tv Capital News Today CSPAN January 13, 2012 11:00pm-2:00am EST
setting a date for the elections this year, passing new legislation to protect the right of assembly and the rights of workers beginning to provide humanitarian access for the united nations and ngos and establishing their own national human rights commission. as i said last december, the united states will meet action with action. based on the steps taken so far, we will now begin. in consultation with members of congress and at the direction of president obama, we will start the process of exchanging ambassadors with burma. ..
in conjunction with our friends and allies to support the reforms underway. and i intend to call president jane taine and i sounds too cheap to speak and to our commitment, to walk together with them on the path of reform. of course, there is more work to be done and we will continue to work with the government on dairy farm and reckons the legation affairs. including, taking further steps to address the concerns of ethnic minority groups, making sure that there is a free and fair by election and making all
the releases from prison unconditional and making sure that all remaining political detainees are also released. but this is a momentous day for the diverse people of burma. and we will continue to support them in their affairs and to encourage the government to take bold steps that build the kind of free and prosperous nation that i heard from everyone i met with. they desire to see. we believe that that future is achievable and we look forward to being a partner in a friend as we see the progress continue. thank you. >> now come a discussion of recent developments in pakistan.
the former ambassador to the u.s. there is under investigation for allegedly seeking u.s. assistance to prevent a military to following the death of osama bin laden. analysts examine what they think they mean internal politics and relations with afghanistan, india and the u.s. the is just over an hour and a half. >> good morning. i am hillel fradkin, senior fellow at the hudson institute and direct gravis center on islam democracy in the future of the muslim world. it is my duty to welcome you to this event, whose subject is packaged and come in a crisis state. and with that, in welcoming you all here and the service authors who spin on the. this duty is an important one, but also for me, a personally sad one.
it is an important duty because pakistan is an important country and also a country in the midst of a great crisis, a crisis which affects important american interests as well as pakistan's. it is a personally sad one because the most grave expression that this crisis are the difficulties, the undeserved difficulty of hussein haqqani until recently packaged as ambassador to the united states. hussein is an old friend of mine, a former colleague and a former colleague of other people here at sin. among other things, to gather hussein and i founded the journal called current trends and islamist ideology. from the first, hussein's interest in this venture was to address and hopefully redress a dangerous and destructive forces abroad in the muslim world,
generally, but also in his native pakistan. in accord with this faith in islam and that the pakistani patriot co. stride with all all his great energy, intelligence and encourage to help find a way forward for the health of his country and relations with other countries, and putting the united states. eventually it became his law to pursue that ambition as the pakistani ambassador. his fulfillment of his duties came at a most difficult time in u.s. and pakistani relations. perhaps the most difficult ever. still, hussein took a this task and defended his country and its interests with exemplary figure in skill. no one in washington is in any doubt about the war his dedication to the cause of pakistan.
but all are amazed that the success he achieved. for his pains, he now finds himself under virtual house arrest at risk of his very life. a serious risk in a country which has in the past year already seen several political murders. why you see in this situation? well, he who hasn't ever to protect and advance this country stands accused of betraying and peered by whom is he accused clerics by a man who many people know him and have known him for many years, who describes him as a serial liar and a con man act even these low art for nearly 20 years and whose evidence is nonexistent. in other times, these charges would receive no credit. unhappily in today's pakistan, they do. this is i think not because
these charges are actually believes, but because they are deemed in the present circumstances, useful in the lower dangerous little coast-to-coast but now calls pakistan. a struggle i might add, which reached the new and heightened state over the past few days. it is us that his situation represents a safe and earlier, the crisis of pakistan and i should add, the shame of pakistan. it is the double shame of men who speak of honor, but instead dishonor themselves with attacks on their most loyal, genuinely loyal and able son. perhaps they will come to reflect upon this, reflect upon what true owner requires. perhaps discover what a great american president abraham lincoln once described as the better angels of their nature. i hope so and pray so.
pray that hussein was due able to return to his crate and patriotic vocation, and the health of this country. for the president's comment is my last duty to turn over our brother destruction to our panelists. let me only found that they are all lifelong union, distinguish students and lifelong friends of packaged and. and also associated with the most distinguished dictation from washington. the presidents here today in the discussion they will provide testifies to the turn for pakistan and its relations with the united states, as well as their concern for hussein haqqani. it is now my privilege and pleasure to turn over to teresita schaffer. thank you very much.
[applause] >> thank you, hello. i am going to remain seated as my fellow panelists have decided to do, but i wanted to set the stage for this discussion. the invitation you receive referred to pakistan, the crisis state. we do meet at a time of crisis in pakistan. it is, first of all, i'd say a clash of institutions, the civilian elected government dueling with both the army and the supreme court. the supreme court whose independence it proudly reaffirmed during the days after president musharraf tried to fire the chief justice, but the
definition of that independence at the moment at the very least is up for grabs. in the past, the supreme court has been overtly controlled by the elected government and is also shown deference to the military. it is not clear that both of those dimensions of independent artists still in figure. secondly, another dimension of the current crisis is a clash within the civilian political sphere. this is by no means new to pakistan. in fact, i would say it is a normal order of business that you have a government headed at the ppp in which the pakistan moving nuances the prime of her. and you now have a third at her and run hot and, in one of his
advisers described to me a year ago is having fans, but not supporters. it appears that he now has supporters, whether that is going to change his ability to gather those at the polls, we will only know when the polls have him come in padilla certainly become an important part of the political landscape. i know a number of older and just came from a skype conversation with him in which he said some things that were quite familiar and some that were less familiar. the big things that we wanted to pursue this morning are two that are tremendous important for pakistan's future and indeed for any country's future. one is justice in the other is rule of law. to my fellow panelists, we'll have a fondness. i would just like to end my introduction on a more personal note.
my husband and i lived in packets and in the mid-1970s. our older son was a year old when we got there. our youngers and was born there. the news of the assassination of punjab governor clutched in our hearts not just for the reason that many people share, that this was a voice of toleration that had been killed by his bodyguard, but also because he was killed a few feet from where we used to go to the bookstore and the barbershop and a the playground where kids played on the seesaw on sunday at noon. so let me turn the floor over to the first of our speakers. marvin weinbaum, who was on a full right here in the embassy, but who is now with the middle east institute.
>> we have a crisis certainly in pakistan. it seems to be a crisis, which the moment is driven by some specific event that has lately taken place. this panel is going to help us understand this event, what led up to them, where they are likely to take pakistan, but in looking at those, i am going to ask whether it is something more than simply events, which has led to this crisis because after all, the topic of this meeting here is the crisis state. i've been lucky not pakistan than 40 years now.
and at the pakistan observer, i really don't know that there's been any time in that. but i would ask your darius pakistan as a normal state. i know when you use the term crisis in your crisis all the time, the term crisis loses its meaning. so i am asking here, before we begin this more specific discussion, i am asking here whether -- whether there is something deeper involved here, deeper in the body politic, deeper in the political culture of pakistan of which this was the latest and perhaps in the order of things, one of the most dangerous crises after all there's a certain degree at human effect. you know, how did these lately, these developments in the one that precede them, how do they
relate to a system, in which few people have faith in their institutions, in which there is a deep distrust in the authority, were just as in the rule of law is so easily violated and regularly violated. we're so much of what goes on is blamed on outside forces, were very specular denial of responsibility. outside forces i might mention that are plotting to we can and indeed overthrew the state can take the state's assets from it. as a society, what once was a
friend set of ideas about some name like 9/11 today is a virtual within the country, about it being an american plot, perhaps american zionist plot. this is generally believed throughout the country and it's only one of many such beliefs, which at least as an outside observer one finds so difficult to understand. the session here in lately within the united states. i could go on and you could go on and certainly everyone on this panel can get us far better examples here. well, could i found this a?
long-term lack of trust, feeling lurking danger, interpretation of the actions of others as hostile. misconstrued friendly actions looking for hidden motives. conspiratorial explanation of the funds, easily slated. in denial, refusing to accept response ability, difficult and its relationships. now, you may think i extracted this from some of the remarks. actually, that list comes from
google. googling the term paranoia. these are the textbook classic clinical syndromes of the paranoid personality. i was astounded. there were none there that i would've said that is clearly not -- clearly doesn't belong. so, if pakistan is, as we had come at a crisis thing and others by the way, other labels it's been called a national security state. it has been called an insecurity state. lately it has been called a hard country. do we also have to say that the paranoid state, but go further than that and say it's a
paranoid society? because that is what we're really talking about here. it's not just a matter of the elite in iraq. we are talking about some game, which is far more pervasive and deeper into sa say the political culture. now, is this fair? is it fair to throw around terms like this? after all, individuals are not nations. what is said and done in the interest of the state obviously can sound very rational. i don't mean to demean pakistan. i do need to understand it. now all so they are individuals are clearly far away from us and pakistan. individuals who have shown enormous scourging being the voice of sanity, that they are
embattled and that's why they were here today. it's not peculiar to pakistan. other countries have experienced periods of paranoia, including this country. but this seems to be some a more resilient about what we're talking about impact and. and it doesn't mean that everything is being said again he means is irrational. but if you look at the assumptions on which this dialogue often occurs, you find that those are indeed nonrational. and i could go on here and just a manichaean part 2 is also an erring in the belief that while the world is hostile, there is some figures out there who can
deliver us the good against evil. i don't have time to develop that notion. let me now conclude by saying, so what is the value in using these terms? can better help us understand here what to do? let's go back to the textbook and see what the textbook suggests. if the first of all that it's curable, but it is manageable. it says there are no single therapies for formularies have political policies, which is somehow going to change things, but there are no therapies, which as such can work. it says, don't get angry.
it says, don't that in a threatening manner because it only exacerbates the symptoms. don't expect that the individual is going to understand its problems. so, finally then, where is the application? you know, it is easy to deal with this if you want to break the relationship. you move on. you have no interaction. but if that relationship needs to be preserved, if it is of interest preserving, then we have to go back again to what is suggested about how you ultimately manage it.
and you manage it as the textbook tells us, clinical textbook, with regular interaction. yes, engagement. that is the management therapy that's recommended. and in interstate terms, that means diplomacy. with keeping in mind the limitations. entrust it turns, it means democracy. both of these are processes. note that these don't assume easy short term solutions. so there is here a formula after all. it is not one which is very satisfying. it is not one which answers their problems immediately.
but again, if it is worth preserving, it is what we've got to work with. i will now turn the panel back to the crisis at hand. but i thought that this was perhaps useful to understand that it is far bigger than just the immediate events that we are confronting. >> thank you, marvin. our next speaker is dr. christine thayer, assistant professor at georgetown. dr. phair has written on everything from politics to food and i believe she's going to be a little closer to the political end of this that turned this morning. >> ascot bacon on the brain. alright, so so let's talk very brief, but let's put it in some
structural context because it is very important understanding where hussein haqqani is and what it to pakistan. we now know about the dubious character in a stem ulcers are things that are bizarre and has the credibility of the snake. he extensively delivered a menu to then to chief of the joint staff, admiral mullen, that he actually got the memo, but that is so insane he disregarded into it act upon it. this is allegedly delivered in the aftermath to the death of the money, which i notice a tenuous time for pakistan. i had the privilege of being in pakistan two days after bin laden go back. it's kind of that going to michael jackson's neverland ranch. it is really, really bizarre. so i was actually going on vis-à-vis the army thinking, you know, will be left for historians decide. the memo alleged that hit you with a person which i did not share in the memo requested that
the united its government intervened to help at the army back in its place. in exchange for doing so, the author's memo promised would be civilian control and pursue our policy is what, nuclear proliferation as long groups like lashkar-e-taiba. pakistan would behave as this constitution as it tells it to. so what very few people have had the sort of sense to saying is even if this memo was authored by this government, it's hardly treason. it simply articulating and requesting the united states to reinforce the constitutional structure that pakistan has. and by the way, it's not the first, last or only time that some pakistani official assessed the u.s. government to get involved in pakistan's internal affairs of the first of which i believe was pakistan's first premiere, when he said if the
americans had hoped the pakistan army, he wouldn't even raise an army. but somehow that is not then. so this man though, provided it was real and authored by a pakistani official at the first laugh and not the only time to the army howl when the sheriff came here with this handout and asking for a check and a bunch of other stuff. let's put this in context. this is not unique in any way, shape or form. the pakistan supreme court dashed out of the supreme court could involve? but is a need for preceding the face is hussein haqqani and others involved? for those of you been watching pakistan for the last several years, the supreme court has been characterized as independent. i think that is a grotesque miscarriage is a shame. it is very interventionist. it is activist. it has powers that are supreme court does not have. so it can actually take up an issue if it thinks it is of public importance. we can question whether the
issues it takes up our public importance or the personal importance of the supreme court justice in question. so that's a different debate i don't want to go into here. or this particular case came to be as another interpretation for pakistan's constitution, that anyone can petition the highest court, which ordinarily is the highest court of appeals, the court of last resort if the issue pertains to a fundamental deprivation of human rights. and so, under this clause, this provision a the supreme court, the washer reads who claims he is a democrat says that this man though in fact violate this fundamental rate to liberties and it therefore is the subject of the supreme court. the first ruling the supreme court engage in is whether or not the petition would maintainable. having concluded that it was maintainable, and it's ordered a
judicial collection of judges to rule within four weeks on the dispensation of the memo. where did it come from and who wrote it? now, what needs a particularly curious, but also invidious is whether or not the hussein haqqani lawyers simply argue with that maintainable. that was obviously lost. but what makes a particular the invidious is that hussein himself is not being tried. that is not what the supreme court was evaluating because there have been no charges filed in any other lower court, which has been all judicial proceedings. so what this process has allowed the supreme court, working of this i believe not explicit collusion with the military in a parallel simpatico with the military has allowed various pieces of so-called evidence, which have not been terrifically validated. there's been no custodial change
, no custodial change for the evidence to be entered into the supreme court, put into affidavits and wandered on its website. so for example, let's take a very concrete issue. the black air exchanges. there has been no forensic evaluation of the authenticity of those blackberry changes. mr. joss has a series of exchanges. he writes necessitated, discs explained that and this is how the blackberry exchange connects to the nano. in any actual court of law, it wouldn't even be considered, right? there's no forensic evidence validating the black air exchanges, much less to the memo. but because there have been no charges filed, there is the requirement to do so. this also means that mr. haqqani cannot file -- was not allowed to file a counter narrative. actually this is how i explain this particular but very
message. i never deny the black very messages or at least the most recent communication does not suggest that. however, all of this information is being turned in pakistan's public domain, right? so in other words, hussein haqqani has been labeled as a traitor. there is no actual evidence that it's been forensically validated, presented before the court. so another, this is really trioval by a media circus. i want to take on the other kenard pakistan, the so-called free by print media. just the freest and most vibrant media you can buy a disa can influence. i know countless journalists who are speaking on the isi payroll. anyone who knows pakistani journalist fullback to set. so it is not that it is entirely free press and also so inches i might have his own views about the end to which this process is
entirely free. it's really important that we understand what's actually going on here. i think it's out in its something i wrote last year, where i was talking about the role of the supreme court and manipulating pakistan's democracy going back over a year ago. in my view, while many others are concerned because they worked with in a variety of capacities, are friends with former ambassador hussein haqqani, this is in my view a slow-moving coup. this is a way in which the military has at its disposal to try to bring down the government house. well, here's my interpretation. there are some similarities with the mysterious father. they took the head of the security and coerce them into becoming what is called an approver and pakistani parliament. a guest in our parliaments would
be basically a witness for the state. so one interpretation would haqqani last week, this is his interpretation that they are trying to use this proceeding to scare the be jesus out of him or put the fear in him, whatever your metaphor is, to get him to give up the good of zardari to bring this government down. so this is a well-worn playbook but this military had at his disposal. i want to also emphasize before i wrap it up, that this is the second judicial mechanism that this court is using to go after the government. you may have remembered when part of the u.s. effort of the shards legitimacy through the ballot box with benazir bhutto, that order among other things drop various corruption charges against ppp members have not pln cannot badly enough that was the
purpose of it. they paved the way for her to come back in to contest elections. obviously the plan of the shari legitimacy through her electronic jc failed when she was killed and that so we ended up with zardari. but the supreme court had been very dubious to begin with. and when zardari became president, the supreme court raised the possibility that he would vacate. you may remember one of the early rose after the election between the pml and in the ppp, when the wake of the election formed a coalition with the restoration supreme court justice that musharraf actually had jettisoned and that was child. so this row between chowdhury of zardari knauss goes back several years. we should not see this as some sort of new phenomenon, but this particular track with hussein haqqani and memo gate really relates as well to the vacation
of the nrl. so in conclusion, while we all care about hussein haqqani, i want to emphasize that the is not simply about the particular personal safety or lack thereof of mr. haqqani, but it's also about pakistan's institution. the only pakistan's democratic institutions can diversify is if there are multiple constitutionally mandated changes the power that had been at the ballot box, right? using judicial dniester trade you grow this government is not in anyone's benefit. i want to very briefly and peered from the blast, by the nro? why they're coming back now in the actually vacated two years ago? if you're the army, they didn't want a washer reef around. none of the relationship with the army ever know the army is not very fond of zardari. it's not as if you had palatable action. it's not a coincidence over the
last six days really changed in significant ways. he went from a political joke to actually been a political force. he's been able to -- i'm sorry i'm jetlagged. i just came back from pakistan. he was able to persuade partial with the boys on a par at of writing politicians to join his party and bring with them the vote. they also have to vacate their seats in the national assembly with this is that the growth of bringing out early elections. so in answering the question why the nro are bringing brought back now, the army now has a chance. if we care about pakistan's democracy as well as hussein haqqani, the u.s. government is to be much more vocal than it has been. we work with partners to send a clear message that we recognize this is a coup albeit by a judicial hue. thank you. [applause] >> thank you, christine. our next speaker is stephen
cohen of workings institution. and before that, the university of illinois urbana-champaign, steven and i are now colleagues that hurricanes and he has in particular been a watcher of pakistan army, but i believe what he has to say is going to go beyond that. steve. >> let me say that perkins is pleased to cosponsor this event and i'm pleased to participate in it. i am happy that it's taking place in hunt thing. here's a guy when i was a graduate student i attended lectures by herman kahn. in her meant was the futurologists. he was one of the first big ten futurologists and dates, the disinterest has nuclear weapons. he wrote a book which describes among other things world war iii to seven. he wrote in a chapter on both
the survivors envy the dead? the answer was no. in the case of a lurch thermonuclear war it was quite remarkable person. but we are in the same position that herman con was. our imagination knows no limits, but a very hard to say what will actually happen. humans are blessed or cursed with the ability to look at and imagine the future. we're also cursed by inability to know what the future will be. so this is an exercise in futurology and i just edited the future of pakistan. i want to look at the pakistan crisis state, state marinated in crisis. powell is going to look at what the alternative features for pakistan and the ratings of others. ambassador jack matlock, former ambassador of the soviet union once said -- i'm paraphrasing, he wasn't sure what happened to the soviet union. what did happen, you would explain why it was inevitable.
so we could come here a couple months from now and hey, it was inevitable this happened or that have been. a large dose of humility is required for things like pakistan are nuclear war for that matter. so let's talk about pakistan today and tomorrow. i think the present crisis began with the 1999 were sure if true, but really from 1965 onward, pakistan has been in crisis. after bechard's failure or collapse as a leader, the hope for pakistan gave way to two d. pessimism and a lot of the rates about pakistan after it raised a deep pessimism. i detect in this literature or breath in areas about the future of pakistan. the first one is not the most popular, but the muddling through scenario. muddling through is not simply a slang term. it is actually a term and read a article about the science of muddling through. muddling through happens when
you're not sure what to do. you sort of do a lot of things have become true. it's a policy of hope. any argument is pakistan is in trouble, but the forces of unity and coherence will ensure it will not dramatically change soon. despite chaos, it is best to assume stability. this is the view of jonathan paris to study out of london about the future of pakistan and the hurd state. in our book on the future of pakistan, but our book, at least a chapter olympics ahead five years and so it's muddling through with a shorter timeframe. now there's two scenario smuggling their variations. when it's muddling through pass and one is mr. manes. muddling through class is best epitomized by malia lodi former ambassador to the united states be known journalists. and i called this because syndrome. and malia argues in a collection of essays, many who make other
arguments, that of pakistan could only reform its economy, if only civil relations could be normalized, if only the terrorists could be changed, if only this could have been unaware that could have been. it is the operative word here. after that, there's a bright prospect for pakistan. and no one has or the research and taunted his people, its location. pakistan had a lot of resources and assets, but clearly it's underperformed in many ways. so the muddling through positive scenario is if all of these things have been when we have been meeting to discuss our book, for some discussion they rule out the term is. in fact, a conversation about pakistan should not put the word s. you know, if this happens, of course benefit glorious bid and we should ban the word if any conversations. the muddling through scenario is different and is characterized by john schmidt's recent book on
the unraveling of pakistan are some of persuade those ratings, a book of his m1 article colored armageddon and pakistan, referring to the america's pakistan. our new but that is just coming out by salman rushdie, pakistan on the brain. that's a second book i've seen that that title. the order pakistan may not muddle through for one particular region and all three authors are concerned with this region. it will overcome good intentions and good abilities and good people and try pakistan is not to destruction, at least to worsen were scenarios. all the doctors pick on the islamist that there is a critical variable in a negative future for pakistan. they don't predict catastrophe, but they're less optimistic. certainly malia's od and others about what happens if muddling through doesn't work. there's another option, the one my favorite i don't have a good title, but i caught the serial
transformation of pakistan. nothing massive is likely to occur. frankly if it was a coup d'état i don't think he would change things at all. they think pakistan will continue the way it is going. pakistan is what aristotle called a mixed constitution. part democracy and part military talk or see. so these kind of state hard to predict. i think what is likely to happen and what is happening in pakistan is priced at pakistan are changing in different ways. i won't go into the details. it spelled out in a chapter, but it's a different pakistan and one ambassador schieffer professor wayne balmer in the 1970s. pakistan is changing. changing bits and pieces which are not always pleasant and someone exchanging for the good. now, to conclude, pakistan is a crisis state or crises were sequentially crazy. why is this the case?
is a paradoxical state. a paradox is a statement or proposition that seems so contradictory or absurd that may express a truth. i think there are many paradoxes, at least three think are important for the discussion. first is domestic local paradox. as i said, aristotle talks about mixed constitution, pakistan's part democracy, you can't tell at any given moment what kind of stay pakistan is. that's an asset of pakistan being a 2 million state and it's hard for their countries to with pakistan. it behaves like neither all the time and attention which pakistan is dealing with and give a moment. second is a nuclear paradox. pakistan might north korea is too nuclear to fail. get nuclear weapons to nothing to advance the economy deal with the many domestic problems in possession important to others in pakistan subpopulation, but that's all they do.
it doesn't bring pakistan many advantages. i do agree with a.q. khan that having nuclear weapons have kept him inside of pakistan, but indians might have been interested in invading anyways. the sum of herman thomas were scenarios could come true of pakistan follows an erratic nuclear event. he tacked about were between americans and soviets and massive global nuclear exchange. he also wrote about catalytic worm were the trigger after a war between major nuclear states. curating pakistan with india and china is something that deserves further study. and of course, the new issue of nuclear terrorism. thirdly, if their paradox in relations with other major powers is deeply problematic. it is america's most dangerous ally. india-pakistan relations are better than u.s.-pakistan relations. it professes to be a democracy, this the most important allies that the people's republic of china, north korea and saudi
arabia. so pakistan's identity i think margaret hinted that this is problematic. but i'm confident there are enough good people in pakistan. by producing a commie at the top of this list, could manage this if they were given the opportunity to do so. so crises will continue. the fact the military may take over does not trouble me. what troubles me the most is the deeper underlying transformation of pakistan going on right in front of her eyes. i have some comments, but all deliver this after. lisa, thank you. >> well, thank you very much, steve. he forwarded to our final speaker, i reminded that professor thayer has to leave at 11 idea caught. so i thought that if there were one or two questions that specifically catch on the legal and judicial issues that she raised, i would take them now and then we will turn to our final panelists.
could i remind you if you're going to ask a question to identify yourselves and your affiliation even if i know you. and to wait for the mic so that our watchers on c-span can also hear your question. the question down here and for. wait for the mic. >> thank you. and dr. in a pot show. christine has a very good hand around the affairs. the haqqani case i think he is at it more than anyone else. in the case of the judiciary when he was opposing the different parties that the prime minister, my achievement with haqqani together her best friend
and advisor to that time. and then he was sequentially advisor to marry if she could use a prime minister. the judiciary if anybody wants to help haqqani, i think one needs to have a good attorney, one who knows international law. and i think it would be good for him. if that can be done, certainly one thing i assure you is there is not one single individual in the future of democracy or pakistan knife. >> thank you. >> if there's another question, i'll take it. right there in the third row. >> professor christine fair -- >> could you identify yourself?
>> i am a freelance writer from baluchistan. i'd like to please ask you what mr. hussein haqqani face says? may i please ask you, is this that instead of the gender who are hiding bin laden were being ousted ambassador was trying to control islamic is then he fears to solve this problem. does that clearly show pakistan? >> read these together. i'm not going to accept the premise of that question because those are premises that i don't personally cut. after that clearly to what is the case with hussein haqqani. no sar, his first information report, charges have been filed against him.
without any charters had come he would back. his passport was seized in lives under list under house arrest. the irony as he is experiencing fundamental of liberty. thank you for pointing out that the relationship between the current supreme court justice goes way back because i was sure wreath was his prank champion and the fact that was the reason why the coalition between the plm and the ppp was over at the disposition of the supreme court justice and disagreement between sharif and zardari. i want to point something out that i find this is pakistan's judicial system. the supreme court is very different in that it has them pushing the parameter of what it is allowed to do. it gets away with it because it's the only arbiter of what it does. but seriously, while hussein is not subject to charges and yet this has become oddly enough almost a proxy discussion about hussein committing treason,
jasmine sewer and i don't owe us -- i don't know how much this has been picked to appear. another one of the things that was said in its various exchanges that were published, was that the director general of the isi, general pasha went to the golf seeking information. in fact, at least one journalist wrote about this and became quite explosive in pakistan and he subsequently no longer in pakistan. what is curious if pasha did do that, that is treason under article vi of the constitution, right? there was this much vaulted independent judiciary that is too remote to concerns that isn't taken up the question of pasha going to the gold. that is very clearly an article vi high treason offense if it's true. so the point that she made about the relationship is plm and ppp and the supreme court justice is
very much at the core of what is going on. the court has not exercised similar interest investigating whether or not pasha was part of an act of high treason should cast a lot of dubai duty over judicial proceedings that are ongoing. >> i have one more question for professor fair, which has been submitted on twitter. >> it's not from you, is it quiet in that i don't know that the tweeter is identified. can the swiss case to which the prime minister is being pressed by the supreme court to reopen be reopened even if a letter submitted? >> all right, i don't know. but i have absolutely no idea how this works. i don't notice statutes of limitations with this case, the one other thing to note is that the supreme -- okay look, zardari we all know is notorious
for coming know, extra market capitalization. and there have been -- [laughter] when i was a student, he was mr. 10%. the there have been a number of churches against him. and he spent some time in jail. and part of the national reconciliation order was dropping those charges. in 2009, supreme court has headed out for zardari for quite some time, both personally and to support the supreme court justice received vacated that, which had two implications. one, he contested the legality of the current ppp ppp officeholders who have cases pending against them in the first instant. for example, folks within an office contested election, the entire viability of their election could be potentially invalidated. obviously zardari himself becomes vulnerable to charges but then pakistan.
the supreme court said something interesting again pushing the envelope of what it can do because it says it can. it has told president zardari that he is not automatically going to enjoy immunity from prosecution, that he actually has to request immunity. obviously making a statement, it's clear the court may not grant him immunity. this is part of the evolving set of actions that the supreme court has taken, which i think clearly identify it has been interventionist and actively colluding with those that have issues with the government to bring it down. >> thank you. and we will now move to our final speaker, lisa curtis of the heritage foundation. lisa has worked in the executive ranks of the government and also on capitol hill, so she has a very broad respect and from which to address her topic, which i believe is the
implications of all of this for u.s. policy. lisa. >> thank you all for coming today. the heritage foundation also is very pleased and proud to cosponsor this event today. so i was asked to look at u.s. policy options in dealing with pakistan, the crisis state. clearly that perpetual instability in the country, this escalating internal power struggle between civilian and military leadership makes it really difficult for the u.s. to develop a coherent policy towards pakistan. i think we've seen that with a response to the memo gate affair. the memo gate affair broke just before our thanksgiving holiday and right after our holiday, you have to strike on november 26th against the pakistani soldiers. this is the nato strike that killed 24 pakistani soldiers and said u.s.-pakistan relations into a tailspin. so this certainly has complicated how the u.s. has
responded to what is happening to hussein haqqani. on two occasions, the state department has spoken out. i agree with chris that this is not quite enough, but let me just point out first of all they spoke out when my sewer jobs claimed the zardari government was pretty notified or knew about the bin laden before it happened. thankfully, the state department corrected the record and say no pakistani officials were informed ahead of time, before the bin laden operations. second was last friday. as you know, a group of guys, including everybody at this table and several others who follow pakistan closely wrote a letter to the administration, calling on the administration to ensure the person that hussein haqqani whisper checked it. we had reason to believe his life might have been in danger and also that he was accorded due process of law.
we are pleased as they were in the process of drafting a letter, the state department did speak out in support of fair and transparent treatment of hussein haqqani. but aside from this, the u.s. has remained relatively quiet. i think they have their reasons for this. one is what i explained if nato airstrike, which is complicated to military relationship and certainly the u.s., you know, has been adjusted having good relations with the à la terry for fighting terrorism. but the u.s. also has a strong interest in a democracy succeeded pakistan. and i believe the zardari government is forced out, whether it be through the supreme court that looks like the army is working in tandem with the supreme court, albeit behind the scenes, but at the zardari government is forced out before its term is over, this is going to send a negative signal
to civilian democracy is really not taken root in pakistan and the army still wields inappropriate control within the system. and even now, you know, zardari government may not be perfect, it's an elected government and we need to keep that in mind. boettcher mention the fact that the crisis in the civil military relationship is to start seeing all of the leaders from dealing with some very serious problems, whether it be the economic folly is attacked in the country for the ongoing terrorist attacks which a site couple more serious terrorist attack. all terrorist attacks are serious in that matter, in the last couple of days. i don't want to get in the details of the case because chris did an excellent job in doing that. i just want to point out that i've been disappointed with the pakistani media and not exploring more, who is my sewer jobs because the whole case, involving very serious issues
revolved around the claims of one individual who, as chris noted has a certain transportation for exaggerating his role, as it comes to u.s. foreign policy issues. but i also want to point out because this happen actually when i was a diplomat in pakistan was 94, 96 in the first time in that hussein haqqani, his information minister under benazir bhutto's government at the time. what happened in 1995 as he apparently went to benazir bhutto with information about a potential criminals to county kernels to be implanted in the army. now, benazir bhutto was far enough to call it tuition to take that information can go straight to the chief of army staff. now, we can ask, why didn't my sewer jobs go to this army chief
of staff at this too was apparently paid patched within the military. so i guess i would just say that it seems that involved sowing seeds of dementia and that seems to be one that we can say for sure about him. >> so what are the u.s. options here in dealing with pakistan? and speaking more broadly not just the memo gate issue but that of course is part of it. one option is the cooling down scenario. and this is where each country takes a step back from the relationship, reassesses, maybe the u.s. reduces aids and maybe pakistan holds documents cooperation, its counterterrorism operation. certainly there's no strategic dialogue. there is no alliance as such, but perhaps some cooperation on overlapping interests and not a complete cut us of u.s. assistance. now the only problem with this scenario is pakistan itself is
not cooling down. pakistan poses to the region to analog. extremists continue to wield influence of society. i think ambassador schaffer talked about this here and his assassination, which is indicative of the trend, of not rising extremism in the country, and immobility of people opposed to extremism able to raise their voices. you still have links between the lashkar-e-taiba groups and military. you have classes which actually opened doors for jihad is to come in and exploit these problems. and just to add to the complications, pakistan is the fastest-growing nuclear power in the world today. ..
but the problem is pakistan a self is under threat from extremism. pakistani leaders are indirectly promoting this dillinger is ideology through through physical support to groups that adhere to it. but at the same time most military officers are disdainful of the extremist ideology and they don't want their children to grow up in a society that's dominated by it. so how do you deal with a state institution that is willing to take risk to its own country's stability and willing to provide support to violent groups than is actually a ultimately does not control? and i would cause that trying to formulate a policy toward such an institution that is both fighting and fasuba hitting terrorism is next to impossible. so i have two minutes to talk about the last and what i believe is probably the most
sensible u.s. policy approach and this is what i will call principled flexible approach. there is no grand strategy, there's no containment, there is no engagement, just for engagement sake, but there are a few broad principles of the u.s. plays down the them allows itself the flexibility to evolve to the m predictable events in pakistan, so some of the principles that i think would be important is one, standing in for the civilian democracy but not getting involved in the details of the power that is happening. that is the u.s. should be making statements standing in for the importance of democracy but at the same time not try to actually shift the power balance within the country in one direction or the other. i think this almost always backfires when this is tried. the second principle is to accept that pakistan doesn't
share the same priority with regard to the terrorism issue and this would lead to not providing pakistan undue influence in afghanistan, sort of recognizing that we have different goals, and for pakistan to participate in the reconciliation process in afghanistan they would have to demonstrate that they are willing to squeeze insurgency and use the leverage that they do have with the afghan taliban to bring them to the table to compromise. the third would be conditioning aid to pakistan but not cutting off. we are already moving in that direction. the congress recently passed legislation which would condition all aid to pakistan on meeting certain benchmarks so we are already moving in that direction. some people say why why would you condition the aid it isn't going to work it isn't going to change pakistan's strategic calculations.
but i would say that even if it doesn't change their calculation, at least the u.s. can stop throwing good money after bad. that this is u.s. resources and that we should be deciding how to spend them based on what the u.s. is actually seeing in return. fourth would be working with partners to help shape pakistani behavior. this would start with the nato partners which is already happening to some degree but would also have to involve pakistan and pakistan is certainly played up its relationship with china in the aftermath. but i think china's concerns are the future stability will limit to this extent to which it would want to bail pakistan out economically and also opens a door for the u.s. to potentially be able to seek cooperation with china convincing pakistan to
take a more comprehensive view against terrorism and extremism in the country. saudi arabia also would be very important country for the u.s. to reach out if saudi arabia is limited in the influence in afghanistan so exciting arabia would have to be convinced that the u.s. would have a long-term presence in the commitment in afghanistan before it would seriously work with the u.s. trying to prevail on pakistan to crack down on the taliban. i'm going to end there. thank you very much for your attention. >> thank you lisa and to all the panelists. [applause] >> and now we will take questions. if i call on you and i will try to keep track of the hands as i see them if a call when you please identify yourself and your affiliation and please wait for the microphone.
the first hand i saw was in the middle. one this is open to the panel. one is the timing. number two why exactly, and third is why they were given extensions which was a violation of the most democracies and armed forces. >> anybody want to take those? >> i think the answer to the first two were murky.
why now? well, because they released the letter or gave an interview about his letter why did he do it at all and at this time that's the question to which there isn't a clear answer. there are lots of suspicions, but on the face of it since the same charges were that are being leveled against the same could in principle have been leveled against him. the motivation for that has to lie in stuff that we don't really know about can only speculate on. why were the two officers given extensions? i have to assume it was because the government of pakistan and the army leadership wanted things to come out that way. there's lots of speculation about the u.s. having encouraged the extension. i have no knowledge of that.
i've always felt that the u.s. ought to stay out of decisions of that sort, but i can't tell you whether that is in fact how it played out this time. front row, sir. >> i wanted to ask a couple questions that proposed by the remarks but really belong to the panel as a whole. the first has to do with the question of internal study whether one can make any kind of long-term relationship given that. and it seems to me from what is said the supreme court has added a whole new element of problems
at this point. in the past we have the situation where it was a struggle between the civilian government and the military but there was an order between them. the courses claim in the way that that will but was heralded a few years ago for having stood up to musharraf. now it seems to be undermining the credit it earned during that crisis of the two or three years ago. so that seems to remove one final element of in the institutions which provide for the adjudication internally. the second thing has to do with the policy approach. generally speaking. one could have a strategic
relationship with pakistan or that we could have one or a transactional one or the position of the ambassador to improve things between the two countries was to try to go up to the strategic level and to address some of the issues of paranoia referred to. now it seems as if we are looking at only the transactional one and that the question is between our military and their military essentially. but our military seems to have also lost its patience with their military and i think in particular -- >> can you get to your question, please? >> the remarks of admiral mullen so i wonder whether we are moving to, whether there is a kind of motion were towards a
kind of disengagement that comes precisely to that part of our government that has been most engaged in pakistan, the pakistani government. >> i think the u.s. tried to have a strategic relationship with pakistan when the obama administration came a few years ago they started this strategic dialogue to handle a host of issues that were also of concern to pakistan that the u.s. also focused only on the counterterrorism issue it just didn't seem to pan out as we've been forced into the transactional relationship because the dialogue didn't work out and you can argue why that happened with the strike whether pakistan continues to support the afghan taliban i'm sure there are numerous reasons. but i would just say that if pakistan feels that it needs to force the u.s. to choose between india and pakistan to have a
strategic relationship it is not going to happen. i think there has to be an understanding that yes the u.s. would like a strategic partnership or relationship with pakistan, but it's certainly not going to choose between the u.s. relationship is important and will remain so. so my fear is that pakistan uses it as a litmus test the u.s. relationship with india and that i think would be to pakistan's detriment. i think the relationship can be brought based, but the u.s. has clear strategic interest that the moment seems to diverge with pakistan for the transactional relationship. >> i actually don't buy the distinction between the strategic and transactional relationship. we've been trying not just in the obama administration came in, but going back to the 1950's and both sides have been trying
to portray our relationship with pakistan as a wall-to-wall strategic engagement with what he might call being a little bit flippant of the big strategic a bear hug with. that has been a great talking point and a great rallying cry for high-level meetings. it has twice already come across the basic difference in strategic interest between the united states and pakistan. if you count the current strategic relationship from the 2001, we are of the east three or four years into the program and the difference in u.s. and pakistan and strategic interest has reared its head again and has interfered again in the genuine strategic cooperation.
i don't think that identifying the the narrow interest to the common and pursuing them is a bad thing. you may give it the name transactional and intended that as an insult. but actually of the united states and pakistan could work seriously towards more limited interest we would both be better off, and i think that is where the u.s. policy needs to be going. in a sense it may have been doing in that direction although the talking points are still strategic relationship there is in fact a recognition that the largest and most ambitious version of that moment. >> can i just say i think until relatively recently certainly last year it was all about building trust, and the idea was
what we had to do was to demonstrate that there was more than simply a relationship based on a need for pakistan to deal with our problems with terrorism, al qaeda, afghanistan , and there were as has been suggested some real moves on our part to move in that direction. the events of the past year demonstrated what a few things could the we really didn't share that many strategic interests in common, that there were some basic divergence is between what pakistan salles as is in its interest and our interest. so what we are left with now as i think is being suggested here we are left now with finding those common denominators on
which we still have a critical convergence. there are not very many at this point, but they remained critical enough that both sides do not want to see a rupture of the relationship, and it's by necessity going to be as you characterize it more transactional because the strategic and applied a far more comprehensive set of common interests than as i suggest we now find possible. >> did you want to speak to this point? you get the full treatment. >> to brief points on policy. first, it's my understanding that there is no formal written agreement between the united states and pakistan on any issue. what we have is american legislation which is interpreted differently by americans and pakistan is the this administration never put on
paper exactly what the american obligation can be and vice versa. therefore if you talk about trust you talk about trust in the context that is not written we can have trust also need to have verification. second on the policy issue i would add to the list of countries we should be consulting with india and its relations with pakistan are better than ours and india has a vital interest, pakistan more vital than we as china, so i think that in fact the pakistan army may want to see the relationship. as far as i know the shipments to afghanistan have not been renewed. if that is true then we speak of our withdrawal from afghanistan which when they argue hasn't been pakistan's problems the proposition will be tested very soon if we pull off afghanistan. we will see how they handle the taliban. stegano court issue to read briefly, i think she would
question whether in fact they are an arbitrator, certainly in honest arbitrator and would characterize it more as a surge for the military so that whereas it does serve indirectly what to implement what the military interests are never the less it still has to be viewed as an independent in the sense that it acts in a fashion which suggests independence, but in fact reflects far more i don't want to say savitt instructions but certainly an understanding about what is in the military interest. >> i have a couple of people on my list that i would like first to pass on one of the questions we have received from twitter. as many of you know, one-third of the pakistan senate is going to be elected in march. this is an election that takes place in the state assembly's on
the national election and the questioner asks what will be the implications of a ppp victory in the senatorial election and i think the question we ought to be answering as well is duties mean? would any of my colleagues on the panel like to tackle that one? >> i think the implication is that the ppp does very well in the elections and that will help them in the general elections that are scheduled for next year, a year from now. but i think again it comes up to the timing. someone asked about the timing and my first thought was the timing of the issue we have to ask he is the one before the article in "the new york times" that brought up the case. but we are talking about timing and why two years after the fact
of a sudden the supreme court now is threatening to disqualify the prime minister for not following through with what the supreme court ordered to banish and move forward with corruption charges against presidents ra, sallai sees suspicious timing of the way around here and so again raises the question of why is this happening now? we only have a year to go until the election. it's just my feeling that nothing would do more to kind of help solidify the democracy in pakistan than that to allow the government to run its full course. it just seems to be something that has included pakistan throughout its history. so i think that all of these issues perhaps are related and i want to come back to the importance of respecting the
electoral, and that is the best thing if we are talking about preventing the future crisis in pakistan and if they want to be prosperous powerful state it talks about retaining the regional position. the best we pakistan can retain its regional position is by strengthening democracy, strengthening its own economy. >> for the next question would for the microphone, please. >> i'm with the american enterprise institute and i have a question about pakistan liberals. he alluded to some thoughts here he was called more than a year ago and we had people on the streets of pakistan not so long ago celebrating the anniversary of his murder but at the same time pakistan is striking in some ways because there's no shortage of intellectuals,
writers and so on who in fact i think haqqani would be preeminent examples of that would be willing to challenge the dominant narrative and very often at great risk to themselves and sort of taking positions that go against fundamentalism or intolerance brawley. so i want to get your sense of how strong is pakistan today compared to where they were say four or five years ago and where do you see the trend line heading? >> i use the word in my remarks earlier but i am baffled and i think that that does describe where they are at this point. nobody doubts as you suggest that they have been very courageous individuals who've spoken up and in fact, you know, in some ways you gotten more criticism in pakistan than you get in india certainly with
regards to foreign policy. there's more of a dialogue that goes on in pakistan. but those who think that somehow the saviors year are going to come from civil society and there are many progressives who see what was referred to earlier who see the civil society as somehow being able with a youth boesh that somehow this is going to create a constituency here which is -- which can counter the islamic constituency for example. i don't see the evidence of this there is one real problem as i see it and that is that class that we are talking about, the danger is they are losing faith in the system. this is what happened in iran in the 1970's when the middle
class, the educated middle class lost faith in the system many pakistanis in that group had 1 foot inside pakistan, 1 foot outside pakistan. and that strikes me as a -- as something which could very well be overwhelmed by populist forces and islamist forces. so i think in answer to your question is they are there and we ought to take note of them, but it's going to have to come from below as well as from a -- of.
>> a couple observations and a small question. we talked about this engagement inside pakistan, and by any analyst now we've settle so disengagement is not an option as a solution. both these countries need each other and their friendship many times higher bids on those things and -- >> can you pull the microphone a little bit closer. estimate in the relationship but somehow they have survived and even now while we are talking here the highest level of the army are still engaged in these. it's important to really bring stability in that region because it is pakistan itself and the stability in pakistan, india and afghanistan is interdependent.
the second thing mention was about pakistan's obsession they are not taking the relationship. i think things have changed with time since the u.s. relationship with pakistan is independent of relations of usa and india and in the seeley pakistan's relationships with the usa is independent of pakistan relationship in china both friendships, those relationships are critical and important, and the question is regarding the kutz i am somewhat amazed that many people of met him i also met him many times. but how could such a man have access to the highest power in america in the national security and then also have access -- how
is that? >> can i see something else? i can't speak to the access that he has in pakistan but i do feel i have something to say about here in the u.s. because i have not followed the case to the detail that chris has but he's made claims he met with officials perhaps even in the blackberry messages that he has handed over, and in my conversations with u.s. officials he never met in the u.s. officials. the only contact was with general jones when general jones was not in his position as the national security adviser he had already retired from that position. you know, we can speculate on why general jones decided to pass this memo on to the admiral.
i personally don't think was a great decision, but you know, at the same time he filed his affidavit and he has said that he had no belief that was drafted by haqqani. he thought this was a personal effort, so i think the problem here is he is painting the picture that he had all this access in the quarters of the power of the u.s. but if you talk to people he did not but because the u.s. government isn't going to slander somebody or pronounced something that isn't asked of them the u.s. government hasn't been able to get all their side of the story to the extent that i think would be more helpful and that's why i was saying i thought was very helpful when they clarified the claim and that our government knew before it happened and the government was very clear no pakistanis were informed before
>> that's the first point, and it's very important. second, the u.s. government, for very good reason, does not want to make itself the story in this case. as far as the action is concerned, admiral mull len has confirmed -- mullen has confirmed having received the memo, decided it was not credible, and therefore, decided to do nothing about it. that, essentially, 1 the only action taken by the u.s. government with the poisonous state of u.s.-packistan relations at the moment, they were not doing any favors by raising its profile and becoming to any greater extent than is already inevitable, a part of the story, so you're not going to see a u.s. government position paper on the
credibility or otherwise. >> a footnote, his role model is from a woody allen movie and they were in all critical american or world events for his whole life. it's a great film. maybe that's the vision of himself. [laughter] >> a second footnote, but a little different order i suspect. he has had minimal effectiveness from everything we've noted. he is a blow hard. he's all the things you've heard, but my information is that he has been used in the past as an em --
that's not all fictitious. people in high places have turned to him seeking his assistance, so it's not entirely that he's in an emergency figure here. why individuals go back to him given his reputation is, for me, the hard thing to understand. >> okay. we have one last question from the gentleman in the third row. >> i work for the leonard scholars and for different think tanks. i'm a freelance writer. i would please like to ask you in pakistan, and ayman al-zawahiri is still there,
supported and hidden by the pakistan military. i would please like to ask the u.s. scholars when are you going to be brutally frank and call pakistan a rogue state? >> you know, one of the messages from the panel, and it could be an unsatisfying message, is the tremendous dilemma that the united states faces in trying to work with and around pakistan on very important policy issues, this is not new. this is something that we have dealt with for at least 50 years, but it's at more of an acute stage now than it was. both countries need each other, and that is for better or for
worse, still true. the united states is probably not going to come out and say pakistan is the rogue state. we'll have nothing to do with it with all the reasons just mentioned. what the united states is trying to do is to pursue its interests. that's what countries do. these interests are some of them in line with what the government of pakistan seeks and some not. that's where it's difficult. pakistan will pursue interest, and all of what we've been talking about this morning suggests that there is agreement on some of the interests and disagreement on others within pakistan and that they are all caught up in the internal drama of pakistan which unfortunately our friend hussein has also become a pawn. >> one point?
>> yeah. >> i agree with everything said, but i think the only thing that seems certain to me is until the pakistan military leadership develops a clear and more comprehensive policy towards terrorism rather than fighting some and facilitying others that -- facilitating others, that there will be no clarity in u.s.-pakistan relation, and both sides will remain fairly dissatisfied with the relationship. >> i would add -- >> final comments? >> i would supporting terrorism complicates relationships with china, india, and other countries. it's not just the united states. >> marvin, last up. >> it comes back to what pakistan thinks is in its own interests. it's not supporting or choosing among terrorist organizations without reason.
it has, in its own objectives, a sense that some of the organizations do work in its interest, do work to benefit for what it seeks as its strategic regional goals and global goals. until that changes, i think we can expect that pakistan will continue to be selective among good terrorists and good and bad extremist, and it's only when the correlation of forces is such that it recognizes that these elements are a danger to pakistan itself and moves away from the denial of this that i think we'll see a real change in its policies. >> well, with that, let me invite you to join in expressing our thanks to the panel.
>> today, the brookings institution had a day long forum on the economy, jobs, and global competition. participants included john bryson, robert reuben, and members from dupont. this is led by former white house budget director, alice rivlin. >> good morning. we're here today about ideas for strategies of making the u.s. economy more competitive and creating more jobs. we have to start from where we are. where we are is a difficult spot as all of us know. we have to start from a realistic look at why the economy is struggling. why do we have 8.5% unemployment
and a lot higher number if you include all of the people who are either looking for work and have gotten discouraged or who have a job, but would like a better job or would like to work more hours. why has unemployment stayed so high for so long? what is standing in the way of a more rapid recovery? the job of this panel is to focus on why we are where we are and where we might be going. one thing that you may be very glad of is you're not going to hear any political here, no references to all the fault of
the democrats or all the fault of the republicans. you'll hear no politics, but sober analysis of what the situation is and what can be done. that's not to say it won't be controversial. it's a very uncertain situation, and you will hear different views of what is happening and what might happen. to start us off, we have my colleague, one of my favorite colleagues, you can always count on gary to know what the numbers show to have done deeply into subjects like unemployment or unemployment compensation or what really is happening to the distribution of income, what's
happening now that we had welfare reform for ten years. gary applies his considerable skills to those kinds of topic, and he will summarize the background paper of which he and his colleague, adam loony, have written, and which i hope you will read. it is available, and then we'll turn to the ceos of two major, global companies to see how they see the markets and u.s. competitiveness. so, gary, you did what i thought was an excellent job of laying out the current dismal state of the labor market and how we got here. the high unemployment and slow growth since the recession ended that the rescission precipitated the crisis of 2008.
we had stagnant wages for a long time, not a lot of good news in your paper. we've had inadequate consumer demand, and all of this has been especially influenced by the plunge in household net worth as a result of the catastrophe in the housing market, and you and adam have also explored hypothesis about why the economy has not come ruering -- roaring back, so i hope you'll tell us about what you found, and in a few minutes, summarize for those who have nod read the paper -- not read the paper of what you think the situation is and why this is better? >> well, 24 is the first -- this is the first session of the day, so i think it would be worthwhile to talk about what got us to the current fix, and
what's the explay -- explanations why unemployment remained so consistently high over the last 24 months. most everybody in the room recognizes that the great rescission was connected to a big run up in house prices and then a collapse in those prices with fallout, for the financial institutions that held all financial instruments backed by home loans. the spectacular decline in the value of houses which directly hurt consumers' buying power translated into an equally spectacular fall in the value of a lot of the financial products that are backed by home loans, and that collapse, those critical values were off the financial system of the country very near to collapse.
for every action, there's a reaction. the t.a.r.p. legislation played critical roles in keeping that financial catastrophe from occurring, so the financial system at the united states continued to function, but there was at falloff of the financial institutions and all of the institutions that are selling goods and services to the american public. between 2007 and the beginning of 2009, the net worth of u.s. households fell by more than a quarter. that was $18 trillion worth of wealth in the united states measured in today's prices. the stock and bond markets have partly recovered, 10 there has
been a rebound in some asset crisis, but there's still seen a $15 trillion disappearance in the wealth households had before the recession began. there's been no rebound whatsoever in home prices. they fell sharply and they are still very low. now, if households spend about 3% of the value of the assets that they own, the drop, and in that house would translate into consumption falling by about $400 billion a year. that means without the crash in asset prices, the flow of household consumption would be 4% higher than it was in the last quarter. now, a lot of lost wealth was in housing which is a very widely owned asset in the united states, and there's a lot of evidence from the last 20 years that, in fact, households spend
more than 3% of the improvements in wealth that they had in their homes. they may spend as much as 20%, and this suggested household consumption might be $750 billion higher without the so much household wealth, but whatever you refer, the house price collapsed, and the ensuing asset price, the decline removed a lot of consumer spending power in the economy. the drop in consumer spending can be expected to reduce demand for workers which has another impact on buying power. when people lose jobs, they lose the wages the jobs give to them. in short, the direct and up direct effects of the financial crisis, the decline in home values has created a huge short fall in aggregate demand in the
united states. the feds action, the t.a.r.p. legislation, a variety of stimulus programs all offset part of the loss, but not all of it. interest rates have fallen, and assets are at zero percent, so there's not much more they can do through traditional monetary tools. the drop in the economy directly reduced the market income of the american households. those fell 50% compared with the peak leveling before the recession began. all of the federal counter cyclical measures tended to reduce that decline, that 10% decline in what the markets gives to just a 3% loss. we pay less taxes than before the recession. we received benefits, mostly in the form of unemployment benefits, but still, there's been a decline in disposable
income in the united states which also reduces consumption so there's been a huge loss in household wealth that suppresses consumer demand for a wide range of the goods and services here in the united states. we are emerging from the slump slowly and way too slowly most people say, the gap between what the economy does produce and what it could produce is about a trillion dollars or roughly 6% of what the potential output of the united states is. now, there's a very straightforward explanation for why we are where we are with 8% unemployment and unemployment population ratio that dropped five percentage points since the beginning of the recession, and we have a 6% gap between potential and actual gdp and the explanation that fits the facts is that there's just too little aggregate in the united states. using con sensual mon --
conventional monetary tools, there's little more the fed can do. they reduced interest rates in the short term as low as they can go. they cut short term interest rates to zero early in the slump, and that's where they remained. the usual policy remedy when you exhausted traditional tools 1 -- is to rely on fiscal policy. some of you say we tried that, and it didn't work. there's no evidence that the fiscal policy failed, none. six months after the on set of the biggest stimulus package that we had in the slump, the economy stopped falling like a rock and started to grow again. within a few months, private sector employment began to grow slowly, but began to grow, and it's grown ever since. about a fifth of the growth in the private sector since the low point has been offset by decline
with the number of people on public payrolls. state and local governments face harsh fiscal reality, and they are reducing payroll offsetting gains in the private sector. i estimate we need 10 or 11 million more jobs today in order to reach full employment. that's 1.6 million jobs, and at last year's pace, we need six and a half years to generate ten million more job, and during that six and a half year, the population of working age is going to grow so we needs a million more jobs besides that. what is tragic is much less unemployment is unnecessary. there are a lot of useful things that say two or three more employed americans could do to improve the country that we live in.
there are millions eagers to offer the united states government their savings by purchasing united states government debt and in other words to lend funds to the government at historically low interest rates so that the government can put those funds to use. if households and businesses are unwilling to spend reserves on consumption or investment, they can identify, organize, and they can complete useful projects with the money that households and businesses are willing to offer to the federal government for that purpose so the first thing we can do to boost demand is build or to improve the nation's public infrastructure. we can also offer direct incentives for businesses to add to their payrolls this year or next year. for example, we can exempt businesses that expands the number of people on their payrolls from paying -- from making payroll tax payments on those additional workers
making it cheaper for companies to expand their businesses this year and next in comparison to three or four years down the road. what are some of the other explanations for why we're in such a persistently terrible state as far as the labor market is concerned? well, one is there's a skills mismatched. today people look the skills that the expanding businesses and occupations need. consequencely this mismatch means there's unnecessary unemployment which could be fixed retooling the skills of unemployed workers which could be fixed if we paid businesses that are expanding to train workers in those skills. a second theory is the social protection would be more generous in this slump compared with all the previous slumps since world war ii #. now, it's certainly true that the united states has been more generous to its unemployed this
time than in earlier recessions. 245 may have added two tenth of a point to the current unemployment rate, and some economists say it's added eight points to the current unemployment rate, but still, the fact is the unemployment rate even if you suggest a point from it, would be very high by post war standards so far after the end of a recession. personally, i'm not sure that the upper level estimate is a very good one, but something to notice of the improvements in the social productions since l slump began -- since the slump began have been explicit, and some have come to an end and the extension of unemployment benefits of 99 weeks will be scaled back over the next year or two, and they are likely to go back to where they were before the recession began. my guess is the unemployment rate is high and remains
stubbornly high because the unwinding of the house price boom had direct and indirect consequences removing buying power from the nations' house -- nation's household and is unwilling to expand our -- or make investments that produce to the scope of those here in the united states. the solution to me is produce direct action to produce demand through the most reliable tool available to us now, which is government purchase of asset goods and indirect subsidies 20 employers to expand payrolls and businesses in the near term rather than four or five years from today. >> thank you very much, gary, for a very illusive position of your paper, and it's helpful. let me turn next to who runs
alcoa, a huge global company that i think employees about 60,000 workers here and in other places. you've been dealing with this very difficult situation around the world with volatile markets and rapid change in lots of dimensions, and you dealt with it for a lot of your career. you came from another big global german based company, and so could you tell us in a few minutes how you see the current situation, both the economic situation, but especially the future of the labor market in the united states and if you comment on the scale hypothesis,
has it affected alcoa, and how do you see it generally? >> i'll go straight into the aspect. you described the environment, and let me just throw a few thoughts out on what opportunities do we have here to create jobs because i'm with you, there are a lot of opportunities here, and some can be put off on a short term basis. i see basically three, what i call, levers there. the one thing that you already talked about is the -- i would call it the work force of the future, and that has two aspects. i'll be happy to elaborate on that. one is the reskilling, and the second is immigration. i think we leave that part out; right? the second thing i see is this innovation. i mean, growth through innovation. the first public panel here had a lot of good ideas around that. should not forget about it, and that has two sub aspects, and one is entrepreneurship, and america is the country where the
american dream is still alive, you know, and will be kept alive, i believe, and the second thing is large scale innovation where you need government. on the first one, i think, the best the government can do is just have the conditions right, and the third aspect, the third big aspect is the question of countries that are competing in the world for a share in the globalization market so to say; right. there's a lot of things going on. ..
a matter of opportunity work environments have changed not to the better whether they have been experiences having mixed and also hear the environment has changed and the third thing on that end is again with that immigration is dealing with who you let in when you travel from the world you see that the middle class is going off around the world once they have their refrigerator and other car they want to travel, they want to see the world that only comes to them on tv. some tourism is booming and the interesting thing is last year france sought more chinese visitors than the u.s., and i think that is not a question of the preference of the chinese but more a question of how we deal with it, and i've seen estimates from experts that say for tourism alone here in the
u.s. we could create pretty to be cut to under 60 million jobs and when you talk to people around the world they all like to come and visit the u.s.. on the recycling front are we affected by it absolutely. and we talk a lot about the k-12 education and leave that aside we know that that's an issue with good solutions there but let's talk about the occupational skills. the way the skills are changing drastically the workplace today requires that people were knowledgeable about handling difficult equipment, so we see that there is a shortage here in the u.s. of almost all places. we have started in a lot of the sites in the u.s. we started programs together with the community colleges so that we can do it in the evening hours and the weekends. what we offer? we offer industrial machinist jobs training so to say.
we offered maintenance, industrial maintenance, we offered welding. we need wilder's and it's not that difficult. you don't need that to be the biggest genius on the plan at. >> even girls can do it. >> absolutely. and i would encourage them to do it. so, and we are doing that with great success asking 900 people enrolled in the program we would continue to do that for alcoa and it's a very successful. but again i don't want to leave the immigration side of things out because i believe that when you look at the statistics here i fink 25% of all of the startup firms in the high-tech space and engineering space have been founded by immigrants to come and i recently mentioned the statistics to vladimir putin and got a very interesting response
that said america is really great at doing these things. we don't want the president of russia basically acknowledging it and asking to forget about this. i feel we have to come back to the roots. so, those are my thoughts on the subject. >> let me pick up on one thing that you said about entrepreneurship, because i think a lot of us think the entrepreneurship is something that starts in somebody's garage and is inherently a small business thing. to talk about it from the point of view of a big company. >> the small company is important because you need to instill this mind set i briefly touched the mind set of entrepreneurship is truly a unique feature in the u.s.. it's one of the things that gets an order from the rest of the world and there are structural aspects also. when you look at it almost 40% of the venture capital money
worldwide is here available in the u.s.. you talk to kids that are in other places are comfortable that won't start a firm they have much more difficult a time to find people that invest in them. so the equal system, the fabric that we have been able to build here is extremely favorable. the mind set, the cultural aspect that we have is unique and we should be mindful of that and continue to build on that and know this structure. we have a silicon valley that only exists in the u.s.. we have partial silicon valley that exists in boston just this morning on the way over here i saw a statistic that new york has not received more capital funding in the first time this year which is great. this is really not a competition. this is something where things come together and build an ecosystem. the other thing is the last innovation. when you see some of the large scale changes and i see the
energy sector as the biggest one there is so much going on and it's almost too big even for the big companies and because it deals with so many fragments if you want to put this together it deals with so many fragments that together are sinner just call come as a unique kind of a intelligent coordinating hand and that, and i give you for instance on that a good friend of mine just recently told me that he had been invited by the chinese, he's on one of the advisory boards, and during the spare time they drove him out and he comes from the nrcc and they drove him outside to a test field and it's about a two-hour drive from beijing and the test field i haven't been there i only describe it he says it is basically every wind mill operator in china has a couple of different windmills they're
so imagine this is a field that has three areas, one is a wind farm with different types of wind turbines and in the middle of different types of storage devices, energy storage devices said you can have those in the right-hand side you have solar, different solar. the cool thing with that is with the combination of that you actually met the base load because during the areas where the wind dies down during the daytime and the sun comes out so when you combine this you get rid of the problems that you have with these renewable energies that you only have at the peak time so if you combine these things and put in the middle and effective storage device, you can literally mimic large scale what we otherwise only got to kind of nuclear power plant by you get it renewable. to do this right you need a lot of companies who handle this
with elements on the smart grid. that's the type of thing we need on the large scale innovation where the companies can be brought in but we need some intelligence to say let's take a look at that and in this case i think it is handled by some of the universities that have come together. it's almost let's go to the moon project and would be worthwhile to do it if we don't want to lose and i saw yesterday we are praising now that more investment has been on to renewables bandana china. if you look at the statistic if you look at what is happened in this industry it has been highly subsidized. but the reason why currently a lot of the solar and wind power firms around the world are having trouble is because the governments are withdrawing the subsidies and telling them you get to stand on your own which i don't think is the right thing to do but the model that we get
works, so that shows the dilemma is that's my thought on that. >> thank you very much. [laughter] smug one of the things trying to distinguish between the statistics and real statistics. [laughter] thank you for that. let's get andrew in to discuss because you also run dow which is a big chemical company involved in all sorts of different products. i was on the board of a different kind of company years ago and the one thing i learned is it is a very cyclical business and it's very kind with consumer products at every level. can you tell us a bit about how you see the current jobs picture and how you react to some of the things that they have said?
>> everything is being said but not everyone has said it. so i do want to make sure that i kind of highlight some of the key points that i agree with has already seven set by ridership and others. if i can start at the end of the final we are 160 countries, 50,000 product families not as cyclical as you would think because we've gone to the science based agendas but we have a lot of touch point of two-thirds of the company outside of the united states and its huge wingspan. i tell you that the united states and the forces of globalization of capital, labor and consumption i think we are not having the right debate and i think this forum, this panel and what brookings is doing all day today is like consider the beginning of a very large debate that the united states needs to have and that is at the widest end of the funnel it is really that short term fix is in the short term political cycles are vastly in adequate now for what
is going on in this globalized world of ours and really what we do need is awful strategies if you like five or ten year plan approaches, and so it is not business as usual. it shouldn't be governed as usual. how do we the great thinkers have think tanks like this one with what global enterprises like ridership and mine are now experiencing and seeing and we make decisions and the myth of we are going overseas because of the cheap labor and associated with protectionism elsewhere and what is fair trade versus free trade and what does that really mean and energy policy and how those of factor into our decision making. but to follow the markets it's no longer putting the mill in the market just for the sake of that market because to do the obviously have 200 million consumers albeit a bundle 2008 very big consumers. there's 6.7 billion outside. so this world of ours is a
massive opportunity that needs to have the united states integrated not at the center of gravity alone anymore and certainly the break in the bubble that is so described has put a new pressure point on the word consumption, so follow the markets has a new dimension and it is the globalization of skills and i want to get down to that one because that is where i think the panel's honing in on an imminent, but i want to see why if i can for a while because we are following skills. other countries he alluded to it putting in place five and ten years strategies and i'm talking the but the free market economies. i'm not talking about direct economies like china who have a five-year plan or ten year plan. i'm talking of countries like germany and others but they are a little bit or directed, a little more thoughtful about where we are going as countries where they are going in this globalized world with capital flowing and markets are fairly open in terms of labor and skill
decisions being based on where you can find the skills and i would tell you that the short-term fixes whether it be the stimuli, monetary and our fiscal, with a baby exports which is a phenomenal story in the last year or so but that is the focus on exports has been much needed but clearly there is a short term and what is really required and i think our government and business leaders come together and find out how to do this in a very thoughtful way is how we in fact create new demand. garrey referred to it. where is this new demand? i would hone in on the three that have already been talked about. i think the country is an huge need of direct demand around infrastructure, direct demand around energy policy and clearly the whole focus on renewable whether it be solar and wind and has indicated this is a holistic approach. it isn't a piecemeal approach. natural gas and now shale gas and how it can play into the revitalization of the economy is
a once in a lifetime opportunity the whole discussion on exports and what a disgrace that we've only had three free trade agreements in the last seven years under two different administrations that wasn't a political statement. so at the end of the day hell do we put energy infrastructure and exports central to the agenda in the fight and tenure look and i would tell you that the -- there are policy impediments out there whether it be the tax kind or the regulatory kind, whether they be the fact that we are very educated on trade that american workers don't understand that a million jobs in the united states say because the course of exports. we have a lot of structural impediments but for me the big structural fixes are in front of laws and the debates of today are going to help us get to them. they've already alluded to one which is immigration and i think that is big for the united states that it needs to stay in
place and we need to be very open-minded of how to keep bringing people in from all over the world to help the country become its next century of entrepreneur ship but that's why people come here, people come here because of the freedom model and you have a german here and a and australian one here. we are here because of your freedom model and to be very clear about that. so bring in the best skills around the world from wherever they come. education and the stem will that's a big structural fix and i won't dwell on it because of my time. the skills mismatch. i want to segue from that point in to the advanced manufacturing partnership that i cochaired with susan at mit. i think the secretary is going to refer to it in his remarks after this panel, but we are for the first time in my many trips to washington finally bringing together the universities, big corporations, small companies and government departments to take taxpayers' dollars that's
already being spent in focus at, and focus it with the input of the private sector and our institutions, research institutions on the pillars that matter and just to repeat them for you we will go into some detail in sure but which technologies. we've already identified the technology areas inclusive in the renewables of the advanced material design, information technologies and means veteran technologies. we have addressed shared infrastructure how to get the synergy of the whole manufacturing innovation is one idea that is coming up as a proposal. third, education work force development and hear the community colleges come in. taken from the german model and taking the high school diploma and retooling the high school diploma for the modern age manufacturing and last but not least policy issues that i've already touched on to read this is a little more direct market
economy than many in the free-market model are ready to accept. and i really say and want to close with that statement that i opened with. this country has to realize that countries are competing like companies, and they are bringing in manufacturing of the advanced kind like speed and a dowel and others to their economy because they recognize the two major drivers. one, new job creation not just inside of the plant, but around the plant. one to five all high skilled. it's in the supply chain. number two, innovation follows. this isn't low-tech manufacturing. it's high-tech which means the research universities that are attached to it than have a proliferation of the entrepreneurial action big company and a small company. that's directed, that is the competition as a country and i think we have to really realize
if we don't bring the debate for that level we are going to not only have a jobless issue for a long time, but we will actually lose out with the suppression of the industry's or whatever it may be so that is my thought elsewhere on that. >> think it is very interesting that you have brought our attention to the contribution that immigration can and has made. i wonder if either of you think that more could be done by the business community to educate the public about the benefit of immigration but we have this backlash which is largely directed towards people preceding that they are losing their jobs to immigrants. could the business community be doing more to turn the table here?
>> it is all of the above. business leaders, i think ridership is a great example of this and many of us who are out there today. it's becoming much more active in the public policy than ever before. i think the era of hiding and just honing in on one aspect of running a global business is over, and i think that we have touched so many areas of the least of them being how to get the work force of the future designed and the immigration is there for the policy that matters as we have to educate our workers and be doing more in concert with the government and local community people. >> we are almost beyond the information point because darryl has written a book about it last year. i said publicly with that that i think this is one of the best books that i've read on it because it provides the solution to the stalemate that we are seeing.
i think i've come to a point that i believe business leaders should be crystal clear to both sides that we are not willing to accept or to discuss with anybody here who is supposed to be an elected official representing the good of this country who isn't willing to have an open mind on the immigration issue and basically you see the stalemate on the one side people say well, you know, we only accept the h-1b one visa 55 solution for bringing the illegal immigrants on the other side says we will never talk about the illegal immigration obviously this cannot be decoupled. and i feel that there are solutions to solve it in the right way. how can you really work in an environment for if that? i think it is ludicrous and who needs that. and they are good answers and partially bipartisan answers and we have to take it on and i
think the business has to actually be much clearer that we are not willing to accept it because of our competitiveness in the u.s.. >> let me raise another question before we open up to the audience. garrey touched on infrastructure , but you talk mostly about it as a way of creating additional demand rather than as a way of increasing productivity and i wonder how the business leaders look at the u.s. infrastructure at the moment which many of us see as crumbling and how it affects you. >> wally phill we have all had the stories or with landed at airports and you feel like you're in the third world compared to land in beijing etc. so that is the consumer art of
the infrastructure, but real, real, ports, pipelines, we have a grid locked the approval process and we have over 60 agencies involved in the permit issuing. it is only a couple states in the nation that are easier than that and the ability to get anything done in this country as a private sector company is almost beyond belief. so we try to break through and when i go overseas i get the red carpet and when i go inside the u.s. i feel like there's red tape. [laughter] and really it is just grid lock in terms of even getting solutions for our enterprise. to go to the national level and see how we coordinate this between federal, state and local life and the answer is evident. it's not only a productivity issue but is determined from the investment and we go to the states the war in the permitting process and expedite because obviously time is money and if
you will know which states they are. there are not many. >> it is a bigger issue than i ever thought and it has increased over the years, unfortunately and the interesting thing is on the local level people are understanding because they understand it needs to be done to keep the competitiveness up. unfortunately but people don't see is how heavy the competition is on investment. was literally true when we go to some places, you really have a welcome bus basically waiting and people say we give you this, we do this, we do that for you and that's a very fast environment and they are competing for our investment. and if you compare that to investing at a place where you say i need that, i have this still hanging there and how do i
get that result then it gets pushed out and now it's another three months and by the way i was willing to present it to my boards and then unfortunately i don't get an answer as i am not going to present it to my board. this is stuff i could give you a whole list of things. i'm very unfortunate and i think a better dialogue and the better understanding would be very, very good and unleashed some of what is sitting on the side. it might not be sitting there for very long any more. >> we have a lot to digest but let me take the last few minutes to invite the audience to raise questions and identify yourself somebody will bring you a microphone i believe, and since
we have the c-span audience it's good if you wait until you get the microphone before you start speaking, but direct your question to any member of the panel but keep it short, please. yes, back here. my name is jack. i'm a special volunteer of nih. but it be possible to lower the dollar? it is a high dollar now which would increase exports enormously to respect you want to talk about one? >> that wouldn't be the main objective of running more stimulative fiscal policy i don't think. it's certainly true that the
lower value of the dollar would help the united states find more customers of other countries for the things that produces but at the moment we have to face the fact that the united states is still regarded outside of this country at any rate as a place where money is recently safe and our currency is an excellent store of value against the risks in a dangerous world. we get direct benefits from that back to the it's cheaper for us to visit overseas. we get foreign products more cheaply would there is a price for the people who produce goods and services in this country that either compete with things that are important or produce things that could be exported. i do think a long run part of our long term solution to the problem is having a weak u.s.
dollar. yes? >> with a question for klaus actually for both of you. you mentioned the fact that regulation are essentially strangling improvements, and both of you mentioned improvement in infrastructure which is itself needed for innovation. but at the local level you often found. so can you go into this and a little more depth to make us understand where the strangling effect really kim's from and whether you have ideas on how to change that. >> i have an old saying that my folks know when intelligence people look at the same facts become to the same country. so let's assume most
decisionmakers are intelligent which would be actually will be my experience. it in the only answer is they have different information and they don't talk about it enough. for the people on the ground usually understand the situation and how this is going to hurt or help them much better than those. very often they don't take the time to get this type of the information and then also don't sense of urgency of how important it is to get this matter resolved so they cannot follow the usual procedure which is we have a backdrop we take it when it comes and it's going to take half a year to year to speed up we're also local level people understand this is something that in half a year or two years will have damaged us and the opportunity would have gone by. that's what i seen in the different types. >> i would just elaborate that the regulatory environments have begun to be addressed to help
the disconnect but i would tell you that what happens is the process of a private sector on first the existing rigs whether they may be environmental or permanent issuing in terms of the siding affected cetera are fairly well understood at the local level but at the federal level the amount of paperwork required for the approval look forward and it's gotten worse. there's over 287 coming down the pike already. that then basically i don't know what. the locals may be dealing with of the current but the ones coming stifles them completely and says just the second i better not take a rest. when you get down to the local level of the mid management level and have no power we have disabled, government is incredibly insufficient in this country sorry to say i elude it
to hit with the 60 state agencies and that's where we have to get ourselves much more efficient and control processes of the local level with local officials and private sector is one way to do that. >> [inaudible] >> it's a lot less environmental in our industry and think. >> the keystone pipeline is a good example. >> we have time for just one more question here. with. the hospitality. i don't know how we solve our problems without fixing the mess and especially happy to hear you say you don't think we should artificially divided the segments of that. having said that i will admit to the considerable frustration that the business community says
the right thing about at least from my point of view about immigration and puts zero political muscle behind that. in 2007 kennedy and mccain while not a perfect piece of legislation would have gone a long way in my view towards addressing these issues and those of us who worked hard on that bill with the bipartisan senators discovered that there was zero muscle in the business community in the issue and i am curious as to whether you believe we can do better in that regard in the next few years considering that this isn't a political statement it is just a factual statement considering that this presidential candidate who i would suspect is the most likely to get a substantial business support has jumped over the right law on this particular issue. to me we won't solve it unless the business community puts muscle behind what you'll have said here today and i curious as
to whether you think that is realistic. >> i've said what i've said because i have seen the same picture you just described and that has altered my moderate public statement to be more non-moderate public statement because i believe somebody just recently said the change has never come from washington change usually gets brought to washington and that is one thing we have to be mindful of. we have to take it in our hands and make it clear to our representatives here how important the competitiveness of the country is. we can make the case and have to make the case on your point how realistic with the candidate you're talking about, my friends tell me that i shouldn't, take the situation where you want to become the candidate, with what your policy would be so that is the thing that gives me hope but but i couldn't agree more we have to to get more aggressively and with that approach this is what we want and we are not
compromising on it and we have a solution. on the immigration side that for me is the intellectual breakthrough from your study which ended up in the book by saying we don't offer the illegal immigration aspect and there is an aspect of you have to learn english because it also changes your chances in the job market and you have some type of test on how our constitution system works because not everybody comes from an environment where you have learned that at third thing i recall is you have to compensate if you haven't paid taxes yet you will build some type of a financial model by which you have to pay out and compensate for it and i think that these three things make a lot of sense to me and i've really not met people that at least have said to me that is a very good approach and i agree that we don't want.
>> one byman jul would add the business community is going through a severe wake-up call on this point we had a discussion on therefore in whatever its forms the owners in china in 1999 played the 1200. why are we going to china? because we can get the skills but equally we can't bring them here anymore. it's difficult to get people into this country. let's face it, and i have three children and none of them have done science so i can say this children are not studying science and engineering anymore as we've moved up the wiltz curve and have other professions they would be it that is a generalization that the immigrants live going in to the professions and we need to make sure we keep that pipeline coming because of the skills mismatch we have in the science base in this country so for that reason alone the business community would get real
[inaudible conversations] >> okay. we are very grateful to the secretary for finding little bit of time to be with us this morning. obviously he is the cabinet officer who is most focused on the issues that are before us today and we've already had some very good discussion of. there are two reasons why he is the ideal person for us to hear from and to interact with a
little bit. one is because of his current job that goes almost without saying. and also the experience that he brings to the job. i think that he's going to say a word or two about the report called america competes the was published just last week by the commerce department. but i think as you all know, he comes with a rich and relevant said experiences from the private sector. so we have somebody here who embodies both with the u.s. government can do and what the private sector can do and what can happen in partnership between the two the chair and the ceo of edison international has been a director of boeing and disney. he was the director of some startup companies including the automotive if i'm not mistaken the ceo of that company was with
us a year ago for this which is very much into innovation and the use of new technologies and in particular electric vehicles with the battery systems, which is just one indication of the extent to which secretary bryson has been part of the solution to one of the biggest problems of our time, one that andrew referred to in his comment earlier which is the need to transition to a low carbon and ultimately no carbon economy and he's been active not just in the for-profit area in that regard but in the ngo as well as a co-founder of the national resources defense council. now his time with us today is very limited. we are going to have a little chance to hear him make some opening remarks, and then he has agreed to stick around for some
questions. the way in which we are going to handle the questions is very simple at least i hope it will work simply a that is we have cards distributed around the room. any of you who have a question, write down your question on a piece of paper and pass it to whoever is in the ogle we will collect those. the director of our metropolitan policy program will then pick from those and work them into a conversation with the secretary. on a personal note i have to say that on a remind you when you arrived a few minutes ago that i last saw you looking even more relaxed than you do now on a flight from sun valley backed to los angeles in august. that must seem like a galaxy far away in a time long ago so welcome to the brookings institution. [applause]
>> many thanks to strobe and all of you that have invited me here. i look around the room and i see so many friends it feels like i'm right back at home, could even be right back in the valley because i usually see kathleen up there for example. it was a wild and wonderful time and we do our family gatherings there and i will try to go through my remarks but i'm going to cover the responsibility of the commerce department a year ago, almost exactly a year ago and do something that was striking and i think quite important and that is the reauthorization of the so-called legislation. the only thing the commerce department was asked to do with support from others but the commerce department had the responsibility was to assess the
competitiveness of the u.s. economy. now i'm told that when the legislation was passed with that modest request there was a kind of sense of the economists and statisticians and various people in the respective roles of the commerce department how could we do that? and i think they did a spectacular job and i'm going to go through and try to summarize it for you and in like 15 minutes then i would be pleased to have questions. so the central question how competitive are we? what are we doing that makes us competitive for the world? we have been an extraordinary
economy, the leaders in the world for a long time. but it's not on known, it is a relatively conventional option to say we are losing that position and we need to address that now. so what the report says is we've had the great benefit of spectacularly strong businesses and business leaders and we've had that for a long time. but the key is that it wasn't alone the responsibility, it wasn't a consequence of having these businesses that we have done as well all these years and the reality for there is the federal government has made a decisive difference. as all of you would recognize there are tendencies across
businesses across the private sector to under invest in some areas and those traditionally have been substantially invested and through the federal government, through state government and three areas in particular i will touch on and they are set out in some detail in the report or in the field of education and infrastructure and basic research. so i'm going to talk about those and then i'm going to -- and i know that andrew is all i can almost say you heard a benefactor in perspective, i agree. but i will say a few words about that in advanced manufacturing in particular but i want to do is start on what i think is as a fundamental point and that is
what is happening, what has happened in the federal policy-making that means we are doing less in support of those key areas, education, infrastructure, research ten, 15, 20 years or more ago. and the focus can be pretty simply put. we've seen over the years and increasingly is the damage that is done by very short-term thinking on the part of policy makers here in washington. one way to get up this is if you run a business you make a distinction between what economists call investment, and on the other hand consumption. there are long-term investments that have to be made to ensure
they help with the company and its ability to grow in the future, there's those immediate expenditures that have to be made to keep the business functioning day by day. electricity payments and payroll for example. and then the of the long term investments that have to be made to ensure the health of the company and its ability to grow into the future and too often washington what we have our decision makers who simply do and have lumped the two columns on the spreadsheet together. so in that model every expenditure whether it is a short term line-item or long-term investment is treated as if they were exactly the same and they are not. the past policy makers made more consistently decisions that took
those things into account. the simple fact is the private sector for practical reasons does under invest in those areas but when federal and state governments have stepped in to fill the gap, there's been a significant benefit to business and a big return on investment for taxpayers and reform of new jobs, high living standards but the longer-term investments has pretty steadily declined now over some number of years. u.s. policymakers have too often rest on laurels of our 20th century and at the same time as you all know over the past decade or more, many developed in what were thought of as developing countries have grown
way more sophisticated and they have become at the same time very disciplined and in the execution of carefully developed plans for optimizing economic development in their respective countries where they have advantages the carefully search out and then follow through. so the result even as american business has become more efficient, more productive and increased in their global reach the underlined building blocks have eroded and with that so has our unquestioned global the economic leadership. so today you know these things today the u.s. ranks 14th in the world in terms of the percentage of college graduates it
produces. we used to be number one. the world economic forum now ranks our infrastructure 24th best. we used to be at or near the top. in the current federal share of research spending is half of what it was in the eisenhower administration. 50% then, only 25% now. in each of these declines is impacting ability to attract and create the jobs of tomorrow. encouraging news in the compete report shows this administration over the past three years has been working to reverse the trend line on each of the front's i've mentioned. so let me give just to that.
first basic research. well, businesses and entrepreneurs are generally most innovative source of new ideas. the federal government plays a key role in supporting and developing those innovations and our country has been a very proud tradition of supporting the work of federal and university labs. it's helped change our world. the internet, satellite kuran occasions, semiconductors among other job-creating advances wouldn't have been possible without the why is we spent u.s. tax dollars. but that commitment has dropped off. in 1980 the federal government funded more than 70% of the basic research. since then the government's share of basic research funding has fallen to 57%.
so then education. all of us are very focused on education and what we are not doing. that is the second pillar of the compete report. we know now that the highly skilled workers boost innovation and economic competitiveness but assuring that our children have the skills employers need for the jobs of tomorrow requires the dictated attention and resources of the state, local and federal government levels. of critical importance of the science technology engineering a mathematical fields this audience knows well the numbers are there and i think they are worth mentioning. in 2009 about 12.8% of the graduates were in stem, 12.8%.
a significant economic competitors such as korea with 26.3% and germany with 24.5% are on the long list of countries producing a much higher percentage of graduates who are stem graduates. this simply has to change. in the third area of investment is infrastructure. the infrastructure needed to support a modern economy and realize on the publicly provided resources and must do more to grow out a modern electrical grid to get fans access and in their urban and rural areas. here in america 60% of households that adopted broadband as an almost eightfold
increase since 2001 and yet when you think about 60% adoption rate means about a father of american homes are simply not cut off from the digital economy. as education, innovation, infrastructure, these are the areas we cannot afford to cut the role of the federal government. indeed investments in these areas will lead to the more competitive economy and higher gross. so what can be done? the administration is committed to restoring the consensus that once existed republican administrations there are long term our businesses won't have to in turn a better chance of
success. we are increasing the levels of government. the recovery act, the course included a one time infusion of the federal r&d of $21.5 billion federal funding for the research comes from $56 billion in 2008 to $60 billion in this past year. the president's budget for the past year called for it more the congress didn't conquer. stultz the enhancements we have seen have made a real difference we are seeing that the commerce department and now it's across the federal government but the commerce department for example the national institute of standards and technology the administration has expanded the core research mission by about
$50 million. the president in this administration will continue to push to make permanent the tax credit for to give companies appropriate incentives to innovate and approve the basic research is transferred from the lab promptly, berkeley, quickly into commercial products and then education we simply must intensify substantially our investment in the skills and knowledge necessary to compete effectively in a world where the economy where as i indicated many other countries are simply surpassing last. on giving the new initiatives or addressing these challenges by making college more affordable, spurring the classroom innovation at all levels and expanding the size and quality of the teacher links.
one student initiative is the aspen institute skills for america's future effort which the administration hoped to launch. that program may be you know of it it works of businesses, community colleges, labor unions and other groups to encourage job training and the program really worked. then infrastructure, this administration is committed to investing in 21st century networks including fostering access to high-speed internet for citizens and distances no matter where they're located. federal government must continue its stride towards a smart electricity grid and a robust network of broadband internet access and the commerce department who is deeply involved in both of those initiatives.
then let me bring this to manufacturing. so this deserves the flourishing you this sector is simply crucial to our competitive strength and will continue to be the key source both of economic growth and of jobs and protect national security. the manufacturing sector is also the biggest source of innovation in our business economy. 67% of all the business in america is done by manufacturing companies. that's why i've adopted one
phrase as a central organizing principal for my priorities as the commerce secretary to read some of you have heard me say this before. i say it again and again. we want at the commerce department and the administration too building here in desolate everywhere. build it. desolate everywhere. if we do that we can retain and enhance our u.s. economic pre-eminence. build it. so the everywhere means helping the u.s. companies sell more of what they make to the 95% of the world's consumers who little side of our borders. for the national export initiative we are doing just that and we are now on track. after two years we are on track to meet the president's goal of doubling the exports by the end
of 2014 but i will underscore with you this is a nonstop challenge we have to continue to intensify so we have three more years, the first two years we have increases. 16% of imports, then 17% of exports this month announced this morning results were not very good for the month of november. there will be ups and downs. this is an undertaking of where we have to constantly focus and define new means of taking this further and i will say of course the free trade agreements for example, very important in our ability to take that further. so building here also means attracting and maintaining more
investment so the companies are building their factories here in america and it means doing everything we can to strengthen u.s. manufacturing and particularly advanced manufacturing because of american businesses stop building things here it won't be long before the actual innovating happens somewhere else. so the president and i are determined to reverse the tide to revive manufacturing in america. last summer the president announced evidenced in effect in partnership and recently created a national program office for that initiative of the commerce department the brings together industry, universities and all the federal government's so we work across the interior federal government to lead that tudor investments in emerging industries like