Transcripts For CSPAN2 The Euro 20161009

Also, former former state Department Official Mary Thompson joan discusses leaked diplomatic cables on book tv afterward program at 9 00 p. M. Eastern. At ten, they recall the life of a former state Department Employee turned soviet spy. We wrap up our sunday primetime lineup at 11 with the account of the final months of president Franklin Roosevelts life. Thatll happen starting next on cspan to book tv. First up, here is joseph stiglitz. Good evening ladies and gentlemen and welcome to barnes noble upper west side. Tonight i have the distinct pleasure of introducing author joseph stiglitz. Mr. Stiglitz is a nobel prizewinning economist and the bestselling author of a number of titles including the great divide, the price of inequality, and globalization and its. [inaudible] he has written for vanity fair, political, the atlantic and harper. He brings us today his new book, the euro, how, how a common currency threatens the future of europe. Can the euro be saved . After laying the misguided and explaining how euros policy, especially toward crisis countries have further exposed the flawed design, he outlines three possible ways forward. Fundamental reforms in the structure of the eurozone and the policies imposed on the country, a a wellmanaged end to the single currency euro experiment, or, a bold new system dubbed the flexible euro. He the review calls this work arguments of compelling interest to economists and policymakers. Without further ado, please do me in welcoming author joseph stiglitz. [applause] its a real pleasure to be here again. Maybe i should begin with a question, why should an american like me be writing about europe. Doesnt america have enough problems of its own to get our attention . Actually, i think theres a a number of reasons and i will come to it at the end of why its important for the United States. As an economist, the point is that the euro is a really interesting experiment. We like interesting experiments, even when they arent really great ideas. What i said is, one of the reasons why economists like me are interested in the euro is that it was a really interesting experiment and even if it was a foolish experiment, we dont have that many experiments in economics and this is one on a grand scale. Unfortunately, even though it was founded as i will explain in a few minutes, with the best of intentions, one cant base a grand experiment of having as much implications for so many people just on a visionary idea. One has to Pay Attention to the laws of economics and you cant just repeal them. Political leaders who helped found the euro didnt really understand that. I think they didnt really, unfortunately, this is is a serious accusation. They didnt really understand economics. It was influenced in a sense by some ideas that were very prevalent at the time. This was the beginning of the 90s after the end of the cold war and the belief, the widespread belief that markets were really triumphant and market economy really worked well and a particular part of the belief that that time was that if only government did its part, the the market would take care of everything else. The idea was that all the government had to do was to things, very, very simple, make sure there wasnt too big of a deficit, thats a theme you can sometimes see here in america. Keep inflation low and deficit low. The mandate was to keep inflation low and they had a set of restrictions on the members of the eu at. If you did those two things, the market would take care of everything else, would guarantee success. We know, we should of known even then that those ideas were wrong as the crisis of all, it wasnt just greece which gets you a disproportionate amount of attention. It was a little proper get and what it did. Spain and ireland had a surplus before the crisis. The crisis caused their deficit and their death. They actually had a very low ratio. The idea of keeping deficits low with debt would make sure you would have a well performing economy and you wouldnt have crisis was absolutely wrong. The remarkable thing is that years after the crisis, germany still doesnt understand this. So, they still think the mistake they made at the beginning, the flawed idea of what was required is what they ought to do. In a sense, they double down on a bad idea. They told all the countries, what you have to do is maintain Even Stronger fiscal prosperity. Not a surprise, it hasnt worked i think a particular moment in history, i think if the euro had been founded a few years later, after the east asia crisis, nobody would have, i shouldnt say nobody, but most but most people would not have had that idea because the east asia crisis was a crisis in a part of the world where those governments had very low inflation, no deficit and so that crisis which was the biggest crisis up to that point, to the 2008 crisis, that crisis was really caused by misbehave markets. We now know that markets can often behave very badly and that is what happened in spain and ireland and elsewhere. So, it is interesting how an important idea like the euro founded at a time has such an influence in design and what the consequences would happen. A couple reasons i was interested in studying the euro, it brings out some things that i was interested in for a long time. One of them is globalization. Its a form of integration of a large number of countries in europe being closer together and there is many other forms of integration and i think the real mistake was that particular form of integration and you have financial and other forms of integration. They thought it was sharing a common currency and as i will explain, that was a mistake, but a more general problem in globalization is a mismatch between economics and politics when the pace of globalization outpaces politics, then you can have disastrous outcomes. You can see that in the context of some of the trade that weve had. Finally, a single Financial Market is an area where ideology plays an important role, where things often dont work very well. Trying to understand what has gone on in the euro help us bring out some insight into Financial Markets. Let me go back to the founding of the euro. It was conceived with the best of intentions, not as an economic project. They would say this was not a good idea. It was a political idea. The politics wasnt really enough to get the project done so they said what is the next stage in european immigration. They scratch their head and there were lots of different ideas you could have had, a common Defense Force and lots of Different Things and they said lets try this single currency. After all, the other side of the atlantic people have a single currency. Its a strong economic unit. Maybe thats a critical point. That is where they went wrong because while it was a political project, the politics wasnt Strong Enough to do what was necessary to make that economic project work. I will explain a little bit later on, we have diverse states in the United States. The difference between the rich is in poorest states was not that much difference than the richest and poorest country in europe at the time. We have a single currency at work and it works because we have a whole set of institutions that make our economy be a single economy. They dont put in place those institutions and the result of that was a political project which was supposed to bring prosperity, and with that prosperity bring the countries closer together and they thought there would be this positive political dynamic leading to more solidarity and political integration and it was just the opposite effect. It was a disaster economically and that has led to clinical divisiveness and making it more more difficult to address the other issues which euro pass to address together like the immigration crisis. The question was, why why has there been this failure of the euro and let me say, i could go through the numbers about the extent to which the economy has not been performing well in the crisis countries like greece and spain, portugal, ireland, the death of the downturn was worse than the great depression. Unemployment in spain, theyre celebrating and things are getting really good, the Unemployment Rate is only 20 . Youth unemployment is only 50 . Thats because one of the great things about europe, you can move easily so the reason Unemployment Rate is only 50 is that a lot of the unemployed young people have moved elsewhere in europe. In greece, the youth Unemployment Rate is 60 in and the gdp has gone down by 25 . No matter how you look at it, even the bestperforming country, germany would be graded a d by any standard if you werent grading on a curve. If you look at whats happening to large parts of germany, citizens are doing very badly. From an economic point of view, its clearly not worked. it had the most poorly behaved financial sectors but they recovered fairly quickly and one of the reasons is they have a Flexible Exchange rate. And then worse, after they have taken away the mechanisms of adjustment, they tied the hands of the European Countries even further and said you cant stimulate the economy to fiscal policy. You cant have more than a 3 deficit. You need to focus just on inflation. I tr tried to explain is that ia sense, the euro was flawed from birth and death goes to a major controversy going on about what went wrong in europe. There is one group of people who say that the only problem is that they did the wrong policies and the fact his policies couldnt have been worse. It is true that theyve given a lot of work on the basis for that as an explanation. The policies that they have imposed, some of them are really weird in the middle of the crisis the house is goin houses. They have a debate with a group of three countries that dictate the policies to greece. They have a debate in which they discuss how old can milk be and still be called thrash and they say we like fresh milk and people from detroit to say the problem with your economy is that you want milk that is only four days old we think that it should be ten dayold milk and that became a major controversy. Can you imagine its in depression and they are arguing how many days old milk should be. There was a little inkling of what this was about. Big Dairy Farmers in netherlands wanted tdebate coachship themils a few days. They would know whether it is greek milk or dutch felt. It would exacerbate and worsen the Economic Situation because the greek farmers income would go down. So as we say lots of them say that the european leaders, the troika wasnt doing the right thing. But the basic idea that i argue if it was a structure of the euro zone itself because it took away the adjustment mechanisms. There were other things that when you have a rigid Exchange Rate there are other things you can do to adjust. You have to have relative Exchange Rates taking into account prices in the two countries. If you cant change the nominal Exchange Rate there is only two others you either have to lower the price in greece or raise the price and germany and that is the only way of going about it. When you lower the prices in the wages increase, greeks over a lot of money. It becomes more burdensome they cant pay it back and go into bankruptcy so it is called internal devaluation. The alternative is raising the prices in germany. Inflation is what brought on the pillar thats made of history. The real history is it was the Unemployment Rate related to the demand after world war ii to have large surpluses to prepay the patriot nation and the penalties were imposed on germany and in world war i and invaded the economic consequences. It is insisting on greece having huge surpluses and causing the depression that i described before. They realized that if you were going to have a diverse set of countries that share the common person he di it would be importt to have them come closer and closer together. But actually, they set up a system that was divergent that led to the countries getting further and further apart but now after the 18 years for 17 years, the countries are richer and the poor countries that were and it was predictable that this would happen. It was part of the structure. Let me give you one example. One of the basic aspects is that the money can move freely around europe. They thought that would lead money to go from the rich countries to the poor countries. That was sort of the ideology and if youd just in elementary economics course you might believe that but hopefully you dont allow people who only taken the course to be in your policymaking decision. So, the problem is that if you take one back in 2008 and 2009, we have a Global Financial crisis where did the money flow after the crisis . The United States was the source of the crisis. Our banks have mismanaged everything. And where did the money flow . To the United States. Very simple reason. The United States has the deepest pockets of any country. Remember i was in a phone call Conference Call after Lehman Brothers went down. It went to the Bush Initiative and had 700 billion into the banks. The response was why only have 700 billion the answer was dont worry, it was only 700 billion because one troubling and said it was too big. There was lots more money. The treasury and the federal reserve. Thats the general principle behind any system. If they are backing the spanish bay is, do you want to put your money in the Spanish Banks or the german banks it made a lot of sense a lot of people took their money out of the Spanish Banks of what happens then . They cant lend money to the Small Businesses in spain, so theres an enormous contraction of lending so the spanish economy gets weaker. What happens then, it gets weaker and they cant bail out the banks or the ability to bail out the banks goes down so more money leaves. The same thing about talented people. All the talented people have left greece and they are leaving spain and the other countries, so it is a system where the rich get richer and the poor get poorer so you get this kind of diversions. This is the basic problem. So then the question is what is to be done . There seems to only be two ways forward. It has to find ways of disintegrating. It takes to integrate more. A natural place to begin is what makes it possible for the 50 american states to share a common currency and one of the things. People move to other places and theres a fundamental difference between migration and the United States and europe if everybody leaves south dakota because there arent many jobs there no one really cares a lot. A few people in south dakota do, but if everybody leaves greece, people are not going to be very happy. The nature of the National Identity is different and is related to language making migration much more difficult but far more important. Its to bail out Washington Mutual and it was the federal government fdic. When we go to the recession we have the employment system. In europe its just the opposite when the greek banks are the problem, greece has to bail it out and about weekends the government even more and theyve pay for the unemployment insurance. Otherwise the money is going to leave the strong and the idea of having what they call the banking unit is now accepted that germany does not now. Sometime in the future but of course the damage that has to be done is going to be hard to reverse. When people leave the spanish Banking System or the other, they are not going to come back quickly, and the same thing about the people. So, one is banking. The other thing that europe did knowingly and i dont think people realized at the time is they created the sovereign debt crisis. Something that again i saw as the chief economist of the world bank when you borrow money is always a risk of not being able to prepay. We owe a lot of money but what do we owe it in. If the Printing Press breaks down or we have no electricity, so you can imagine a disaster of this kind but its almost unimaginable. So, but in europe, they created a situation where greece and spain are borrowing that is not under their control so they created for the first time, the kind of sovereign debt crisis that they have had in recent years so to address that, you need Something Like a common framework and you have to have industrial policies to catch you up to the stronger. You have to have a Solidarity Fund that has the sharing of the cost and the high unemployment and so forth. Most importantly, you need a system of adjustment for the countries that have big surpluses raised their spending and prices so the system adjusts when you have a fixed Exchange Rate. So, doing what is necessary to make it work isnt economical or possible politically. Theres nothing like the degree of unity and economic integration and political integration in the United States. But germany keeps saying we are not a chance for union. Europe is not a transfer union which means we dont share risks with other people or be allowed other countries. Now the irony is that while they say that, because of the policies, they wound up bailing out so they have a greater cost as they try to take th tried tod of not doing it. So, they wound up paying a price for you might say their stands of not creating institutions that would make it work. So if that is impossible, what are the other idea is . I try to describe in the book how you could break up, separate the Different Countries may be into two or three different units and dont have to go back to the different currencies they have before. I think it can be done. Not without cost but one has to remember the system is costly. The depressions are costly and people are burying a high price. The final idea that was referred to as a flexible euro, so the basic idea is you might keep the idea of the single currency as an eventual ambition trying to keep the advances that theyve had so far but recognize that they put the cart before the horse. In other words, they were not yet ready to have the single currency and what i described is the particular way that they could test whether they have that. Then they could go sometime in the distant future to have the single currency. Where will this all go back for testing is different than the economics. Unfortunately, if i were to give a forecast this isnt going to end very pretty because i dont think that any of the three alternatives that i just described is likely to be undertaken. The most likely course is the current course and muddling through. Its a kind of brinksmanship and the danger is that eventually, you go over the brink. And it will be an interaction between markets and politics. He saw what can happen when you have large numbers of disaffected people and there are large numbers of disaffected people in europe because it hasnt been working. If you have been in the depression for a long time when you are a young person and one of the is 50 , you are not happy. And what they are jeopardizing itits not only their economy today, but their economy in the future. So finally, let me say why should we care about all this, there isnt much that we can do about this. But we should care and there are several reasons. Europe is facing a large number of problems that the cutting edge of the world global migration crisis and the euro has made it difficult for them to address this migration crisis. One of the reasons it makes it so difficult is if you are a migrant, where do you want to go . T. Want to go to the country 50 unemployment, no call for migrants want to go to the few countries that have low Unemployment Rates and that puts an enormous burden on the countries and that of course in those countries they start generating resentment. So the dysfunctional zero is making it difficult to address the other problems they face. And the world more generally base as a whole set of economic, social, political problems, social change, and europe, the issues its been one of the loudest voices on the right side on most of those issues and a divided europe and one that is trying to solve this totally unnecessary problem in the currency is not going to be able to be as forceful in addressing these global issues. So, with that, let me open up for questions. I have a microphone here just raise your hand and i will come to you. I have two quick questions. One is do you think that ireland is being idiotic and refusing to take the back taxes owned by apple and the second question if hillary were to tax for the treasurthe treasurysecretary wo . I actually did get on irish radio after the finance minister of ireland. I said yes it was very foolish of them and let me try to explain what was going on because it is a little complicated. Basically apple was cheating. It wasnt picking up taxes that go to. This was a global problem that hasnt been working very well but in this aspect, i ireland was a coconspirator. What happened is very simple. It was the result of the activities that were occurring in ireland by a few people working in ireland, but then they said actually most of that has to do with the home office. So then its been tending a little bit as she was shocked to discover they had no employees at this home office, that it was the source of all the prophets of old of apple and all of europe so she just said one simple thing. I am just enforcing the rule and its not changing the law when the ireland joined europe and one of the european walz is that you cant get special deals. And this was a special deal. I will tell everyone why they kept it secret, but they kept it secret until they did the investigation. And they said you did this special deal. You have to pay 12. 5 which is the tax rate already very low on the prophets and we are not attacking the tax rate, but if they were made in ireland, you have to tax. They didnt say whether they were really there. That was cheating so it was a windfall to ireland because they dont cooperate in moving the claim prospects to ireland. The reason of course they kept it secret as if they had publicized this and is available to everybody, no european country, no American Company operating in europe would have any profits in europe and that would be a political scandal. Whether the secretary of treasurer in the u. S. Say on that, while eventually, apple was planning to bring some of those back to the United States and when we bring those back to the United States, they should be taxed in the United States if they originated from activities in the United States but if they originate in europe, europe should be getting those profits. So, his answer was if they tax it we cant because of the debt. There is a fundamental flaw in the tax agreement in our tax system that the answer is a very simple one. You have the taxation based on the Economic Activity profits generated in the activity that occurs in that jurisdiction. There are problems figuring that out but what is clear is it wasnt this homwasin this home o employees to generate all the prophets and it wasnt even iger land. And you know what, we were cheating but that is the way that everyone else does it but rather than be honest, they tried to be shocked about what happened. I have a question. I also just wanted to say representing the upper west siders we appreciate you coming from this barnes and noble in some place in soho or washington, d. C. Or Something Like that. There is a laboratory of sorts for the kind of things you are speaking about and most people would acknowledge that it was mostly politically driven. Can you speculate on what one would expect to see economical economically . The the trouble they did contribute to because if you are on one side of the channel looking across to europe, you saw two things going on. A dysfunctional europe and in particular germany dominating everyone else with the kind of rigidity. Spain is 20 unemployment and the European Commission said your deficit are still too high you have to have another dues for posterity. So theres a kind of rigidity that a lot of people in the uk reacted against. In terms of economically, there is a lot of uncertainty Going Forward. A lot of people thought that it would be overnight. Thats proven to be wrong. Its still may be bad Going Forward there may be a lot of companies that said we wont invest given the uncertainty. But canada and the United States actually have a good economic relations and we both prosper pretty well. I think most think they do pretty well with a currency in the United States and without being part of a Single Market. I dont think on either side they would do better if we formed a single economic unit and there may be some advantages and some disadvantages. So i am not as pessimistic. I think a lot of it is political because the worry is that it begins the process of the disintegration. There was this movement to bring things closer together and that is one of the reasons people are afraid of letting go. One of the planes that i argue is if you want to save the european project, you should probably let it go. Over here. I wonder why you focus so much on the dysfunction of the euro there was no political will to create a system supporting the european integration and economic integration. So, i would rather say that what would have happened if they would not have had that euro what would have happened to all the small economies if it had been more disastrous after the scandal here and so what is your reaction on that and then second, i think it is good that they leave because why you have the Financial Center in new york running the dollar and the financial strength of the United States wire the same function in europe they didnt move to the euro. One of the things us to talk about what happens. Economists always say what is the counterfactual that would have happened otherwise. Would things have been better or worse . The argument is that its made things worse. In fact, what i argue is that it actually created some of the imbalances that letter to the crisis in europe in the first place so for instance in combination with the ideology prevalent at the time in the market failures that are pervasive so for instance, when they formed the euro a lot of people in the Financial Markets they have taken away the Exchange Rate risk of the price of different currencies. In the markets you cant say how would they think that. So what happened is money flowed into spain and portugal and greece and ireland and created real estate bubbles for all sorts of problems. It facilitated creating this crisis that has been so difficult to deal with. I remember talking to some people at the Spanish Central Bank saying you should really be worried. They are creating more than the rest of europe together and something was odd and it was good to break so who do you think we are to be smarter than the market and a year ago in the Single Market has made it easy for all of the money from germany to flow south of the border into spain. The interesting thing is you can talk about the bailout. More than 90 of the bailout money went to german and french banks. So it is money that went down and then back up again. So it was a charade in that sense. I feel very strongly that they facilitated creating begindoublequote is that led to the crisis and made it more difficult for the countries to respond. There are a few smaller countries where the balancing cost anbalance ofcost and beneft different. But as a whole, you can see how badly they were formed into can look at those that remembered the members of th the euro zoned you look at the book and see very clearly the countries that were not members that havent donhave donemuch better than th. [inaudible] clearly the bogeyman here is the germans. We dont have to blame them for everything. I wonder about the german experiment for the integration of the east and west and as i remember under those circumstances, they basically raised the financial level with the money from the west that would be a different kind of historical model for what could have happened. Do you think that is true and why do you think they theyve d that model which is more a historical paranoia about inflation . There was an enormous transfer and that is part of a lot of the psyche of what you hear. In the conjuration we brought Eastern Europe and eastern germany and now solidarity but not the kind of economic solidarity with the rest of europe. If their motivation is more political and economic as you suggested, could we look at it as the Marshall Plan that attempted to control by Financial Markets and banks to extend their control and its all this great stuff but the purpose of the plan was a matter of controlling europe and i think the motive is they thought this would bring more motivation and political solidarity but you have to understand they have a particular neoliberal ideology and that is one of the things i try to point out in the book is what it takes us to make markets work. Any Economic Policy is going to be drained by what you believe in the way markets work. It just so happened ideas were wrong. There is the political dynamic because they thought they committed themselves to the single currency of political will to make sure that it works would be Strong Enough for them to do the next stages in the project they would realize. There is a severe consequences and that would be the engine that would make a series of reforms and that would then part of the process. So thats how it didnt work out. How would Something Like dispensing and providing for the safety nets for the rest of the book we dont know of any mechanisms by which this is done by anything but the national site. But that isnt enough institution grounded. It is funded out of the common money or the fund for Small Businesses and recognizing what i described before in the crisis countries the lending has collapsed because the banks have had to contract. So they recognize that there is a scope for something along that solidarity but after talking about it, they havent been able to do that so far. The currency evaluations have never worked. If that is the case, argentina and brazil will be the richest in the world and they are not. Thats my first question. The issue is the following that in some countries when you devalue the price level goes up. You get the evaluation but if you ask what happened after you mentioned argentina in 2002 before they paid the value to the u. S. Value the result of that is that by 2000 the Unemployment Rate was up to 25 and then they said the system isnt working and they devalued and the result is they had the fastest economic growth. It became the Fastest Growing country in the world to the growing financial crisis of 2008. There is other cases where it hasnt worked for the reason i said before. My second point is a. There is such a thing as market failures where i do believe is that the politicians make cases and they muck up the markets. I dont know what you call the 2008 crisis where the banks had lent money to people they preyed on. Economists use the word market failure. Would they use it anymore generic way not just the most obvious like the banking failure they use it whenever they see adam smith talks about how the markets lead by an invisible hand to the wellbeing of society and the idea that it is the basis of belief in the market economy. There is a very large body of work that shows that often that is not true. Whenever there is imperfect information or imperfect competition or risk market, almost always that isnt true. There is a whole set of it provides the basis of why government has to take certain actions. It doesnt always succeed but no government has ever failed on the scale of our Financial Markets. It is regarding how the pie is going to be divided. The story that you are telling seems to be about the policies that fit in to perform in the tt way that they would advertise. So the question is what needs to happen for the politicians not to enact policies that dont behave in the way that they say they are. That is everybody understands what the policy will do if enacted. I do want to comment one of the consequences of the policies is that there is not only greater disparity between the rich and poor countries in europe, but there is greater inequality within europe. Theyve had a disastrous effect on policy and the numbers and the countries like spain was one of the countries that it was coming down before the crisis. In some ways it was a Success Story and now that isnt true. So, these policies have very large distribution consequences. There is no easy way to event these kinds of huge mistakes other than what i hope its one of the reasons i wrote the book which is it was based on some politician having a misguided idea about economics, and it was always a topdown agenda that was one of the problems. Whenever they put it to a vote, they typically the people voted against him. It was a topdown agenda and there wasnt enough public discussion of the underlining economic ideas and i think that one of the reasons i wrote the book i as i hope there will be more discussion of the basic ideas and part of the basic idea is they can work on their own. Make sure inflation is low and people have the deficit flow into the market will take care of depressed and this is a tremendous testimony to the fact they are not only wrong but they are dangerous. I have a quick question when you mentioned the breakout of the countries. Im just wondering you happen to be from italy. Once i hear that the governments are talking about it, it wouldnt be rational to get all the money out of the banks how would you take into account that affect . When i said amicable it wasnt that it was creepy perfectly smooth. The question is how is it going to end a . Iend . Is an interaction between the markets and politics. In italy now there is a bank on the verge of collapse. What will happen if it collaps collapses. If it is in a position to win, but for the government starts thinking about it, people have more money than you have well have taken u out the money from the country and you would be left disappointed that is the kind of run on the economy that would lead to the end of the euro. So what would have to happen, they would face this kind of crisis. And what would it do, it would have to impose capital controls and banking controls. A long time ago people thought that those were bad ideas. Today theyve endorsed the idea of capital controls. We know a lot more about how to impose a so people have a lot of experience and you can find out what they do overnight so that is what will happen. So if you are worried about it, get your money out now. [laughter] i was kind of intrigued and was wondering if they would set the input and export how will that address with the supply and demand of the goods and services . Who im glad you asked about that idea which is interesting in the book. One of the problems is that when 35 years ago they opened up the Capital Markets very freely the idea is that the capital flow would help stabilize the economy and what we learned in the last 35 years is that is not true. They could be very destabilizing and the countries could wind up with large trade deficits. Countries in Southern Europe and the trade deficit so one idea that could cause this global imbalance was one of the things people worry about before the 20 of eight crisis they were worried about the unwinding of the trade balance is when you have those who have to borrow to finance them and increasing in the event cant be unsustainable. You have the start and stop. So, the one way of dealing with that is this idea that whenever you export the good comments you get a trade chip that gives you the right to import the same value. But it is tradable. So, if somebody wants to import the have to buy the trade and then you have a free market and that is just demanding of the trade ships and what will happen, the demand of equal supply at the point where it will import and that is an automatic way. The trade account as we call it will wind up without the trade excessive and you can calibrate and say no more than a 20 trade deficit or 20 more than 20 surplus. So you dont have to have exact balance. Its a marketbased way. Its to make sure it dont have the trade deficits or surpluses. So it isnt a government saying that this is valuable or that is valuable which has been a problem with the systems if the government winds up having to allocate and you have these complicated offices. No, this leaves it to the market the way that works it will automatically ensure they do not exceed those by a certain amount. By the way this is a leftwing idea. People look at the conservatives and people in the left of center have supported this kind of idea for adjusting our trade account. Any final comments before we find the books . It is always in the upper west side. [applause] a big round of applause. [applause] thank you so much, ladies and gentlemen. Please remain seated. We will have the first two rows stand. If you dont already have it i promise we will get to everyone. This is for crowd control. Then line up next to the stage. Thanks to everyone. You have been fantastic. [inaudible conversations]