell whatever you get rid of because its possible at the moment. And thats the distinction i see between the, you know, the Counter Party where none of those responsibilities in the relationship. All of these claim relationships in their own party. The relationship is everything. They put that in a piece of mail they sent to me. But thats not true for the trading operation. The relationship isnt everything. Its how much profit we can make on the trade today. They havent lost all sense. But rl they lost a lot of it. I discovered it wasnt very effective. But the sec had a rule book, that said an Investment Bank that they were supervising did certain things for which they had a relationship. And they had other things for which they had no responsibility. I dont think its much realized in the own approach. That has been certain around in the back of there anyway. Actually in the written regulations for a long time. Im not saying anything new. Its different. The impersonal trading oermss are different from a continually banking relationship. Do you think that mak it . Always behind . The expects at the time in a down and out kingdom. Is this the best stuff onto the biggest banks and the less qualified onto the smaller . What we asked them, if they look to the business modelthey say it was none of the by talk. I think its chronic in the ability that were talking about. The conflict that youre talking about. Thats why it is part of the human nature. Theres difficult problems. But thats why, i think, it is correct that you want some structural change thats change thats kwleer enough that its not easy to get around. The regulator can say im sorry, i dont know more about banking than i do. I have to enforce the law. There it is. When it comes to important points, thats what you want. You dont have much leverage if you dont have some statutory plain english rules. Plain ek lish is a bit of on axsy mora oxymoron. There are endless criticisms. Why cant you do something schi simple . This is tough stuff. Even though there are instances where the kpleer principle doesnt make sense. If you keep making exceptions to it the time, it wont be sufficiently disciplined. The problem begins when things are going well. Anybody can put a lasso around the banks whn theyre on the brink of bankruptcy. When theyre doing well you have to get them under control. How are the people in the United States realize what is going on with the subprime mortgage thing. Weem in the credit standing. In the field that has seen volume accrual with bankers taking bonuses get there today. That problem still seems to exist today and is unique to the Banking System. What chance do we have of that being abolished . Discipline has arised. That happened to the chairman of the Standards Committee foundation. They began realize iing. When you get down to the detail how much the regulators are similar to the problems of the accountants. And drawing some of these difficult distinctions. The accountants are in a better position. But somehow they lay down the rules and everything follows. But theres a lot of controversy in the accounting rules. Sometimes you wonder. I talked about the bank credit. The United States on a Clear Capital standards. They just didnt have it. Citi bank had a ratio of 2 and the big chicago banks were around there. This sounds crazy. But i assure you its not crazy. Ive been reporting accurately. I was visited by the biggest banker in new york. He said, i want to tell you my bank doesnt need customers. What do you mean . We make a profit every year. Now, he was not entirely. He really felt that. He was the same banners who believed they dont go bankrupt. But thingsere going well. So all this stuff. All this stuff, in an effort to get capital standards up. The desirable efforts still exist. Nt count on that entirely. Because thats subject to all kinds of uncertainty. The there are socalled risk based standards. They had the assumption that they didnt have a risk. The mortgages had almost no risk. What two things went bad ding the eye sis . Mortgages and sovereign debt. They had no risk waiting. Has that changed entirely . I dont think so. They have hundreds of different waiting for different assets. You got so many that you dont know what any of them mean. Everybody said you cant possibly think youre on the same risk waiting for some small Little Manufacturing Company like General Motors, can you . He says general matters was aa. Didnt need much so forth. To yrs later General Motors goes bankrupt in a way you could not have foreseen. So tre you have very able working people working very hard that dont trust the judgment and able to administer the standards over times. Everything you said so far makes a great deal of sense. But i would like to go back to the question of the rule and all of that. You make the point that this reinvents the location. And youointed out the differences. The fact is. Who directed and responsible for the game shup of shareholders. Would you say there is another reason of the no you gave to us, which is extremely helpful where you refer to the cultural probleand the change in the culture of that. If we are addressing a culture problem ape we are charge to do that and maybe thats the reason we didnt address it. Thn its difficult to understand how they can be completely separate and indeed two totally incompatible cultures within the same organization. With fficulty, certainly i done want t be in charge of saying that. Theyre aimed at the same thing that american law is aimed at. Creating some separation. And the court is trading locations. So the question s, the United States g forward from the unjust trading. People say, well, that doesnt lapse with us. You can make the distinction that has strong arguments made against it. Theyre saying you cant do pro pry tear trading exit in the nonbank part. Yob how all of these come out. The law hasnt been written. In the work conditions, can they do i the Payment System has to be available to everybody. Does that come into the whole sale par or the retail par . St this is a different Payment System. I dont think so. We will follow that with two questions that arise direct from that. Accepting your side that the realization, you have to have complete institution separation. Is if qution of where do you draw the line. And you say its a function on one side. Theres proprietary trading on the other side. Of course, theres a whole range. Largely trading nature. Not strictly proprietary trading. Absolutel they would say on behalf of the customs. They would ill have the same trading youre right. As i say you have trading that isnt nominally proprietary to get you in trouble. And they both we know a trader is a trader. He wants to make money on his customer trading. There is a distingion that can be identified and to say you look at every transaction and say thats proprietary or a customer trade or Market Making trade. You can tell over time and what irritates me a bit, every management, if they have any sense at all, these big banks maintain very close control over their trading operation. They get report daily. They know what positions are daily. They give them orders as to what their value at risk would be and if they take too much risk they cant do it theoretically. And theyve got other controls. They can look at the aging of the inventory and why is your Trading Volume so high and your inventory so low or vice versa. And the key to me in enforcing what is United States law, is very simple in concept. You got to have thehief executive officer and the bank of directors understandinghat the law is and there is a diffence between proprietary trading and Market Making, and if you ask a banker whether he knows the diffence had they always say yes because they cant say anything else. I mean, they wouldnt be a proper banker if they cant tell the difference between a proprietary trading and Market Making so they have to say yes, and make a role to control their traders. Is that going to be perfect, no, but the supervisor can look at that role and see whether he thinks its reasonable and then what you will do which they will do in the United States have socalled metrics and theyll have, i dont know, maybe too many, but they still have seven or eight metrics they look at, volatility would be very important. The ordinary trading operation, customer trading operation will not have a lot of volatility. The aging of the inventory, the size of the inventory, the hedging of the inventory. Half dozen things you can look at that are going to give you pretty clear evidence as to whether, you know, as a regular matter proprietary trading is going on in the guys of Market Making. Doesnt mean you catch every transaction. You dont have to catch every transaction. And i think that can be effective. And you know, ive had a lot of traders tell me its going to be effective. So, i dont on that particular point, its clearer. They say were going to take all trading and put it away. Now what do you do about you say altrading. That means you cant do any underwriting in the bank itself. Put that in the other thing. In the logic, the american position is underwriting is clearly a customer related activity. You are financing the customer, you want to keep the customer, you offer him a choice and make a bankloan, sell the security, mr. Customer, we would like to make a loan, maybe you want to do it, a security, and well advise you on that. Its all part of the same custom to me. That involves some trading inherently but you can with that trading related to underwriting operation or not. One thingyou said when you were asked a question, was that when you done the separation of the volcker rule and this proprietary and separate company, you said, if they fail let them fail. If they let them fail. Yes. If they gamble and get it wrong basically get it wrong. Would you not agree that is actually rather important issue in its own right, that we have been putting too much of the disciplinary burden on the regulatory system and on the supervisors and the more that you can let market disciplines, then that reduces t complexity and difficulty for the regulators and supervisors. This is probably the most important singlessue we should have. Or dodd frank. Dodd frank is law at this point. They have a preocedure spelled out how to deal with a failing Financial Institution without quote bailing it out. The government will in effect take it over, they will have enough resources to run it for a while if they deem that it should be run for countntinuity the market. At institution will be lick which gaited, liquidated is a strong word, i could be selling off parts of it or the whole institution to somebody else. By its nature that resution process will mean the stockholders is gone and the management is gone and depends upon what happens, but creditors may be harmed too. Now thats not what happened during this crisis and talking about the United States in particular, true in the uk too, there were a few cases in which stockholders may have lost. There were many cases in which the stockholders lost money. There werent many cases where the stockholders were wiped out. Right. And there werent many cases where their management was removed and there were no cases where the creditors lost. But that may be an exaggeration, maybe in one or two cases where the creditors lost. Basically the whole effort in the middle of the panic, so to speak, was to save the institutions. And now youve got a way to avoid that and it wont work for an international complicated International Institution if the United States doesnt loan. What do you do with the other operations . And by far the most important of the countries is the uk. Because these big banks are big in new york and theyre big in london and small every place else. Little casual in saying that. Its more true with the American Banks than the british banks. But an interesting statistic which is given to me in looking at the socalled resolution process, they looked at the big American Banks and how important were their overseas operations outside the United States and how do you measure that. They looked at assets. 85 of the assets of these big American Banks outside the United States itself were in london. Only 15 in the whole rest of the world. And there were about 5 or so in tokyo. No other country had really more than one. Neither the country had more than 1 nor its Banking System nor did the American Bank have more than 1 of any single country and japan, theyre not doing all these things anyway. Theyre kind of, you know, in the curve in all this speculative activity so thats not such a big problem. But the uk, youre probably aware, the uk and u. S. Regulators are working closely together in my understanding on what they view they are concerned. Full of this too, so youve got the continent of europe and britain and the United States work on the same problem which is inherently an international problem. Mr. Volcker if i can parafriz what youre describing with the volcker rule. It strikes me what youre saying, there is one side of a bank which is virtuous by the fact that it equally balances the shareholders and the staff and the customer and there is another side of the bank which is nonvirtuous where it only balances the interest of the shareholders and the staff and the customers completely excl e excluded and thats the core behind the volcker rule. I reject the word virtuous and nonvirtuous. Thats rather prejudiced. No. The one that has i think historically important public function, its hard to see an economy working without commercial banks doing their essenti essential funkion. Its not hard for me to see the economy working without the amount of speculative and proprietary activity. Im not saying thats wrong. I just say let people do it who are not protected by the government. And who can be permitted to fail because they dont have a central piece. But they can do all they want. We got mixed up. Thats what the Investment Banks were doing. They were immensy profitable but they got in trouble. Now they suddenly make themselves and the banks. Why did you make themselves into banks. Because they want the government support. At that point the government wanted to support them. The only way they could support them was by making them a bank. Now they dont want to give up their banking license cause its dollar and cents. They cant finance themselves. Theyre not confident they can finance themselves economically unless theyre a bank. Im very interested by your whole idea of the crosscontamination of the institution, the Banking Institution from the proprietary traders who have no interest in the outcomes of the customers of the bank compared to the other people, the rest of the bank who should have a vested interest or do have a vested interest in the outcome of the customers. I look back to the deregulation in the city of london in 1986. At the time the London Stock Exchange had two very, very clear funkions. One was if you prepared if you to positions on your balance sheet, you were never allowed to talk to cause mer or an outside investor and if you were a broker who only talked to a customer never allowed to take a position on your balance sheet. And that to me really putting the customer at the core of the Stock Exchange by having that rule. Do you think we lost something quite special when we deregulated . [ inaudible ] you had all the mixed functions in the bank, by a whole technological revolution that created, made it much easier for different types of institutions to deal with each other and made it easy for the traditional institutions to engage in these exotic activities. And you had at the same time, i think this is quite fundamental, a philosophical approach that said markets can take care of themselves. And we have a whole blossoming of thee yor rising about the efficiency of markets, the force of market participants, rationale expectations, and this and things were going well for a while so the whole implication was leave it alone. The market can takeare of itself and theyll have excesses from time to time, but, you know, theyll control it themselves because its in their interests to controlt themselves. Now that viewpoint isnt very popular anymore given what happened. At least it went overboard. And, you know, that viewpoint was not consistent quite specifically with tass of both the subprime mortgage market. Obviously went well beyond any kind of selfmediating function until it went over the cliff. And then it all collapsed. You had a whole philosophical development that affected regulators that affected banks that affected politicians. It was a different climate. Do we go back to where we were 30 years ago by snapping our fingers or passing a law, no . But i think we can dothings around the edge. Arou the edge when you deal with volcker, its more than around the edge but its not the whole thing. Let me say here, i get a little irritated when people say what are you worried about p proprietary trading. That didnt cause all the bankrupt bankruptcies. It certainly contributed to some of them as i say, but thats not the point. Its the cultural damage that it does. And without where is the corresponding of the offsetting Public Benefit. There is a Public Benefit in having reasonably active markets. Good. A lot of people are willing to do that. Thats what the Investment Banks are doing all the time. A lot of hedge funds are doing. Theyre not publicly supported. Hedge funds are largely financed by partners. Limited partners. They dont have much to say but its their money at stake. Theyre not by and large financed too these days, but the heart of their financing is not whether they have the capital ratio or 3 or 10 . You know it would be 50 . 75 . 40 . So thats different. Let them rise or fall on their own. Earlier about pushing the toothpaste back into the tube in terms of standards, do you think part of the answer could be to introduce more professional andards . Do what . Introduce professional standards within the Banking Industry . Yeah. Not just in the Banking Industry. You know, better extend it to the legal. Profession too. I dont want to hurt any feelings here. We have a real problem. Look at its getting more attention. What about auditors . There arent any. Anybody here not like the United States theyd all be lawyers. I dont want some profession to go away with a feeling i didnt offend em. Think there has been a change in professiona behavior. Law firms are an example. Partly a compensation question too. Okay. Andy . This commission is tasked looking critically at sorry to come back to that but youve been very diplomatic and the ring fence so far and weve listened very carefully to your criticisms. Can we fix or more importantly can we make it more effective than it will be at the present . I think you imposed right now it would be effective to a considerable extent. Now, whether, you know, i might argue the causes and you didnt have to go that far anditakes big business leing more difficult and maybe questions of Payment System that you didnt need to go that far. But yes, can you make it effective . Compared to where we are now. You mentioned and comments to the Daily Telegraph it wouldnt work in fall weather. Thats important that discussion. These problems, you cannot read the treasury paper, you cannot read [ inaudible ], you cant read the original paper without knowing that there are leakages, if you can call them that holes in the fence because there are advantages in having them. That doesnt mean its not going to be effective the day after you impose this. Depends on how many of those you put in there. Saying over time, those are likely to get bigger rather than smaller. Thats what happened to glass diehl. Were somewhat influenced. Glass degreele was a simple law. It said the bank cant trade, se except in governmentecurities and other things. You cannot hold a trading security in your account. You can act as a trader for a customer but cant deal with them. But then you got a subsidiary. Can the subsidiary do it. Somehow its put in there well if its not principally engaged maybe you can do some underwriting. Whats principally engaged . For 30 years, people assumed that meant no, you cant do it. Then the banks began getting more what do you mean the law says principally engaged. We made up this subsidiary to sell apples. And its principally engaged in the apple market but we wanted to do some underwriting. Thats what the law says. So we said, great wisdom, its only 5 of the activity, you can do it. Thats not principally engaged. But another Federal Reserve later, that got to be 25 or 30 . Or whatever. And through the years, a whole lot of Additional Securities were added to what was possible for a bank and for the subsidiary to do because you could find language in the law that said the regulators had some discretion. And by the time some justice in those that said by the time glass degreele was abop lished it had already been abolished in practice. The original vicars proposal slightly mandated was Investment Banking would be here, Retail Banking would be there. I think what youre saying to us, over time and with financial innovations that will change . [ inaudible ]. There are a number of things they say yes, maybe the commercial bank can do the retail bank can do for a customer of the wholesale bank. Can a big company put deposits in retail bank . If not, why not . They said well maybe he can. I dont know where theyre at on this. Can the retail bank lend. Im taking simple stuff. Lend to the big customer and under what terms and conditions or is that wholesale. Whats the borderline or wholesale. Endless numbers of these questions that arise. You can read. I read it on the plane coming over here. Can i move you on and ask you about this whole issue about how independent the retail part of the bank should be . You mentioned about the board of the overall boards to allocate capital. Thats one of the big concerns here, a way of i think what vicar says, you can do this, yeah, the overall board in the end can allocate the capital except hes going to have a provision of law that says a subsidiary holdin company will be responsible for the adequate capital of the retail bank. You know, thats an unusual i think you can agree thats an unusual provision. I dont know how long its workable. Because they are both part of the same company. The ultimate stock holder has an interest in both sides. It may not be impossible to insulate one part. At t end of the day, the stockholder. His immediate stockholder is obviously the holding company. But the ultimate stock holder is the stock holder in the holding company. If he changes the law he knows what hes buying. He hasnt got whatever law says he hasnt got influence on the retail bank. But its thats something that you have to work out over time. For what its worth, some of our largerignificantly important banks seem to be warming tohe proposal they would like some changes at the boundary. Is it possie, i mean, your experience of the volcker rule in the United States where there have been changes to the boundaries, is it possible to be absolutely definitive and what implications does that have for regulation . Couple problems. You see, proprietary trading, the law says its quite reasonably, its not a proprietary position if its well hedged. I forget the exact language used. Wh the banks came in and said we hedged the whole position. Make a caricature of it. We have some stocks, Standard Poors 500. Thats not a hedged pro pry thats not a hedged trading position. Thats a hedge fund. Thats what they do. The law says but you have to be practical about it, they hold a particular security, long position. Short position against the security thats a hedge and thats okay. They then say well i know, but we have this particular security and its not traded very frequently and we cant take a short position against that particular security, but suppose you take a short position against a similar securityr something close to it. So im sure in the end of the day thats what theyre struggling over in writing the regulation. If its close enough theyll say okay. Asthey said. But how do you define that. There are problems in the volcker rule no question about it, that involve similar problems. But, you know, the whole [ inaudible ] didnt exist. Its a wonderful instrument for hedging. Somehow the banks 200 years got along without it but they its a great hedging instrument and it can be an efficient had hedging instrument. Taoesnt pln how at the beginning of the crisis estimated 60 trillion in value of credit default swaps against a universe of risk that may have been 6 billion to 10 billion. How can you have if you hedged every one of them, theyre hedged six times over, which is an oxymoron, its no longer a hedge, somebody somebodys hedging hedges. And thats what the traders do and its all right but dont do it in the Banking System is my argument. Let me ask you one final question. Looks likely that the United States going ahead with the volcker rule, europe is considering the proposals, were considering vicars willot cause any problem across Banking Systems of internationally . Youre getting beyond my confidence becau im not involved in writing regulation or directly involved in writing the law. Disclaimer. Fal always fun. But the law gets a little tricky, probably put in there because the American Bank said okay, foreign banks cant do a proprietary trading inhe United States, but they can do whatever they want to do outside the United States with so long theyre not doing proprietary trading with americans basically is what it says. That creates you know practical problem of super policing. Difficult problem ofhos american and not american and all this. And apparently im just saying what foreign banks told me, a lot of trading activity around the world, be however it originates, pure foreign trading activity, involving foreigners, at the end of the day is cleared through new york because thats where the clearing facility is particularly for dollar transactions. You interpret theaw to say, clearing transactions through the routine new york facility, makes it american and you cant do. You cant have any trade. Im exaggerating but thats an overreach. The law says something about an american connection, you cant do proprietary. You can do ordinary Market Making. So im sure the regulators are ying to fix that up. And we hope they will because they have a reasonable solution. Can they Work Together . I think they can Work Together. The idea that everybody was on the same. But come back to the beginning, philosophically, they have Common Ground. Theyre both worried about excessive trading,roprietary trading. Theyre both worried about the curl turl implications of that. So there is some Common Ground. A lot of Common Ground. Maybe well end up with the volcker rule is what youre saying, a little bit passse here. I think were going to call it the love rule. Thank you m chairman. I just wanted to hark back, mr. Volcker, to some of the comments you made about your longdistance visit to continental illinois via chicago, to fair i should say i joined continental illinois as a new banker on the day that Penn Square Ba in the Shopping Center in oklahoma went bust to continental illinois with it. I do understand the issue of under capitalization and difficulty in assessing risk. But if we could go back and just get dig a little more into your thoughts around bassle 3 youve talked then and been quoting as discussing the practical limitations of setting capital and liquidity requirements and i mean, is your view that the bassle 3 approach is just the wrong approach and we should be using a different strategy or that we should be amending somewhat and adding other features to bassle three . Ne feature thats very important that i guess hasnt come up, which many of the american regulators feel very strongly about, and at least continental regulators dont seem to feel strongly enough, given inevitable practical problems and identifying risks and appropriate Capital Requirement against different risks, there ought to be you can think of it partly as a backstop. There ought to be an overall leverage requirement. The riskbased assets are not small, but there are many banking assets that arent covered at all by e riskbased approach. And theres been some interesting studies recently ive read about, that said oking backwards, what can we say about what banks did best during the crisis and which is it worse . And they concluded that the banks that had the biggest capital, whether or not they conform to bassle two at that point, did the bt. And they did the best because capital was allocated. The United States thought it out years ago to the extent we had anything and gradually developed the leverage ratio. And with much fighting, tleverae ratio was kept in the United States with bassle one and two at a quite low level. The feeling in the United States, i think i can say, is yes, you ought to have a leverage ratio and it ought to be higher than what theyre talking about in bassle, significantly higher than what theyre talking about in bassle. But i dont know whether that will ever be agreed in bassle but yes, i think that may be more important than the riskbased standard. I mean this is t way you get at the fact that some important risks are not covered at all by bassle. Now the difficulty with it is, is we used to have it that way. They said okay, we got one capital standard for the whole bank were not going to buy in american terms were not going to buy government securities anymore because we just want to hold things that are more profitable. We dont want to allocate 5 capital against government securities. And whatever youre doing, there are going to be games played. Its inevitable. So you try to make up the rules somehow anticipate that as best you can. But i really would say strongly that i think the risk based standard ought to be selfinvented by leverage ratio. So leverage ratio to set the floor, to set the floor. Yes. Yes thats and then a riskbased mechanism. Sometimes it may not always be the floor. It may be part. Good point. I mean that chimes in very much i suppose some fds comments we had here talking about the complexity thats of capital and liquidity requirements as in a sense potentially being part of the problem itself. Thats something that tends to lead to gaming as well. Is that a view you would take too . Yes. Part of the problem with bassle two as i understand it, apart from the obvious omissions of sovereign debt and mortgages,s they struggled for ten years to come up with bassle two. By the time they came up with it we had a big crisis. But they were struggling over how do you evaluate risk . And they thought, well, you know, originally they said, well let the Standard Poors and moodys and so forth. We know how good that was at the end. They said we dont want to rely this is an outsider too. They said banks that have a good internal risk base system we will give a lot of weight to. We will see whether we like the system and we like the system well rely upon the bank system. And that sounded perfectly reasonable but we found out a lot of banks that thought they had a good system did not have a good system. They broke down. All im saying is complicated how do you avoid the complications . The complicated will break down too. I come back to very simple thing, a few simple rules, statutory rules, cant be changed cant easily be changed, ought to be the backbone of this. The most important one is the reconciliation procedure. Now we have a reconciliation procedure in dodd frank. Most of the people in the market say i know, but it wont work. Forget about it. And well be back in too big to fail. It would be helped if we get a uk u. S. Agreement, little harder to say. And if we can get a simpler one we have all the better. Bui think we have Common Ground on proprietary trading and hedge funds and equity funds, handled differently but at least theres Common Ground there. And i hope we get Common Ground on a leverage ratio. Could i just pick something on the leverage ratio to push a little bit more. One of the issues and youve raised it, be sort of i think you called it the unfinished reforms about the nature of bank capital and a question about the usefulness of contingent debt instruments. Do you have a comment on that as we think through the leverage ratio . I know thats a big issue and its a trade within europe. For some reason or another this was proposed in the United States back with the latin american debt crisis. Thats how old i am. As a measure and we had an internal banking crisis following that. This idea of convertible debt, converting into equity and certain conditions was thrown out at that time, particularly the then chairman of the fdic. Was pushing it. The banks never have liked it. People in the market tend so say sounds good, but wont work. People wont buy the securities. If you get this risk in buying Debt Securities might as well buy equity in the first place. From the bankspoint of view they think its too expensive. Its on the table now and i think that ought to be looked at very closely and it would be good to have its not an area you need Common Ground in every country, but if its good in europe it ought to be good in the united stes too. Could i just ask youlmost passed the contrarian view, because one of the issues we testled with and im sure you do as well, how do you get safer banks on the one hand and yet, fuel sxheconomic growth on the other. Just is tre a risk, sort of the general Movement Towards tighter capital and liquidity standard could chokeoff lending and economic recovery . I dont know if you have some comments on the experience in the u. S. Which may be a little different from us in the uk . I mean theoretically its possible. I dont think were in the range where thats relevant frankly. Bank lending invols risks. Yeah. I guess in my head those risks are socially useful. If theyre not overdone. You want banks to make loans and make loans to Small Businesses and risky businesses but you dont want them to do subprime mortgages with no down payment and no Credit History and all the rest. Get some kind of a balance. Mr. Volcker, i wanted to ask you a little bit about the wholesale markets and banking. But youve set out some woerful insights and you said a moment ago we need a few simple rules. The volcker rule is a simple rule. Why does it need sounds simple, doesnt it . Why does it need such a vast complex amount of regulation to enact it . Pardon me . Why the volcker rule is a simple rule. Why does such a simple rule require vast quantity of complex regulation to make it happen . I dont think it does. I dont think it requires some regulation. You know, part of this is power of my opponents. How many times have you heard that the role the proposed role a year ago was 300 pages long. It wasnt 300 pages long. It was 35 pages long and at 160 ba pages of questions that lobbyists said would work. Wont work, we have a 300page rule. Im cheating a little bit. The rule was 35 pages and had an appendix of 30 or 35 pages laying out the metrics i was talkg about. Now i hope theyre getting this beer. This comes back to this vexing question, principles against rules. And theres no doubt that the american legal system, american habits say we want a rule clear and simple,black and white, so we know when were obeying the rule. They dont say we want to know how to get around it too but thats part of the deal. And you take that attitude, there were 400 Bank Lobbyists down there lobbying the agencies on this regulation. And make a million, spell this out exactly, we dont like it. How do you tell the precise difference between a proprietary deal and a i think you c shortccuit all that by relying on what i said earlier. Making sure that general policy is clear, incorporated in the banks internal they can write the regulation themselves internally, subject to review and then you look at the statistics. And thats not a huge shouldnt be a new imposition because they all have these daily statistics anyway. They might have to eak them a bit or add one or two but its not that theyre starting on vir begin territory with a whole new reporting burden. They already have the reporting burden inside the bank. Thank you. And turning to the whole concept of wholesale banking, youve mentioned earlier that figure youve stated before of 60 trillion of cdss, 6 trillion of that actual debt, and in the article that i read, you went on to say over the years banks have become much more obsessed with trying to make money by trading between themsees. Is there any actor or practical common sense commercial purpose to the instruments that are being traded . Is it necessary at all . Well, see, the proposals made, okay, credit default swap, thats kind of an insurance policy. You take out you will pay for somebody else to take the credit risk. As you pay in Fire Insurance or anything else. Now, people point out the difference between credit default swap and insurances its against the law to take out Fire Insurance on your neighbors property. For fear you burn it up. But nobody is nobody is preventing ten credit default swaps against the same security. And so the proposal said okay you can have a credit default swap against your loan. You own the loan, xyz company, and you want to sl a credit default swap or buy it, you can buy it, pay a fee and buy it, okay, thats your insurce policy. That sounds reasonable, right . Insurance. Thats what it is. But then they say, but, you know, the person selling that insurance has to have a market for derivatives so that he can hedge his risk. He sold the policy to you. He now has the credit risk and he better lay off some of that credit risk to somebody else. And now we have two derivatives and maybe three derivatives. Exponentially it rises and in the end its not anything, its a pure people are taking the risk without the instrument or without the basic loan. Does that activity multiply risk in the system rather than spreading it . I think demonstrably it has led at the very least to these interconnections between its certainly a big, big amount of trading that involves many instituti institutions. Its not, you know, youre not playing just with one other institution or not just playing with yourself. Youre playing when the derivative goes bad, god knows how many other people are involved in that. And thats wh were feared to happen when hman went down. That was cleaned up pretty well, i think in the end. But theres undoubtedly a lot o interconnections. If we have if we identify social use i think the phrase used earlier, socially useful or socially required side of banking the Payment System, you have the deposit collection the loans to Small Businesses, to proper mortges to houses, but equally you have a required commercial side in Investment Banking, the sourcing of capital fo expansion, initial public offerings, all which is useful commercial or social activity, it seems this bubble on the end thats what in the bank exactly. But thereshis bubble at the end where a bunch of guys selling things that nobody wants, nobody needs, arent useful, dont contribute to commerce and what were saying isell let them like the horse racing industry here, running horses, and then the bookie industry over therejust betting on it and make money. My question is to date were talking about how we coain that and control it. Nobody seems to be asking the fundamental question of should it happen at all in the first place . Im a modest fellow. My imagination doesnt go that a fall about these things. There is some funcon in trading activities whether its derivatives, they buy something, they want to sell it, you need some traders. The more argument you get the more liquid that market is, by liquid, they mean ease to sell without any change in price, the better, thats a change in market efficiency, i say yes up to a point. But liquidity is not a additive good no matter how much you have. Because it may lead to behavior that in the end is unfortunate. If people can buy very complicated risky stuff they probably shouldnt be in in the first place, and they buy it and say i can sell it tomorrow, thats a very liquid market. Maybe too liquid. If theyre buying that kindof stuff maybe that leads to behavior that in the end this point is often made with respect to Pension Funds actually. Rather endowment funds that have traded much more actively and was really quite dramatic in terms of the turn joevg of these institutions and they can do it because stocks and bonds are so easily tradeable. But at the end of the day is it really good these institutions have been turning their positions so much. You would have a nice argument about at. Thank you. Mr. Volcker, going back to this much quoted statistic about your rule being turned into a 30page rule book that you mentioned a minute ago,are we to take it from your relies that you think the integrity of what you proposed is still there, despite all this lobbying by banks to chip away at the edges of it, rather than you taking a view that the integrity has been undermined by making it more complex than it need be . Well, really tells the initial regulation was more complex than it had to be. I dont know what the new regulation will say. I do not believe that the thrust is being chipped away, no. Maybe there is a particular deminization expectation for risk funds and hedge funds that really is, not going to be a make or break thing. The law is pretty precise about what you can do. Theyll try to find a way around it. But no, look, the amount of proprietary trading in american commercial banks is today i have no measure but its without question diminished. Because even if the regulation is not fully effective at the moment, they can see you coming. Theyve all were talking about relatively few banks that do this. Dont forget that. Youre talking about five or six banks in the United States and you want to say, eight or ten that fight with you, but only six or seven banks in the United States that do this in big volume. Mostbanks, they may occasional occasionally, but its rare. They used to some of the big banks, i guess most of them, had a division two years ago to set up proprietary trading, som them said proprietary trading, sometimes they had another title, but they were for proprietary trading but they kept separate from theest a esee rest of it. They are outlawed by the law in any interpretation. You cant have a unit of a bank sitting out there doing proprietary trading. Now the only argument is, okay, so the proprietary trading moved three trading desks down on the Trading Floor and he now calls it Market Making. Many of those aggressive traders are less because they can go somewhere else. They can go to hedge fund. It hasnt affected us. I think flagrant violations you can identify. Sounds like three quarters still atleast. At least. Just going back, the paper that you gave us has a section on it, titled vicars, volcker under the ghost of glass steagall. I want us to be clear of your view of this because going back to the question asked, there is some confusion i think or misunderstanding about this. You said in this paper that the approaches of vicars and linnen appear close to the form of glass steagall restrictions in the u. S. Which broke down over time and that made a precautionary lesson. Hearing you describe your own proposal, to me that sounds more like a glass steagall two type proposal because its proposing a complete separation between two sets of activities, rather than a ring fence within the same company. So who is closer to glass steagall two . Is it you or vickers . They both have relevance. I said that because it would allow more functions in the Overall Organization than my rule. But youre right. On the original desi of glass steagall, it changed over the years, but in the original designs well, it what i was going to say wasnt quite true. Absolutely prohibiting trading but it didnt. It permitted some trading in the bank itself, certain securities, which got broadened, and it did not prohibit socalled dealing effectively in the subsidiary. Now what i think of is, there were lots of rules in the United States between the bank and its subsidiaries. So thats what made it kind of restrictions on dealing with the subsidiaries, not as strong as vickers at all. In that respect vickers is much stronger than glass steagall, attempting to be much stronger. I say to the extent they exist in glass steagall they broke down over time and i fear that might happen in vickers too, yes. Can i ask you about just one or two areas as we come towards the end. Were often told i suspect in the united stas and certainly in the uk, that the Financial Services industry contributes a huge amount to the overall economy and, therefore, we should be very, very careful with doing anything that might spook this industry. But youve also said that a lot of the energy and innovation in recent years has been pretty worthless is your famous quote about the only useful innovation about being the atm machine in recent decades. That may have been a little far reaching. Do you think th contribution of Financial Services to the overall economy has really grown in recent years or has most of this growth been in terms of its own size and the rewarzs within it . Well, im afraid i think a lot of it is spinning your own wheels and making money doing it. There is a calculation, i dont that the losses from trading, not just proprietary trading, but the losses from trading in 2008 in American Banks was all kwaequal in size all the money trading this century. I think i came out even. Looked very possible for a while, but when you got in a crisis it blew up. I didnt calculate that number. I cant even give you a reference for it. But that point has been made you can go check and see what it says. But you know, a lot of this is, i think, basically, you know, the banks, with this clever financial engineering, to make up all kinds of complex instruments, the simplest version, if you give us your money for five years, you will we will guarantee you against any loss and if the stock market goes up, well double whatever the stock market goes up until that happens. And, you know, not going to take any loss, may double my money in the stock market. You kind of forget back in those days when you paid some interest. You would give them the money for five years thats 25 in interest youre not making. Right away. Theyre able to offer that deal because they got guys down there, my grandson used to be one of them, they go down there and they work on their computers and they buy options and puts and calls and so forth, and they can shape that instrument in way that the bank isnt ending up with any risk or any substantial risk. That particular structured transaction in fact theyre not going to sell it to you unless theyre making 2 or 1 or sothing. You can argue thats a useful service. Im not stopping anybody from doing it. But an awful lot of activity of that sort goes on. Which i doubt makes an enormous contribution to risk taking, economic activity, whatever. A lot of this is pure activity, some of it is counterproductive for the reason i suggested. It all to the extent the complexities of this led to the breakdown then its counterproductive for sure. Following the crisis, slerneslern e certainly in the uk theres been a lot of criticism of regulators and the role that regulators played in not blowing the whistle, not as to use a phrase, taking the punch ball away at the ight of the party, what do you think about the quality of leadership in a Banking Industry . Say the regulators, why did so few bankers themselves speak out, if any, against the culture of excessi reward, risk taking, incentives and all the st of it that led to this . What do you think about the quality of leadership within the Financial Institution itself. This is part of the whole cultural and intellectual climate of the times. The amount of mon that some traders are making, and the amount of money these executives are making, at the top, you often see the statistics that maybe e chairman of a bank when i was in banking might make 50 times or 40 times what the average employee makes. Now he makes 500 times the average employee makes. Its a difference in scale. And may be smarter than they used to be in those days and more aggressive and they take advantage of enormous complexity and they get people who understand the complexity and can make money on the complexity and may end up taking big risks in the ecomy but in the short run theyre making a lot of money. I do think thats changing. Nothing like adversity to change peoples minds. And i think bankers have begun to realize they kind of let the rules of the game change, not because partly because of regulation but partly because of losses that were taken and the instability and you see some changes. Dont know what the changes yesterday, but i interesting speculation. Justin has one more question for you. Then ill ask if you have anything else you would like to add. Weve kept you quite long enough. Mr. Volcker, based on what they were just saying a few minutes ago, historically london was restored to a position as a Major International Financial Center through essentially regulatory and taxar ba traj in the 60s with the opening openi euro dollar market to evade certain issues in the United States. And that moved to a lot of assets over here. You have commented that roughly 85 of u. S. Banks overseas assets are in london and the rest is small change essentially. How much danger do you see of a seismic change similar to the reopening of the euro market if london london had strict regulation through regulatory arbitrary. People upping and moving that 85 somewhere completely different. Well the argument y hear all the time. Those are the only two senators now that have the capability to size the knowledge, whatever to really do this in a big way. But it will grow over time. And i think the more w internationalize some of the basic regulations, thats what it wasll agent. Level the Playing Field. Its obviously not ideal that the United States has the local role, but i dont think its entirely terrible either. Because they are both ending up in the same way to s which one is better. And i would prefer otherwise, but i dont think thats the end of the world for british banks or American Banks. Or for either one. You get europe to followsuit, as they should. They are not the enormous threat right this minute, but they could become obviously. But by threat, you mean that to the Financial System . Yeah, yeah. Just to kind of benefit to the economy. Characterization of all kinds statistics and im going to give you an uncertain statistic. We added statistics for value added by indust in the United States. Im sure you have them here. Its pretty tricky. Its pretty straight forward in the manufacturing business. If you look at value added numbers in the United States for the first decade, the decade before the crisis rough ly, youll see phenomenal numbers, value added in the United States of the financial industry went from 5 to 10. If you look at it in real terms, it went up very little. So you had all this additional activity and all the additional profits yet somehow the statisticians said there was no technique over what you had before. Its hard to believe that those calculations for finance are extremely difficult to make. But at least its in the direction of saying a lot of activity here that didnt have any strikg relationship. Ill tell you, the machine does improve productivity. One final question that we havent asked you is whether you think a lot more uld be done by tightening up criminal sanctions for serious wrong doing. For bringing in tighter, stronger criminal sanctions for serious wrong doing. Its frustrating because there has been some wrong doing, but what people say, its very hard to see actual violations of criminal law. You can see a lot of bad behavior, but if you have a case to bring to the ry that beyond doubt, beyond a reasonable doubt this guy had in his mind that he was doing that deliberately. Its easier to bring Insider Trading cases, but thats not easy. Thats the one place were seeing people being put in jail. I promised you before we started that i would give you an opportunity to say anything you had a note there right in the beginning that you thought you might want to make. I kept within the two hours. I appreciate your asking when you sit here listening to l these unreasonable propositions, but i would i said it many times. I think volcker, doddfrank are both the actions to pception of the same problem. And they have all some effectiveness i hope. Its not the only problem. We have problems of resolution authority. But it is a problem. You have given us a great deal of food for thought. Were extremely grateful that you have come cspan3 cspa tomorrow, the u. S. Institute of peace examines u. S. Tensions in the middle east and the sometimes violent reactions to provocative statements about religion. Thats live at 10 00 a. M. Eastern on cspan. He told folks he was the ideal candidate for the tea party. Hes forgetting what his own positions are. And hes betting that you will too. I mean, hes changing up so much and backtracking and sidestepping. Weve got to weve got to weve got to name this condition that hes going through. I think i think its called romnesia. And so this election is going to come down to being a choice between two different americans, an america where government makes the rule, where government getting larger and larger where it runs more of our businesses and increasingly runs our lives, in an american where we bring back the issues of the principles of independence. Recognize that god gave us life and they include life and lebity, and the liberty, and the pursuit of happiness. Watch monday as president obama and mitt romney meet for their final debate from Lynn University in boca raton, florida. Online on cspan, cspan radio and online at cspan. Org. Next, highlights from the october 9th session of question time in the australian parliament, the debate in the house of representatives was dominated surrounding the speaker of the house peter spicker. Following the debate the speaker won a slam no confidence vote of 7069 but resigned hours later. Julia guillard and tony abbott gave heated remarks about the controversy surrounding the speaker and spent some time criticizing partys positions on womens right. This 40minute program is curtsy of aipac, australias Public Affairs channel. Peter spick irstepped aside while a Sexual Harassment court case went on. But during the course of that case, Text Messages between the pair emerged showing crude language and a bad attitude towards women and fixing a political victory, the opposition moved to dump him seeing it was the government that put him in the chair. This is how question time started during the week. Let me say madam Deputy Speaker, that it is absolutely Crystal Clear that this speaker is no longer a fit and proper person to uphold the dignity of this parliament and is no longer a fit and proper person to uphold an protect the Standing Orders of this house. And i say madam Deputy Speaker that the speaker is not disqualified for the me effect of illegal action against him. That can be any member of this house. What madam Deputy Speaker must nevertheless be held against this speaker, theer undenied, uncontradicted fact which continues to emerge in the cause of the case apparently on foot against the speaker of this parliament. At the risk madam Deputy Speaker of dismaying this chamber, at the risk, madam Deputy Speaker of dismay of the public, i must allude to the gross references to female genitalia which i contained in the undenied evidence before the court of the conduct of this speaker. I must allude, madam Deputy Speaker to the vial anatomical references to which this speaker appears to be addicted in his text message. And mad damn Deputy Speaker madam Deputy Speaker, there is the clear bias in uncontradicted evident against a member of the house by someone who is charged to act without fear or favor by someone who is charged to act impartially towards all members of this house, by someone who is charged with the upholding of the Standing Orders of this house without fear or favor against or in favor of any Single Member be you the newest member, be you the father of the house, the speaker is charged with upholding the Standing Orders impartially against all members of this parliament and in the face of the uncontradicted, undenied evidence before a court. This speaker cannot do that. This speaker has not done that. That is why madam Deputy Speaker, this particular speaker is no longer a fit and proper person to be the speaker of this house. But madam Deputy Speaker, its not just the speaker who has failed to pass the test, it is indeed, this Prime Minister who has failed the test. This Prime Minister hand picked the current speaker for the top job of this parliament. This Prime Minister orchestrated the resignation of the former speaker, the member, a man of undoubted character, a man of undoubted quality and a man of impartiality in the congress of this speaker. Does anyone think, a man who loved this parliament who loved the speakership as he loved his life. Does anyone think of the former speaker of the parliament would have resigned to spend more time with the colleagues than the caucus . I mean, ask the members what caw sus is like these days. Does anyone think that the member really resigned to spend time with members of the caucus . Clearly the member resigned the speakership because he had been instructed by the Prime Minister, a Prime Minister who engaged and who masterminded a squalid did to show up her numbers the parliament. And mark my words madam Deputy Speaker, what we will shortly see from this Prime Minister and ministers in this government is a defense of the indefensible, is an attempt to say that someone who has clearly failed the character test is worthy of sitting in the gravest chair of this parliament. Well, i cited this Prime Minister just as the speaker has failed the character test. You Prime Minister, are about to file the judgment test. Fail the judgment test. And every day that you run a protection racket for the current speaker just as you ran for months an years of protection for the member you indicate your unfitness for high office as well. Madam Deputy Speaker, last november when the Prime Minister feared he was about to lose the support of the member for denison because she knew she would not be able to deliver, she cooked up this deal. She knew she was about to lose the support. She feared she was about to lose the support in the parliament of the member for noble. She was aprehencive then as always about the actions of the foreman Prime Minister, the member. So in conjunction with the leader of the house, she drempt up this brilliant political tactic, never mind if it involves the political assassination of a wellrespected speaker of this parliament, she knew that she could rely then as always on the death squad that had already dispatched one Prime Minister to deal with the speaker of this parliament. Never mind never mind that the squalid did that the Prime Minister cooked up last november involves slicing in the chair of this Parliament Someone whom her own government was investigating for misuse of entitlements. All that mattered to this Prime Minister all that mattered to this Prime Minister last november when this brilliant piece of political maneuvering was being drempted up was enhancing fer position in the particle . Thats all that mattered to this Prime Minister, her own survival in this parliament. And madam Deputy Speaker, what is now absolutely apparent is that while members on this side of the house were attempting to maneuver the speaker out of the parliament, the Prime Minister members on the other side of the parliament were giving him the biggest job in this parliament apart from the Prime Ministership itself. And in the process of managing the speaker not out of the parliament but into the speakership, this Prime Minister doubted a good labor man who had done nothing, nothing at all but to charge for duties for the speakership in a fair and impartial manner, not sufficiently partial to satisfy the Prime Minister and the leader of this house. So madam Deputy Speaker, lets be absolutely Crystal Clear about the situation in this parliament right now. This speaker is this Prime Ministers creation. This speakers actions are this Prime Ministers responsibility and this speakers stand before this Prime Minister status unless, unless she has the responsibility and the decency to remove this speaker from his high office. Now, madam Deputy Speaker, we know, we know because we have been observing this Prime Minister now for a long type in the parliament. We know that sorry is the one word she cant say. We know i was wrong in the one statement that she cant make. Well, i say to this Prime Minister, please for the sake of this parliament, for the sake of this country, for the sake of ordinary status of decency admit that you got it wrong when you engineered the member for fisher into the speakers chair and just say sorry. Just apologize to this parliament for the travesty that you have inflicted on us back in november last year. Madam Deputy Speaker, as things stand, this whole sorry slipper saga just illustrates the ethical bankruptcy of this government. Weve had minister after minister, just about knocking over the microphones at the standup for this speaker. Weve had minister after minister tripping over themselves to defend this speaker. We had the minister for Foreign Affairs describing the accuser of the speaker as him. Wed that leader of the house that was guilty in engaging in the politics of personal destruction. We even had the leader of the house compare court action against the current speaker to watergate. What sense of proportion, what sense of perspective do these people have . But worst of all madam Deputy Speaker, we had the one person in this house, most charged with respecting due process, with respecting the ordinary processes of the courts. The first officer of the crown, the first officer of this country, the attorney general herself who went out in public again and again and again and again and again to say that those who were engaged in prosecuting this speaker was somehow guilty of an abuse of process. She didnt say it once. It wasnt a slip of the tongue in the heat of the moment. She went out and said it deliberately, cold blooded and calculateedly again and again and again and again. And when the attorney general was picked up for commentary and its interesting, isnt it, that the Prime Minister herself is now saying, oh, i couldnt possibly comment on something that is before the courts. Oh, no, not me. Not me. Upholder of standards. Upholder of decency. Always wanted to give someone a fair go. Oh, yeah. Oh, yeah. This is what the attorney general said when picked up on the fact that she was prejudging a matter before the court. The attorney general said, i think its unrealistic given the Public Interest in this matter that there will not be commentary. And wasnt there commentary madam Deputy Speaker. There was comment after comment after comment. There was defamation after defamation after defamation of someones whose only fault was looking to assert his rights at law against the speaker of this parliament. But whats happened . Whats happened madam Deputy Speaker since more has been revealed about the real character, the real nature of the individual who holds the highest job that this parliament can bestow upon anyone . Whats happened is that the attorney general is now taken the vows. The attorney general has taken the vow of silence on this matter that the Prime Minister is now going to attempt to take. Well, madam Deputy Speaker, total, total hypocrisy. This is a government which is only too ready to detect ma sogeny until they find one of their own supporters. Until they find it upon someone whom this Prime Minister relies to survive in her job. Then no fault can possibly be found, no evil dare be spoken. Madam Deputy Speaker, the australian public are no mugs. They know what is going on here. They know that this government is about to run a protection racket for something which is absolutely contemptible for attitudes and values which are absolutely and oddly indefensible. Madam Deputy Speaker, not only has the Prime Minister failed the judgment here. Not only has he failed the status test but this attorney general has failed the honor test. She has dishonorably failed to defend the honorary judicial process of this country. Not only has the attorney general failed to defend judicial process, she has been the chief defender of the speaker himself. She has been running his defense rather than defending the courts and the justice process of our country. Madam Deputy Speaker, it is no accident. It is no accident that the members for banks has today resigned as chairman of the government caucus. It is no accident that the member for banks has resigned today because the member for banks must be only too well aware of the fact that back in november last year, it was the member for banks who was forced to no nominate the current speaker for the position that he now holds. It was the member for banks who was forced by this government to endure 10 minutes of infamy while he stood in this place to assert the virtues of the member. Well, he knew it was wrong then. Hes known that it was wrong every day since then. Its obviously been hanging on his conscience and now he has resigned. And im waiting for the member for melvin ports who was asserted as well the honor of the member, an assertion hes knew then and has known since then to be simply false. So far the only honorable man opposite in this matter has been the member for banks and i commend him. And i commend him for that. Now, i know i nomad am Deputy Speaker, that the Prime Minister is in a difficult position today. Shes already lost her caucus chairman. Shes fighting to avoid losing her speaker and ultimately what she is frightened of losing is the support of her caucus too. Well, just as shes lost the caucus, chairman, she will lose her speaker and i suspect she will shortly lose the caucus. Because what she has done is shame this parliament. And should she rise in this place now to try to defend the speaker, to try to say that she retains confidence in this speaker, she will shame this parliament again. And every day, the Prime Minister stands in this parliament to defend this speaker will be another day of shame for this parliament, another day of shame for a government which should already have died of shame. The members of fisher should never have been a speaker in this parliament. She shouldnt have been made speaker last november and she shouldnt he shouldnt be speaker now. Let me simply remind the Prime Minister who i presume is about to rise to her neat this parliament and defend her personal selection of the member as speaker of this place. She said back on the 24th of november last year. She said of this speaker that he had shown a fierce sense of balance and appropriateness and appropriateness. This Prime Minister thinks that this speaker is a man of appropriate judgment. Well, madam Deputy Speaker, what does Prime Minister now needs to do is to defend the conduct, the character and the words of this speaker. I hear an accusation. How long were he in our party room . We were trying to get him out of the party room and what did you do . They put him in a the biggest job in the parliament. This speaker is the Prime Minister property. This speaker and every day the Prime Minister stands in this parliament to defend this speaker, the bonds between them will just be closer. This Prime Minister should be a shamed of herself. She should be a shamed of her choice. She should be a shamed of her judgment. She should be a shamed of the fact that she is now having to defend the indefensible. This speaker should be gone. This speaker should be gone today. Those words died of shame had a special meaning for the Prime Minister because just days earlier, a popular broadcaster here in australia had used the same phrase to describe julias guillards late father claiming he had died of shame because of his daughters life. That caused huge controversy here in australia. And trying to protect peter slicker and keep him in his chair, julia used the opportunity to use it back. Julia guillard delivered a speech regarded as the best around the world. I call the Prime Minister. Thank you very much Deputy Speaker. An i rise to oppose the motion by the leader of the opposition and in so doing, i say to the leader of the opposition i will not be lectured about sexism and masogeny by these men, i will not. And the government will not be lessoned by sexism and masongeny, not now, not ever. People who hold sexist views and who are masogenists are not appropriate. I hope he writes out his resignation. He doesnt need a motion in the house of representatives. He needs a mirror. Thats what he needs. Lets go through the opposition leaders repulsive double standards when it comes to masongeny and sexism. We are now supposed to take seriously that the leader of the opposition offended by his Text Messages. When this is the leader of the opposition who had said and this was when he was a minister under the last government, not when he was a student, not when he was in high school, when he was a minister under the last government. He has said and i quote in a discussion about women being underrepresented in institutions of power in australia, the interviewer was a man named stabroth. The leader of the opposition said, if it true that men have more power generally speaking than women, is that a bad thing . And then a constitution ensues and another person said, i want my daughter to have as much opportunity as my son to which the leader of the opposition says, yeah, i completely agree, but what if men are by fizzology or temperament for adapted to exercise authority or to issue command . Then ensues another discussion about modern society and the other person participating in the discussion says, i think its very hard to deny that there is an underrepresentation of women to which the leader of the opposition says, but now, theres an assumption that this is a bad thing. This is the man from home were supposed to take lectures about sexism. And then of course, it goes on. I was very offended personally when the leader of the opposition as minister said and i quote abortion is the easy way out. I was personally offended by those comments. He said in march of 2004, i suggest you check the records, i was also very offended on behalf of the women of australia when in the course of this Carbon Pricing Campaign Said when the housewives of australia need to do what the housewives of australia need to understand as they do the ironing. Thank you for that painting of womens role in modern australia. And then of course, i was offended too by the sexism, by the me ma sodgeni came calling at this table. If the Prime Minister wants to politically speaking make an honest woman of herself, something that would never have been said to any man sitting in this chair, i was offended when the leader of the opposition went outside in the front of parliament and stood next to a sign that said stick the witch. I was offended that described me as a mans pitch. Every day in every way across the time the leader of the opposition has sat in that chair and i sat in this chair that is all we have heard from him. And now the leader of the opposition wants to be taken seriously. Apparently hes woken up after this track record and hes gone, oh, dear theres this thing called sexism. Oh, lord theres this thing called masogeny. Doesnt turn a hair about any of these past statements. Doesnt walk into the parliament and apologize to the women of australia. Doesnt apologize to me for the things that have come out of his mouth. But now thanks to you, this is a battering ram against someone else. Well this kind of hypocrisy should not be tolerated which is why this motion should not be taken seriously. And then second, the leader of the opposition is always wonderful about walking into this parliament about giving me and others a lecture about what they should take responsibility for, always wonderful about that, everything that i should take responsibility for now apparently including the Text Messages of the members. Can anybody remind me the labor of the opposition has taken any responsibility for the contact of the sydney young liberals and the attendance of this event as members to be taking any responsibility for the conduct, members of his Political Party and members of his front bench who apparently when the most vial things have been said about my family, raised no voice of objection. No one walked out of the room. It is a great honor to have you here, dr. Biden. We have such a great opportunity in minnesota to roll the dice. We elected the majority in the minnesota house and minnesota senate. [applause] i will shine your shoes. Defeated two terrible constitutional amendments. [applause] and we can reelect our congressmen and women. And reelect our tremendous senator. [applause] he is here today. And so then of course the reason we are all here today is to reelect a great president and a great Vice President. [applause] you didnt come to hear about them from me. You came here to hear dr. Biden. I came here to hear dr. Biden. I will turn it over to carol. I am glad. One reason i am supporting president obama is that i have the feeling he is grounded in the real world and as i said in researching dr. Biden, i found out that she has children and we have a lot in common. Got married in the 1970s, had children in the 1980s. We both have been educators. I started teaching in minneapolis in 1970 and taught mostly in the inner city. In 2004 i retired. She began as a High School English teacher and in her time she taught as a Psychiatric Hospital for adolescents which had to be a challenging assignment. Later she moved on to teach at Community Colleges and still works as a professor at a community college. I found a blog entry from 2008. Apparently she sat in on a Conference Call and one of the participants said i cant remember when i have interviewed a public figure who sounded so much like the people i work with every day, and of course thats probably because i am a teacher. Some of that made me feel that she kind of knows what its like to be in a classroom with 25 to 30 kids and have to play it by ear. Jill biden believes in Community Colleges. Both of my children have attended Community Colleges. My daughter majored in interior design. My son is now attending he went to a for profit Technical School for two years. He got his degree in sound engineering but they didnt have job placement and there are no jobs in that field. The credits didnt transfer. So he is back at north hennepin and will get his Associates Degree in the spring and wants to go on to a four year college after that. I also found out she helped co found the book buddies program. Having been a primary teacher i really appreciate getting books into the hands of 4 and 5year old kids so when they come to school theyre ready and they know what a book is. In 2003 i was diagnosed with Breast Cancer and after surgery and chemotherapy i am doing fine. Good. [applause] she was diagnosed with Breast Cancer and started a Health Initiative in delaware. Theyve helped around 10,000 High School Girls learn about early detection. Shes a military mom who has worked to bring attention to strength and courage displayed by military families and she wrote oh, dear she wrote a book called dont forget god bless our troops and its based on the deployment experiences of our daughter natalie. If you are looking for a gift, here it is. For all of her life dr. Biden has been immersed in real life. Shes been a lifelong learner and always strives to be better at what she does and make the world a better place. Whether its working with struggling students or caring for children who have experienced tragedies, teaching adults who need a Second Chance or advocating for causes that improve life, she seems like a really special person and i am really proud to introduce her today, dr. Jill briden. [applause] dr. Jill biden. [applause] thank you. Hello, everyone. Thanks for being here today. I really appreciate its great to be here in minnesota again i want to thank carol for her comments. Really, carol, i think you should come on the road with me. And thank you, governor dayton, for being here. I really appreciate it. I appreciate your friendship. But most of all really i am here because i want to thank all of you for what you are doing for our campaign and i see that you all have clip boards and you are all getting ready to go out and canvass so thank you so much for being here today and what you are doing for this campaign. Over the last couple weeks, i have been traveling around the country. Yesterday i was in iowa. I think tomorrow i will be in wisconsin. I see the energy and enthusiasm thats building, just like here, just like in this room today. So we are moving forward, and i think this campaign is really connecting to people because its about peoples lives. For me its no different because it connects to my life as well. Even if joe werent running for Vice President , i would still be involved in this campaign. And as carol said, i am a full time teacher, and as she knows as a teacher, teaching isnt just what i do, its who i am. And i am sure there are other teachers in here who are the teachers . Great. Thank you. Thank you. [applause] when we were elected and i thought of my role as second lady, i was thinking, you know, i knew that i would have to continue to teach because its just my passion as every teacher in here knows. You have to love what you are doing. I love going to work every day. I teach english. I was there thursday giving midterm conferences. I will be there again on tuesday. I teach because of my students. They inspire me. As a teacher, i want to make sure we continue to invest in quality education. That is why president obama and my husband are moving things forward. We have already made so much progress in education. They have doubled the funding for pell grants. For those of you who have kids, they change the student loan process of makes it easier for students to pay back their loans. It makes Smart Investments in our public schools. This is where i started out in the publicschool system. We have made Community Colleges a cornerstone. I have been there for almost 20 years. I truly believe in the power of Community Colleges to change lives. I am also a military mom. Our son is a major. He was deployed for a year to iraq. That was a tough year for our family. That is why i wrote the book. All the money goes to scholarships for military families. [applause] i wanted to let people know what it was like to have a son or daughter who were deployed. My hope was that barack would end the war in iraq. He kept his promise and he did. [applause] he also brought Osama Bin Laden to justice and now we are going to responsibly and the war in afghanistan by 2014. I am sure many of you saw that. I want to make sure that all of our veterans and their families get the benefit they earned the respect they deserve. It is important to me that we keep moving our country forward. Look what we have done. They have expanded the gi bill so that the veterans that are coming back and go to college and get an education. They have given tax credits to businesses. To businesses that hire veterans. Did they support a military families and organizations in real ways that affect their lives . I am involved in this election as a woman who cares about the direction of our country. I have seen what joe and barack have done in fighting for our freedoms every single day. As you know, the president signed the Lily Ledbetter fair pay act, the first thing he signed. [applause] they also fought so hard for health care reform. Insurance companies will no longer be able to charge women more than they charge men. [applause] they cannot charge a copay for basic Services Like prenatal care or contraception. I see a lot did you in here. You can stay on your parents insurance until youre 26 years old. I am sure most of you know that they cannot discriminate against you because of a pre existing condition. [applause] most of all, they knelt how important it is for women to make our own decisions about our on health care. [applause] many of you women know, the younger ones may not comment that we thought really hard for roe v wade that we fought really hard for roe v wade and equal rights. We want to make sure our daughters and granddaughters did not have to go back and reified the fights we fought decades ago. Back andhave to refight the fights that we fought decades ago. [applause] you have to educate young women and men at about the Supreme Court and what it is going to be like if we have super conservatives who are appointed to the courts. Think how far that will take us back. We have to live with all these consequences for decades to come. We have to keep moving forward. Moving forward means that after the worst economic crisis is the Great Depression we have seen 31 straight month of job growth in privatesector jobs. We have seen manufacturing and exports on the rise. Weve seen the unemployment raitte as low as when president obama came into office. The Automobile Industry is backed up on its feet. [applause] forward means that we all have to keep working so that we can create a better life for all americans. No matter where you come from or who you love, we have to keep moving forward. That is why im so excited to see all of you here today. So we can keep moving forward. [applause] the election is just 17 days away. Believe me. We are counting it down arent we . Need to get out there and take people to the polls. You are already working for us. I can not thank you enough. You have a program that is four shifts for four more years. If you can get anyone from exercise group or schools come get them to save a little bit of time. My sister said she was out canvassing in pennsylvania. If everybody pulls together, that this election is between two very different choices. I want to thank you again for being here. You are the ones that are going to take us forward. Thank you so much. [applause] youre love is lifting me higher [playing your love keeps lifting me higher by jackie wilson] watch and in gage with cspan as the president ial candidates meet in the last president ial debate in florida. Our live debate preview starts at 7 00 p. M. Eastern. At 9 00 p. M. , Bob Schieffer moderates the 90minute debate. Following the debate, we will hear reactions and comments, your calls, email, and tweets. Follow our coverage on cspan, cspan review, and online at c span. Org. With the focus on the president ial debates this month, cspan is asking students to send messages to the candidates. Students will and to the question what is the most important issue the president should answer it in 2015. Cam videotudent competition is available. The fairness argument, we would expect a lot of stores in california to see growing sales as customers walk into their stores instead of going online could dont hold your breath. That is not likely to be the case. People shopping online for choice and sales taxes. On whether goods over the internet sold should be taxed, tonight at 8 00 p. M. On the communicators on cspan 2. Can dissenter rand paul campaigned for mitt romney saturday at a Huge Campaign rally in New Hampshire. First, you hear some entered a tree remarks by New Hampshire students for mitt romney. This is about 40 minutes. Good afternoon. I want to welcome you here today. Can we get a big round of applause for senator rand paul . [applause] i get to see a show of hands. How many people here are College Students . Ok. This election is about our future. This is about what kind of a country do we want to have. Do we want the good job . Do we want to lower the deficit and have we must come together, get involved, and make sure in november we send romney and paul romney to the white house and barack obama packing back to chicago. [applause] we will win this election. We would get this country back on track. America can do better. We can do better. Please let me introduce to you state rep adam. Adam schrader. Thank you very much. Just from here on the doorstep, is a new market. I am not sure how many you live in the market. It is a fantastic turn out. I hope everybody comes out november 6. I encourage you to do that. Every vote matters. One of the reasons i am here today is because i know mitt romney in paul ryan understand Small Businesses create jobs. I am also a Small Business owner. We own a place called the stone church music club. We happen to not just create jobs that we directly employ, but we are one and many Small Businesses that are a job it incubator. We have our tests that were supporting local artists that we are supporting. And hope you do the same any think about this when you go to vote. An example of this would have been working in the legislature as well. I was able to work with small breweries this year. I allow them to sell their products at their farmers market. It creates economic development. Also working with local oyster farmers and the pollution from a probusiness perspective. When you are pro Small Business and economy, and these are the kind of things that can happen. Please come out and vote. Hes connected with the campaign here in the past. The alternative would be another obama administration. He has nothing to say about it. It is what we are shutting down. I know he is very focused on reducing the deficit. More taxing will only cause it to go up. We need senator rand paul back in. Please to come out to vote. Im really encouraged. Thank you very much. [applause] coming up next is randy sanborn. [applause] how are you this afternoon tax fantastic. Let me ask you a question. And the next four years how many will be looking for a job . How many of you want a job . The next foursix years, how many people may want to buy a house or a new car . It is an amazing thing. Not that long ago i was in the exact same position you are in. Our economy was not doing well. We ran at a real crossroads in america. We have the option of what we had versus what this guy named Ronald Reagan might bring us. Think about whats the need if youre looking for a job in the next four years. You need someone that understands budgets, that those have to live with and our means, understand what it means to have personal freedom and personal responsibility. I have been incredibly blessed and humbled to be associated with a sweet man you might know. His name is dr. Rand paul. [applause] it was an amazing experience for me to have that opportunity to help cochair his election with one of your professors to i do not see in the audience gets. They open their family up to us and allow an amazing it sent to try to help the things that are important to all of us. It was a great experience. I know you guys support him fully. What i see today in rand paul is so much of his father that as they are transitioning at the president ial level to what ever we need to do in order for you to have a job, in order to make sure that you have your own future, and is not even just yours. It is a big part of what makes you have a transition. Money no longer there falls off the tree you call mom and dad. As a Business Owner and the good doctor is a Business Owner. I ask you to pay particular attention today to what he is going to talk about. He has shown true conviction, which is what we need more. He has a patch to fix our problems. We have been fortunate enough to spend some time with mitt romney. Today we have a decision to make. We are asking all of you for your help. If you want a job i ask you to support mitt romney. He will prove to you that we can fix this. We can only fix this with your help. Let me introduce my friend, rand paul. [applause] thank you for coming out. I would like to first introduce my wife. It is our 21st birthday today. [applause] we just sent our first son off to college. But some of your parents, they were worried about you. They may still be worried about you. Are you showing up for the 8 00 a. M. Classes . What are you going to choose for your major . We still be living at home with their parents . Their parents worry about all of these things. There is a story about how parents can determine whether their child will turn out ok. They hid in the closet and they devised a test. But a hundred other bill out. They put out a hundred dollar bill out and a fifth of bourbon. They figured if he picks up the money he will be a business money. If he picks up the bible, youll be a clergyman. If he picks of a burden, and maybe he will be in a fraternity. He picks up the dollar, sticks it under his arm. He picks of the bourbon and is under is other arm and marches off to his room. His mom said it is worse than we thought. Hes going to be a politician. [applause] politicians get a bad rap. We have about a 10 an approval rating. That may be about 9 points higher than it really should be. Why do we . First of all, we do not even obey our own rules. You have to read the bills. Two months ago they gave us a bill. It was put on line at midnight. It was printed at 9 00 the next morning and you are voting on it at noon. That is not quite 48 hours. I said it is not 48 hours. The rules allow them to override it. 77 senators voted against 22 of us and said we deem it not so. About a year ago we had a big debate over raising the debt ceiling. The conservatives said we will raise the debt ceiling because probably be have to. We will do it only if you seriously address the deficit and say we will pass a balanced budget amendment. We said if the passage we will raise the debt ceiling. From here on out you have to balance your budget. We did not win. We lost. They did pass some restrictions. They passed it with some statutory caps. They broke that 25 times. If you raise your hands and say youre breaking your own rules, they vote to deem it not so. You are supposed to have a budget every year. It has been a loss in 1974. When you pass appropriations bills, there is about 12 different categories of government. To have committees. The bills would go to committees. Nothing comes out of the committee. There are no appropriation bills. If you lobby me and say we want this special bid for New Hampshire, i do not even get to vote on that. This is 2000 pages that no one reads. We continue funding government the same way it has been funded. We are funding a government that we are spilling over 1 trillion we do not have each year. We bring in about 2. 2 children. It is over 1 trillion in debt. We have added 6 trillion to the debt in the past four years. It is unsustainable. Youll hear people say it is. But they it are adding to the debt. You may say that republicans did it to. We did. Just not quite as fast. Republicans doubled the debt but others are quadrupling. Why is the debt expanding so rapidly . 1 primary cause. This is not republican spot or democrat fault. It is the entitlement. Medicare, medicaid, and Social Security are 2 3 of all spending. But bad in interest in that segment of the budget will become all of the budget. No money for anything else other than those three programs. That is what we are on. I have sat down in a room with president obama in a year ago. All 47 republicans and said you have to fix these. All you have to do is matt. Math s simply raise the age. It erases the age of eligibility. They both say you can. It is not republicans or democrats fault. If anybodys ball, it is your great grandparents fault. They had too many damn kids. As they get smaller, the tax base grows smaller. There are People Living longer. When Social Security started the average Life Expectancy was 65. Now it is 80. The maker said the five you will probably make 87. Iv you if you make 75, you will probably make 87. The number goes up because it is an average. People are living well into their 80s. We have to change the system or we could raise taxes. What happens if you raise taxes . If you want to pay medicare and Social Security taxes enough to make the system solvent, you would have a 20 payroll tax. Currently it is 7. 5 . What do you think will happen to the working class if everyone is paying a 20 payroll tax. The president will say i am just one to tax rich people. The problem is rich people pay all the taxes. The incometax, the top 1 pay 40 of the income tax. The top 5 make 200,000 or more in pay 70 of the income taxes. It is ridiculous to say that theyre not paying their fair share. It is just a lie. It is untrue. Here is the thing. I am not up here saying you are a rich person. You are a poor person. I want everybody to thrive. I do not care who you are. This is something that is true that cannot be denied. The private sector create jobs. Jobs in the Public Sector are paid for by those working in the private sector. If you leave money in the private sector with whomever, ideally we ought to leave it with those who earned it. The more you leave in the private sector, the more you will leave the private sector. The present the point is the opposite. The president s viewpoint is the opposite. He said we have to hire more government workers. Hiring more of me will not make the economy recover. I am a burden. They all are. It is not mean they are bad people. I went to public schools. Teachers are a cause. The teachers are a cost. You do not just hire more teachers in the economy grows. You have to have education. He get so make things fundamentally wrong. He said elected people are smart but it was the roads in front of the school that got them to succeed. That is crazy. We just came from murphys over in manchester. Do you think he is successful because there is a road . He will tell everybody that nine out of 10 restaurants fail. Do you think i went to medical school because there is a road in front of my school . After he said he did not build it i sent out a tweet. He might be an economic illiterate if you think the roads creating Business Success and not the other way around. Think about it. If the rich are paying most of the income tax, who is paying for the roads . People who are successful. People who are successful paper taxes. If you want to punish those who are successful, youre not have the steps you want from government. We have tried this before. The punish the rich scheme has been around. People sat on their hands. Moneys sat in banks. They would not invest. They were terrified. The recession got worse. The depression got worse. It does not work. We are doing the same game book once again. Some have said the president at least got Osama Bin Laden. I am glad. I am glad he got Osama Bin Laden. I have some questions. I want you to ask the president this. Where the were the marines in libya. There were no marine guards guarding our ambassador. The most dangerous has to be libya or iraq. I think iraq has 17,000 people guarding the ambassador. There is a host of armed people. How big is the wall . 10 feet . We have a fortress guarding him. There was a 16 person security team. Why did you send them home when he specifically requested to say . Ask him where in the hell were the marines. Ask him what happened to the plane . Theyre supposed to be an airplane there. They took the plane. Here is the real rough. They took the plane on may 4 of this year. Do not happen on may 8 . Do you know what happened on may 8th . \ the state Department Spent 108,000 buying a new electrical charging station to green up the vienna embassy. He have to ask yourself is the green initiative, the Global Warming campaign, more important security of an embassy . Greening up the embassy. We probably spent 1 million fine these electric cars to make a political statement in vienna. We would not have a one marine guarding our embassy. We would now allow 16 personnel to stay in libya. We have enough money to make a show of a very politicized agenda. It is inexcusable. If he says the buck stops here, someone should be fired. [applause] they like to ask those who are successful and the socalled 1 . That is unless you are a big donor of his. Crony capitalism and corporate welfare is fine if you have been a big donor. Solyndra got 534 million of your money and they went bankrupt. Who owns solyndra . 20 of the richest men in the world. A billionaire got a 500 million loan from you. Do you think he is really sincere that is going after the 1 when he is taking your money . Do you know who approved the solyndra loans . He is married to the solyndra attorney. Solyndras attorney that negotiated the loan is married to someone in the department of energy that helped approve a loan. Does anyone remember the Kennedy Family . They got 1. 8 billion. I am guessing there in the 1 . It is for a Company Called bright source. I do not do high finance. The Gross Revenue is 30 million. They got a 1. 8 billion loan. There is a slow cycle right now of going bankrupt. We had for five other Companies Going bankrupt. The president thinks he is smarter than all of you. Every time you go out you decide the prices. He said im going to make a whole industry of this something that is not profitable. Im going to do by reporting rich people with loans. By rewarding rich people with loans. He should not let the demagoguery said. You should not let it be out there that he somehow cares about the regular folks. He is taking money from regular folks in giving it to the rich folks are chronic capitalism and welfare. Do both parties do it . Yes. I will oppose is no matter who is doing it. [applause] ultimately, this election for me is about something very fundamental about our country. It is about the American Dream. We have two different belief systems. We have two different visions of where the American Dream goes. The American Dream is not where you are now. It is where you want to go. Do you believe you are stuck where you are . Do you believe there is a future for you . Do you believe if you work hard makes a difference . Do believe if you go to school and make straight as will do better than if yo u made straight fs . Random whonk its succeeds. Merit is based on your work and how hard you try. Do you believe in that merit based idea are do we think things are random and ought to be redistributed by someone who is smarter than we are and to list in washington and set up a committee to say some people should have one car instead of some people having three and some having none. Do you really believe in the American Dream that the numbers are staggering. One of the greatest things is mobility. 60 of those born into poverty will climb up the ladder of success. 60 . There are people who can tell you either they did it or their parents did it. They came from nothing and succeeded. Do you want a hand out or a hand up . We have given away 11 million cell phones. I laughingly say kentucky used to be a bottle of whiskey and now it is cell phone. Do you think people are more happy with that cell phone . Theyre happy for a while. Are they getting the selfworth you get from having a job . The hand that gives you the hand out, the other hand is keeping you down. Youre only good to them as long is your dependents. As long as you are dependent. The difference in dreams between president obama and governor romney is the what you to realize the self worth of having your own job. We want millions of new jobs to have jobs. We know what happens in the private sector. The president by say the same thing. That is not reflected in his policies. The other thing is that the jobs have to come from the private sector. Milton friedman put it well when he said nobody spend someone elses money as wisely or frugally as they spendtheir own. It is not the government is inherently stupid, although it is debatable. Is that they do not get the right signals. Why this government make bad decisions that the five are 100,000 and start a pizza parlor, every night and going to worry about paying it back. Every day i will worry about making a profit. If i spend 10 trillion on something from the government, you do not worry about it. It is not your money. The government is not have the right kind of signals about your money. It is more productive if it is left with the. With y when he said government is a necessary evil, he meant every ounce of government you get you give up an ounce of freedom. That is not mean we do not have government. Were going to have roads. When we get to a question of to government be in the car business or should government be in the banking business, we should ask the government is any good at any business. The dream is different between president obama and governor romney. What we have gotten at the president obama has not worked. 23 Million People are out of work. Gas prices have doubled. Food prices are rising. More people are becoming dependent. Theyre putting in to this category of dependency. You lose hope. Your self worth comes having a job. When you go out and make your decision, i think he will think long and hard about your futures. Youll be looking for jobs and to buy a house. Right now the government arm is so large that some say the debt is costing 1 million a year. Think long and hard. If you decide like me that the best hope for our country is to look forward with governor romney, get out there and work. It will be very close. Thank you very much. [applause] [playing proud to be an american by lee greenwood. [captioning performed by national captioning institute] [captions Copyright National cable satellite corp. 2012] wants an engaged as the candidates debate tonight in florida. Our live debate preview starts at 7 00 p. M. Eastern. At 9 00 p. M. , Bob Schieffer moderates the 90minute debate appeared following the debate, your reactions and comments, your calls, email, and tweets. Follow our coverage on cspan, cspan real, and online c span. Org. Today, the u. S. Institute of peace. That is live at 10 00 a. M. Eastern on cspan. The fairness that agreement and the level Playing Field is so important. A week into it, we would expect in the stores in california to see growing sales as customers flocking to their stores instead of buying online. Dont hold your breath. That is not likely to be the case people by online because of convenience, choice, and lower prices with the getting into the cells gas. On whether goods so crudes sold over the internet should be taxed. When i watched cspan, i particularly like the congressional hearings. They had hearings on various pieces of legislation. I found the congressional hearings coverage reticulate interesting on subjects that have to do with Veterans Affairs or appropriations. But if you read something in the newspaper, you get an idea of what is the Public Interest. You can get the raw data, ron information. He watches cspan on comcast. Cspan, created by americas people come days in 1979, brought to you as a Public Service by your television provider. Provider