Transcripts For CSPAN World Food Programme 20101127

it's very small. : troops host: we will see you again tomorrow morning at 7:00 a.m. eastern. [captions copyright national cable satellite corp. 2010] [captioning performed by national captioning institute] >> coming up, a discussion about the legality of the governments of a bailout by bankruptcy law experts. then the former u.s. ambassador to the united nations on the threats that different governments pose for free-market economies. that is followed by a look at u.s. policy in the middle east. a former assistant deputy secretary of state for the region. as a peace. later, politics and journalism treated media officials joined political figures in the discussion. tonight, a discussion with the president and ceo of national public radio. vivian schiller talks about the future of public radio. >> back on october 20, we terminated the contract of one of our part-time news analysts named juan williams. he was a contractor, part-time news analyst. we terminated his contract perfectly under the terms of the agreement. the circumstances around that were unique. there is a lot of chatter about the reasons that we did it. you did not hear those from me. there are a lot of assumptions made about why we did it and what happened. it is not my practice or that of npr to get into personnel decisions. i will say that the circumstances were unique. there was a series of incidents over time. these are things i have said before. we terminated his contract. that is all i want to say specifically about the matter. what followed was a tsunami of media attention and opinion and a lot of commentary. it was all over the map. did we expected to be that large? i think it is fair to say we did not. npr is an organization that made mistakes in the winter we executed this. as ceo, i take full responsibility for that. our staff did not meet with him in person. that was a mistake. we left our stations and some supporters without the tools and information they needed to address it with their constituents. those things were a mistake. what is happening now and i think there is generalconsensus that this likely would have happened anyway, although certainly the controversy did not help things. with a change in congress and the ever-growing deficit, there is a call for deficit reductions. included in that is about $450 million of federal support for public broadcasting. that is what we are looking at. >>you can watch the entire interview with the president of npr tonight at 8:00 eastern on c-span. >> president obama and vice president joe biden stopped by and water supply part plant in indiana st. the bailout work and jobs were saved. a panel of experts talked about the legalities of the government actions. stanford university law school hosted this discussion in california earlier this month. it is moderated by appeals court judge william fletcher. >> i am as a expert on the federal bench as anyone. that is to say that i know almost nothing. i encourage the panelists to talk to you as if they were talking to me. i got an e-mail that said secured creditors like to play hardball. you can translate that to the audience as well as to me. let me begin by introducing the panelists. i will introduce them in the order in which they will speak to you. stephen lubben is a professor of law. his recent call the -- scholarship focuses on derivatives and chapter 11 and the reorganization of large organizations. his recognized expert on bankruptcy and corporate debt. he analyzes these issues for national and international media, including but not limited to "the new york times" and "the wall street journal." he testified on the bankruptcy case before the tarp oversight panel. said it is david skeel, professor of corporate law at the university of pennsylvania. he writes in the area of bankruptcy and corporate law as well as sovereign debt. he writes on the connection between law and religion. he is a frequent commentator in print and broadcast media on bankruptcy law. he has written extensively about the financial crisis and the government response including three publications this year. he is aweso-- has offered a book about bankruptcy. todd zywicki is a professor at george mason university. he writes on bankruptcy law, consumer credit, consumer protection law. he has a forthcoming book with university press called " bankruptcy and personal responsibility." i have to say he is no friend of the environment. he has published more than 70 articles. that is an awful lot of trees. the home team for cleanup is marcus cole, professor at stanford. his scholarship focuses on bankruptcy law, corporate organization, venture-capital regulations, not only in the united states but in the developing world. he serves on the regional board of directors and on the editorial board for the supreme court review. i thought we would start out with each of the panelists speaking in sequence for 10 to 15 minutes. i might occasionally interject with a question. i am a scratch my head until the very end. -- i may scratch my head until the very end. we would like to save some time for questions at the end. i encourage you to be brave. if there is something you did not understand, you are in very good comny. do not be afraid to ask a question. professor lubben, if you would begin. >> i think i will begin by throwing out my position on the automated -- automotive cases on the table. >> you need to speak directly into the microphone. >> ok. [laughter] i will stop moving my head at all. here is my take on the automotive cases. for a least 10 years and probably even longer, secured lenders in chapter 11 have been gaining the upper hand. they have played hardball for that time. as part of that, they have dictated the terms on >> sales for debtors. if you come with that background knowledge, what the government did in the chrysler and gm cases becomes less alarming in the sense that the government was acting just like secured lenders have been acting for more than a decade. where you might have concerns is if the government was acting in any sense beyond what the secured lenders could do in all the other bankruptcy cases. that is putting to one side the policy question of whether bankruptcy and chapter 11 should be going down this road. that is something that congress could well address. it is not specific to these automotive cases. >> could i interrupt for one minute? number one, what is chapter 11? no. two, what did the government do? >> chapter 11 is the reorganization chapter of the bankruptcy code. it is the chapter that applies most often to large corporations, whether they are reorganizing or liquidating. it is all done under chapter 11. chapter 11 is for large corporate bankruptcy cases in the bankruptcy code. what the government did in chrysler and gm was used its position as secured lender, a position and acquired relatively recently starting with the late bush administration and early obama administration, it became a secured lender to both of these automotive companies because no one else would lend to them. it also became a post-bankruptcy lender to them. it was a secured lender on both sides of the bankruptcy line. entering chapter 11, it said that you have a very short leash to solve your problems in a short period of time. the way to do that is to basically sell yourself. that is what secured lenders have been doing for 10 years. they do not want to live through an old-fashioned reorganizational plan. they saw what happened in eastern airlines in the 1980's. eastern wing guard for a long time and never came out. -- eastern and pulling guard -- eastern lingered for a long time and never came out. there were many political risks in keeping the case is going too long. they got the automotive cases out relatively quickly. to go back to my overall theme, i look at these cases as worrying about situations only were the government exceeded the powers that any secured lender would have. i did not find many examples of that. "wall street journal" did have an article about special treatment of gm. it did not help the government any. it may have helped the canadian government, but not the u.s. government. that is my basic take on the automotive cases. with that framework in mind, my justification or the reasons why i think the cases were justified but would not be in most instances is because the debt markets were closed. that means gm and chrysler could not borrow from anybody else. the government was the only lender available at that moment in time. if the government had not lent to them, you would have destroyed a lot of value. gm would have liquidated. that would have destroyed value. it would not have been in the interest of anybody. that is my basic take on the automotive case. i am more comfortable with the automotive cases than i am with aig. at least the automotive cases happened in the court with transcripts and transparency. we understand exactly who was getting what in the transactions. aig is not a very good example, but it seems to be the example adopted by the dodd-franc bill. generally speaking going forward, if we are worried about insolvency, bailouts, what role bankruptcy plays, you should be very concerned about the resolution authority in dodd-frank because it is far less transparent and the bankruptcy process would be. it could be even more value- destroying. i have a lot of concerns in that regard. i will stop there unless you have or questions. >> i have a question. could you explain dodd-frank? what does it do and how does it do it? >> i will not explain all of it, but i will attempt to explain the resolution authority. irresolution authority is the new bankruptcy process -- the resolution authority is the new bankruptcy process for financial institutions. if everybody gets together and agrees it should be instituted, but everybody i mean the federal reserve board. i think it is fdic as well. if they agree, the treasury secretary to put a financial institution in to the resolution authority. if they do not agree, then bankruptcy still presumably applies. they are eligible for bankruptcy. if there is a resolution authority proceeding, if the treasury cannot get the consent of the company, they will file a petition in the district of columbia. the district judge has 24 hours to act on that petition. otherwise, it is deemed granted. the size of the d.c. district court is not known for handling lots of large insolvency cases. they did not listen to me on that point. if the court approves it, you have the fdic appointed as the receiver to resolve the financial institution just like they would with a failed bank. the trick is that under an fdic process, the fdic is acting both as bankruptcy trustee and bankruptcy court simultaneously. there are no transcripts. the fdic says or decides what claims will or will not be allowed in the process. they do not have to explain their reasoning for that unless they're suited for it outside the process. it is less transparent than a bankruptcy process where you have hearings and due process. >> i am thankful to michael for inviting me to the conference. i am almost as painful for stephen doing the hard work -- i am almost asainf -- thankful to stephen for doing the hard work of explaining it. when we were coordinating this panel, todd sent an e-mail saying in effect to me saying that he assumed i would give my usual talk about how bankruptcy is good and bailouts are a bad idea. i was going to give my usual talk about how bankruptcy as good and bad hot -- ad hoc bailouts are bad. it did give me pause. i do think that bankruptcy is almost always preferable to a single firm bailout for the reasons that most people in the room are familiar with. it addresses the moral hazard problem. it make sure that people are punished if they invest in companies that perform poorly. it assures that if you have a company that needs to be restructured, it will in fact be restructured instead of just being kept afloat in zombie form. it has the general rules of law and transparency that steven was just -- stephen was just talking about. i do feel like bankruptcy is almost always the right answer to the questions we're talking about today and tomorrow. i do not think it is always optimal. i do not think bankruptcy is the solution to the afghanistan war. i also do not think it is a good idea when it is used the way it was used in the chrysler and gm cases. this is one thing on which we do not agree. i will quickly talk about three things. one is the car cases. the second is the dodd-frank resolutions. then i will open up the issue of whether a bankruptcy would be a good solution to the state's financial crisis billionth, hypy speaking if there were a large state with big financial problems. [laughter] with the car bankruptcies, they were not done in the traditional chapter 11 negotiations to do reorganization. they were done ostensibly as a sale of the assets under section 363. this is not unusual in contemporary bankruptcy. lots of companies are dealt with through these 363 sales. one fun thing is that they sort of flipped the academic dialogue on its head. people like douglas. with the champions -- douglas baird were the champions of this. all of a sudden when chrysler and gm came along, he started saying he was not sure was a great idea. these sales undercut bankruptcy. stephen six years ago wrote an article about this issue, 363 versus chapter 11. he said that we should be suspicious of a model that issues -- eschews traditional reorganization in favor of sales. now after the fact, stephen says that everybody is doing themo the government should do them. the only person in the bankruptcy world to has been completely consistent about this said that three and 63 sales were corrupt before 2008. he says that 363 sales in chrysler and gm were also corrupt. the treatment in the car bankruptcy's has complicated the discourse in bankruptcy scholarship. the general objection to the sales has been that they seem to violate absolute priority. in chrysler, it seemed like the senior creditors got stiffed. they only got 29 cents on the dollar. employees got a lot more than that. creditors got paid in full. that may be right, but it is not what the real problem was in the cases. the real problem in the cases is that we do not know if absolute priority was honored or not. the reason we do not know is because these sales were structured as options -- auctions. they were a sham sales. the restriction in a way where it was essentially impossible. they were structured in a way where it was essentially impossible to put in a competing bid. if you wanted to make a competing bid, that was fine. anybody could make one as long as you precisely the same thing the government did. you promised to pay off the employees and trade debt. you could not come into the chrysler case and see the government's $2 billion bid and pay $5 billion. you could not make a bid like that. they were ostensibly options auctions, but not real auctions. there were lots of problems that the cases have created. they distort the credit markets, particularly with respect to important industries where you might think the government will come in and do something like this again. they potentially distort chapter 11. there are aspects of what the government did that private parties could do as well. >> could i embarrassed myself again? >> as long as you promise not to embarrass me. >> you have run no risk. i run considerable risk. chapter 11 reorganization is designed to preserve the value of a growing concern so you do not make it liquidated. in order to have that happen, you restructure the financial arrangements of the corporation. there are two different kinds of creditors. there are secured creditors and unsecured creditors. a secured creditor is a protected up to the value of the debt. all of that is pretty straightforward. how does 363 fit into this? what is being auctioned off? is it secured property only? it sounds like we're talking about the whole company. >> that is a good question. in theory, what was being auctioned off was essentially the entire company, alof the good assets. the argument that was completely kosher would be that the assets collectively were worth $2 billion. they were all sold to this new chrysler entity. the $2 billion was distributed to the old creditors. the senior creditors were owed $6.9 billion. they got the whole $2 billion. all of that is completely kosher. if that is what happened, a $2 billion was the right price for the conclusion. the thing that troubles people is when you looked at new chrysler, you see the same employees as the old chrysler. the same employees getting a substantial portion of their $10 billion fund paid off. all of the trade creditors of the old company are there with new chrysler again. they are getting paid in full. it looks like from that perspective that new chrysler is being used as a way to pay off old creditors. to repeat the bottom line, if $2 billion was the real value of the assets, the fact that new chrysler wants to pay the trade creditors and unions, that is their business. they can do whatever they want. new chrysler can pay them if they want to. if new chrysler bought the assets on the cheap, they are basically taking money away from the old senior creditors and giving it to the employees. is pretty complicated. >> that begins to help me. in an ordinary bankruptcy, let's say the whole company is sold off in a 363 sale. how is that auction structured so that we can compare it to what happened with chrysler? >> it is typically structured as a sale. to keep it simple, we will assume it is for cash. it is not unusual for the buyer to keep some of the old creditors. if there are suppliers that are important to the business, they may keep those creditors. this is consistent with stephen's view of the case. one question about chrysler is whether it is pushing the model too far. chrysler capped -- kept 80% of the old creditors. it got rid of the 20% it did not want. a. a the senior creditors and the tort claimers. -- it got rid of the senior creditors and the tort claimers. it was different not in kind but in degree. it was the amount of old creditors carried over to the new company. it was not the fact that some old creditors were carried over. >> in an ordinary 363 were the entire company is being reorganized and sold off to a single buyer, who approves the sale and on what criteria is the sale approved? >> more good questions. the judge approves it. one thing that concerns people is chapter 11 has an elaborate system of procedural safeguards so that the judge does not have to be making these decisions. there are rules as to how you divide up the creditors into different classes. there is a disclosure statement that has to be produced. you do not have any of that with 363. you propose a sale. 363 does not give any criteria for approving the sale. it just as there has to beat notice and a hearing and in the court to approve the sale. the case law has developed some criteria for approving sales. the traditional requirements are that there has to be a business justification for the sale. there has to be a reason why you were doing the sale now rather than negotiating a reorganization plan in a traditional way. you also cannot do what is known as the sub rosa plan of reorganization. it cannot simply be a disguised organization. in my view in both chrysler and gm, they both would have been seen as sub rosa plans of reorganization. those of the two criteria. >> that helps me. >> that was the first of my topics. in about an hour, i will be done with the other two. the second thing i wanted to talk about is the resolution rules in dodd-frank. the resolution regime enables bank regulators when three keys turn. the treasury proposes and 2-3 agreed to take over a firm that is systemically important. there is a process for designating systemically important financial institutions and regulating them differently irresolution rules do not require that the institution be pre-designated. the treasury can decide if they get into trouble that they think they are important and could mess up the economy. the resolution rules are structured with the intent of requiring a liquidation and not a restructuring of the big financial institutions. there are all sorts of provisions built into the resolution rule that are designed to end taxpayer bailout. when president obama said it in taxpayer bailout, he was thinking of the resolution rules in particular. they will not end bailouts. the resolution rules will not stop the bailout before resolution. the fed can still bailout companies before we reach the resolution point. there are interesting restrictions on what the fed can do. when we reached the resolution point, the fdic can pick and choose who it wants to pay. it can bail out creditors that it wants to bail out. it will bail out the shadow banking system related debt. derivatives will get bail out -- bailed outif one of the companies fail. the resolution rulesre based on an assumption that what the fdic does well with ordinary banks in taking them over and selling their assets quickly in a completely non-transparent environment with no judicial rule or review, the presumption is that as a good model for the large systemically important financial institutions as well. in my view, that is simply wrong. the fdic does ok job with small and medium-sized banks. it does not do a good job with big banks. one reason is the fdic mode of operation is to find a buyer and sell the bank to that fire -- buyer. the pool is not very big. if you find a buyer, you have just created an even bigger financial institution. if you do not find one, you are in trouble. the resolution process is a bad idea on lots of different dimensions. it also has some significant constitutional issues that others are better positioned to talk about than i am. there is a 24-hour review in secret before the court decides whether the resolution will be allowed or not. there's almost no basis for rejecting the application for resolution. the only bases is that the government was confused when it thought it was a financial company. if it is a financial company, one of the bases for resisting is gone. the other is that the company is not in default or in danger of default. almost by definition, if the treasury wants to step in, you are in danger of default now. i think there are some real problems with the resolution rules. i also think there is a solution. the solution is to change the special treatment that derivatives get in bankruptcy. they are exempt from the automatic stay. if you put a stay on derivatives in bankruptcy, a lot of these companies would have an incentive to file for chapter 11 before regulators ever stepped in. if there had been a stay on derivatives when aig was in trouble, i think they would have filed for bankruptcy. they could not have offered them anything because they could not have stopped the creditors from running. the last issue is states. could we have a bankruptcy regime for states? we have a bankruptcy regime for municipalities. vallejo is in this now. could we do this now for a state? i think absolutely. the same analysis that allows us to do it for municipalities, as long as we made a voluntary that the state had to file itself rather than being thrown into bankruptcy, i do not think there would be a problem with that as a legal matter. whether it would solve the problems is a harder question. my sense is that vallejo is having problems because of the question of the political will to go after the contracts they would need to reduce their debt and a significant way. as a possible solution, i think a bankruptcy regime for states is something to think about. i am not quite as optimistic about how effective i think it would be. i think it is worth thinking about. >> what judges ordinarily do when a lawyer goes over -- i apologize. >this panel is bankruptcy and te rule of law. building on what they have talked about, i am going to talk about the whole thing from the context of the rule of law. i will talk about bankruptcy in dodd-frank from the rule of law perspective. what is the rule of law? we have a general sense of what it is. rules announced beforehand, equal treatment of everybody under the law, arbitrary discussion, being constrained. we kind of know what the rule of law looks like. why does it matter? we have a lot of research on why it matters. it really is the cornerstone of economic freedom and prosperity. enforcement of contracts, regularized bankruptcy processes. if you look to the economic literature, it is the non- entanglement of businesses and the government. enforcement of property rights and all these sorts of things. if you want to know the difference between the united states and a lot of places that are not rich, it is because we have the rule of law here and they do not have it there. there is a lot riding on this. crusaders for the rule of law around the world have been talking about this for decades. they have been talking about putting in regularized bankruptcy proceedings in countries that have traditionally soft problems by -- solved problems by big bailouts and communism. the crisis is not a pretty sight when we think about it from the context of rule of law. politically motivated interventions -- i do not think there is any serious argument that the auto bailout was legal. i do not think there's any way you can get general motors and chrysler out of the definition of the tar. i think the chrysler and gm cases and dodd-frank show us what has been going on and how dangerous it is in the context of the rule of law. the politically motivated interventions motivated the response to the crisis are now being institutionalized and dodd-frank -- in dodd-frank rather than being retreated from. i think the big problem in chrysler and gm was the violation of absolute priority. secured creditors, senior creditors are supposed to get paid before junior creditors. in that case, senior creditors got 29 cents on the dollar. the junior cases happened to be the united autoworkers. they got 59 cents on the dollar for pension funds and everything else. i am not familiar with any other case where secured creditors got 29 cents on the dollar and unsecured creditors got cents on the dollars. maybe those cases exist, but it strikes me as extraordinary that it was the case. they say there was a real violation of the way it was conducted. typically if you are a secured creditor and get knocked down to partially unsecured status, you are given an unsecured claim in the case. that would have meant that the secured creditors should've gotten 55 cents on the dollar on the unsecured portion of the claim. perhaps the most disturbing thing, good and bad, is in the case of general motors it did not get pummeled. creditors were paid in full. it is a good thing because maybe some people had second thoughts after they took the secured creditors to the woodshed and chrysler. from a rule of law perspective, it is in even worse thing. it appears that they looked out on the horizon and decided to accomplish what they wanted that it was necessary to attack the secured creditors. for general motors, it was not necessary to plunder the secured creditors there. it is almost worse that they decided to plunder the creditors in one and not in the other. what has been set up in these cases? i was really glad when they finally file bankruptcy. i thought it would finally get out of bailout mode and into bankruptcy mode. instead, we ended up with a frankenstein hybrid with the worst of bankruptcy and bailouts. we've seen a fundamentally politicized corporations in america. they have 435 congressman and 100 senators. the obama administration has made it clear throughout that intervening and helping the company would be contingent on the making more grain cars -- green cars in controlling the marketing strategies of the companies from washington. one reason they needed to file bankruptcy was because they had an overextended system of dealerships that was about three times larger than honda and toyota. one reason why that would eventually have to file bankruptcy and why it was good was so that they could close the unnecessary dealerships. that process has become completely politicized. one of the largest local business people is usually the local chrysler corporation gm dealers. they are on the phone to their congressmen. congressmen have intervened to trto keep dealerships from being closed. they are politically influential constituents. general motors was going to close a plant in montana. it was a mining operation. the owners of the mine lobbied congress and got congress to order general motors not to close the plant, the mine. barney frank intervened because there was a manufacturing plant in his district in massachusetts that they were going to close. barney frank suggested that would be an unwise decision. that is especially considering that gmac follows under his jurisdiction. as far as i know, that plant is still open. we talk about saving the industry, but it is not that simple. honda and toyota dealerships around the company -- country are owned by americans as well. one honda dealer was upset about the money the government gave to gm being used to subsidize the purchase of gm cars. he was finding the american government was subsidizing his competitor and harming his own dealership. the uaw wanted them to do it. one thing that is absurd about this is that among the secured creditors who got fleeced in chrysler were the indiana firemen and teachers retirement union. the problem they had is that they were not as politically powerful as the uaw. the uaw got 55 cents on the dollar. the firemen and teachers to 29 cents on the dollar. i wrote an op-ed where i said this is the kind of thing that hugo chavez would do. i got an outraged emailed from a lawyer in new york and said it is an insult to chavez because when he takes their property, he compensates them for it. let's not forget the process. what happened in chrysler is that a lot of the secured credit was held by banks. most of those were also tarp recipients. they did not make a peep about the fact that they were getting fleeced. you can draw the obvious inference that their independence was compromised because they were welfare words. they went on national television and announced those like the pensioners standing on property rights and used the tarp banks as a club to bully the other ones standing on contract and property rights. john allison has described the process more generally of the way in which she was bullied and threatened into forcing bb and c into taking bailout money so that the public would not draw inferences as to which banks were good or bad. it is not a pretty story. the wall street journal reporter was talking about the bullying in getting bankamerica to buy merrill lynch. none of that looks like the rule of law to me. that looks like the antithesis of the rule of law. i do not think we should forget that. dodd-frank seems to institutionalize the pathology of the past few years, the idea that the role of the government is to pick and choose winners in the economic markets. one provision places price controls on what banks can charge for the debit cards. it only applies to banks that have over $10 million in assets. they will find their prices slashed by about 80% relative to those who have less than that. that is because politicians like small banks and not big banks on that issue. no other explanation has ever been given. that provision was passed with no hearings or consideration. it is an obvious effort to pick and choose economic winners. it has been challenged. it is challenged on the basis is regulatory taking and violates economic protection and due process. i think it is a worthwhile case. we will see how it goes. the consumer financial protection bureau is really a dangerous principle. it creates an independent agency within another independent agency. the way the budget is allocated is that every year, the director of the bureau since a demand to the board of governors of the federal reserve of how much money they want. as long as it is less than 12% of the federal revenues, they must grant it. it is ruled over by one person and not a bipartisan commission. it has vast loosely defined policies. it has all kinds of problems. one problem you can anticipate will happen is the way in which the deputy director is appointed will likely give rise to a challenge down the road. when the director cannot do something, the deputy director steps in. the deputy director is appointed by the director. it will probably end up violating the peekaboo status if that ever happens. the good thing is is likely to self-destruct. hopefully eventually it will be reformed. we have unleashed an era of incredible politicization of the economy and crony capitalism. it is beyond all limits we have seen before. millions of dollars are being sent by the financial industry -- spent by the financial industry. we're likely to see that beig banks have acclimated to the recognition that they will bear the administrative burdens and costs as a result. they also know they will be able to capture it and use it against smaller banks and competitors. mortgage brokers contributed to the crisis but also provide a check on banks in terms of competition. banks will probably be powerful enough to run the mortgage brokers out of business. there's an interesting in purple paper -- empirical paper that shows the overall response was that there was a clear signal that people understood that union firms would be bailed out in the future going forward. non-union firms would not be subject to the same sort of benefits. finally, let's talk about california and the states. political leaders have learned a lesson. moral hazard pace. if you are california, give me one reason why he would act responsibly. california looks like it is too big to fail. if you are sitting in sacramento, what is the basis to believe washington will not bail you out? california, new york are too big to fail. why would to get your fiscal house in order if you are a big state if you know the federal government is incapable of saying no in a situation like that? i think we will see that we will be reaping what we have sown over the last few years in dodd- frank and the bailouts. >> the home team that last. -- the home team bats last. >> thank you for inviting me to participate with some of my good friends. it is nice to follow some of these guys. todd and i have known each other almost 20 years. i have voalways wondered why anyone would invite both of us to the same conference because we sound a lot of light. i always thought the only difference between us was he has not had the good sense to grow deadlocks. i finally found an area of disagreement. i agree with todd that this is really about the rule of law. i want to tie this back to the whole purpose of the conference, the constitution. article one section a confirms that congress has the power to establish uniform laws on bankruptcy. there are a couple of things that are important about this provision in this discussion. the provisions of the constitution does not create the rule of law out of thin air. that ink and paper does not create the rule of law. it comes through the application of the bankruptcy law. the second thing to recognize about this particular provision in the constitution is that it basically went without being invoked for almost 100 years. it went without a lasting bankruptcy provision. we do not need bankruptcy. we do not have to have it. yet we are behaving as if it is essential to our economy and the way we do things. the interesting thing about the debate between stephen and david is that the whole time they're talking about the problem, particularly with respect to the auto bankruptcies, is that there is an 800-pound gorilla in the room of their discussion. they were not talking about the politics of it. those bankruptcies would not have come out the way they did if it were not for the relationship of the trade unions and the political power that the uaw has. that is the bottom line. i do have one area of disagreement with todd with respect to dodd-frank. i agree that bankruptcy creates a regime where we can have some transparency and see the application of the rule of law with respect to resolving insolvency. the problem is if you engage in that behavior and upset the rules and satisfy the absolute priority role whenever it is politically expedient, what is the purpose of transparency? how much good can transparency do for senior creditors and chrysler? it does not matter if it is transparent if the government is going to come in and manipulate the rules because it is politically expedient to their favored constituencies to do that. the wording of article one, section 8 creates the perception that the rule of law will be obeyed in bankruptcy. if you were not going to obey the rule of law in the application of bankruptcy and you think bankruptcy is important to your economy, it behooves you to depart from bankruptcy to do the things you want to do. it behooves you to step outside and engaged in the kind of manipulation or bailouts or other mechanism. when you use bankruptcy to achieve political ends, if you are undermining the trustworthiness of the process. you are undermining the expectations of creditors all across an economy who can no longer rely on the pricing of credit with respect to a particular data that might have a relationship with the politically favored constituency. if you are going to do that, manipulate the rules, why not do that outside of the bankruptcy regime and do it openly? simply decide that you are going to rearrange things and bailout companies. you are going to rearrange the rights of creditors in a way that hugo chavez would do it. one thing i li abo dodd- frank, todd says the problem with dodd-frank is that it institutionalizes the abuse of power. the thing i like about that institutional as agent is that at least it creates -- institutionalization is that it creates some expectation. you cannot price if the rules are going to be abandoned every time the government encounters a favored political constituency inside of an environment like bankruptcy. i disagree with todd. i do not think that bankruptcy is the appropriate vehicle for everything. we do not use it for everything. it is not necessary to resolve every crisis. . . i don't think that we can easily amend chapter 9 of the bankruptcy code to cover california. i think that when we suggest this, we're again going to the framework of the debate between david and steven. i think david and steven are focused on results and not recognizing the importance of process. one of the problems with amending article 9 to include to allow states to file for bankruptcy is to recognize the difficulties that the 11th amendment to the constitution poses for such an amendment to chapter 9. the 11th amendment protects states sovereign immuents -- protects the states from being sued. states can exercise sovereign immunity. and to suggest that they can waive sovereign immunity for purposes of bankruptcy is an oversimplification i think of the strictures of sovereign immunity and the ability of bankruptcy to resolve this common problem that we call insolvesy. what's the alternative? i'm not sure that there's a good at nitive. i do think that todd put his finger on the moral hazard problem. the moral hazard problem, as a californiaen i recognize that the moral hazard problem is much larger than what todd has identified. sure, california has seen the government bail others out, why wouldn't they bail us out? but it's bigger than that. the california electorate has essentially been irresponsible and so have their representatives. we have a state here with essentially we're 15% of the budget or less than 15% of the budget is discretionary. so much of what we've done with constitutional amendments through the initiative process have built in spending strictures that can't be circumvented. and so the moral hazard problem is much larger than what todd is even suggested. what's the solution? well, the big problem are the commitments we've made with respect to the unions, the public employees unions in the state of california, and essentially we're going to have to revisit our agreements and especially our commitments with respect to pensions of various labor contracts. but i'm not sure that we can do that through a simple amendment through chapter 9. i think it's going to be a much messier process. >> i thank all of you. before i open up to general questions, i've got two topics tied into exactly what's going on here, and i'd like quick responses so we can get to the audience. first, i want to talk about the car bankruptcies and then the possibility of bankruptcy declared by a state. but first, i've heard mr. 11 says well maybe it wasn't so bad. i heard the two professors say yes it was so bad and i've heard professor coal say we should have soved it outside of bankruptcy. but i didn't hear what that would be. you've each got a minute. you are in charge of the government fr a minute and you have chrysler in front of you. what are you going to do? you didn't like what they did. professor leven, give them what they wanted? >> chairman chrysler would have filed two years before they did. so that the debt markets could have been open and we would have avoidd this entire mess in the first place. i don't think it's good to make a habit of government in possession financing. but i think given the state of the markets when those aut moative cases happened they had to do it. in my ideal world, they would have fiveled two years earlier and just done a normal chapter 11. >> what would you do with the problem in chrysler in particular you end up with secured credit tors getting paid 19 cents on the dollar and others 50 cents on the dollar? >> they were paid 59 cents on the dollar by the new owners. so it goes back to the question that david asked. what do you think the value of chrysler's assets were? you know, david says they could have been worth more than the $2 billion that the government paid. i think it could be argued they could have been less. chrysler had essentially been on the market for two or three years. the private equity firm was basically that owned them at the time of bankruptcy was basically paid by dimeler to take it off their hands. so i'm not sure chrysler even had $2 billion worth of value there. in which case, you know, the secured credit tors got perhaps, even if anything, a subsidy from the u.s. government. >> professor? >> steven introduced another topic so i have to spend 20 responding to it. i was not even going to talk about this today. but chrysler was on the market for over a year for a deal that would pay all debt in full and something to equity. it was a completely different deal that was marketed. so the auction in bankruptcy was really starting from scratch. in terms of the kind of deal that we ended up with. what would i do? i would have done one of two things. i would have either just let the companies go their course and file for bankruptcy like they should have. there was a risk there that we would lose chrysler. there was a very real chance chrysler wouldn't have survived chapter 11. gm would have survived. it would have been in as good of shape maybe better. >> wait. >> i get to say my two things. the first is either just let them go through the normal chapter 11 process, without the government helping hand. or the second is for the government to provide the funding for a dip loan but silent funding. not to exert the control with it in the way that they have purported to do with some of the other bailouts. >> response? >> i was going to ask a gm one because i don't think gm would have needed the largest debtor in possession loan ever in history at a point in time when even a small company couldn't get one. so i'm not sure how they would have survived a normal chapter 11. >> i think with some government arm twisting, i think that that loan would have been forthcoming. but i'll leave it at that. >> i heard you say some harsh words about what did happen. you're now in charge. you can make whatever you think should happen happen. >> i think i'm -- very similar to what dade said. let me say it a different way. which is to the extent that the tarp ever made any sense at all, i think the beauty was i think paulson gave us about 42 different definitions about what the tarp was supposed to do within a week after it was introduced. but to the extent it ever made any sense, if we had a liquidity problem in the credit markets as opposed to a solvesy problem, that the tarp was supposed to prevent a bank run caused by liquidity problems. but not to prop up institutions that were insolvent. i think steve makes the point, which is about whether or not dip financing would have been available. now, what we know is that if credit markets were functioning properly there would be no problem getting dip financing for gm. that's a very high likelihood. if dip financing were not available, it would seem to be simply because there were liquidity problems in the market getting money into gm, which i think and i said this testifying in congress, i think a reasonnable case could be made that if general motors needed tarp money in order to get over the hump of dip financing until credit markets were stabilized, that would be a logical use of tarp money or something like tarp money, something that would step in that would be, whether through a bank or whatever. i think that it's limited to what david said, which is it's limited to providing dip financing. it doesn't include deciding which dealerships gets closed and stay open, which whether they're going to make green cars and the whole other package of stuff that came along with it. >> so i would agree almost completely with todd's assessment except for i would take david's point about letting them go through the bankruptcy process even further. so the very first thing that i wanted to respond to when steven was speaking was when he suggested that we would have a loss of value when chrysler, if chrisler had been allowed to go through a normal or traditional bankruptcy. how do you know this? how could we ever know whether or not there would be a gin win loss in value? we had a completely manipulated bankruptcy process. and if the assets of chrysler, just to use an example, are not most efficiently deployed in that entity, then the best thing for our economy and including the workers associated that company is for those assets to be redeployed in our economy. it is not to prop up a company that is not efficiently sound. so let the company go through the bankruptcy process, let the bankruptcy process operate, let the absolute priority rule, maintain -- be maintain and respected. so if we have that process, then we'll know through the operation of that process whether we're destroying value or preserving it. the people involved and any onlooking seam bladge of credit tors or potential buyers who might want to keep these assets together will decide to do that based on whether or not it's the most efficient combination of assets. but beeve got to let the process work. and that's how i would have handled that. >> now, the question has been surfaced although not investigated in depth. wean talk about it for a few minutes here. we don't have much time remaining. what if a state is so insolvent that bankruptcy would be the ordinary solution were it not a state? should we have states be allowed to declare bankruptcy under the current bankruptcy code municipalities can declare bankruptcy. val ao did so orange county did so. and the purpose of bankruptcy in that situation is to allow the municipality or county to escape from some of the obligation that is have become so burdensome. look at us in california, we have many obligations they are very burden som in part because we refuse to tax ourselves up to the level neffs troy pay for part of that. and the idea of having a state declare bankruptcy is an attractive one. just treat them like a county. but the problem of sovereign gmuent is a difficult one. i'll give you the briefest of thumb nail sketches of the history of sovereign immunity. a state called georgia was sued after the civil war on a contract. the supreme court said the suit may go forward and the 11th amendment to the constitution was adopted almost immediately thereafter. the terms of the 11th amendment are somewhat ambiguous but by 1890 the court had very clearly head that an in-state citizen could not sue an unconsenting state. the cases after the the civil war were very uniform because what had happened was the southern states after the war deeply impoverished issued large amounts of bonds and then repute yated them when they came due. and the out of state and instate citizens sued and the supreme court said the sovereignty of the states protected them. those cases are still good law. the most recent of which was 1932 called principality of monaco. someone found bonds from the state of mississippi in the attic. the law that he as a private united states citizen could not bring suit. he knew a foreign citizen could not bring suit. but there was nothing in the supreme court case law that said a foreign country could not. so he gave them to the principality of monaco. monaco brings suit against the state of mississippi. the chief justice writes an opinion in which he uters the well remembered phrase, behind the words are postlats which limit and control. nrts, the words of the amendment be damned. i know a post civil war case when i see it. we know that states cannot be compelled to pay off on the contractual obligations unless they consent to do so. now, a state can waive its sovereign immunity. so a state if we were to amend the bankruptcy code to allow a state to go through bankruptcy, the state of california could say, we declare bankruptcy. but why would a state do it when all it needs to do is to stiff every one of its creditors or even to do it selectively? >> i'll bite. my take on this is that the sovereign immunity law, and we were talking about this beforehand, has become increasingly complex in the bankruptcy area post decision called cats. and it's unclear to what extent states do have sovereign immunity in a bankruptcy case post cats. given that reality, a state might have some desire to file for bankruptcy. there's also the added benefits for providing a structure for potentially rejecting contracts in a state case, the most important ones would be the union ones. and you have more power in chapter 9 to reject union contract than you do in chapter 11 because congress made a change to the law but they only made it in chapter 11 not in chapter 9. so those might be two attractive reason why a state might want to file. i think chapter 9 if it were expanded would be primarily useful for the point of rejecting contracts perhaps providing some cover, so to speak, and structure for rejecting contracts. and the other way it would be useful for binding holdout creditors to a plan. if california said we're going to refinance all our debt with these new bonds and a vast majority of creditors agreed but there were a few holdouts, the bankruptcy structure does provide a way to bind the holdouts to the plan. it doesn't provide a solution, however, to the problem that the judge alluded to, the political issue of matching up taxes with expenditures. >> well, you can splish as a state this binding of unconsenting creditors saying sue me and you're going to lose because the 11th amendment protects me. let me, i'll say a few words. what's interesting about this whole bankruptcy perspective is that basically california is general motors. right? you've got a massive retiree base and a dwindling revenue base as people keep moving out of the state trying to prop up all these people who retired with $100,000 pensions when they're 50 years old. so they basically aren't general motors. >> those people are largely fictional. they are few but they're usually local employees. >> but local employees have to go through bankruptcy. >> but it's the same, what is who. but the exploding, the thing is going to continue to grow that you can't control are the pension and retiree benefits over time. and as you said, the way i understand it will work now is basically what california could just be argentina and basically say we're not paying our debts or we are paying some and not all. we're paying some not at all and some partially and that sort of thing. now, there are some limitations, number one my understanding is that a in a lot of bond issueances, the state is already waived sovereign gmuent, my understanding in this very state it varies by bond issueance. but beginning with i think in the 18 40's there were some bankruptcies or there were some state repudeations of debts when they built canals that didn't pay off. after that the states could no longer get credit and so they adopted a practice of waveling sovereign immubte when they would issue bonds. so it's already waived with respect to some bonds. on the other half you can seize the assets of debter. here, i don't think you can seize the state house or the university of california and satisfy your debt because those are limited. the other aspect is that there are various obligation that is are wired in the state constitution. so one of the big things is public employee rights in particular have been hard wired in the constitutions, number one. number two, pension, vested pension obligations are treated as property rights rather than contract rights, which means you can't adjust a vested pension obligation without running afoul of the fifth amendment. so you can change it going forward but you can't do anything about already vested pensions which are protected as property rights. and that seems to be something states can't do anything about. so they would be hemmed in. the larger point is they're hemmed in to some extent by the federal constitution, to some extent by their own state constitutions. what they can do to certain types of obligations. >> particularly intractible problem. and california is different from argentina in that california can't print its own money and it doesn't have its own federal reserve that can print money through the lowering of interest rates or through the purchase of long-term treasuries. so in addition to the other structural impedments, it is limited in its options. now, when i look at the problem, i wonder what the advantages of bankruptcy might be. so steven mentioned, well, you could reject the labor contracts. but rejection of labor contracts inside of bankruptcy is just another term we use for breach of labor contracts outside of bankruptcy. it's not a big difference. there isn't a difference at all except for in bankruptcy if you're insolvent then you're paying prorated damages. but if you're an insolvent state outside of bankruptcy and you've breached those same labor agreements, you're assumedly going to pay prorated damages anyway. so why do you need chapter 9? why do you need bankruptcy? you might need it because of the built-in procedures that might promote negotiation. chapter 9 in particular is focused on reaching political, recognizes the political nature of government bankruptcies. but if you recognize that already, i'm not sure why you need to use bankruptcy to accomplish this. you might be able to do it through the combination of a state constitutional convention and negotiations with the labor unions that are the big source of the long-term credit obligations. >> i'd -- you've been waiting patiently. >> thank you. just one quick question. does the contracts sclaws limit the federal government's ability to allow states to get out of contracts by the bankruptcy process just as it might limit the states' ability to take property under the takings clause? and the second question is just sort of, i'm confused. everyone i think would assume that congress could pass the law time one that pay off secured credit tors at 29 cents a dollar and then pass another appropriation that just decided to give money to the uaw. i don't think there's any violation of the absolute priority rule there. as much as i can make of what that is from your conversation. so what did they do that was different than that? if they can just pass through apopriations one that pays the -- and one that buys gm for 29 cents on the dollar and one that says we're going to give separately a bunch of money to the trade unions, how is what they did different? >> they called it a bankruptcy. that's what they did that was different. and they also couldn't do the first. that would be a takings problem. >> there's a body of law that came out of the new deal that joint stock railroad versus radford where they tried to fiddle around with mortgages and the supreme court held that a security interest is actually a property rights, not a contract rights. >> only up to the value of the collateral. >> right. >> but just to modify the problem. if they just went to the bankruptcy and offered 29 cents on the dollar and no one showed up, then they would have at least accomplished that part without the takings issue. and if they separately passed an appropriation, we wouldn't be having the conversation. >> that's what equity receivership was in the 1800s. that's essentially what we called a freezeout back then. if you're bidding your debt and you just buy the whole company lock stock and barrel, then you can do whatever you want with it. that would have been fine. the problem here was that they used this particular process and then violated the most fundalityal rule of the process. >> just to add, this is the point that marcus was making earlier that the real, one of the really problematic things was the mixing of bankruptcy and the bailouts, which i don't think had ever been done before. typically when the government stepped in, they did it outside of bankruptcy. which is what the point marcus was making. there was a real irony here i think. why did they do that? why didn't the government just pay 55 cents to the union? they didn't do it because they couldn't do it. because the political hostility to bailing out detroit was so high that the obama administration could not bail them out directly. so we ended up with an incredible irony, which was that bankruptcy, which is the most transparent process we have was used for a disguised bailout. it was a bailout that the obama administration had political cover. they could say we're not really bailing them out. and i believe that's why it was done that way. fundamentally, let me put in, there's an empirical question that divides skill ns wicky with will you ben. you can fig yir it this way. new money came into the case. scenario number one, the za wicky scenario is money was taken and given to the unsecured creditors. money that the secured creditors should have gotten was given to unsecured creditors. correct me if i'm saying this wrong. scenario two was the will you ben scenario, which is secured crettords got what they wanted. new money came in and the money given to the auto workers was new money, not money stolen from the creditors. that's an empirical question whether or not the money was transferred or they got new money that came in. if it was the former, that's what which looked to me it was, gets me exercised. if it was the ladder then you're in the will you ben camp, then it's just a bribe to the uaw. >> i thought you danced around the major question here, which was whether bankruptcy is really appropriate during a financial crisis. so i guess just two points. a lot of what the government seemed to try to do during the crisis and what i get dodd frank is trying to do is create more like an fdic styled system for all types of financial institutions, which would in the past not have fallen under the jurisdiction of the fdic. faster, which of course means less process and less transparency. and so i guess one question is, if what's going on is just -- first of all, an ad hoc expansion of the fdic system and then more a legal extension of it, to all financial institutions, is that a big deal? is the record of the fdic a bad one? that is, would you call that, the sort of fdic resolutions in the past corrupt or objectionable in some way? and then just another way to ask the question is what about lehman? my understanding is that was kind of a disaster. the use of the bankruptcy process for an enormous financial institution on which all afthese creditors depended as well as people who had their money in the custody. so both in terms of what the government did at the time and going forward in the dodd frank bill, isn't there an argument that they're just trying to rationalize the system by extending the traditional approach to distress financial institutions to all financial institutions rather than banks narrowly defined? >> the next question, really quick. >> on lehman i'll just say my take on lehman is that to the extent i think it's a disaster, it's a disaster because the bankruptcy attorneys were called into the case about eight hours before they would to file. if they had time to plan that the way you normally would it would have been a lot smoother. >> hopefully this is a quick question about 363 sales and the way they've been used recently. my understanding was that historically they've been used for the sale of minor assets and it's been more of a recent phenomenon that they've been used to sell core assets, and bankruptcy lawyers that i've spoken to in california have talked about the major reason they're going that direction now is because how long it takes to do your traditional chapter 11 and the proverbial -- the value of the company. as well as the difficulty to get financing to do the traditional chapter 11 with banks struggling themselves they're more retiscent to loan money to help companies get through the reorganization process. so i'm wondering how to you overcome those hurdles when you're arguing that it makes more sense to do a traditional chapter 11 and should it not -- should the 363 still not be used for core assets? >> quick answer? >> well, very quick answer. one is why do we have so many 363 sales? one reason is concerns about the leptteds of chapter 11. but i think a really big reason was just the liquidity in the markets. that it was possible to sell things that you weren't -- in the 1990s that you weren't able to sell in the 1980s. so i think there are a variety of reasons for the 363 sales. i do think there is a case -- well, i wouldn't say we shouldn't allow sales of major assets. what i would say is if what you're doing is restructuring the company by which i would define as more than half of your old creditors and shareholders are going to be new, we ought to go through the tchapter 11 process. i do think there is a case for streamlining. that chapter 11 is a little bit too cumbersome as it's now constituted. >> a quick word. which is i don't necessarily see 363 sales as being a problem. what i didn't like here is number one it was a bogus sale because of the rigged auction as david described it. an, secondly, it was a subrosa plan as they were deciding what the various creditors are going to get through the process of the sale. so it was kind of a peculiar 363 sale that i don't know that you necessarily want to generalize from, in my view. >> last question. >> i'm interested in been thinking about the government's interest as tax claim nt and contrast two examples. one in the gm case, there was a story last week about how treasury permitted new gm to take old gm's carry fords where they would be extinguished in bankruptcy. but it was a 60 billion benefit to gm and seems to go along with the thesis that the government tends to put its interest in helping interest groups ahead of its interest as a tax claim nt in situations like that. but then there's the counter example where warren buffet tried to buy through some sort of mechanism a tax credit from fannie mae and treasury blocked the purchase and the explanation that was given was that it would on net cost treasury a couple of billion dollars. and i think it was treasury blocked it right after issa started investigating it. so it seemed to be counter factual that the government in that case was more interested in its interest in the tax claim nt than catering to interest groups. i'm wondering what it means for issues of this topic or otherwise government as a bailout conflicting interest possibly as a tax claim nt. >> quick answer? >> i think i mentioned the gm tax issue before. i think the real beneficiaries of the government's position on gm's tax losses are going to be the canadian government and the bond holders who got 10% of the stock. the government is just moving money from one bucket to the other. i'm not sure the federal government's perspective matters at all. it is an oddity of the case. it adds height to the degree of subsidy. in that case. although that's kind of intention with some of the other arguments here. i don't know. >> i'll just ditto. i think they're subsidizing gm. it's not 50 billion dollars, it's a 50 billion dollar deduction. so it's probably 17 or 18 billion. just a small amount. >> ask the panel one question. there was a question about contract clause that relates to the states. and i would be interested in the panel's response because it got the contract professor there. my understanding is that if the state breaches a contract or repudeyates the contract does not violate the contract's clause. it's -- is that wrong? >> elaborate on that. >> it starts out that the contracts clause was apparently designed to prevent the states from repudiating the contracts of the private citizens saying the citizens of south carolina from paying off those evil bankers in new york. but in fector versus pack the court holds it applies to contracts between states and individuals. >> that's still good law except for the 11th amendment ambingts it. >> it's state in the sense of state actors so that the yes, the state itself could violate it but the 11th amendment protects it. but all the subdivisions of the states, the counties, municipalities, if they breach a contract they repudiate it, it is a violation of the contract clause. >> the municipalities here in california are in such deep trouble with their pensioners. >> this has been a fascinating panel. i have learned an enormous amount. some might have started out more sophisticated than i did but this was a fabulous panel for which i thank all of you. [applause] >> take a look at the new members of congress with the c-span video library. find a complete list under the congress tab. every new member is listd with their district map, their campaign finances for the mid term elections and any appearances on c-span. all free on your computer any time. washington your way. >> this week marked the 47th anniversary of the assassination of president kennedy. this weekend we'll talk with gerald blain an kenthill. whose job it was to protect the president on that day. the conconspiracyy theories. and mr. blain's new book, sunday night on c-span's quay. -- q an a. >> now, john bolton discusses the different types of government throughout the world and the threats they pose for representative republics and free market economies. he spoke at a conference hosted by new criterion magazine. this is about 40 minutes. >> i likto welcome new to the main events. a lot also like to mention -- i would also like to mention that versions of these talks will be published in the "new criterion" february. if anyone has let his subscription lapse, now's the time prescribed. there'll also be anudio pipe cast available on our web site. it is an honor as well as a pleasure to introduce ambassador john bolton. your programs give you a fair outline of some of his many acmplishments in his long career of public service. his important work of the state department, at the department of justice, and at their paris the figures, a pro-american voice for sanity at the united nations. [applause] i hope that is for sanity in not the united nations. [laughter] it did not indicate the quality that his admirers especially prized. his courage and willingness to speak notnly truth to power, but truth to the rancid forces of political correctness and animals. how refreshing was to have a state department delicate described the north korean leader as a dictator and that life in horse korea was a hellish nightmare. he was not conatulated for that but it is the tck. a splendid that our ambassador to the united states should it merck -- observe that there is no such thing as the united nation, there is the only the international community which can only be led by the only remaining superpower, the united states. my only quibble with his wary attitude toward you and concerns his observation that the secretariat building in new york has 38 stories. if you lost 10 stories today, it would not make a bit of difference. i would put the number higher myself. we live in age when global governance is enjoying a new lease on life, not only in the quarters of the united states in the european union, but also in the hallways in and about 1600 pennsylvania avenue. the assault on national sovereignty and american liberties is proceeding on many fronts on issues from the environment, the tax policy, the gun-control, a national security. it is not at all beyond the realm of possibility that amerans could one day be answering to the unelected and unaccounble officials in brussels or the hague on these and other issues. what we're facing is an international attack on limited government whose ultimate object is the absorption of the uned states into which european-style socialist superstate. john bolton has been one of our most strenuousur particular it and effective advocates for the national american -- american national sovereignty and the liberties it guarantees. please join me in welcoming a master john bolton. [applause] >> thank you very much, rog, and thank you for coming today. i want to thank the panelists this morning for a series of really interesting, fascinating discussions on a wide variety of subjects relating to the question of individual liberty and initiative. bowsher has asked me to look at this -- roger has asked me to lo at this from an international context which is important to, both for what this says about our country and the threats that we face from around the world. by cncidence or not, today is the 21st anniversary of east germany's decision to open its frontier with the west. obviously that was a signal moment in our history, given that that really reflected the beginning of the end of the cold war followed two years later on december 31, 1991 when the soviet union itself was dissolved into is constituent republics. the the end of the cold war produces dull lot -- now the end of the cold war produced a lot of jubilation, reflecting what some would call the vindication of the week theory of history, that progress -- we are always moving forward. but it was particularly evidence after the collapse of the warsaw pact and the soviet union. ople were writing things about the end of history, because obviously democracy and the free market had triumphed and there was not anything else left. it was all over and we had one. there were no further threats. it turned out, not surprisingly, that that is not true. whatever our views here in the united states, there are a lot of other people in the rest of the world to actually do not share of t washington consensus in are not wild about representative government and the market. that leads us into a debate about exactly how we're going to respond to those other governmes and their supporters, and why i think it is critical for us not to take the utilitarian arguments in favor of individual freedom as the only imptant arguments, important though they are. utilitarian argument for markets in particular is this is how to maximize national wealth, liberty, and all things bright and beautiful. i certainly believe that, but it does now get me from time to time that maybe the utilitarian argument does not always capture what is going on, at least in the short term, being defined as several generations of human life. it is important to remember the moral argument for individual liberty asell, even if in any given period of history, it does not seem to be working out quite as well as it should. and to me, a moral argument was thinkut, although i don't he intended to put it this way, by of brett named john ruskin, who in 1870 rou the following, one evening while as yet in the nurse's arms, i wanted to touch the t earned -- tea urn. my mother said, let him touch it. that was my first lesson in liberty. [laughter] ruskin was a socialist. my guess is that the obama remedy would be a national commission on tea urns. steps to take care of innocent children from callous mothers and all the rest. i viewed it as a central insight into what liberty means for us, which is not merely the liberty to make decisions, but the liberty to fail, too. because markets are not good just when they are going up and turn bad when they are going down. that is the nature of markets, and i would say human life more generally. the moral component of liberty is particularly important to us when we look around the world, because i think there is a lot of bad news out there about the utilitarian side of the totalitarian and authoritarian states. they do not do badly sometimes when it comes to mobilizing resources and posing threats. in the 20th-century, we looked at the first two world wars -- i described the successful end of the cold war. we look at the first two. the defeat of germany and the central powers in world war room and one, and the defeat of zism in world war ii, and it looks like a pretty good century. we are three and -- 3 and 0. it did not turn out as easily as we remembered it. if hitler had restrained himself from attacking the soviet union, if he hadonsolidated his power over europe and focues britain instead of launching the attack against stalin's soviet union, it might well turn out differently. if the russians had not been bled so badly in world war ii, they might have been able to hold on to their empire. we forget that one of the nsequences of world war ii was the end of the european colonial empires, because britain was on its back after the war economically. france really never qualified as a major player in the war. the dutch had been wiped out. and ultimately the collapse of the soviet empire, which is what happened in 1991 was launched by the massive human and economic cost of world war ii. these are factors that ought to give us a little bit of pause when we look ahead at the challenges that we face around the world and that are precepts of representative government and free market economies. i just want to run thrgh, in the time we have, several examples of this so that we can continue -- begin to think about what it means to both preserve our own system of liberty versus these other visions. not all of them threats in the short term, but these other visions that are out there. let me start perhaps in probably for some with the european union. i am not a big fan of the idea that self-government in europe is as free and open as it is in the united states. number one, most european systems are parliamentary. they did not have the separation of powers. you win a majority in parliament, you control the executive branch. so much for the tension we see between president and the congress. and even in countries like france where the constitution has a strong president and a strong parliament, it was always envisioned that in most cases they would govern in the same party. by and large, the parliamentary systems use proportional representation. they do not haveheir representatives tied to geographic constituencies. they run on the basis of party list that are comprised that are put together by the leaders of the party at the national level. i will leave the u.k. of this for the moment. so that if a party gets 8.9% of the national vote, it gets 9.9% of the representation in parliament according to a list that the average voters d nothing to do with. so do people vote for governments in york shire? they do. we still in many states a vote for judges and vote to recall judges. i think that is a good thing. i can see a little of that at the federal level as an experiment from time to time. [laughter] europeans are horrified that we vote for judges. starting from what i think is a different basis in many respects, now look at the phenomenon of the european union, which encompasses the -- virtually all the domestic policy decisions of the member governments conducted in brussels in mass meetings of diplomats and bureaucrats from around the european union meet next to no transparency or visibility, certainly next to no democratic accountability on the part of the people who actually live in the european union. the figures were compiled in britain sometime back, and they are absolutely shoing. they vary a little bit depending on who you are listening to. but something like between 2/3 and 90% of all legislation that parliament passes today is enting into u.k. law decisions that have already been made in brussels. that is phenomenal. in other countries, i am sure the percentages are roughly the same. that is why in europe today they talk about the democratic deficit, because none of the members of the so-called executive of the european union are elected by anybody other than other government bureaucrats. the european parliament is a joke that has a virtually no influence over the workings of the european union, and it does not look like that will change unless we see the breakup of the eurozone. but here you have got a largely democratic society creating a structure that is fundamentally anti-democratic and living with it happily, in ways that perhaps were not intended at the outset of the european union but continues to progress in a direction that i think most americans would be part -- disturbed with. i think that is one of the reasons, among several, why the european union has med away from the united states over time, because these are people who see their interests in what happens in brussels and the govements of the european union as being divorced from the interests o the nation states that making up. -- make it up. let me turn to russia which may be the biggest example that i can think of of how a country that started with a totitarian or and authoritarian government passed out of that into a form of democracy. and maybe a passing right out the other side bacinto authoritarianism and maybe totalitarianism. freedom of the press is going down. freedom of political activity is going down. control of the media and the economy are being re-centralized in the kremline. . russia is today still refer to the leader in the kremlin as they did -- russians today still refer to the leader in the kremlin as "the boss." of course they wl do it. i think we can see in russia's increase belligerence where they are clearly seeking a return of a hegemony if not reunification of russianrectoion policy, while certainly not communist, may be best described as a reversion to russia of the 19th century and before is entirely comfortable with centralized control over both politics and the economy. this may be an example o democracy blasting 10-15 years depending on how you measure it 10-15 insatingasting years depending on how you measure it. let's take china is another example, a sysm under the communist -- the most authoritarian in the world durin apping a t period, cpaping century of unrelieved turmoil and conflict inside china beginning with the collapse of the last chinese dynasty. we have heard for years now, really decades, that china's making progress, it is becoming a freer society, much of which is based on what has happened to the chinese economy. to be sure, central control there has diminished. there e possibilities for on to the to prin entrepreneurship. fret least 25 years now, i have been reading about how wonderful local elections are in china, where the cadres elect the ville leader. and how inevitably that will spread throughout china at the national level. 25 years in a culture that has lasted six millennia. not be in a hurry. i think 25 years is a pretty long time, where the idea of popular sovereignty would begin it to catch on a little bit more. and some would say, it did catch on a little bit more right up until june, 1989 in tenement square when the people's liberation army voted on what it thought about increased political eveliberty. the communist party is the dominant political force in china without question. within the structure of the communist party, the people's liberation army remains the dominant political force. the chairmanship of the central military commission is the real locus of power inside ina. and that does not appear to be getting ready to change, so while a lot of people talk internationally about the peaceful rise of china as in that wonderful phrase that it will be a responsible stakeholder in world affairs, i do not see that as inevitable at all, nor do i see it as a place where foreigners are necessary treated equally and therere -- there is opportunity to make money. you can see in research reports by the u.s. and european chambers of commerce in hong kong and beijing evidence of increasediscrimination against foreign investment. at the same time, you can see evidence of china's increasing military buildup, its extension of claims in the yellow sea, the south china sea. its acquisition of blue water naval capabilities. this remainsn extraordinarily centralized and highly controlled governmental system, and one that i think is being -- becoming increasingly threatening to american interests. let's take a couple of smaller cases. let's take north korea, for example. he is a state that is essentially a prison camp. it controls everything. it has been sanctioned internationally for decades and yet it ssesses a nuclear, chemical, and biological weapons that have indeed it -- has intimidated its neighbors. how poor is north korea? from the time of partition in 1945 until today, when both north and south started equally poor. in fact, the north and was better off because it had more of the industrial capacity. until today, we find that the average north korean is four to 6 inches shorter than the south korean. now, this is a society that both during the bush a obama administration's we have been saying, we can help you with the economic betterment of your country if he will only give up nuclear weapons. what could we have possibly been thinking? to say that to a government that does not care that its population is literally shrinking so that it can keep nuclear weapons? that is squeezing everything that they can of their population in a centralized government. when i hear the utilitarian argument in favor of individual freedom, if you are kim jong il, utilitarianism works his way. iran, you have a theocracy that since the islamic revolution has turned it -- turned the country into an economic basket case. and within a short period of time, it is within reach of getting nuclear weapons. the obama administration, as the bush administration, talked always about the islamic republic of iran. how sweet. forgetting that the first word of the islamic reflects the beef that iran is governed by jurisprudence that comes directly from allah. this is what theocratic rule means. an increasingly militarized rule as the army takes control. if the word comes from god, and the only people that will understand it are the mullahs -- the idea that we would have free and fair elections in iran under that system is naive to say the least. at my favorite in atlanta america -- in latin america -- hugo chavez. it has taken him 10 years to get to the point of manipulating elections. he is a kinder and gentler version of fidel castro. he did not do it all went. he is doing it slowly. but venezuela continues to sink under this increasingly centralized control, and he poses a threat not only to u.s. interests in the region because of his ties with russia and iran, especially on nuclear matters, but in threats to the fragile democracies elsewhere in latin america. he has interfered in the elections in mexico, colombia, ecuador, peru. he supports the farc terrorists in colombia. economy thatin, is an has incredible riches, but which are being diverted for the purpose of maintaining chavez and the military in power. as long as oil stays the price that it is, the implications for the venezuelan people are not going to slow chavez down. then there is al qaeda. it is not even a state at all, and yet they are able to threaten and carry out terrorist organizations all around the world. that is simply a quick run through of some of the thrts we face from people who do not believe history has ended, who did not follow the washington consensus, who are not wild about individual liberty and who do pose probls of one sort or another for the united states and our friends. what about the united states itself? i tnk we have still got in this country the most libertarian country in the world. not perfectly so, but nonetheless one where we do prize individual liberty and initiative more than in the aggregate than anyplace else in the world. consider the following -- would you think about having the united states and any other country vote together to merge the two countries, as the europeans seem bent on doing? suppose all the provinces of canada were admitted to the united states estates. what do think the balance in the senate would be today? pretty frightening, if youan my opinion, with all due respect to our friends in canada. the lefthera thar saying, we have got global problems and global problems need global solutions. we need to get past these antiquated notions of national sovereignty, and we need to look at solutions that get you to shared sovereignty. what theare saying fundamentally is, you americans have too much control over your government. and what you really need is to share a little bit of that with us. i think most americans do not think we have enough control over our government, even after last tuesday's election. so that they recognize that this idea of sharing its sovereign is very directly and impiement on their authority as citizens and that the removal of sovereignty, even from as distant place as washington it to even more distant place is this something that will only work to their detriment. that is why i think ideas like the international criminal court or a number of of proposals that were being proposed at copenhagen to deal with climate although they have been rebuffed by the united states in the short term, are very much gointo be on the international agenda going forward, and i think the risk in the next two years with obama gridlocked at home domestically, he will turn his attention internationally, where he is traveling out, and think that this might be a way to achieve some of the games that he is that going to be able to get domestically. -- some of the aims he is not going to be able to get domestically. what do we conclude? the economy with almost any kind of market basis, create such an enormo potential for dead weight loss that governments have a lot of room to do so foolish things, and given the chance, they usually do. for totalitarian regimes, the lessons they should of learned from the last century are don't attack your enemies too early or too often. with a little bit more patient you might have a beer chance of succeeding. and then third and finally, i think the most important lesson of the last century is do not mess with the united states. now that's a pretty good rule, although not sufficient. there have been a conflicts where we did not prevail, usually because we did it to ourselves. we did not fight to the stalemate in korea. we stopped after the chinese intervention voluntarily. we did it to ourselves in vietnam. i would argue we did it to ourselves and the first persian gulf war by not overthrowing saddam hussein. but the big question going forward is whether this third role, do not mess with united states, still applies. as happy as i am about last tuesday's election, this battle is far from over. it is still a jump ball over the direction of the united states, both in our domestic policy and internationally. and if the time comes around the world where people cannot worry about messing with the united states, not only is the rest of the world going to be in worse shape, we will be in a lot worse shape, too. thank you very much. [applause] >> thank you, john. i am sure there'll be some questions. we have a little bit of time, so please go to the microphone. >> that was a wonderful presentation. i am just wondering the extent to whi you think the current republican leadership shares your assessment and in particular the potential candidates for president in 2012? >> well, as happy as last tuesday's election returns were, i think that they will have a fairly insignificant pact on foreign and national security policy. obviously congress has of role in the treaty process, in the budgetary process, but responsibility for and direction and control of foreign policy essentially remains with the president. and i do not think that will change no matter which direction obama goes in, whether he does a clinton and tries to move center or continues to pursue an ideological agenda. i do not think we know the answer to that question. i think a big unknown is wheth facing difficulty in making progress on what he wants to do domestically, he decides to ramp up some of the things he has talked about internationally. -- where the president has a lot more flexibility and where congress, other than helping to shape the general political debate in the country which is very important, they cannot really constrain him as effectively as they can on domestic policy. so that is one of the things i am most worried about in the next two years. combined with the fact that, although the president has unambiguously and resolutely tried to avoid foreign policy questions, facing them only when he had no choice like what to do and afghanistan, the rest of the world has not been waiting for us to get our economic house in order. however much it is important to us what kind of health care system we have in this country, ought to decide and kim jong il do not care -- ahmedinejad. they see this as a very weak administration and they are calculating policies based on that. what is suggest is that you have not simply the level of threats and problems we have had in the first two years but you will see are rising and accelerating vel of threats as in the cases of extraordinary good fortune we have had in avoiding a terrorist attack just in the last 18 months, even just in the weekend before the election. yes, sir? >> i have a question about it ron and nuclear weapons. do you think there is anything short of a military strike by israel or the united states that can stop this regime from approaching building a nuclear weapon, given the fact that our last chance a movement in iran and obama ignored it. >> i think right now the most likely outcome with respect to iran is that its nuclear weapons. even the obama administration admitted several months ago that iran could have nuclear weapons capability within a year. i think there is a lot we do not know about their program. it could be closer to that. they have proceeded more deliberately in recent years because i think they do not believe that they are thatened. certainly, in the last two years, i do not think they are threatened at all by the obama administration. i fear that the president believes that the fallback position on iran is that we can contain and deter iran once it gets nuclear weapons. i think this is badly mistaken. i think the calculus of deterrence with respect tour regime like iran opposing an asymmetric threat to us and our friends and allies in the region and around the world is very different than the countless of the cold war standoff with the soviet union. even if i am wrong about that, the nuclear weapons problem in the middle east does not stop with iran. if iran gets a nuclear-weapons, almost surely saudi arabia will, egypt, turkey, perhaps others. in a short period of time, 5-10 years, you could see half a dozen countries in the region with nuclear weapons. and if you did not like the bipolar nuclear standoff of the cold war, aatch of a multi- polar nuclear standoff and a volatile middleast -- imagine a multi-polar nuclear standoff in the volatile middle east. i think we are seeing that in the efforts of sanctions, which the administration agreed to after a year and a half of opposing them. the continued negotiation that we will see before the end of this month will come to naught. you have two alternatives. one is that in iran with nuclear weapons. other is a preemptive military strike by the u.s. or iael. the burden of that decision falls on israel. its extremely unattractive and undesirable to contemplate having to use military force against iran's nuclear program, but when you compare it to them option of havinin iran with nuclear weapons, that is why you have to look at it. the choice that israel basically faces is not a choice between the world as it is today versus the world after a strike against iran's program. if that with a choice, that would be easy. the world as it is today is disappearing. the choice is between the world after a strike on the nuclear program and a world where iran has nuclear-weapons. i think there is not a lot of time within whichhat choice will be made, and so could well have a very, very difficult series of decisions for the president to make, whether the famous 3 a.m. call that he will have to make his mind up about. ok. thank y9oou very much. [laughter] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> thank you for >> republicans have regained control of the u.s. house, and as of now they have picked up 64 seats with only one race still undecided. democrats currently have 192 members, and republicans to 42 members. the one undecided races is in new york between ken bishop and randy altshuler. it is still unclear when a winner will be announced. one new house member will be bob gibbs of ohio. he defeated the democratic incumbent. mr. gibbs is a property management company owner and hog farmer, and currently serves in the ohio state senate. >> the night, with paul -- tonight, with polling data from eight arab countries, moslems are questioned about stereotypes, 9/11, and the war on terror. it is part of this weekend's nonfiction books and authors on c-span2. >> this year's documentary competition is in full swing. make a five-to-8 minute video. upload your video for your chance toin the grand prize of $5,000. for all of the rules, and how to help load your video, though online. >> now, and not fit on the middle east from a delegation that recently -- now, an update on the middle east from the delegation met recently travelled there. hosted by the washington institute for near east policy, this is about one hour and a half. we wer >> over the course of the next hour and a half, we will have ox abou what we discovered and -- your questions about what we discovered and where we think the u.s. policy is going. just a few words of backgrounds about the trick that we took. this is the institute's 25th anniversary, and to mark this important milestone, a broad range of trustees of the washington institute joined the three of us to travel from cairo to oman to jerusalem to room a lot. i would very much like to express our gratitude to the government set of egypt and jordan, israel and the palestinian authority, all of whom been over backwards to welcome and accommodate us throughout our trip. this is a very busy time in the middle east in many different respects, and we really were treated warmly, roiling -- as it were -- with great hospitality in every venue that we visited, and we express our gratitude to the leaders and advisers in all those places. i would also like to officially think the u.s. embassies and consulates. they were across the board helpful and considerate with their time and their personnel, often running interference for us when we were trying to make arrangements and confer meetings and hosted us and provided the news for us to meet with a broader array of political diplomatic and cultural figures in those cultures. i am quite grateful to the fine american diplomats in that part of the world. as a set at the outset, i traveled along with my o colleagues who are here, david r. wright, a distinguished fellow and director of our project on the middle east peace process, and scott carpenter on my left, scott the director of our project devoted to amplifying the voices of mainstream muslims in the context against radical extremism. we're joineat various parts of our trip by a rovi band of washington institute scholars who happened t be in the middle east for various reasons. quite proud that when we were in oman for our brief one-day visit, we were joined by two who had been in jordan as unofficial election observers come out one with the democratic national institute, and david with the international republican institute, observing jordan's parliamentary elections which were six weeks ago today. we had the benefit of their on the ground insight into that experience. and in israel, but we were joined by two other senior officials of the washington institute, one doing important public opinion polling work in the west bank, and another who joined us after visiting lebano and ended up his trip in israel, and i think he went -- i guess you can go to part of that country -- and the mess the tail end othat trip. that is all by way of background to what we did. we traveled for eight days. it is that the first time that we had traveled so we will well burst with the people and the sites that we visited. we met with very high political figures at every site. i like to say that we met with one king, two presidents, for milli -- four prime ministers, and more navy brass that you could wave a football team. and then we went beyond officialdom and created settings for us to meet with political activists, liberal activists, thinkers, writers, cultural leaders, journalists, scholars, and we did this in egypt on a couple of occasions, and we had a chance to do this with palestinians, and then a chan to do this quite extensively with israelis. we tried to get beyond just the official line, as it were. let me offer a series of my own ief observations and then i will turn to scott and then to david for their on more specific observations about egypt and about the israeli-palestian arena. there were many surises. i will not going to to many of those, surprises like the extent to which egyptians view the situation in the as being at the very top of thr national security agenda -- the situation in the sudan being the very top of their national security agenda. the most important impression that we came away with is the sense from both arabs and israelis, it is important to note that the arabs that we met with -- the arab leaders committed to the peace process, firmly on america's team. we did not go to damascus or beirut. we didn't go to other middle eastern places. we were in cairo and oman. what is clear is that both arabs, these arabs and israelis, are longing for clear american leadership. to confront regional threats. especially but not solely for iran. everyone were asking the same question, where is america heading? what is america's objectives? does the withdrawal from iraq mean the withdrawal from this part of the world? what is america's real goal with revelation to a run? is the containment of prevention? we got the sometimes with fingers wagging, such as the speaker of the egyptian parliament who set 30 years ago, you americans were carelessly -- you carelessly lost the shah and now today you may carelessly lose egypt. and then we got a friendly, warm embrace from the king of jordan, who was eagerly, almost plaintively wanted to know where america is really going in this part of the world. it was clear to arabs and israelis that tensions were unexpectedly strong and biting at against iran, and it welcomed that, but it was also clear that no sanctions are having their ultimate goal, which is trigring any change or even rethinking our grandpas nuclear policies. nuclear policies. we heard from arabs and israelis alike about the growing iranian influence in t arab-israeli a redneck, whether home loss -- arab-array -- arab-israeli agreement, whether hamas, or others. even beyond the discussion of the nuclear issue. this common worry dominated discussions with every leader with whom we met. secondly, we were impressed by the fact that there seems to be the foundation for real politics in this part of the world. i am referring specifically to r visit in egypt and jordan. in egypt, holding parliamentary elections later this month, we met with courageous reforms who offered a message of liberal change. in jordan, where were your wife to days after their parliamentary election, which was -- where we arrived two days after their parliamentary elections, this was a positive note. the jdanians permitted international election observers to monitor the election. we had quite an exchange with the egyptian political leaders about the importance of their agreeing to universal standards for elections, including the role of international monitors in this election. the pushed backward and continue to push back as we followed this closely in the last few days, pushing back on everything but the religious freedom report to furtr requests for international monitors. but beneath the official levels we were pleased and emboldened by the idea that there is real politics beyond just what you hear in the newspapers, that there are many people eager to engage in real politics in these countries, and this is part of the good sign of something that we ought to be encouraging. third, when you travel in israel in the west bank there is and easy -- erie coma -- eerie calm. despite the missiles loing down from syria, lebanon, and gossip, and the reality that there is considerable hamas activity on the ground in the west bank, there is remarkable calm. israel is experiencing the lowest level of terrorism ever in the west bank. r all the international condemnation that israel suffered from its wars in lebanon and in cause of it in 2006 and 2009, with the passage of time it certainly appears that israel has succeeded in deterring both hamas and hezbollah. d if, perhaps when, war comes again on those fronts, today the idea projects a level of confidence that it is preparing to deliver the swift crushing blows that either was not capable or chose not to do in the earlier conflicts. and perhaps it is that level of confidence combined with the aftereffects of previous conflicts, -- one hesitates to say it kept the peace -- but has perhaps kept deterrence operating. fourth, the sense of tranquillity is felt in the west bank as i said earlier as result of several key factors. the security sense is opera to the security fences operating anit works. one can debate different aspects of that but it clearly works. the continued presence -- it is much less ishat had reached -- then in the past. they've taken sizable troops out of the west bank but there is still an idf presence in parts of the west bank, steer periodically they operate at night time and various palestinian urban centers less so than before, but it is performing what they consider to be important missions. thirdly, a remarkable improvement in the palestinian authority. i'm sure david will talk more abt this. and fourthly, the development of professionally trained palestinian security forces working constantly with israel in a way that even goes beyond the level of cooperation that we had in the old days. they're much more sober levels of cooperation, the training under general dayton and now general muller, has clearly has a maitre -- a major impact, and even at a political and strategic level. on this. paying, -- on this point, there are clear decisions taken by palestinian leaders about the and by ability -- in the viability -- inviobility about israeli targets. there are obstacles, not least is which the need for peace diplomacy to catch up with on the ground progress. i do not think anyone in the left with the impression that there can be no linkage whatsoever between the eventual peace diplomacy and the improvement in security. but it is important to note that this improve its security occurred -- that this improvement in security occurred in the period in which there was zero diplomacy. we're talking about the total absence of israeli-palestinian diplomacy for about 20 months, except for the two-week period beginning in december. even with that, there has been remarkable improvement. and cooperation on the ground. my observation here is, yes, the diplomacy eventually has to catch up, but we should not underestimate the depths to which the israelis and palestinians have internalized the wisdom of maintaining security and security cooperation in the west bank. fifth, compared to will recent trips inhe region, everyone in our group came away with very positive impressions across t board in our meetings with palestinian leaders, who radiated optimism -- or at the very least, did not radiate a traditional complaining, demanding, "what have you done for me lately" mood. much more positive in terms of self-reliance, internal development, in terms of -- the entire ambience across the board. we're talking about the high political level, the president and his advisers, the prime minister -- just generally a very radiating, of very positive, upbeat mood. it is not though -- it is not as if any one segment concession. no one on the palestin andian -- no one on the palestinian side signet concession. despite the fact that there are no negottions currently under way, despite the fact that it has been 20 months sinceny serious engagement, you had this up meet -- is up be buoyant mood. that is -- this upbeat, buoyant mood. this is nothing to take lightly. the process of institution building has taken hold, there's a lot more now -- palestinians have lines of credit, if they have -- they want to build on, and this is something that was a very tangible plus. sixth, our trip concluded with meetings with israeli political leaders, prime minister, the president, other members of the inner cabinet -- just at the moment when it appeared that the united states and israel were on the verge of resolving, at least temporarily, the settlement issue in a way that should clear the path to the resumption of peace talks. in our meeting with the prime minister we went over in great detail the subance of this understanding which is still not yet finalized. and it was clear that his hope was that this will finally put to rest the issue that has reared its head now what time is now at least in the 18 months and prevented any diplomacy, any negotiation. he made it important distinction about how the u.s.-israel agreement is different than the previous moratorium. first demint point merely to say that the agreement was not finalized. there remained important things to cro about what the united states is proposing -- we can get in a greater detail. but it is not an extension of the previous moratorium, because it was unilateral. this moratorium, should it come to pass, is the direct result of bilateral u.s.-israeli agreement. an inherent part of that agreement is that the end of this moratorium, the united states will not ask for an extension of moratorium. at the same time, he specifically dampened expectations that during the 90 days in vision for this moratorium, anyone should expect to start break through, that suddenly an agreement on borders, agreements on territory, an agreemt on security is going to emerge during this 90 days. he underscored his view, which is, there's a lot of groundwork denise to be done on the security issue, -- that needs to be done on the security issue, which is israel's first order of priority in real engaging with the palestinians, and that it would be a mistake to believe that before day '91 arrives, there will be an historic breakthrough on these issues. it is, i assume, the belief that progress can be made to keep the parties engageat the table, and the light at the end of the timing -- tunnel will be bright ough that it will maintain their commitment to continue negotiations. but he was very clear in trying to lower expectations about what is possible. on balance, and with this i will conclude my remarks, on balance -- overall, there are some very positive trends which deter -- which deserve greater trends -- attention in washington and nurture. the domina message, however, remains -- come back to washington and ask your leadership where they are going. we are to a great extent dependent on american leadership. and while the middle east has been a high priority issue for your administration, the arabs and israelis say to us, from the very beginning, and what your president has made important speeches and statements, we still do not know on fundamental issues, of war and peace, of security and stability, we still are not clear about where your government is going. and so that is the message we will be bringing back our leaders here in washington. scott. [alause] >> i like to welcome you here. it was a great privilege to travel with them. theiexperience in the region is much better than mine. i learned from them. you get to learn a lot about people when you travel with them. i have to say, their ability to go beyond 24/74 a long period of time was very impressive. i wanted to share tidbits from my rationale and thinking about why was that we visited cairo first. we did choose to go toairo first. i think the rationale there was obviously egypt, as the most populous nation in the region as the most populous in terms of -- and growing population, the challenges in terms of its economy, the re that it played in the middle east peace process historic plea, it was the best place to start in our 25th anniversary in commemoration of the celebrated peace between israel and egypt. we knew where we were going first. we did not know when exactly we would arrive in egypt. we've had been planning this for a long time and the date kept shifting around as we conform to everyone's schedule. we arrived in egypt right after our elections. right before the egyptn elections, and precisely at the time in egypt where the ruling national democratic authority is struggling with its candidate selection process, and if that were not good enough, at the precise moment where the obama administration is trying to rejuvenate and reinvigorate the peace process. for that reason, for example, if we were unable to meet several leaders because at that moment, they left. to come here. the quick take away is that the countries that we visited, my impression, was that the egyptian leadership is the least confidence. it projected the lea confidence in itself come but that the level of participation in foreign affairs but also domestically. official egypt seemed intent on convincing -- betraying a sense of normalcy and in all of our meetings. -- portraying a sense of normalcy in all of our meeting. but in my view, they projected weakness and lack of confidence. i think thi is centered fundamentally on the degree to which all of egypt is focused on this transition period that is coming up. there is in my view a level of attention and concern related to the transition in egyptrom officially jumped -- offical egypt that is creating an insularity and worry about how to affect this? it will be the first transition in 30 years in this country. there is a great deal of lack of uncertainty as to how things are going to workout. that is the context under which we arrive. what we wanted to talk about is we're egypt was going, of course. we wanted to get their impressions on the obama peace process and the initiativeshat the administration was taking. but mostly, we one of the sense of where egypt is going. what is going on in the political sphere, with the aspirations of the government, and where they hope to take it. instead we really heard almost exclusively about the peace process. i want to talk about two things. one, this impression that there was a weakness in their ability to project in foreign affairs, an secondly, about the insecurity that i thought they are feeling at home, and clearly demonstrating at home. as rob touched on, we met with parliamentary folks, the speaker of the parliament, we met with people in the ministry of foreign affairs, we met with representatives from other institutions within the egyptian elite. we met with egyptian business people. we were hosted for dners where we were able to talk with lots of cross-cutting those, but mostly within the egyptian elite. and then we did meet with some liberal reformers and i will touch on that in a second. the most impressive thing for me, one key indicator of this was that we met -- this was parliament, we n only met with the speaker but four or five committee chairs of various committees in the parliament, including the education committee chair, the investment committee chair, privatization -- the number of others. in a meeting of the people's assembly and the eve of an election, we could not talk at all about anything related to domestic affairs. it was all about the peace process. not only that, but as rob was saying, about the american lack of leadership generally. this notion that somehow the united states was contributing to the marginal insulation of egypt in the regn. in particular, the sense that we had in our policies contributed to the rise of iran. it was not the normal rhetoric about saddam hussein and then you took down the taliban with rival, no, we to the shah to leave tehran. going well back in history, the rise of iran was our responsibility for telling the shah to leave. as robb noted, the take away from that was that we had better be careful that we not lose egypt in the same way. on the peace process, what was interesting to me as they take away this is -- as they take away was that the leadership in each it seemed to like dynamism on this issue. when we met with the minister of foreign affairs, an explicit statement -- if there was not progress, they would pursue the arab league initiative, which would be to help the palestinians go to the security council and seek recognition from the security council. if that did not work, and the u.s. used its veto, they would go to the general assembly and ask for a general recognition there. knowing full well it would just create a great deal of embarrassment for the administration and would no get anywhere at all. this approach in public in an immediate disavowal of e process in private, which struck me of an example with the this was lacking. the sense that because the president seemed to be week after the elections here, somehow they could pressure the obama administration to twist netanyahu's arms and do more on the settlement issues. again, while fully recognizing that that would probably not going to happe sudan, another example. on the one hand, the united states is powerless come up that loss, we're not doing anything, but all in sudan, please -- it is of paramount concern to --. the united states must intervene to stop the referendum from taking place there. on the one hand, this notion thathe united states was powerless, but in the case of sudan, asking that the united states intervene specifically to do something about the growing prlems, not in the north, but in the south, from their perspective. on the hole in the area of foreign affairs, i sense that the egyptian establishment was looking to lay the blame for the egyptian marginal station at washington's doorstep. the other thing striking to me from official egypt was, even in our quiet time with various elites, you could not have any conversation aut domestic issues. weather was labor unrest, any candidate selection process, no one wanted to talk about any of these sensitive issues. this was a large departure from previous trips i have made to egypt where you could talk about there is a great deal of circumspection. this in security? when we would try to talk, we would return tohe peace proce ss. it proved nearly impossible to get anything on this issue. the dinr i attended was organized solely with only talk about the peace process, which was educational but proved a it of a disappointment. i was most struck by the person who spoke the longest, one of the chairmen of the investment committees. our delegation in consisted longley of new york -- largely of new york investment capital. it is a bit of famous opportunity. i wanted to not get into issues related to the electrical process are what is happening in egypt. he tried to give the speaker to talk a bit about domestic observers. that discussion was stiff armed , unfortunately. thankfully, we read able to meet with members of the egyptian civil society and political activist young people who expressed a couple of different sentiments. one was that what the national demoatic party was doing was its own a fair -- affiar. -- affair. it does not happening within broader society. they need to invent some critical process to make a better for them. we also heard this. this is on the whole dialogue with the egyptians on where they were going in terms of political and domestic reform. anotr message that was clear is that egyptian civil society is not looking to the united states to lead it in any way. we need to do what we can change things. it is something we shod seek to nurture. my overall impression was that egypt is completely and entirely focused. it is worried about to ensure the plan which seems to be just around the corner. in the meantime, a restless population is looking for a change. expectations are rising. the ability to deliver services is that keeping pace for t. everyone we talked to seem to be holding their breath. that is not a recipe for confidence in international affairs. without a successf resolution of these internal dilemmas, the ability to be a creative and energetic partner of the united states will be sharply limited in any endeavor we choose. thank you. >> thank you. it was a delight to travel with both of you. they brought this trip forward to fruition. without her and her team, we cannot have done it. i want to thank her and my colleagues. keeping with what rob said, i am sure he wants to talk about jordan and more of the top we got from the keen to, which was very upbeat. thegoing to focus on israeli/palestinian issue. rahm mentioned some people we met. b mention hoss -- ron labeo some of the peoplee met. abbas was very welcoming. [unintelligible] we are trying to new people's the renault officials. i would like to say my main impressions. let me say a word on the end. one is the ground cooperation. i tried to get data. they have some hard facts. i would like to talk a little bit about what is going on in the ground. i see it driven by a few factors. one is clearly a converging interest between israel and the palestinian authority when it comes to hamas and limiting them from acting in the west bank. they got a call there was a little bomb factory. 10 people were arrested. it is not done for our benefit. they said it was true. the operation is fantastic. there is an over archi convergence of interest. one is clearly what i would say culture of accouability. that is a driving scene of the prime minister. you cannot really speak of a bottom up without a top-down approach we are doing this because of it. there are a key element here. it depends on your point of view. some people say feed do things of this self interest in mesa tactical -- less tactical. it is sustainable over time. no one thinks the government is building a two-stage solution. i sought in a positive light. i ll take of the 120 new schools have been built in the west bank. because we don't know this idea of double shift but this is a big issue for palestinians where their kids only study half day because they have to use the building twice for kids in the morning and in the afternoon h there is no more double shift. 1,400 kilometers of water and networks, 15 new health facilities. 1,700 kilometers of roads paved this is a big issue. a big focus. 50% tax revenue collection has gone up. a 50% increase at the time of a recession. it says that the institutions are starting to work. on economics, and a drop in dependency on foreign aid. - one went right into the budgary support. next year it is 1.2 billion. i do not see people facing these things. they think this is a case they can make even for a republican congress. poverty in has decreased by 1/3. unemployment is trending down. there is 8% to 9% growth. what is the main on securities? 73% of paltinians say security forces were for the palestinian people. thei graduation exercise is attended widely by family. this is something that has more and more by the end of the public. 63% say they feel secure in their own town. according to the commander in 2007, there were 700 shooting incident in 2007. in 2009, it was down to 19. this year, we thought the number was even lower. most import lane is the corporation -- importantly is the corporation. the training is done in the e iman -- yemen area. there is not been one case and then using firearms against israelis. they have been reopened. you have heard me before. this has meant that preachers who were agitating for suicide bombs have been removed from mosques. it is an effort t start reforming the colleges where they train the. this is an important mosque initiative. it is one the most important part is going on. the israelis from a few years ago. it is at 43. it is devoted to the west bank. there is this cooperation. israel has reduced rates. for the palestinians, the nuers went to 0. there are statistics on an average 24-hour time frame. the palestinians will say 0. the israelis will say we share intel and that their son that they cannot share. i think it was the security doctor. there is no pelorus them. they are no malicious. there were some elements of the quartet. if the war willing to compromise on. they were firing. i do not think they are trying to arm themselves. you can look at going back. that is just in terms of data on the ground. where are we now on the 90 day issue? i know this is a knowledgeable audience. what can we say we know? in the middle of last year, the parties were finalized. the texts are coming out from the u.s. but if there were four points in the taxut. some are pretty minor. some had been worked out. there are some issues not in the text that kept the shadow. if the air not done quickly, -- if they are not done quickly, it could leave things to unravel. what are those non-sexual adams -- non-textile items? i think it is clear that he made hillary clinton a verbal assurance that during the 90 days there is been meaningful progress on the territorial issues. it to be done in parallel. it may negotiate them. i think it'll be a parallel set of agreements. as you can imagine, no surprises there. the u.s. has a clear verbal commitment that there will be progress. i do no think anyone believes that in 90 days you can solve the territorial issue. i think this is meaningful progress. the administration believes that without this, it is keep looking at the issue differently. he calls in the light at end of the tunnel. i think that is accurate. they believe that the settlement issue of a difference and they will not be asking for another extension. water these non textile issues? -- what are these non textile issues? to keep them from joing a six, the ministers clearly conveyed a desire to ramp up housing in east jerusalem. no one is arguing about it. the united states administration can only recommend to congress about these a 35 planes but there clearly, if you like some hedging that if it did not that it will come from somewhere else in the budget. i assume that part is not clear there the eighth fallback understanding on this so he can present to this cabinet that it is hell or high water the third elements is that they have been hearing reports that he is not as much focus on the territorial issues. they do not see it as walking back. it is very hard for a washington audience to understand this. i thought i needed to drill down what exactly the concern. israel believes that the main asset is the border and terceira asset. clearly, if your focus on security and borders, will the chips be useful on jerusalem refugees? netanyahu talked about progress on all fronts. everyone wants progress. everyone in this room was progress. the question is, what is doable? that is where you get into some people trying to get him not to use that phrase. is this a semantic point? it is semantic, the administration will li with it. those are the issues. people will say that you wrote about this. does this meant is off? i believe it will come up again. this is the one issue that the palestinians were concerned about. he said israeli troops to be braced there. it is a traditional arrangement. you could try to read between the lines. how did netanyahu played this politically? the papers say that 14 of the factions that signed a petition? my team has come up with 10 names that we say have sign on to this position. whether it is in our 14 is sizable. what does he do? i think the efforts could escalate. it is a time -- cited the times that he cannot reach an agreement. not bother reading him. he clearly has future as a public speaker. who knows. they tend to come back. i when not where that out. of the fishing could escalate. for some believe they started to late. you did see a situation that the demonstrations will circulate. what does he do? tactically, he is done something that is useful for him. he is going for a round of talks. what it hasone is that it has kept the more recalcitrant evidence. that was wn the biggest lessons. he has 28 seats for them there is no threa against him this way. you can say they got into terry l. conversations. anything could happen. . maybe they have a conceptual understanding. this of the a huge move. it would tell people about the contours' of a deal. how he juggles it is something we will see. it is clear she has been offered something or there has been hence. it seems it is more as a fifth wheel. if you want to join, fine. we are of business people. then you buy a majity shares. what she once has not attacked the car. they have an understanding about a common destination. >> i agreed that this will always be the number-one issue. there is rundancy the facing to be sacrificing feet in their -- speedn their country. is it because of this famous warned that people are talking about? we do not have the source of operational questions. clearly, and the issue, we were told 70% of the defense. they can pay -- play this game. it is crucial. i think he said it well. the sanctions are working. they are pleasantly surprised. i will focus on a provocative way to end predell. it is in terms with the role. i felt the news had not reached all the corners of the mide east where we were. we raise the questions. i tend to think that what cld happen is that netanyahu may emerge as the lobbyist for the arabs in the new republican congress. he will cut off egypt and jordan and israel. he emerged as someone that tries to work with republicans who met with whoever is there. he met with them very early. he may say to be careful. it is easier for him to do it. t.think he might do it for the netanyahu is summoned boys they may listen to. that was an idea that i'd bounce around with people. i did not feel the full news of our midterm news permeate. i think that is a little peace to end them. thank you very much. [applause] >> if you could use the microphone in the middle, press the button and identify yourself. >> thank you for a comprehensive look at the situation. i like to pick up on something you said about the general feeling of calm on both sides. did you get into any discussions about how long that calm could be expected to continue with out. progress on the front? this was a common discussion. we had with the israelis and a litical level and military level. nobody would offer and how many months and weeks. i think i tried to relate with the general consensus that no one suggested that these two trends were totally independent of each other. there is some linkage out there and. he has said, we will deal with the situation as it is for the. no one gave a date for the most positive assessment is the one i gave you. it is remarkable that this h been achieved in a time when there is 0 diplomatic engagement the argument they need diplomacy to get this started is not true. it is false to a system that it can go open ended, especially if the perception is that whatever narrow door might be open will be slammed shut. what does that mean? imine to have time in front of us when the parties can gauge. -- engage diplomatically without fear that it will collapse. that is the case predell. will it take is to the end? i cannot give you a time frame or not. it to be a function of the perception of the possibility of diplomatic engagement they clearly have not reached the low point now. they may have good reason. they have not reached it. there is clearly a long way for them to go. this is a hopeful assessment that i come away with. >> you are a seasoned observer of the israeli politics. do you think the netanyahu has a map in his pocket that he is going to be willing to put down? is there any sense that what they are looking for is a security treaty that will be formalized in? >> i do not know if he had a map in his pocket. you have to look at where the blocks are. the roughlyonverges exactly with the israeli security barrier. 92 sermons on the other side. -- 92% is on the other side. you have to assume that. i look into voting records. the settlers have voted to the one. if you want to drill down, i did do it, report. i got every settlement on their vote. i'd think most people would say if he could get a block he could get 80% of the settlers. the remaining 20% are scattered. we can get into this for them it is t soon to know. he may try. he does not know. he may have a problem 1c opens the map. that the become a code word for the opposition for them and makes me believe there is a back channel that would enable them to make a lot o progres. i tend to believe him for them he has told other that he sees a changing radically -- radicalization. he tells people that the palestinians will probably blow it again might have learned in .he past for th the need to have a strategy. who wants to expose himself once and expose the political capital. e can fracture it. she fears lieberman that if he fractures to assume, a lot of the rights will go with him. his traumatized by the river agreement of 1998 ford people the right to abandon him. his decision making is there yet. if you say give me one piece of paper, someone said they have it for you. this is what i think he does not want to give even the will not be presented, that is the way he feels it will be perceived. this is a day. he is at a crossroads. it of the interesting to see where she goes. the second point about the treaty is interesting. there is a zionist at those - ethos of self-reliance. others s it ill be a hop, skip, and a jump three deterrence policy recruit a deterrence policy. some say that as defeatism. some will say they can all work together. a do not think we are there yet. >> will we see more israeli discussions? one way to get around the decision question is the old which are notits t the, deposits to the other side. it is important to note that despite israel's will earn a reputati for leaking, the conversations between the president and the prime minister have been extremely close holds. they have been very well kept between them they have kept their level of confidence on the types of levels, stations they can have with each other. yes, sir? >> thank you for that for the. >> how has the movement -- is it on their radar? has it impacted the way they are working on their countries? is this entering their calculus at all about to deal with it? >> no sure -- in short, no. i did not see there is a retion one way or another. i do think that there is more of a sense with in egypt andave that scope. there is still more space than there was before. there is something there. i do not think what is happening is pulling in the domestic political debate in either country. >> did you get a sense of what specific expectations they have about the u.s. leadership? it is not engaging. they have done a fair share. >> if you are looking for consistency, you are in the wrong business. regardless of what people thought about the invasion and 2003, everyone was concerned about what the message of americans withdraw from iraq has meant. does this mean that america is decreasing the assets in the persian gulf? are they decreasing it with a run -- iran? are they decreasing ability to restore security and give them greater opportunities to spread the influence? we heard that across the board. we heard the cairo speech was exceent. where was the implementation. it could be forced. perhaps even formulized the takeover. where's the united states? the region is not moving in a positive direction. the isolation strategy of previous years sapodil. they will make the pilgrimage to damascus for the i was interested? what you said about the issue of incitement and the efforts to tamp it down. i had reported about those efforts and you get mainstream jewish organizations still complaining about incrimet. so i have to report that too. and then report that they have been made efforts in the washington institute is an organization that has huge influence that i cover and that we both li in. are you going to try to get that message out? are you going to try to get that message out? >> i will be in los angeles next .eek a coc i do not you say there are no issues out there. i saw there is the report. the western world has no connecon. i have issues, too. i think there is a terrorist. and i think it see it was the of the era town council. these are things we need to be vigilant about. i think it is one metric. i think there are 30 metrics need to look at to give us a better picture. abbas' hope is that they reconvene the committee. i will still go across the country. someone will say there i a photographer and a meeting between president obama and net and yahoo! in marc that will give more attention than 100 memos. it is not matter. symbolism is important. mr. not pretend it is the only metric. i had seen these in a broad context. outgoing to keep speaking across the country and give the of dates when i can. >> i think that is exactly right. this is an evolutionary process. we heard positive reports about changes in moscow mos -- in mosque supervision. both of these things occur at the same time. that is why any good analytical work. then we will come over here. >> you have to press the button. >> what abouthe rule of the muslim brotherhood in egypt? >> what a striking to me is that the government has been traing it down. i think the number is over 1200 at the local level. it is for the government to be able to show that the success that the muslim brotherhood had 2005 that the public support has dropped significantly. that is one of the narratives that will come out from these elections. we had a session here yesterday or refocused on each attendee election ship them the brotherhood voters are perhaps the most hard-core. they are the ones who strive the hardest. the vast majority of egyptians are the politicized. did get the005 elections and conclude that the brotherhood did reach the peak in e ability to produce results, it only succeeded in getting less than 20% of the seat from th. it will create the challenge the do you cannot allow other liberals to emerge in competition. the muslim brotherhood for now does not seem to be a political threat to the egyptian regime. >> is there any discussion of gaza and the egyptian approach? did you meet with people? how wide a spectrum did you leave it? >> my question is, what is your reasoning for why it is that netanyahu isot taking the initiative and leading toward peace? while we not act on it? -- why will he not act on it? >> i will leave my colleagues to correct me on this. now that i think about it, and all of our mtings with officials in egypt, i tuna remember -- i do not remember gaza featuring heavily in the discussion. it is much more focused on what the united states can do to get the israelis back to the table. i do not remember anything on efforts to do mor or to promote palestinian ronciliation between the authori and hamas. >> this was a higight, watching a diplomat at the height of his power to pruce lead. -- sleep. >> we are grateful. some want to cut diplomatic water boarding. that is another matter. i tend to talk to the people. we are very crunch for time. e, t hatcting for peac is a fair question. back not and now a new project netanyahu's seems to agree on the objective. -- president netanyahu's seems to agree on the objective. you still need a strategy for the objective. you can avoid any sort of head on collision. he knows the politics best. i hope on both sides that there is more of a conditioning of the societal landscape. i feel that really missing. i had a lengthy back and forth on the state issue. i said i him many times. i know your answers before you are going to save them. when you do not give a justification of why, they fill in the blanks for you. they will interpret your lack of a rationale as meaning you think the jews do not have rights. you may think it is doing it because it has to be worded in a way that should stay with the jews. for the eve caveat is on finis fadel issues so as not a backdoor way for them. he may say it is a bargaining chip. these are all things people can rete to and fix. we do not give any reason, and the people who gn are only the right-wing people in america and israel who interpret it. this is something he needs to fix. these are historical and legitimate claims on both sides. thre is some way to get at people's angst. sh is afraid he will unleac underminet iwlt will his coalition. we need that to get people to believe again after what happened in the 1990s. we all know why each side feels jaded, but without the support of the middle, leaders cannot do it on their own. they feel if i d knowledge what the other one does, it put pressure. that is what i look of the missing piece. >> let me close with two comments by to the people with whom we m. i thought these were very important in a broader spectrum. top chief ofrael's intelligence to after giving his briefing about intelligence threats included for the first time included 100,000 missiles. it was a strategic threat to israel's well-being. it is right up there with a run -- iran nukes. in a different way, and that same idea a good by the prime minister of egypt. the san that israel -- they said is struck everybody with his comment that said the conflict if we are not careful is in the process of morphing into a jeshoslem conflict. -- jewish/muslim conflict. it will take of our power to resolve. this is from someone with no interest in having this civilization no clash dominate the way people and his country in the region view regional politics. he is on the wrong side of that. i thought it is important for all of the upbeat messages that we come back with. it is important to underscore these very powerful messages, one from israeli and one from arab. thank you for joining us today. [applause] >> tonight, a discussion with the president and c.e.o. of national public radio. talking about the future of public radio and addresses firing of ron williams. >> back on october 20, we terminated the contract of one of our contractor part-time news analysts named ron williams. i suspect everybody in the room has heard about this particular incident. he was a contractor, part-time news analyst and we terminated his contract perfectly under the terms of agreement. the circumstances around that were unique. there's a lot of chatter i guess about the reasons that we did it. you didn't hear those from me. there are a lot of assumptions that are made about why we did it and what happened. and the fact is, although i will say, it's not in my practice or nprs, nor do i think it's appropriate to get into decisions around personnel. so i will say that the circumstances were unique. there was a series of incidents over time. these are all things that i've said before. and so we terminated his contract. that's really all i want to say specifically about the matter. but certainly, as you know that what followed was real aa tsunami of media attention and opinion and a lot of commentary all tover map, and it was, did we expect it to be quite that large? no. i think it's fair to say we didn't. we made -- n.p.r. as an organization made mistakes in the way that we executed this. as c.e.o. i take full responsibility of that. our staff did not meet with him in person. i think that was a mistake. i think we left our stations and some of our supporters without the tools and information they needed to be able to address it with their constituents. those things were certainly a mistake. what's happening now, and i think that there's general consensus that this likely would have happened anyway although certainly the controversy did not help things, is there is a call with the change in congress certainly and with the ever growing deficit there is a call that, among the deficit reductions included in that should be the, i think about 450 million of federal support for public broadcasting. and so that is really what we're looking at. >> watch the entire interview with the president of n.p.r. tonight at 8:00 eastern on c-span. >> take a look at the new members of congress with the c-span video library. find a complete list. every new member is listed with their district map, campaign finances for the elections and any appearances on c-span. it's all free on your computer any time. it's washington your way. >> this week marked the 47th anniversary of the assassination of president kennedy. this weekend we'll talk with gerald blain and clinthill. two former secret service agents whose job it was to protect the president on the events of that day. the conconspiracyy theories. and his new book sunday night on c-span's q and a. >> the bipartisan policy center recently held a forium looking at how politics is covered. >> journalists and political advisers discuss whether it's still taken seriously. this is an hour and ten minutes. >> i want to thank you all for doing this. this panel on journalism, if you want to see bipartisanship, talk to any democrat or republican and you'll find agreement about their views of the press. one of the things we talked about this morning is how much this campaign compares or the election cycle compares with previous ones. and stan kept talking about 1994. this is, the media today is really completely different from the media environment in 1994. and the media is a player. that's why we can all have our views about them. but we couldn't do this, we could not have a democracy as we all know it without the media. and for those of us and many of our panelists have worked, as we travel around the world and work with emerging democracies, you talk with young people. what do they want to do? fair and away they want to be a journalist. they want to tell the truth. they want to get the truth out there. those of you who have kids know, my girls want to be a journalist. both of them. so it's an incredible profession, and it's one that's under a lot of transition and everyone here has lived through that transition. so the title of this panel is learn the line, is it journalism or entertainment? politics has always been show business for ugly people. so you speak to the journalist part of it. david corn, that's another bipartisan thing. dade is the bipartisan editor for mother jones. the nation. tv. he is an institution in washington. a very thoughtful person. we used to spar on crossfire and loingly so. and i want to publicly apologize for something i privately apologized for. i used refer to his bretheren as a loony left. and i thought that was a term of endearmt. and he one time asked me to stop using it. i thought we always had a civil conversation, and it can happen and it will happen. because i think at some point we're all going to blaze ourselves out with some of the rhetoric that's been passing for political dialogue. and now is the time. david is going to introduce all these fabulous panelists who have been instrumental in this election cycle and past. and thank you all very much for coming. [applause] >> let me go to the introductions so we can get to questions. all the way. i'll start with dan who is not the person in the dress. dan had several -- he was very instrumental in bush winning the white house, in 2004 and somewhat in 2000. and he is now the president and c.e.o. of public strategies in washington, d.c. next to him to his left is betsy who is the executive producer of the number one rated sunday morning show, meet the press, and it is the longest running television program in the history of the world. she hasn't been there all that time. jill was press secretary for bill clinton. a very easy job at the time. and he is now a founding partner and managing partner at the grover park group. next to him in the baseball cap is mark, who is a media producer and communications strategist who has worked for president bush, senator john mccain, lance armstrong and bono. i'd like to see them all in a room together some day. next to him is kiki who is the managing director of global partner affairs in a big firm in d.c. a senior adviser to hillary clinton, worked for the obama campaign and also the john kerry campaign, around has done political consulting over the years. next to me is jonathan martin, as he is known in washington jay mart. it's sort of an honor in d.c. when you know them by a nickname. and he is the senior political writer for politico and has written for the national review of the new republic, the national journal, and the "washington post." he is one of the top guys in politico. yeah hear about the breaking stories, one out of two times it's probably one of his stories. we're going to talk about blurg the line. is it entertainment? journalism? maybe it's something else. and so let me just start by setting out a few premises. when i think of the media, and it's really a tough term to use. because it covers a lot of things that really aren't the same. but it makes it convenient at least. but it seems there are three sort of views of the media perhaps. one is the pla tonic ideal. which is the media exists to inform the citizenry so we can have good public debate and our decision makers make better decisions. then we have perhaps the corporate view. the media largely are for profit corporations that have to make money, and what they do has to justify the bottom line. that might be different than educating the public so we have better conversations. and then i think for some of the people on the panel and for the political class, the media is really something to use. it's a vehicle. it's not their job to make the media do a good job. it's their job to use the media to advance their agenda. it could be electing a candidate, it could be promoting a presidential policy. and so all those things are sort of happening at once, and people i think as they approach the media come at it from different per spectives. so we've seen, i mean, i won't think we have to go into details about the ever changing media landscape by the time we finish this panel it will have changed some more. . . >> is at a fair way of framing it? >> to use the katrina example, the emotions that went into our coverage of that, the people pleating at the convention center, crying for help, that was the emotional story. that was the first week or two of the story. then, i think as time goes on, we investigate how did this happen, why did this happen, but the commotion was what it -- demotion was what generated the cry for what was going on. if you did not see that, the next act would not have happened. >> do you think there is a default position in the media, not just on that story, to go with the personal, dramatic narrative, and then we will get to the tougher issues? >> in order to draw people in, you need to start with that narrative, and let people know why they are connecting to a certain issue. in print, and on television, you start a story with relating it to something, and mo vaughn. if that is how you draw the reader or the reader in -- or the viewer in. >> mark, you try to use the media more than create media. do you care about whether it does a good job? i'm sorry. i am looking at dan. do you care about whether the media gets things correct? is it an important vehicle for you guys these days? >> absolutely. there is a lot of people that look at the transformation of media and think it needs to be an either/or proposition. there has been a decline in network news since ronald reagan ran for reelection. 72% of people got their news from the networks, and now it is cable, and the new social media. our approach was always that it had to be all of the above -- of the above. for the most part, but typically with a crisis, -- particularly with a crisis, the traditional news will still shapes the narrative, and it will still have the reach and context to the most amount of americans. we understand the old adage, if it bleeds, it leads, and we knew the motion would be put on the forefront, but we have gray hair because we are always banging on those guys to focus on this. betsy fischer is right, it starts with the raw emotion, and each day you get further, you start seeing what went wrong and that is where the dissection takes place. >> there is criticism that the media goes for titillation. if you are on a campaign, is it not, in some ways, your job to manipulate the media as much as you can to events where you are working for? >> i will do manipulation. you will do education. look, obviously, the more you control the narrative of your candidate, the more successful you will be. the reason why we spend millions and millions of dollars on political advertising his a direct recognition that you cannot control the media. having said that, having a strategy to recognize that reality, understanding the tendencies of journalists and the competitive juices with print, and network, there are things you can do to shape the news through lead strategists -- leak strategies. it is our effort to steer the beast. in some weeks, you are successful, and other weeks, it feels like you cannot get out of a barrel. when you see those waves coming, you try to ride it, or if it is coming at you, you get out of the way. the recognition of paid advertising demonstrates we recognize there is limitations on how much you can manipulate or control. >> joe, when you were in the white house, who was there ever a conversation in which someone said we need to have a good public debate, let's get out right information about this issue? >> yes, then we had the real meeting. [laughter] >> listen. just to pick up on something betsy fischer said, and dan, what the media is doing now -- i buy into your second argument, the corporate argument, that is a business there is competition to keep viewers or readers, and the traditional media is losing the fight to a host of other things. what is missing, then, is while everyone is sitting there saying we need to get everyone to watch or read us, is the basic element of having to inform people on what is really happening. it has become a product of what you think they want. there is nothing less, and underneath it, to give you that broader, textured, reasoned analysis of what happened. it is just not good business right now. there might be, as we move forward, with the wonder of the internet and the digital revolution, something that will emerge, but it is not their right now. that is why you see some of the debates that you see on cable television that is really not in the public interest. >> which brings me to ."oliticao for some people, it is the next great thing, and for others it is everything that is wrong with internet journalism. it is all about winning the horse race, good links, squeezed out -- squeezed out competitors. it does do a lot of analysis, and does cover a lot of legislative details, but those stories did not get tweeted. do you think it represents a step forward, a step to the side, or something else? >> we do not control what readers are interested in. we write it. we put it out there. obviously, it is up to their readers to decide what they will put on facebook. that is their decision. we have a lot of people who are very serious about politics and policy. i think that to say a person like david rogers, who has covered capitol hill for 35 years is some call frivolous, it is just not fair. i spent a lot of time on the road. i think we did substantial coverage on the midterms. i will say there is no question that we are, i think, guilty, as a part of a more collective shift in the media towards what oftentimes tends to get bogged down to politics and personalities. in some ways, it is inevitable. this past cycle, the most covered senate candidate was a person who lost a race by 17 points. that should not happen. that is a problem we need to reconcile. >> of course, christine o'donnell. >> i was not going to mention her name. >> we did for more coverage. >> exactly. what i am concerned about is all of the incentives are built in toward rewarding behavior that is more provocative, flamboyant, and all lend a. case in place, joe wilson, the congressman who stood up. what happened to him after he said that? what does every politician one? they want publicity and money for their campaigns. what did he get in spades? he was a back bench congressman then no one in this room would have heard of before he stood up and did something that was very ungentlemanly. he was on national tv for days. he raised millions. if you look back on that, was that a mistake? i do not know. he certainly helped himself. that is what i am concerned about. we reward that behavior. >> did the same with the explosion and the expansion of the media, -- it does seem that whether -- if it does seem that with the explosion and of the media,nsion if you do something, someone will be out there to transmit the message. in decades past, a small number of people could control access to a large number of you. if you offended them, you did not get access. nowadays, through a proliferation of media and everything else, people can break through very easily. kiki mclean, sarah palin -- entertainment, or journalism? >> how but a made-for-tv movie? >> i will not be popular for this. it is all entertainment. ok? when i say that, i do not mean to demean serious journalists, but at a certain point, we are competing with all lot for people's attention. whether it is me, as a press secretary, or betsy fischer as the executive producer of a network show, we are competing for your attention, right? you are taking care of aging parents, going to work, cleaning the house, fulfilling obligations at church, taking care of a friend, get away on vacation, and that the doctor's appointment, and somehow, in the middle of all of that, you need to understand the deficit, trade, jabs, and what the health care reform package means. we are using the term media. are we talking about the news media, or media? where are we conveying information? jon stewart, and "meet the press." president obama is going to both. at a certain point, as many nights i spent hollering at a member of the news media, i have to say that some of the responsibility is out there. there is a lot of rubbernecking that goes on. do i really need to know what has happened to linsday lo han. the point is, we should not the intellectual elites, but the reality is that we need to get your attention, and there needs to be something in beijing. that is what anyone on this panel -- engaging. that is what everyone on this panel has struggled with. the front page of "usa today" is a dramatic example. what you see with president bush, and the headline about his memoirs is dramatic, and it is compelling, because it is his point of view. ask if they simply have the publication date, you would not stop -- here is they simply had the publication date, you would not stop to read that. >> in watching the interview, he asked all lot of questions about how the former president felt about things. >> how do you feel? do you think you should apologize? those questions are, may be important, may be engaging, but it seems to me they are really half of the story, and they do not give you anything to years to improve the situation or did it better next time. mark, you work with politicians and celebrities. is the line blurred between how we cover each, and from your perspective, in the last 10 or 20 years, how have things shifted? >> radically, but it is a market. the market is responding. unless we want to be a soviet- style culture where we forced news, the news environment will respond to what people want. one recent poll asked who the most respected news source was. no. four was jon stewart. i was recently on a cable news show with a well-known cable host, and we were talking about working together on a bipartisan solution to some problems. we caught to the brakes, and the host said would you? cut the bipartisan cracked and give us read me? the meat is responding. there are outlets. there is serious journalism where people can get the news that they want. at the same time, i think we should quit the sure raid about the notion -- sure raid about the notion that what some of the networks are doing is really news. why don't we brand some of the stuff on fair, and unbalanced, tell it like it is? >> you are not talking just about fox. >> no, i'm talking about all of the media. most of them are breaking up their coverage. they are calling on all news, and i think they should all break it up. >> it is an op-ed column. >> quit calling it news. >> newspapers have successfully divided opinions from is. -- news. >> that is not necessarily the tradition of american journalism. you sell papers identify with political parties. there is also a false dichotomy between the opinion and news. having worked for "mother jones" and "the nation" you can have journalism that is still accurate with values. no one would care about of bias if the stories were accurate, because then you could say this is what happened, and this is what it means. people understand that is a value judgment. -- that it is a value judgment. dan, you represent corporations and clients who are struggling to get messages out, maybe sometimes in times of crisis. do you have more media choices now? is it harder to get a message out? >> no. for those who have always had to rely upon the filter to get their message out, now have, through the proliferation of all let's, much more opportunities. -- outlets, much more opportunities. for example, your greatest and best hitter, or spokesman are your employees. they have access to discuss the values of their company. if they do not like where they're working, they will let people know it, and if they do, they will be advocates. i think there are more opportunities when it comes to that. from a political standpoint, how the consumer uses their time -- this proliferation has been great. we do not have to tune in right at 10:00 a.m. at sunday morning. we can consume it when we want. my fear is that those that are politically inclined are using the luxury to go to places that only reinforced their views. if i wake up in the morning, and i have to go to the conservative-leaning site, and you have to run there, and if you're talking points, then you will decide to have a conversation. you have access to people who think just like you, and can articulate it a lot better. >> mark says that is great. you are giving th people what they want. >> i think the consumer likes it, but i think it contributes to some of this systemic partisanship. >> i found that the other day. i had a senator on, and someone said how can you have him on, i do t like him, i am not going to watch ever again. >> the interesting thing is, five years ago, that person would have thrown something at the television set. they would have never reached you. >> i want to diffuse the notion that this is all new. that is not true. >> the media has always been problematic. >> well, for some, but the fact of the matter, the first televised debate -- you think people went on because they wanted to understand the difference between two presidential candidates? they wanted to see what happens next. rarely do they tune in because they feel they will have a clear understanding of where these two people are. i am telling you, it is rubbernecking, and they're waiting for the crash. go back to 1992. bill clinton was having trouble breaking through with the national media, so he found a different avenue. i hate for people to walk away thinking this is some new crisis. it is not a relationship between citizens and information, and how they will get back. >> let me bring our ratings down for a second. i get e-mails from joe about global warming all of the kind -- all of the time. to my mind, and the mind of most scientists, it is very serious. we are not doing anything about that. the last election has put more deniers into congress than there was previously. taking that as an example of a serious issue, one that president bush agreed upon in terms of the degree of seriousness, there is bipartisan belief that this is a serious issue. look at the media landscape. what to do from your office, trying to work on that issue? >> part of the problem is, we will need to redefine our terms. news used to be controlled by a few people for the public good. you could only turn on four channels. remember, if you grew up -- unless you were born in the last 20 years, you did not have access to papers outside of your home town paper. now, we have moved away from this idea that a select few will make decisions for us. news is just like any other content. here is just content. politicians are just creating content with a -- the same way people do with "and the real housewives of beverly hills." you sit at home, and have an amazing ability to program your own television. look at global warming. it was an issue that no one paid attention to until someone figured out a way to make interesting content, which was al gore's will be. -- movie. the problem is, change is hard. if you go through times where it is not working, the way you will do with -- the successful politicians, advocates, they will be the people that create content that will give the impetus and political support for change. global warming is a great example. we have not build something on that debt has been able to push it through. until we do, we will not get anywhere. >> jonathan, let me ask you. you have been at politico a while. do you see anything changing in terms of political media changing in the next two years or the months ahead? >> i think it is definitely changed in the past couple of years. you have now -- political news basically captures real time. the notion of watching the news at night, or reading about it the next morning is gone. i do not think this is necessarily unique to political news. fragmentation is happening not just across media, but across everything. we are living in an ipod culture, choose your metaphor, where you decide what you want to consume or listen to, when you want it. people have weather, sports, political -- espn was the head of its time. it is not just us. the consumers want power. they can get what they want. it is taking place well beyond politics and journalism. >> but me ask you and mark about the issue of speed. what impresses me is that information comes and goes rather quickly these days. stories break at 10:00 a.m., they are on cable, regurgitated at night time, and by the next day, it is like "that was weeks ago." how many people have a twitter feed? every time you add somebody, it makes sure twitter feed go faster. if you are following 600 people, your information moves up. people tend not to subtract. this is part of what the michael -- model was for "politico." i am old enough to remember the days where you were able to think for a day, or maybe two, before writing it, and then it would come out, and people would respond in a week. now, everything is so compacted. >> when it comes to breaking news, certainly it happens in real time. we consume it, and to override an hour later. there is a space on line, and in print journalism that could penetrate, and take weeks or a month to put together. i do not think that just because there is a platform to get stuck in real time that quality journalism is preaching gets stuck in real time, that quality journalism is eighth -- get stock in real time, that quality journalism is a thing of the past. o called time magazine -- "time magazine" a long, thorough, heavily reported, 15,000 word report on the obama white house. one hour with the president in the oval office. that he's had staying power. it was referred to -- that peace had staying power. it was referred to time and again. if i would dispute the notion that only quick hits, and you are gone is what translates. >> i would agree. there are pieces, i just think there might be fewer than there used to be, and a transmission belt is getting faster and faster. marks, what do you think? >> it has been an ongoing debate with my wife. i am a big consumer. i happen to think that the proliferation of new media, while it is messy, it gives us more information. it is great for people seeking information and campaigns, because campaigns are compelled to provide dp information on policy, because people can get to them. if you are a responsible campaign, you have an obligation to provide that. my wife feels pretty strongly that you do not need information 30 times a day, and you do not have time to reflect or get deeper meaning unless you stand back and reflect on it. i think our family is a good reflection of this debate. >> i want to raise one thing. it is interesting. it takes two to tango, not just the press, but people like dan and joe, and mark and me, have a role to play. we had a conversation about what our expectation of a journalist is. to we treat them like a vendor, or do we treat them like a stakeholders in the conversation? are we taking time along the path, if we are working on an issue, to talk to them when there is no coverage, when it is about making sure they have all of the fact that we have, so that when they do have to write quickly, engage, understand the context, they have it right. they cannot do it by themselves. we have a responsibility to maintain that part. >> let me get back, if i may. you are compelled to post frequently throughout the day. i remember you sitting down in the middle of new york city. you are compelled to do little bites, multiple times in a day. does that allow you to do longer formats? >> absolutely. during the campaign, i was sort of doing a blog item 8 or 10 hours a day. i do not think it is an either /or. it is possible to do a quick hit, and to step back into a more comprehensive piece about a demographic trend. >> i think there are two sides. i agree with jonathan, and at " mother jones" we are totally schizophrenic. we have a bi-monthly magazine, and a 24/7 website. if it can drive us crazy. i have some concern about the diversion of resources to the fierce urgency of now. thank you. the other thing is the cacophony that the fierce urgency creates. it is not necessarily a problem for the media to solve, but whether it is people involved in policy debates, where citizens at large, it is out of your the information, and whether there is the space and time to ponder it in an effective way. i think the proliferation of hyper-speed communications is making that more difficult. let me check on the time. i want to make sure we get to questions. 10, to. ok. time for questions. there is a microphone. let me get to some students, too. let me just say, no speeches, questions, although you can prefaced with a short remarks. >> you talked a lot about the vast amount of music that -- news that is out there, and the spectrum, but you did not talk about the accountability. how can we restore the accountability? >> i was going to ask you, because you are the market debt. >> i think it will take time. what we are experiencing now is so many outlets that are on government, that we are increasingly getting that information, and there are consequences. it was just amazing, during the last campaign, i would see these stories with a legitimate by line, a legitimate source, but they were completely fabricated. i think what will happen over time to is that people will get inoculated to that sort of thing, demand accountability, and they will go to sources they know are honest and true, and over time, they were conquered it into fewer sources that are more of legitimate -- legitimate. -- hundred it into fewer resources that are more legitimate. >> i think that is the danger of this bloc mentality. there is no editor. where you are reading in the newspaper has an editing process. something that is going on "meet the press" there are two or three people looking at that's correct. that is gone. -- looking at that script. that is gone. >> what we are missing, is the most profitable part of news is, in some cases, misinformation. if you were locked in a room, and had to watch msnbc and fox every other hour, you would go crazy. [laughter] >> they cannot be used incorrect, verifiable information. they are telling a story that they know will appeal to people to make money, both on the left and right. jonathan mentioned espn. espn now has five channels. they have everything you could want to watch. there will have to be things that will come up. there will be smaller audiences for people who want the news straight, or people that want it 10% right, or people that want it clarified. they will want to see television footnotes. >> for all that we take, and some of it is fair, that as part of the reason we have been successful. we give the reader news. you can get opinion across the internet. new information is a precious asset. >> we are best served to stop using the word "news." you are giving us content and information. the people who used to process this for us are not around anymore. >> this is for another day, perhaps, but i will have to say that it is easy to make equivalency arguments between fox and msnbc, and i would challenge anyone to said that what glenn beck does has a a ngle remote reset -- has anything remotely similar to what is on msnbc. that is my bias. >> i wanted to offer an alternative deal of of what could happen with all of this segmentation. -- alternative view of what could happen with all of the segmentation. as a professor, what i'm seeing with all of my students is that one of the auctions with all of the alternatives is to just shut it off. i do not know if that is more dangerous, or less dangerous than just choosing your and is based on political preferences, -- york news based on political preferences, but that is what i think young people are choosing to do -- i can not trust these outlets, and no one is accountable, i will not watch, read, vote, or participate in this process. what do you say to those people who feel like they cannot trust anything they hear or read? >> i think it is an interesting point. on a much broader scale, i think a lot of the takeoff in social media is not because people want to go in there and gossip with their friends, it is that some of those traditional institutional pillars we used to go to to verify big financial, political, or religious decisions, are now under assault in many respects, and their reputations are under assault. i think the news media is under question, just like politicians and congress. they're not going to seek information, they're just going to ask a friend. the social aspect is going to people i trust, and i'm going to do what they do. it breaks down the whole analysis, the research, and all of that, and i will go to a forum that i know is light- minded -- light-minded. i will go to people that i can trust to give me good information. i think that is part of what is driving social media. >> before we get terribly depressed about this, the attention span is pretty short. all of those things came together in 2008, where the youth were engaged in a campaign like they have not been since the civil rights movement and the vietnam war. it is a combination. we need people willing to tune in, and leaders, in the system, where they can engage. for better, or worse, the obama presidency has not been able to engage the way the candidacy did, and that is an ongoing issue. they need to figure that out. >> let's go to the next two questions. please keep it brief. >> my favorite anchor man growing up was walter cronkite, and my favorite as an adult was tim russert. i miss him dearly. he was not afraid to challenge the person sitting on the other side of the table from him, and he was not afraid to ask pertinent questions, and put them on the spot, and make them feel uncomfortable. today, when i find, instead of watching news, i'm finding out what i am watching and hearing are talk shows and sound bites. one of the things i wanted to ask you is because of the limited number of owners of media -- at one time, you could only own media in a newspaper, if you owned newspapers, or television, if you owned television. now, ted turner owns a lot of things, and all of these big companies. how is that effective investigative journalism? >> let's take the next question. >> i like to ask a question about more of a global perspective on media. as the world's largest exporter of democratic ideals and media, do you think that turning public policy conversation into a spectacle more than a real discussion is going to change the way that emerging countries like india, china, russia, and brazil, in particular, approach allowing freedom of speech? >> interesting. >> betsy fischer, to you want to talk about nbc news? i know they just hired the author of my book as an investigative reporter. we're happy about that, but the truth is that investigative reporting costs a lot of money. newspapers and networks that are under pressure are finding it increasingly difficult to spend that amount of money, particularly if they do not think there will be big ratings or returns. >> that is the culture we were talking about with a 24/7, news, turning things around quickly. you need to spend a lot of time working on a piece. if you're an editor is not going to see you turning out story -- your at there is not going to see you churning out story after story. the investigative department is no longer. >> that is why you have places like the center for public integrity, and nonprofit organizations, doing investigative journalism. it is very hard in the for- profit world to justify the cost and expense. >> i think that center actually connects -- collect information, and will

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