.hairman -- a vote chairman bernanke's remarks are about 35 minutes. >> thank you. thank you bill. asless than a month, my term their chairman will and. needless to say, my time has been an eventful. i thought it would be appropriate to reflect on some of the competence of the past eight years as will some of the incomplete tasks. i will cover the federal reserve's commitment to transparency and accountability, financial stability and financial reform, and monetary policy. i will close by discussing prospects for the u.s. and global economies. fostering transparency and accountability at the federal reserve was one of my principal objectives when i became chairman in february of 2006. i had long advocated a more explicit policy framework as a way to make monetary policy more predictable and more effective. our efforts to enhance transparency has made monetary policy more effective, that as i will discuss, the steps of been important other spheres, as well. i expected to build on the monetary policy framework that i inherited from paul volker and alan greenspan. they solidified the feds commitment to low and stable inflation as foundations of our economic stability, and they gradually increased transparency. for example, chairman volker introduced a money targeting framework to help guard the fed's attack on high inflation in the early 1980's. and the practice of issuing a statement after each meeting began under chairman greenspan. i believed that a more transparent approach would make policy more effective and further strengthen the fed's institutional credibility. in particular, as an academic i had written about the approach used by the bank of england and other central banks. by making public some simple information about policy goals and strategies for economic forecasts, the central tanks -- banks provided the economic framework to help the public and participants understand and anticipate policy actions. the provision of the goals and policy plans also helped to make the central banks more accountable for achieving their stated objectives. i was confident that we could adapt this kind of framework to the federal reserve's dual mandate to promote both maximum employment and price stability. indeed, central banks using this framework were ready in practice often pursuing economic objectives in addition to low and stable inflation, hence the term flexible inflation targeting. because the financial crisis and the aftermath occupied so much of policymakers' attention progress toward a more explicit policy framework at the federal reserve was slower than i had hoped. nevertheless, progress was made. in the minutes of the october 2007 meeting, they introduced the quarterly summary of economic projections, which included participants protections of key macroeconomic variables, such as inflation, gdp growth, and the unemployment rate. over time, we added long-run projections and inflation growth and unemployment, as was projections of the path of the path of the federal funds rate consistent with each individual's views of appropriate monetary policy. these additions have better informed the public about long- run objectives of policy and the path of interest rates most consistent with achieving those objectives. we took another important step in january of 2012 by issuing a statement laying out the goals and policy strategies. the statement established, for the first time, explicit longer run goals for inflation of two percent and pointed to the sep to provide information about participant's assessments of the longer run normal unemployment rate, currently between 5.2% and 6%. the statement also indicated that the community would take a balanced approach to price stability and employment objectives. we adopted additional measures aimed at clarifying the rationales for our decisions, including quarterly postmeeting press conferences. the increases in policy transparency that were achieved proved valuable during a very difficult time for monetary policy. as it happened, the transparency and accountability proved critical in a very different sphere. namely, in supporting the institution's legitimacy. the federal reserve, like other central banks, weilds powerful tools. democratic accountability requires that the public the able to see how, and for what purposes those tools are being used. transparency is particularly important anytime like the recent one in which the federal reserve has been compelled to take unusually dramatic action, including the provision of liquidity to a wide range of financial institutions and markets that did not normally have access to the fed's discount window, to help stabilize the financial system and the economy. what types of transparency are needed to preserve public confidence? at the most basic level, a central bank must be clear and open about its actions and operations, particularly when they involve the deployment of public funds. the federal reserve routinely makes public the information on all aspects of those activities. since the crisis, and has greatly increased the quantity of an detail of the regular reports to the congress and to the public. importantly, contrary to what is sometimes asserted, all of the fed's financial transactions and operations are subject to regular, intensive audits by the government accountability office, an independent inspector general, a private accounting firm, as well as by our own internal auditors. it is a testament to the dedication of the federal reserve's management team that these thorough audits have consistently produced assessments of the fed's accounting and financial controls that most public companies would envy. transparency and accountability are about more than just opening up the books, however. they also require thoughtful explanations of what we are doing and why. in this regard, our first responsibility is to the congress, which establish the federal reserve almost exactly one century ago and determined the structures, objectives, and powers. federal reserve board members, including the chairman, of course, as will a senior staff, testify frequently before congressional committees on a wide range of topics. when i became chairman i anticipated the obligation to appear regularly before the congress. i had not entirely anticipated though that i would spend so much time meeting with legislators outside of hearings, individually and in groups. but i quickly came to realize the importance of these relationships with legislators in keeping open the channels of communication. as part of the fed's interaction with the congress, we have also routinely provided staff briefings and conducted programs at the board to benefit the congressional staff interested in federal reserve issues. i likewise maintained regular contact with both the bush and obama administrations, principally through meetings with the secretary of the treasury and other economic officials. the crisis and the aftermath, however took the need for communication to a new level. we took extraordinary measures to meet extraordinary challenges. and we had to explain those measures to earn the public support and confidence. talking only to the congress and market participants was no longer enough. the effort to inform the public engaged the whole institution, including the board members and the staff. as chairman, i did my part by appearing on television programs, holding town halls, taking student questions at universities, and visited a military base to talk to soldiers and their families. the federal reserve banks also played key roles in providing the nation and their districts, through programs publications, speeches, and other media. the crisis has passed, but i think the feds need to educate and explain will only grow. when paul volker first sat in the chairman's office, in 1979 there were no financial news generals on cable tv. there was no bloomberg screens, no blogs, no twitter. today, news, ideas, and rumors circulate almost instantaneously. the fed must continue to find ways to navigate this changing environment while providing clear, objective, and reliable information to the public. for the s. and global economies, the most important event of the past eight years was, of course, the global financial crisis and the deep recession that it triggered. as i have observed on other occasions, the crisis or a -- bore a strong resemblance to a classic financial meltdown, but it took place in the global financial system. likewise, the tools to fight it, though adapted to the modern context, were analogous to those that would have been used a century ago, including liquidity provision by the central bank, liability guarantees, recapitalization, and the provision of assurances and information to the public. the immediate trigger of the crisis, as you know, was a sharp decline in housing prices, which reversed a previous run-up that had been fueled by irresponsible lending and securitization practices. policymakers, at the time, including myself, certainly appreciated that the housing market would decline, although we disagreed about how much. indeed, prices were already moving down in 2006. however, to a significant extent our predictions about the macroeconomic effects of the price declines were shaped by the apparent analogy of the bursting of the dotcom bubble a few years earlier. that involved a large reduction in paper wealth but was followed by only a mild recession. in the event the bursting of the bubble helped trigger the most severe financial crisis since the great depression. it did so because, unlike the earlier decline in equity prices, it interacted with critical vulnerabilities in the financial system and in government regulation that allowed for moderate, aggregate losses to cascade through the financial system this included high levels of leveraged funds, excessive dependence on short term funding, deficiencies and risk measurement and the use of exotic financial instruments that distributed risk in nontransparent ways. in the public sector, bone - vulnerabilities included gaps in the regulatory structures that allowed some systemic lee important firms and markets to escape conference of supervision. failures of supervisors to effectively use the existing policies and powers and insufficient threats to the stability of the market as a whole was part of it grade the federal reserve responded forcefully to liquidity pressures during the crisis consistent with the lessons of federal banks have learned over more than 150 years summarized in the writings of a british journalist. "lend early and freely to solvent institutions." however, institutional contexts had changed substantially. the panics of the 19th and 20th centuries was about commercial banks and other depository institutions. prior to the recent crisis, in contrast, credit extension had migrated outside of traditional banking to so-called shadow banking entities, which relied heavily on short-term wholesale funding that proved vulnerable. accordingly, to help calm the panic the federal reserve provided liquidity, not only to commercial banks, but also to other types of financial institutions, such as investment banks and money market funds, as will those for commercial paper and asset backed securities. because funding markets are global in scope and u.s. banks depend on foreign lenders, we also proved currency swap agreements with 14 foreign central banks. providing liquidity represented only the first step in stabilizing the financial system. subsequent efforts focused on rebuilding the public's confidence. this included backing of money market funds and the injection of capital into the banking system. the bank stress test that the federal reserve lead in the spring of 2009, which included detailed public disclosure of information regarding the solvency of the largest banks, are there but just confidence in the banking system. the success of the stress test disclosures, by the way, was another example of the benefits of transparency. the subsequent efforts to reform our regulatory framework focused on limiting the reemergence of the vulnerabilities that exacerbated the crisis. changes in bank capital regulations has significantly increased requirements for loss absorbing capital in global banking firms, including a surcharge for systemically important institutions. the federal reserve's comprehensive review, a descendent of the 2009 stress test requires that large financial institutions have sufficient capital to weather extreme financial shocks and then they demonstrate that their internal processes are effective. in addition, public disclosure facilitates market is one. the depositary framework also includes the liquidity requirements designed to mitigate excessive reminders from local banks of short-term funding and otherwise constrained funds. top in the oversight of large institutions and to strengthen the infrastructure, for example, by requiring central clearing with greater transparency for the trading of most standardized derivatives. oversight of the shadow banking system has also been strengthened. some non-bank firms have been designated as systemically important institutions. sifis subject to the consolidated supervision by the federal reserve. in addition, measures are being undertaken to address the potential and stability of short-term funding markets, including reforms to money market funds. of course, and a highly integrated global financial system, no country can effectively implement financial reforms that i have described in isolation. the good news is that similar reforms are being pursued throughout the world with the full support of the united states and of international bodies such as the financial stability board to provide the coordination. more broadly, the approach to regulation has involved to include a macro credential, in addition to the traditional focus on individual institutions. for example, they created the opposite financial stability policy research, which coordinates efforts to monitor the interactions of financial institutions, financial markets, and economic developments to identify emerging vulnerabilities and systemic risks. enhanced monitoring of this type is especially important as the changes in regulatory structure and financial information might manifest and risk in new ways outside the current regulatory structure. much progress has been made, but more remains to be done. in addition to completing the efforts every mentioned, including the full implementation of new rules and supervisory responsibilities, the agenda still includes international cooperation to ensure the effectiveness of mechanisms to allow the orderly implementation to increase the effectiveness of the large institutions. the potential macro credential tools that might be used to find financial imbalances is another high priority. for example, the new policies regarding the regulatory framework includes a kind of cyclical capital buffer which may build additional resilience in the financial sector during times of buoyant credit creation. staff members are investigating the potential of this and other regulatory tools such as cyclically sensitive loan to value requirements to improve its financial stability. a number of countries, including both advanced and emerging- market economies, have already deployed such measures. their experiences should be instructive. although in principle, monetary policy can be used to address financial bounces, the perception remains that macro tools should service the first line of defense against emerging threats against instability . however, more remains to be done to better understand how to design and implement more effective macro creation tools and how these tools affect monetary policy. while liquidity provision and other emerging systems are critical, a rapid shift in the stance of monetary policy was necessary to counteract the massive economic blow delivered by the crisis. it reduced the federal funds rate from five and one quarter percent in 2007 to a range of zero to one quarter percent by the end of 2008, a very rapid easing. the federal funds rate has been on the lower bound ever since. despite the constraint imposed on interest rates, the federal reserve has turned to alternative tools -- enhanced guidance and large scale purchases of longer-term securities for the federal reserve sport folio. other major central banks have responded to developments since 2008 in similar ways. the bank of england and the bank of japan have employed detailed guidance and conducted large- scale asset purchases. the european central bank has moved to reduce the perceived risk of sovereign debt, providing banks with financial liquidity and offered qualitative guidance regarding interest rates. short-term rates expanded guidance about future policy, and that is helped to shape market expectations, which in turn, has eased the situation. forward guidance about the short-term interest rate supplements the broader policy framework that i descriptor earlier by providing information about how the are going to achieve the stated policy objectives. beginning with qualitative guidance and communication about the anticipated future policy has evolved through several stages. in december 2012 they introduced state contingent guidance, announcing for the first time that no increase should be anticipated so long as the unemployment rate remained above 6.5%. inflation was projected to be no more than half a percentage point above the long-run goal. expectations continued to be well anchored. my colleagues and i have emphasized that those were thresholds and not triggers. crossing the threshold would not automatically cause an increase. instead, it would signal that it would be appropriate for the committee to begin considering, based on a wider range of indicators whether and when an increase in the target may be warranted. large-scale asset purchases lowered long-term interest rates. working through the portfolio channel as a purchases reduce the assets to the public, reducing longer-term yields. at times, the decision to begin with a standard asset purchase program mails the signaling effect to the extent that market presence of and see that decision as indicative of policymakers commitment to an accommodative posse stance. however it is important to recognize the potential signaling aspect of asset purchases depends on the broader economic context. the decision to modestly reduce asset purchases at the december meeting did not indicate a diminishing of the commitment to maintain the policy for as long as needed. it reflected the progress we've made toward the goal of the labor market outlook that we set out when we began the purchase program in september of 2012. at the most recent meeting, the committee reaffirmed and clarify the guidance, stating that it expects to maintain the current target range for the federal funds rate well past the time that the threshold is crossed, especially if inflation is below two percent. have these unconventional tools been effective? skeptics have pointed out that the pace of recovery has been slow. with inflation-adjusted and gdp growth averaging only slightly higher than two percent over the past few years and inflation still below the longer-term target. however, as i will discuss, the recovery has faced powerful headwinds, suggesting that economic growth might have been considerably weaker or negative without substantial monetary policy support. for the most part, research supports the conclusion that large-scale asset purchases has helped on the road to recovery. for example, changes in guidance appeared to shift interest rate expectations and abundance of study showed that that pushes down asset prices. -- boost asset prices. these changes in financial conditions appear to provide material support to the economy. once the economy improved sufficiently so that unconventional tools are no longer needed, the committee will look at the design. large scale asset purchases have increased the size of the balance sheet and increased reserves in the banking system. in late 2009, improvement was far from certain, as indicated by stock prices that were low. despite this progress, the recovery remains incomplete. at seven percent the unemployment rate is still elevated. we will also employ term repurchase agreements to tighten control of the money market rates. time, we williate be able to return to conducting monetary policy through adjustments to the short-term rate. that someible specific aspects will change grade -- change. will take into account what it is learned. in their mentor of my remarks, i will reflect on the state of the u.s. economy and the progress. payroll employment has 7 million jobs. gdp in thef real 5.5d quarter of 2013 was percent above the peak. hasstrial production the bankingks grade system is recapitalized and the financial system is safer. when the economy was in freefall, such improvement was far from certain, as indicated by stock prices that were nearly 60% low current levels. the spite this progress the recovery remains incomplete. the unemployment rate is still elevated. -- theber of an term number of long-term unemployed remains high. and other measures have improved less than the unemployment rate. labor force participation has continued to decline. this is evidence he cites a evidenced by a number of factors, including declines in the station. the boom and bust left severe imbalances that would take time to work off. research,n the economic activity following financial crises is usually anemic. weak recoveries from financial crises reflect, in part, the process of delivered to -- whileraging and repair. financial institutions repair addition tolios, in these factors it reflects the changes in commercial real estate. activity is esepcially tepid. beenught the fed has overly optomistic, we have at pessimistic.o this reflects declines in participation. intuitively, when answer limited, firms need more workers even if demand is growing slowly. disappointing growth must be added to the list of reasons that growth has been slower than normal. that was not evident until well after the fact, an illustration of the frustrations of the policy. the reasons for weak productivity growth are not entirely clear. it may be a result of the financial crisis or of tight credit or it may indicate slow growth in sales. that has led firms to use capital and labor less extensively. weak growth reflects other unrelated trends. reasons for the including event elswhere.e and federal fiscal policy has turned restrictive. there have been sharply declining tax revenues. in the current recovery, government employment has declined by more than 700,000 jobs, and there been corresponding cuts as well. long-term sustainability is a clear objective. weaker than it otherwise would be. monetary policy has less room to move. balanced risk may fix jobswithout sacraficing and growth. may now beds abating. situations have improved. have rebounded. the number of underwater mortgages has dropped significantly. oftly as a result finances weimproved see easing. healing andion of forter balance bodes well growth. we should be cautious in our foecast. still ahead.y is central banks and other advanced economies have taken significant steps to provide policy accommodations. difficult reforms, such as banking and fiscal reform in europe and structural reform in japan are still in early stages. we have also seen indications of growth which should have policy indications the united states. emerging markets are also growing more quickly. prospects continue to be good. policy changes like those going on in china and mexico will be critical factors. last month we had us their money to commemorate the signing of the federal reserve act by president woodrow wilson. it has faced challenges. certainly, the past few years will rank among the most difficult times for the us economy and the fed. the experience led to important changes at the institution, including new monetary policy tools enhanced policy communication and a substantial increase in macro financial policy, including increase transparency. we often speak of the federal reserve and other groups is that they were autonomous actors. they are not. the fed is made of a people. there is an institutional culture and a set of values. i am very proud of my colleagues for the hard work and creativity that they brought to bear in addressing the financial economic crisis. i think we and they have been well served by a culture that the sizes objective analysis, professionalism, dedication, and independence of little influence. whatever the fed may have achieved in recent years reflects the efforts of many people who work individually and collectively to pursue the public interest. our people and our values make me confident that we will meet those challenges successfully. thank you. [applause] >> on the next "washington they look at president obama's relationship with the press. discussion of the criminal illegals and those apprehended at the border and whether they will be removed from the country. then they use of capital punishment in 2013. plus, your e-mails, phone calls, and tweets. that is live on c-span. >> about 10 or 15 years ago we started looking at the data, and something very strange popped out. of europe, youap see germany, france, ireland, italy, but if you look at the data on where the profits are it germany, france, and ireland. a disproportionate amount of profit was in ireland. that was one indication of something was going on. ofnonprofit global provider tax analysis on c-span's q&a. >> next a look at higher education. open online courses. he is the developer of google glass. he said down with gavin newsom at the techcrunch conference last september. [applause] >> welcome. >> thank you. >> we asked a number of university presidents to come and represent the old world of education on stage today. and they all said no. why do you think that is? >> i think it is an interesting time for higher education to understand where we are going. i would love to see more experimentation, people trying new things. there is another language in the state of california that the old model is the only model out. given that it is the 21st century and a new technology, it is time to do something new. >> i serve on the uc board of regents and the system board of trustees and the problem for us is our success. and as a consequence, our willingness to dramatically change our behavior. we have been debating the last number of years about this new crisis, the lack of state support for higher education. crisis is an overused word, but we cut, for example, the uc budget by over $2 billion. as a consequence, the last six years, we have doubled tuition, more than tripled since 2001. the concern is now with quality because we are not paying the faculty what other private universities are paying. and so all of these things are now creating an opportunity to have a different conversation. a conversation that sebastian has been on the forefront of. this world and this idea of online education is taking shape and taking a lot of traction. the debate is a long overdue and formidable one. >> your own staff invited you not to get on stage. >> when things are going well, you want to get along. there is a lot of mixed reviews on higher education. a lot of folks are threatened by it and the faculty is concerned about it. we have had an institution that outperforms other institutions around the world so why screw up a good thing? we are one of the top 10 universities, in the top 10 or 12. seven of the top 50 highest performing in the world, it is the workforce of american education. from my perspective, that question is amplified back at the office because there are saying why associate yourself with him when he wants to disrupt it. he has a radical new view of higher education and if it doesn't work out, the fact that you're sitting up here on stage may not work out for you. are you a threat to higher education or do you think you're complementing it and offering something that can run parallel? >> i don't see it as a threat to the communications system. it has been discussed this way because of the reaction people have, what is going to happen to me? we leave so many students behind, 470,000 students willing to enroll and pay full tuition. but china has 20 million freshmen this year. the huge gap in the professional development please, follow the curriculum that gets people trained to understand what the industry needs. there is a huge vacuum. the committee provides international education, and so on. >> why is it it mistake that we graduate more bachelors in psychology than engineering? >> we do a bit more in psychology than engineering. i don't see a single person in this room saying that they want to hire more psychologists. i have nothing against psychology. it is important to have a diverse set of skills. but we need data scientists and cybersecurity scientists. those technical fields, when i talk to companies like google and at&t, very few think that they need more psychologists or english majors. >> the backdrop of this is self evident to everybody. you have a system of higher education that is not sustainable. we have talked so much in the last year or two about the deck -- debt crisis. the higher cost is self-evident. it becomes a more fundamental question of what kind of world are we living in. are we conveying enough talent to meet the needs of jobs that exist today, let alone the jobs that will exist tomorrow? sebastian loves to point out this wonderful stat. the labor department suggested 65% of grade school kids are going to have a job that hasn't even been invented yet. are we, as a system of higher learning, are we prepared to advance the workforce development? the human capital? for today, let alone the future. widening. gap is we can't afford to fail more efficiently. this is code red and we have to do something dramatic. if it is disruptive, it is worth leaning in and making the case that there is an alternative pedagogy of learning. the opportunity to use technology that sebastian and his colleagues have advanced would be extraordinarily advantageous. >> did either of you think it is ok for online education to divorce itself from academia entirely? -- to become a jobs training platform. >> i think divorce is a binary word and there is a need across the entire population and many different ways, a need for critical thinking and a broad set of minds. the skills that will be necessary tomorrow morning to execute your job. for the lieutenant governor, a change of the skills affecting the nation. when my great grandparents lived, one indication was that things did not move far very fast. my education expires after five or 10 years in computer science. my education expires after 5-10 years. everything is new. the cloud, facebook, twitter, hulu. historically, we have distributed human life into four slices of life. there is a work phase and a resting phase afterwards. but we should have them all at the same. we should play and work and rest at the same time because the world moves so fast, we can't afford to have a single set of education anymore. at&t is the first to point out that what we are doing is not benefiting the new kids on the block. those engineers have do stay up- to-date. when something new comes along, they care that the existing engineers get those skill sets. that is a new vision of education than the idea that you one degree for the rest of your life. >> think of all the disruption in this world, from media, financial services, talking about the shared economies. if you went back in time 200 years, it would look like a contemporary classroom today in terms of most of these fs or professor/ student relationships. this broadcast model of academia that still exists today. it is a remarkable thing and we are not even indulging k-12 where people are lined up taste based on your date of manufacture. it is comedic in some ways. seniority and tenure seem pretty trivial in the context of the world we are living in. what sebastian is offering is something that is imaginative, but he is not just talking about taking a lecture and putting it online. he is talking about a new model of education that takes the latest in terms of how we learn and incorporate it into a new platform of engagement that arguably will make learning more interesting and meaningful and lifelong. >> you're not just paying lip service to this, you have something to announce? >> today we put up a website and announced we have an open dedication line where new companies are working with us and we will be talking to more education outlets. khan academy joined us. we get a lot of inquiries, that the students that we graduate, what we want to do is this thing over here. can we participate in the creation of curriculum for higher education? it has been hard because of conflicts between academia and industries. if you want to get a job at google or nvidia, wherever, come to us and you can learn the skills necessary. we work with those companies to curate those skills and keep them up-to-date so at any point in time, you can understand what the right skills are. we decided to make it an industry where you can get education involved for a much broader set of companies. and i think what will hopefully be the dedication in the 21st century, it is not just us you can come to. anybody you can come to to really serve these employment needs. >> the academy force would count -- >> if you call it google university, my friends at google get nervous. it is called an industrywide alliance. >> i love this. if this doesn't wake up the community colleges, i don't know what does. if we talk about the economic development commission, i won't give you that speech. i will save you from that. there is now coastal california and inland california. the july unemployment numbers, 5.3% unemployment rate. you're down in imperial county right now 26.1% unemployment. we have a state with the fourth highest unemployment in the united states and hundreds of thousands of open jobs right now that we can't fill. we have a system designed over half a century ago for what no longer exists. the conversation that sebastian has been having with the private sector, we are not having that conversation anymore. what does salesforce need or google need? we are not conveying enough of that talent so we can't continue to do what we have done. we have to radically alter the approach. if it takes sebastian to put pressure on all of us, i say bring it on. i think that is a wonderful thing and i am very encouraged by his hard work and i am very enthusiastic about the next phase of his announcement as he scales this at a larger level. >> but it has not always been successful. state?ppened at san jose >> the key to innovation that everyone in the room knows is to try it out and learn from it. >> what has been in the news quite a bit, our first set of numbers didn't look the same way. graduation numbers were lower. it was largely the effect of involving inner-city high school kids. we talked to governor brown and many others that looked to get high schools a chance. most inner-city high schools don't have access. we took this big hit and it was against us. they have the draw of making sure that it is appropriately funded. should we tell the lieutenant governor that we would be enjoying a new path or not? any moment about dedication could be construed as a threat, to be honest. this is not about replacing or changing on-campus education. i will ask him to increase the fund. there is no question that it is extremely important. but it doesn't mean that we should stop innovating or leave people out. in the most recent round, over nine percent were out-of-state. we are reaching people in the entire world and some of them can now go out and teach people in all countries. that is a big success story. >> it is not linear. we are on a journey here. this is the first phase. people are quick to jump on this early example. we have been doing online education since the 90s. it is getting a lot of attention, these massive online courses that they are engaging in. like anything new, going to be breakthroughs, there will be some setbacks. you can't be ideological. it is the genius of "and," not the tyranny of "or." having that robust interactive environment, that opportunity to rewind when you get home or fast-forward. your world is unique, your expression is unique. it is personalized. as a consequence of this technology, we can bring those disciplines into the classroom and scale it to not just 2200 or 20,000, but hundreds of thousands desperate to take advantage. >> what about kids and toddlers? >> you have a five-year-old. i hope they are enrolled. >> i will save myself the college money. >> i have a three and a half- year-old daughter that runs up to tv and doesn't know why it doesn't do this. you can't educate my daughter like she was educated. i thought she was a prodigy just watching her on the smartphone. she didn't understand why the top of the magazine did not flip. continueno capacity to to do what we have done. the global average is rising. we have got to get serious about this. >> every student in the class is exactly at the same pace, almost like an industry of drones. we will do what khan does so well to have the kids learn at their own speed of progress. it is the speed of progress. why isn't it as much fun as a videogame? they compete for prizes as part of the class experience. that is as much fun as anything. so many teenagers walk away from education thinking it is boring. perpetually, they come from a world that is not interactive. i think that we should create it. >> amen. i know my species. i am a politician. people like me say all the time that i happen to legitimately think that this is one of the most important topics of conversation that we must be having, not just in california but across the world. this is code red and we have got to wake up to this remarkable world you have created around us and the one you're creating day in and day out. our educational system, it reminds me a bit of kodak. the world you invented is competing against you. >> are you comparing your employer to kodak? i love the csu, no finer institution of higher learning in the world. but we can be so much more and we've got to be willing to invest. if you don't invest in the future, you will not do very well there. >> i want to mention those that khanazing stuff, like academy. amazing stuff, they shape the future. that activity is very important for us going forward. >> thanks for having us. [applause] lady series continues with a look at the life and times of rosalynn carter, followed by a tour of the capitol dome while it undergoes a complete restoration. then there will be a discussion on airline frequent flyer programs. >> i have learned that you can do anything you want to. they asked me if i thought the first lady ought to get paid. i said, i have to do what the first lady is supposed to do. it is such a great soapbox. it's such a great opportunity. i would advise any first lady to do what she wants to do. another thing is you are going to be criticized no matter what you do.