tv U.S. Senate CSPAN July 19, 2013 5:00pm-7:01pm EDT
it is consistent with the statutory mandate with price stability and specifically most participants are beginning to step up during the second half of this year and eventually reaching a peace between 2.93.6% in 2015. they did and had to pick that decline by the final quarter of 2015 and they saw inflation gradually increasing towards the
2% objective. the pickup in economic growth, partly reflects the federal fiscal policy that will reserve less drag as the spending diminishes. the committee also believes that the risk to the economy has diminished reflecting some easing of financial stress to your up in the games and housing and labor market that i mentioned earlier for state and local government and stronger households. that being said, the federal fiscal policy will restrain economic growth by more than we currently expect where the debate concerning other fiscal policy issues will evolve in a way that could hamper recovery. more generally, the economy remains one of old to unanticipated shocks come including the possibility that global economic growth could be
slower than anticipated. with unemployment still high, and inflation running below objective, the highly accommodated monetary policy will remain appropriate for the foreseeable future. in normal circumstances, the committee's basic tool is targeted for the federal funds rate. however, it has been close to zero since late 2000 and cannot be reduced. instead, we are providing additional policy accommodation with complementary policy tools and the first tool is expanding the portfolio of long-term treasury securities and mortgage backed securities and we are currently purchasing $40 billion per month and $45 billion per month in treasuries. the second tool is forward guidance for setting the federal funds target over the near-term. within our overall policy framework, we think that these tools have somewhat different
roles and we're using asset purchases with the federal reserve's balance sheet, primarily to increase the momentum of the economy with a specific goal of achieving a substantial improvement in the outlook of the labor market in the context of price stability. we have made some progress for this goal and we intend to continue our purchases in the labor market outlook is what has been realized. in addition, even after purchases then, the federal reserve will include agency security software market and reinvest the proceeds of maturing securities, which will continue to put downward pressure on longer-term interest rates and support mortgage markets and help to make broader financial choices more accommodating. we are relying on short-term interest rates together with this it will continue to be exceptionally low to help maintain a high degree of monetary accommodation for an extended period after asset purchases and.
even as the economy strengthens towards more normal levels. an appropriate combination of these tools can provide a high-level accommodation needed to promote a stronger economic recovery with price stability. in the interest of transparency, it is helpful to lay out more details regarding the asset purchase program, specifically to provide additional information on her assessment of progress to date, as well as the trajectory of the program as the economy evolves as projected. this agreement to provide additional information does not reflect a change in policy. the committee's decisions regarding the asset purchase program depend upon the economic outlook in the queue monitor progress towards the objective. of course we must revise new information and it is not always provisional. as i noted, the economic outcome
saw this is most likely in the june projections is supported by moderate growth over the next several quarters as you restrain from fiscal policy that diminishes. many participants also saw inflation moving back over time. if the incoming data were to be consistent with this production, it we think it would be appropriate to begin to moderate this later this year and that the subsequent data will continue to confirm this pattern's ongoing economic improvement and normalizing inflation we expect it to continue to reduce this in measured steps through the first half of next year, ending them around midyear. at that point if the economy had evolved, the recovery would have gained further momentum and unemployment would be in the vicinity of 7% and inflation would be moving towards a 2% objective. such outcomes would be consistent with the goals of the asset purchase program that we have established.
i emphasize that because the purchases depend on financial development and they are by no means under a preset course. on the one hand, the economic conditions will improve faster than expected and inflation will move towards the objective, causing it to be reduced more quickly. on the other hand, if the outlook were to become less favorable, and inflation did not appear to be moving back towards 2% or financial conditions, which have tightened recently were judged to be insufficiently accommodative, the current purchase could be maintained for longer. indeed, we hope to be prepared to include all, including this to promote a return to maximum employment. the second tool the committee is using is forward guidance regarding a path to the federal
funds rate. the committee intends to maintain accommodation for a considerable time after the asset purchase program ends and the economic recovery strengthens. in particular, the federal funds rate will be appropriate and the unemployment rate remains about 6.5% and it remains well-behaved as described in the statement. as i have observed on several occasions, the phrase at least as long as it's a key opponent of the guidance and this would and imitate a specific number that is part of a threshold and not a trigger. reaching one of the thresholds will not result in an increase in this target. rather it would lead the committee to consider the outlook and the broader economy justifies such an increase in for example, a substantial part of the reductions were judged to
reflect cyclical declines in the labor participation rather than gainful employment and the committee would be unlikely to view the unemployment at 6.5% is sufficient reason to raise targets for the federal funds rate. likewise, inflation can remain increasingly below a longer objective. moreover as long as the economy remains short of maximum employment, inflation expectations remain well anchored and it increases the federal funds rate once they begin and it is likely to stay as gradual. let me finish by providing you with a brief update on progress to reduce systemic risk at our largest financial firms. as discussed in the testimony before the committee, the federal reserve and the other banking agencies have adopted a final rule earlier this month to implement capital reforms. it increases the quantity and quality of capital by
establishing a new common equity capital ratio and implementing a buffer. the rule also contains a leverage ratio applies only to large and internationally active banking organizations consistent with this systemic importance. in addition, the federal reserve will include surcharges with those that have greatest systemic risk including what they are faced in for the next two years. the federal reserve is considering further measures to strengthen the capital positions of large internationally active banks, including the proposed rule issued last week that would increase the leverage ratios for such large firms. the fed is also working to finalize the standards set out in section 165 and 166 of the dodd-frank act. among the standards, the rules related to resolution planning are already in place and we have been actively engaged in the
stress test and reviewing the first waves in coordination with other agencies and we have made significant progress relating to the voelker rule and are hoping to completed by year-end. probably the federal reserve is preparing to regulate these nonfinancial firms and last week the financial stability oversight council designated to non-bank financial firms and it has proposed the designation of a third firm that has been for the council. we are developing a regulatory framework to tailor to each risk profile and systemic footprint along with collins amendment and others along the lines of the dodd-frank act. i'm pleased to take your questions. sumac thank you, thank you german ben bernanke. we are putting five minutes on the clock for each member. german ben bernanke, with unemployment so i, what trends
in the data would you need to see before beginning to unwind the monetary policy measures that would surely threaten the economy and financial system? >> certainly we face the same issues that are always something we are faced with when the monetary policy normalizes after expansion, which is if we do this too soon, we risk not letting the economy get back to full employment and we risk having some inflation. as always, there will be issues of judgment there that are unavoidable in any monetary policy normalization. that being said, we have laid out essentially a three stage process for normalization and the first, which is dependent upon the economy strengthening, the labor market continuing to
normalize, and inflation continuing to move back towards 2%, is a process of moderating in the asset purchases and eventually bringing those to the point where we can say that we have made substantial improvement in the outlook for the labor market. and we have given some guidelines about how that process would be going forward. the second stage would be a potentially lengthy periods of time in which we are watching the economy for continued improvement and continued reduction in unemployment and normalization of inflation as i describe in my testimony. but it's a 6.5% for employment, and inflation is looking closer to target at that point, we would consider whether tightening in short-term interest rates is appropriate. that would be the second stage in the final stage would be normalization of policies and the raising of short-term
interest rates and eventually the normalization of our balance sheet as i noted in my testimony, assuming that the economy remains in a slow growth mode that we have seen with a very gradual process. >> what explains long-term interest rates and how much more of an increase could cause the recovery to falter. and what does the federal reserve do to respond if interest rates by? >> well, they're essentially three reasons. although i would emphasize that they remain relatively low. the first is there has been some better economic news as investors see brighter prospects ahead in for example we have seen a relatively good labor market report, which was accompanied by a sharp increase
on interest rates of that day. the second reason for the increase is probably the unwinding of the leveraged and risky positions in the market and it is probably a good thing to have that happen. although the tightening is associated with that is unwelcome. that leaves the benefit of it is that some concerns about building financial risks are mitigated in that way and probably makes him some more comfortable using the tools going forward. the third reason has to do with federal reserve communications and market interpretations of set policy and we have tried to be very clear from the beginning and i have are iterated again today we have not changed policy and we're not talking about tightening monetary policy. we have been trying to lay out what i have just described to you about how we are going to
move going forward and how that will be tied to the economy. and i want to emphasize that the monetary policy will be tighter at any time within the foreseeable future. >> what you currently see as the biggest threat to the housing market recovery as we continue housing finance performance? >> certainly we have to keep our eyes open to pay attention to mortgage rates and affordability and that is our job at the fed. but i think it is very important for us to get our housing institutions and regulatory structures -- it is cleared up and to get those in working order and i'm glad to see that the congress is now looking at the reforms of fannie and freddie and the mortgage system and we still have rules to do about this and other aspects of
mortgage markets. i think that as we have greater clarity about the rules of the game for mortgage making and mortgage securitizations, that we will see less tightness in the market for mortgages for first-time homebuyers and people of less than perfect credit scores. i think one of the risks that we face now is that there is a significant part of the population that has had considerable difficulty accessing mortgage credit, even though they may have the financial results be worthy of that credit. sumac thank you, mr. chairman. german ben bernanke, you have said that the fed wants to see substantial improvement. in the labor market and in your june press conference, you know that the substantial amount is in the eye of the holder. as i understood you today, you indicated that this all goes as expected and we can expect to
see this to wind down by next year. is that correct? >> just. >> the flipside of that is if all does not go as expected, we can see that continued for the indefinite future? >> i suspect that at some point that the economy will reach that outlook, given the way we have seen progress to this point. exactly whether it is earlier or later, that remains to be seen. >> icing you would agree that there is a risk in continuing the qb indefinitely. would you agree that? >> yes, there are costs and risks and we are watching this carefully. we sat in her statement that one of the considerations we are looking at at every meeting is the efficiency and cost of this program, and we do a benefit cost analysis that was discussed when it comes to additional purchases.
>> given them no sure that the substantial mess is in the eye of the other holder, i don't think it's easy for the market to understand how and when we are going to see the winding down of her. it appears that possibly communicating more specific targets rather than thresholds would help to reduce that risk. do you agree? or do you think that it is not possible to get more specific. >> this is an issue that the committee will continue to discuss. i would say first that we have given some fairly specific guidance about what we are looking for and i did say that unemployment in the general vicinity is 7% of inflation moving back towards 2% of the objective, it was indicative of the kind of progress that we were trying to achieve. the specials are tied to rate increases. therefore we are quite confident
that we will not raise rates before we get to that point and in that sense we are providing the assurance of the public into markets. >> thank you. with regards to whininess down from you and others have talked about keeping this on the balance sheet and rolling over securities and keeping them in the market. but no one is talking about unwinding, which would mean that the fed's balance sheet could be over $3 trillion for sometime. is that correct? >> well, not necessarily. because these ultimately, ultimately we will stop and then we will begin to run off and the balance sheet will start come down. we have done a lot of analysis, of course. in allowing the securities to run off at a certain point in the economy is strong enough.
it does not delay normalization by very much. >> you're not expecting this any time soon? >> certainly not until we get to the rate increase. >> not until we get to the three-part sequence i have described to you. and there again, we're not planning at this point to sell this. >> we would be allowing this at some point, securities to run off and not replacing them. >> as long as you continue to hold and not wind on the balance, doesn't this lead to increased investor risk and undertaking? >> is nothing so when we are winding down. i don't see that there is any real difference between, for example, are mortgage-backed securities, which is intended to
strengthen the housing market. and the usual monetary policy which lowers long-term interest rates through short-term rate cuts, which is also intended to strengthen the housing market and it is always an important channel of monetary policy. i don't really see that there is a significant misallocation going on there. >> all right, thank you. >> senator menendez? >> thank you, mr. chair. chairman bernanke become i understand that this may be her final monetary policy before the committee. i am sure you will miss us. [laughter] >> i want to thank you. i want to thank you for your hard work and education underserviced our country, especially during a time of crisis. i appreciate your service enact thank you. >> we seem to be experiencing a trend right now where economy and employment are growing and
recovering, but we still have from our perspective away to dig ourselves out from us by the financial crisis in unemployment coming down and more than a third of the people of long-term unemployed. which is a crisis for those more than 4 million individuals and families caught in this situation. as you have discussed with this committee in the past, long-term unemployment make it harder for people to maintain hills and networks reenter the workforce. the question is while the economy is recovering, we still have a lot of work to do to give employment and strong growth through this. with core inflation well below the fed's target and weak demand suggesting that inflation is unlikely to be a problem anytime soon, isn't it way too soon
consider any kind of policy tightening? >> well, again, i distinguish between the mix of our two tools and the overall trust of monetary policy and i printed out with inflation below target and on employment still quite high, by some measures the unemployment is too optimistic of the state of the labor market, given some cited, that both of the statutory mandate are suggesting that we need to maintain monetary policy for the foreseeable future enough we intend to do. but i think we will be able to maintain this high level of accommodation ultimately through rate policy and by holding a very large balance sheet. making that transition to a different stage of the process, then we are attending to keep it highly accommodative. >> limited follow-up.
as we have engaged to strengthen our economy, some critics have argued that any growth that results in us might somehow be artificial order that might lead to stability bubbles if investors make risky investments in order to reach the yield. as a weak demand for greater concern currently, especially consumers are pulling back on their spending because of high debt burdens and underwater mortgages from the financial crisis? businesses are holding off on investing because of weaker consumer demand, does not change the relative cost benefits and risks? >> yes, it can. on the first point about artificial growth, during the '30s there was a liquidation list view which says that recessions are healthy and encouraged the evil side of the
system and i don't think we accept that point of view anymore. we think our economy is producing the lowest potential and monetary policy is trying to help the economy returned with potential and i would be sustainable growth that we can achieve their armies we given this experience and it's important that we know what is going on. the relationship is a complicated one and on the one hand very low rates for sustained period of times and risky behavior, other risky behavior. we're trying to address that are oversight and monitoring and that is our first line of defense, certainly for dealing with the sorts of issues. as you point out, it is a simple relationship because you've economy is also weaker credit quality and less funding opportunities and more
delinquencies. our strategy is to try to focus on inflation and unemployment using monetary policy and to pay close attention to any developments in the financial stability spare and using the supervisor tools that we have is the first line of defense. >> i appreciate that. the reason i asked those questions is because there has been a great deal written and said about this and as i look at what is happening in europe, i'm not sure that all of the measures taken under that guise produced either the economic results that we would like to see and certainly what we have seen for the results in europe. i don't want to make those mistakes. >> thank you. >> thank you, mr. chairman. inc. you care ben bernanke. we were just talking about the
situation. it certainly -- i'm here today and i don't really have any questions. i read your testimony yesterday. it really, i want to thank you for your service. another we have had our differences on some issues. but i really do believe and especially appreciate the way you handled the crisis. i think that our country was under extreme duress and i don't know how many people could have handled that crisis and the complexity that came with it in a way that you did. so i want to thank you for that. honestly we have had discussions publicly and privately about some of the quantitative easing. another we have had differences. another there is a whole industry of folks out there who watch every word that you say
and people right now doing calculations as to whether to buy this and i know that you have to be very cautious on what you say sometimes. so this is a little bit of a setback. i guess some of the concerns that i have had nothing members on this side have had, it has been a hyperactivity and it almost acts as an enabler for congress, which has had very bad behavior for a long time. this includes art and ability to do this in ways that would stimulate our economy and i think you are well aware of that although sometimes i wish that you would weigh more. i wonder if you have any parting comments. i wonder if you have any comments -- about any concerns, about this over time.
because of the hyperactivity of the fed has been engaged in. in a way that congress has lived up to what we have to deal with. if that is of any concern to you and if there is any similarity to a person who knows that they need to do certain things like eat right and exercise and instead, relying on them from amphetamines other kinds of activities to get into a place that we are in the world. as you contemplate those, i want to thank you whatever happens, i wish her well. >> thank you very much for the comments, senator. on hyperactivity, i think what we learned during the crisis is that we don't have the right
tools. that we wouldn't create a huge amount of this in the financial market. that we didn't have appropriate oversight in the banking system and there were a lot of weaknesses in our regulatory oversight and our system it is sometimes seen as frenetic because we are trying to improvise in many cases. and i think we have made some progress it monitors the system when it comes to emergencies. so i hope that that is the case. it is true that monetary policy has carried a lot of this burden for this recovery. we're happy to share the burden more equally with fiscal policy and other policymakers. i recognize that it's pretty difficult at this time politically for people to come to an agreement on very
important issues. and i do not think you have mentioned the enabler idea. i don't think it's my place to try to force congress to come to any particular outcome. congress who is ultimately responsible. all our role is to figure out how best to meet the mandate given to congress' action. i don't think we should try to threaten congress with higher interest rates or something like that. >> i know that is not her your place. i know you operate under the mandate. then think that most people would ration that the fact that the fed is there and does have to do what it does and in some way acts as a hover with our inability to act responsibly and
i think that goes without saying. >> i think as you can see, the acting alone is not producing the current results we all like. going in the right direction, but still a very slow process as i have said many times. so there's still plenty of room for congress to address some of these problems that the senator and others refer to it. >> senator reid? >> that you very much, mr. chairman. i want to commend you and thank you for your service to the nation. i witnessed you are innovative and improvisational thoughtful approach to problems that were potentially devastating to the economy and i think that through your service we have avoided a much worse the duration and i thank you for that. one of the things reflecting back as there were a few that
were talking about a housing bubble as the next great crisis and it didn't get the traction. in a similar vein you have some college talking about the city's debt, that is that could have macroeconomic effects going down in purchases, slowing down the we assume was the normal course. also i think that underscoring another huge problem is inequality in the growing inequality of income. our solution is education it seems. we have reports from georgetown university that there is already a projected gap that will be available and yet as we increase
this and all of the proposals that we are talking about currently, that is something i think it will cut down on opportunities for a lot of people. can you comment on this potential crisis in this macroeconomic effect, and whether we don't provide some kind of support directly and also other support, that this could be the next great problem that we face? >> it should be acknowledged that the ability to borrow and build your capital is extremely important and there is a time when no matter how much a student is qualified, it is very good for economy as well as for individuals and the amount of student debt is large. it is overage billion dollars at this point. and i think that it is not particularly likely to use cause
any shtick sharp stability that we have seen our last two years and it has a couple of consequences. one is it represents a physical risk for the u.s. government. and the extent that there are people who have taken a lot of debt and the economy is not serving them well and obviously over time, this is not something that the big issue, but over years they will not be able to buy a home and do other things that they otherwise would be able to because they are paying off the debt. so i think the answer to it is you need a strong economy that provides job opportunities and ensure time to do this as well. we need to make sure that students are better informed about labor markets and opportunities and with different options they have. you know, we know some of the
private sector cases the private sector online universities which don't have very good graduation work placement rates, people are still borrowing to take those courses and i think that there was better counseling and information, that would be an important step. but i don't want to step back from doing everything we can yet, to give people a chance to be appropriate. >> this growing income in the united states. doesn't impose economic and social risk your country, and how do we deal with it other than through education in many different ways? sumac that's a tough problem. it is a global phenomenon that has been going on for a long time. there are a number of factors
behind it and i think that one of the most important is the new technology that they favor the most for skilled workers and they reduce opportunities for people with medium or low skills, particularly the global labor force. so i don't have an easy answer. but i do think that related to the question about student debt, i think that the focus is important. not everyone should necessarily be doing the four year bachelors. some people would be better off working towards a job in an industry where there is understanding in advance that this is what is needed, this is the opening, this is community college. preparing those kinds of courses, more focused and job
oriented for those students who are interested in now. it might be helpful. this is a long-term trend andhar it. >> thank you, mr. chairman. >> senator toomey? >> i do want to thank the chairman not just for being with us today, but also for his years of service and we have had our disagreements over the years. but not without that respect for the way the approach to this and the work you have done. i have a few questions. one has to do the efficacy of the quantitative easing. more specifically there is a number of very thoughtful analyses that suggests that the benefits of the quantitative easing the ipod we have had might be quite honest, specifically i think the suggestion has been the conventional understanding of the mechanism of the increase in
consumer spending that would suggest a modest increase of gdp that has resulted from the significant increase recently in household net worth. even if you attribute all that the fed, which is itself a questionable premise. and then you have your own previous testimony and you acknowledge that the nature of this may be more a matter of timing rather than net increase and it can move forward with economic activity. that might not increase the economic activity in total. so i guess what i'm saying is that the magnitude of the benefit has been that, you might be a shift in timing anyway. i will suggest modest benefits
and yet the costs and risks keep mounting. the risks of whether or not we will have an orderly exit, i guess my question is how do you quantify the benefits that have been occurring, especially near term marginal but it can trim benefits going forward and kenny when do you systematically attempt to quantify the risks of what he found? >> yes. that's a very good question. there is a very large literature trying to figure out how big the effects and it's quite difficult to know for sure but the preponderance of the evidence is while this is not as powerful a tool as ordinary monetary policy, it does have meaningful impact on the economy and jobs. since 2008 where we have had no ability to movies short-term rates, where we have had some times where we are somewhat concerned about this we think
that it has had a critical boost to help the economy move forward. so i don't want to overstate it. again, there is a lot of uncertainty. there's a lot of work that suggests this is not quite so meaningful. it is true that no monetary policy could be very much about the long-term growth of the economy. but in a situation where we are well below that, that is net gain that is enjoyed by the economy. i've identified in terms of costs and risks, including other places, some of these risks, as i have said in her statement, that we look at this carefully. i think that the one that we have potential with its financial stability.
and we have tried to greatly increase our vigilance and monitoring in our use of supervisory tools and the like. senator menendez actually pointed out that there is risk on both sides because the economy does very poorly not create financial stability because of the effect on us and so on. let me just acknowledge that this is an issue that is important. we believe the first line of defense should be monitoring supervisory regulation and other similar tools. we do take into effect and take into account these costs and risks when we debate the monetary policy. you attempt to quantify this, or is it all subjective? >> we try to quantify it. it is very difficult to know
exactly what the size of the risk is. but we do a lot of work trying to measure, for example, we might be looking at this hormones and whether or not these covenants are becoming less restrictive and we monitor those kinds of things and we report those kinds of things is essentially every meeting so they can understand where financial risks are building and they are trying to engage these risks. >> thank you. i have other questions in my time has expired. >> senator schumer? >> thank you, mr. chairman. i want to thank you chairman ben bernanke, you are echoing the views of many of my colleagues in the house and senate and we thank you so much for your service during such a critical period of time. you have a quiet but strong
leadership that has been instrumental in keeping our economy from falling into repeating the devastation of the great depression, and we are now, because of your leadership, on the path towards turning that economy around. my view is that 2014 and 2015 will be stronger economically than our present time, and i will be in large part because of the building blocks that you put into place. so here are my questions. you have been as clear as i think you can be that the timing and tapering of your asset purchases will be imperative to our financial conditions. in june, 20 rejected economic growth will pick up since previous quarters and since then economic data has been mixed and we have decent job numbers, but
many signs of weakening growth, we have found that the baseline for the june outlet is worse than we first thought in the gdp numbers were revised downward. so the economy is worse than he thought in june, but the markets appear to think that you are set to begin tapering in september. so if the economy did not change and it was exactly as it is today, with the fed be announcing a moderation in the face of its assets in this one one subsidiary question. you have often said that these will continue until we see substantial improvement in the labor market outlook. the weakening data regarding growth changing with restraint and transfer into the labor market and can that continue to improve with relative growth. so first up is known about the labor market. >> the june meeting was only a few weeks ago and there has been some data points since then.
so it is way too early to make a judgment. honestly we will be reviewing the data and what we are looking for is a pickup as the year progresses. because one of the reasons the economy has been so slow is because of fiscal factors and it is hard to judge how long those factors will last. as the economy moves beyond that point and it becomes less pronounced, then we should see a pickup in growth and that is what we shall be looking for. >> you will look at the data and
is this in regards to the strength of the labor market? >> yes, we talk about talked about this. we were specifically talked about instead this was the goal of improvement so we have a broader growth. the three conditions that i described it will provide continued improvement. >> even with this relatively weak growth. >> it is possible. again, i think it has only been a few weeks and i think we have new data. >> my first question was about the tapering. i second is when you might end the asset purchases altogether. the minutes of your last meeting talked about how the participants indicating it would be likely that it would be
appropriate to end up with purchases late this year. yet you yourself said this was approved by the committee based on current projected and you expect them to end sometime in the middle of next or when you currently anticipated unemployment will be down around 7%. that is the level of unemployment that you say represents the amount of improvement that would want moderation. do those other members have a different definition of improvement? there seems to be some disparity between the other members and if you're not there there is a worry if there were a different view of the labor market and do they think that it will be 7% this year to have the relative costs and benefits. >> our there are reverse views on us and people can see an orderly winding down because
they are optimistic about the economy or because they don't think it's very effective. there's a lot of different reasons why you could have that. let me assure you that we have a very careful discussion and we have a goal around what every person including nonvoters get to express for several minutes interview on policy and perspectives and the general scenario is broadly supported by people on the committee, including voters and nonvoters. >> that is good to hear. >> senator coburn? >> sumac chairman, i appreciate the service we have given our
country. we have nobody to compare you to because we have never been in the situation that we were in before. but i think that basically you have done some significant work for the average american and i appreciate it. i have a couple questions in terms of the balance both in terms of inflation and employment and growth. in one of the things that concerns me is since 1980 we have changed the way we have measured untenanted inflation. if you use the same measure of inflation that we had, it would be over 8% in the other thing that concerns me is the median family income is the same as it was in 1989. and so if i had a criticism, it would really go along with senator corker stopped that we have let you down.
the kindergarten of congress have let you down for not doing the things you create the certainty of the business community which create some of the growth that you're hoping to do. for that i apologize. but would you care to comment on this, since in their testimony from inflation is under control, but the average american over the last 10 years has seen significant inflation and has seen significant inflation in the things that really matter. the cost of his content in education, education, electricity, in terms of this, would you comment on the changing metrics as well as maybe what we could have done
looking backwards that might have accentuated and augmented what you have done? >> the inflation statistics are calculated by the bureau of labor statistics which is made up of highly qualified professionals and there is no partisan influence and their efforts are always try to make the inflation numbers better and make them more accurate and that is my extent of what is happening there in terms of changes. there was a bipartisan commission on inflation measurements which includes this was overstated and not understated for inflation. so this is a distinction between prices seem high and prices being rising. it is true that all of these prices, wages are not going up much. >> that is right.
it is high and it is not going up. in other words this is part of the wages are going down because even though it's very low, it has been growing slower. >> discretionary income has increased. >> that is true. that is not an issue of inflation, that is an issue of living standards and it has to do with the productivity of the economy and the distribution of income. so i guess i would respectfully disagree doing as good a job as we can and if you look at light up prices, again, is not much different than it was a year ago. that is what it is, a rate of change over time. i can only go so far in
recommending this, but i do think that an attempt to focus this one the longer term would be more productive way rather than putting so much of the tax increases and spending in a frontloaded way, it would've been more helpful. >> if it would have helped create a certainty especially with the entitlement program, but also in terms of some of the ways, the effectiveness of some of the things you have done that monetary policy might have been greater. >> certainly. >> senator brown? >> thank you, mr. chairman. thank you for your services. >> thank you for the. >> urged holdfast on them and i'd do think he will do that.
>> some financial institutions argue as we discussed that we should not get ahead of europe and our financial regulation and on monday the governor said this and i think it's very dangerous that some try to characterize this so for us in the united states, those of us who are charged with financial stability need to make the judgment as to what levels will ensure financial stability without affecting the flow of credit ever since i have had this proposed adulation, i have had those around the world said that is really interesting. they're telling me the reasoning on us, why they are thinking about this, explaining why this is inadequate. and that we should do what we think is best for financial stability and if we lead by example, rest of the world will
follow. you agree? >> i certainly agree with the first part which is that it is a common denominator because these agreements are made by unanimous consensus and therefore there are a few countries are very resistant for whatever reasons, that makes it tougher to get a higher standard. we review those we are prepared to do whatever steps are needed in order to make our financial system safe. i don't know whether our countries will follow us. but their other countries that come to mind and those who have thought hard about this and have taken additional steps to strengthen the baking systems and we do have a leadership issue and we hope that that will happen and we hope it will be with universal. we see different responses from
different countries. >> you expect that this will follow. >> they all have the same key financial centers, which recognize how important banks to the economy but also the fact that in some cases they recognize that it's very important it is to have stability. especially comes to reconsidering additional provisions. ..
of ramping up regulation. since the crisis, international real real estaters kept demanding more capital including a senior charge for the bigger banks. hitting the new target six years early in some case, financial times asked where are the ill effects. the best continue to set new profit records with every earning season warns of calamity look more and more hallow. the debate about the feds new propose the supplement tear ratio reminds me when we think about cost we as poll makers think about cost and benefit industry want us to only to think about cost to them. steel companies dump waste to the river and argue it will be costly to clean it up.
it's been a it's a higher human cost to the minors and the children who get sick from the children and passes more health care on to the society. as they fail to internalize the cost. those who believe in a society with rule understand it might cost car companies a little bit more for air bags and safety features. they save lives. they might cost a little bit more and smaller bonus and maybe even in dividends. they'll help prevent a repeat of five years ago where the cost were obviously shifted to the broad public and retirement savings and lost jobs in every way imaginable. and certainly people lost homes if these are the costs of a safer financial system, aren't they worth it? >> the crisis was an enormous waste of resources,
pose a risk to society. in setting policy we should look at the social cost and not just the cost to the firm. that's what we're attempting it do. >> if it means the bonuses are a little smaller and dividends a little less and the earnings report of the banks aren't quite up to what they were this quarter, which was pretty lucrative quarter for them. that's a price we should pay? >> from a cost point of view we should look whether there any effect of credit availability that effect our economy. for broadly, but i certainly agree that again, given the enormous cost of the crisis that strong measures to prevent and repeat are obviously well testified. >> concern that the higher capital standards will result in less credit available?
i'm not concerned about it. we have done some analysis of that. >> there's not much downside if you said that our capital -- you said that the biggest potential problem with rules is does it mean less credit available? if it doesn't mean less credit available there's know real downside for strong capital standards. >> the only downside i can think if -- if banks are finding themselves finding very costly to make loan. credit may start flow u through less regulated channels. >> you're not implying we are close to that situation with capital standards? >> no, we're not there yet. we have to watch the shadow banking system and other part of the system and make sure risks are not being offloaded to other part of the system. >> thank you. >> senator.
thank you, mr. chairman. i appreciate the question of senator browne. chairman bernanke, thank you for being here. i was pleased to -- in the question of i think you answer the question i was going ask you to give some innight why we came as opposed to a former fdic chair who wants that percentage to be closer to 8%. we have legislation that wants it as high as 15%. i was looking for insight where we came to the capital rates. and it appears the answer may be risk unless you have more to add to it. >> we have a program for building up capital. i described part of it which was i.t. which triples the amount of high quality capital then the surcharges then the higher leverage ratio, and in addition
whole sunday fund and discussed the possible of requiring large firms to have unsecured senior debt in their capital structure, which could provide some buffer in the event of the firm fail. so we are in variety of ways trying to build up a buffer the large firms have. let me change the topic quick here to housing. the "the wall street journal" had a article on las vegas and the difficulty. we have had 2300,000 people in las vegas receive notices over 50 percent of the homes are under water. i know, you played an important role trying to reverse the situation. what are we doing wrong? what can we do as a congress to help move and change the situation we have not only in nevada, arizona, florida, other
states. >> as i was saying earlier congress' point of view that getting the mortgage finance system working better in term of reforming fannie and freddie and helping to clarify the rules. some is on us as regulators to do that. so there's greater access to credit and more people can buy homes. ultimately the solution is find a demand side to the market, you know, so that the man for homes will support prices and help us get out of the housing problem we have. >> i wasn't here earlier in the discussion of the reforms for fannie and freddie. i signed on the bill on the senate side. i know the house ruled yesterday. do you have a preference? >> i think it's very important with the congress move forward on this. i think it's time to do that. your insight on the second
compair market or government involvement, and experience? >> i think a key issue is going to be not so much making mortgages cheaper, but rather making sure there's some kind of backstop or protection for situations where the financial markets are in distress like they were recently. and the question is the government is one way to do that. there may be other ways to do that. if the government is involved,ic it would be important to make sure, first of all, that the government is appropriately compensated for whatever insurance or backing it provides. second disli, that the firms securetizing hold enough capital to protect the tax payer from losses. if that's done, i think that would be very helpful. if you come to a solution that involves a government role. >> let me talk about one other topic. sorry to jump around so much. gold prices. we have gold price almost $2 ,000 an ounce. it's dropped about $600 an ounce
trading today i think around 1275 where around there. do you have any insight why this volatility what quantitating easing what long-term impact it will have as you ratchet back? >> gold is an unusual asset. t an asset people hold as sort of disaster insurance. they want, you know, they feel things go badly wrong, at least they'll have gold in their portfolio. >> is that accurate? >> is that an accurate feeling. >> it's not all that accurate. for example, a lot of people hold gold as an inflation hedge. the movement of gold prices don't predict inflation very well, actually. but anyway the perception is by holding gold you're having a hard asset you'll be protected protect you in case some kind of major problem. i suppose one reason the gold prices are lower people are less concerned about extreme
outcomes. either, you know, particularly negative outcome and therefore they feel less need for whatever protection gold. >> an indication of perhaps psychologically the direction of the economy. for investors. i think psychologically with gold price going down not necessarily a bad things suggest people have more confidence and less concerned about really bad outcome. let me end by saying nobody understands gold price. i don't pretend to really understand them either. >> thank you, mr. chairman, thank you very much. >> senator. >> thank you, mr. chairman. chairman bernanke, thank you for your service during hard times. i still want to ask about other risks to the economy. you know, the biggest banks in the country have reported huge profit over the last couple of years. but just this week they reported staggering numbers. wells fargo's profits jumped 19%
from last year. jpmorgan chase profits jumped 21%. citigroup's profits jumped 42%. now some reports have indicated a big part of the profit have come from the bank's trading activity. in other words, not from banking but trading on wall street and elsewhere. so are you concerned that the biggest banks are loading up on big risks again? there another explanation for this spike in profit? >> well, let me just say we are quite aware of the portfolios, and we are addressing them in at least two ways. more than two, really. one, we just finalized new capital requirements that banks have to hold against these assets for sale. these securities. which provide protection. we have done stress tests we
assume that dpes of 2008 type of financial shock hit and there's a huge drop in asset values. and we're stress tested the banks to see if they have enough capital to cover protect themselves against big losses in their securities books. the other thing, of course, you know we are working hard with our colleagues to put the volcker rule in place. it will restrict proprietary trading. >> let me say, mr. chairman, the question i'm trying to ask whether it indicates they're loading up on risk. i appreciate what you're telling me about the ways we're trying to regulate the risk when the banks take it on. maybe i can ask it slightly differently. that is yesterday secretary of treasury jack lou said, i want to get the quote right. if we get to the end of the year and cannot with an honest straight face say we have end
too big to fail, we're going have to look at other options. do you agree with the secretary and treasury? >> i don't know about the timing. maybe another year from now. i've said to you in an earlier hearing there's a strategy. dodd-frank lays out a strategy. bozell three provides additional support. if those thing do not makes comfortable about the status of the largest firms, i think additional steps would be appropriate. >> we need to look at other steps, as you know, i introduced, along with senator mccain, senator king a glass stegall bill another tool in the toolbox to deal with too big to fail. i think we have some time. the secretary of treasury said at the end of the year you say maybe a yearlonger. we have to keep it under examination. fair enough?
>> yes, i think we want to look all tool, obviously. i think there's probably more scope for capital if we're not comfortable with the status of the firm. >> fair enough on that. i want to ask you, as you know, the federal reserve and the occ announced last january they were stopping their investigation in to this systemic ford motor company fraud and you reached a settlement with the largest mortgage servicers in the country. and just last week, the occ announced that 52,048 people just in massachusetts received checks so far under this settlement. it it was an aggravate total of $41 million in compensation, or about $8 00 in family. now, thatted 00 in family estate massachusetts where the median home income is $3 24,500. i'll do the math for you.
that's about two tenths of one percent of the purchase price of the average home and the commonwealth of montana. it's my job to look out for families in massachusetts, including helping them get basic information about whether settlement made on their behalf by the government are fair. to do that, six months ago i started asking for basic documents about the investigation. and to see what the foreclosure fraud investigation had uncovered. how many people had lost their chance to save their home? how bad the damage was. so far the fed and the occ have disclosed very little of what i asked for. so the question i have is how the people i represent in massachusetts who believe they were cheated or the 4 million who receive checks around the country how they know that the
payment they're receiving are fair if the fed and the occ won't disclose details about what they uncovered in the investigation. >> as you know, we stopped the investigation well before all $4.2 million boar borrowers are analyzed. we don't have the information for everybody. we have it for some folks. we are looking to see if we can find a way to get the information to individuals who did -- whose files were evaluated by the independent consult assistant. >> good. so we're talking about getting that information to them, and releasing more information about what you did find in the aggravate? >> yes. we hope to have a report on the whole thing within the next couple of months. >> good. >> that will layout basically all the information we have. some of the things you have asked, frankly, we didn't collect or whatever. we will try to provide as much
transparency as we can. >> i would be very grateful for that, mr. chairman. you know my concerns in this area generally that if the regulators are not aggressive enough, if they don't require a admission of guilt, if they never take large financial institutions to trial, then the resulting settlements are too weak. and so i know you appreciate the slap on the wrist is not enough, and if the occ and the fed are confidence that these are good settlements, i think it helps everyone if the information is out there. thank you, mr. chairman. i appreciate it. >> i would like to add, of course, the people who receive checks have not yielded their legal rights and could pursue further if i wish. >> i hope by revealing the information they'll be better to evaluate whether or not that's appropriate for them. thank you. >> thank you, mr. chairman, i have a number of additional questions that were coming up
again a vote right away. chairman bernanke, if it's okay with you and the chairman i will submit these questions to you and ask you to respond later. the questions i have among others are some further inquiry about the short term interest rate policy at the bank. the actions right now that the f -- and as you might guess, i'm gse reform. get further information from your perspective on that. ly submit those questions, mr. chairman, in light of the fact we have a vote pending. thank you. chairman bernanke, i want to thank you for your extraordinary service to our nation. i want to thank you for your testimony. this hear is adjourned.
president obama made an unexpected appearance at today's white house briefing. the chief executive wanted to talk about the trayvon martin/zimmerman case. we'll show you his complete remarks at 8:00 p.m. eastern on c-span. but here is a brief look. there are very few african-american men in this country who have had the experience of being followed when they were shopping in a department store. that includes me. there are very few african-american men who haven't had the experience of walking across the street and hearing the -- on the -- locks click on the door of car. it happened to me, at least before i was a senator. there are very few african-american who had the experience of getting on an elevator a woman clutching her purse nervously and holding her
breath until she had a chance to get off. that happens often. er don't want to exaggerate this, but those sets of experiences inform how the african-american community interprets what happened one night in florida. it's inescapable for people to bring those experiences to bear. the african-american community is also knowledgeable that there is a history of racial disparity in the application of our criminal law. everything from the death penalty to enforcement of our drug laws. and that ends up having an impact in term of how people interpret the case.
this isn't to say that the african-american community is naive about the fact that african-american young men are disproportionately involved in criminal justice system. that they're disproporing nately victims and perpetrators of violence. it's not to make excuses for that fact. although black folks do interpret the reasons for that in a historical context. we understand that some of the violence that takes place in poor black neighborhoods around the country is born out of a very violent past in this country. and that the poverty and dysfunction that we see in the communities can be traced to a very difficult history. and so the fact that sometimes that is unacknowledged add to
the frustration. >> in 2003, an article you recommended a historical quote history -- crimes sponsored or permitted by the united. which crime were you referring to? which decision taken by the current administration would you recommend for such a reckoning. >> thank you, senator. again, thank you for giving me occasion to respond to that. i, as an immigrant to this country, think country is the greatest country on earth. as i know do you. i would never apologize for america, america is the light to the world. we have freedoms and opportunities here that people dream about abroad. i certainly did. with regard to that quote, one of the things that had moved me, i had as some have mentioned i written critically about the
clinton administration's response to the rue rwanda genocide in 1994 written in great detail about that, and president clinton himself, you know, has come forward and expressed his regret that the united states didn't do more in the face of the genocide. when i traveled to rwanda; however, having been very critical. i was stunned to see the degree to which clinton's visit to rue dwan, his apology, for not having done more had resonated with them. >> this weekend on c-span, the senate foreign relations committee taking up the nomination of salesman that power to be u.s. ambassador to the u.n. saturday at 10:00 a.m. eastern. on c-span political c-span2 booktv live full day coverage of the harlem book fair.
i decided that he was -- the subject for a biography when it dawned on me he had not only at abraham lincoln's bedside mainly after his assassination but william mckinley in 1901 i thought who could the fellow be? of course, why opened the archive i realized what a rich subject it was. his life really has two bookends at either end of his biographical shelf. lincoln's one end. he lived in the white house with lincoln for four years. so much what we know about lincoln comes from heys imminent contact with him. at the other end of his life, he served only under mckinley.
he was the secretary of state for teddy roosevelt. you have wonderful iconic bookends. when you look deeper you realize that all of the chapters in between in american history from the civil war through to the beginning of the 20th century, a presence in every one of those chapter. his fingerprints are on all of the pages. and in many case he's a written those chapters of american history. who was celebrating his 95th birthday. mandela served 27 years in prison and was south africa's first democratically elected president. representative maxine waters who organized antiappar tide protests and attending his
inauguration said the leader was, quote, the most historic figure in the world in the past 100 years. other speakers including -- the south african ambassador to the united, and marry francis berry former chair of the civil rights commission who participated in this 90 minute ceremony. ♪ [drum beat] ♪
[drum beat] [cheering and applause] ladies and gentlemen, good morning. welcome to the united states capitol. in recent weeks, reports on the health of nelson mandela refocused the world's attention on the remarkable state'smen and the rich expanse of his life. at times, it can almost feel like we're talking about an old friend. the reason for that, i think, is scarcely a week or day goes by without pointing to mandela as an example. an example standing on principle
of loving your neighborhood and extending the reach of freedom. all of these eye dials we cherish and he has lived a closest to them. it's not a perfect picture, no one is. he walked to a condemned to prison for life as a terrorist. he said i had time to think, i had a clearer view of my past, and found that my past left much to be desired. if i had not been in prison, i would not have been able to achieve the most difficult task in life, and that was changing myself. by keeping his humility and faith, mandela became a better man. e he has made all of us better
too. in the timeless question is asked if a man dies, shall he live again? well, i know this man will. he surely will live on in the heart of every dreamer, every builder, and everyone who toils and says i want to be free. -- his spirit will last as long as we do our part to honor his life, his legacy, and his values. so let me thank the member of the congressional black caucus for bringing us together for this celebration. let me express my appreciation to the ambassador in the african diplomatic war for joining us today. i thank you for being here today. happy birthday, mr. mann mandela [applause] [applause]
>> let us pray. we give you thanks, almighty god for the appearance among of us great profits. this day we honor perhaps the greatest of our time, nelson mandela. his modeling of forgiveness in the wake of horrible injustice suffered is a call to us all to a greatness beyond most of our imaginings. if we continue to celebration this grant them all who attend these proceedings my transcends smallness and limitation, and emerge as people desire of being our best cells. and service to all of our brothers and sisters. dear lord, thank you for inspiring such greatness in nelson mandela. continue to bless south africa
oh say can you see by the dawn's early light. ♪ ♪ what so -- proudly we hail ♪ at the twilight's last gleaming. ♪ ♪ whose broad stripes and bright stars through the perilous fight o' er the ramparts we watch ♪ ♪ so gallantly streaming ♪ ♪ and the rockets' red glare, the bombs bursting in air ♪ ♪ gave proof through the night that the flag our blank that our
[applause] we come here today to celebrate the life and legacy and the birthday of the father of a nation. the george washington of south africa, the abraham lincoln of south africa, nelson mandela. after appar tight ended congresswoman maxine waters attended the inauguration of nelson mandela as a part of the official united states delegation. she has said many times it's a day she'll never forget. a cull m nation of more than a decade of her blazing awarend as only maxine can do about the evil of appar tight.
throughout the 19 80s, maxine waters organized marches plural, lots of them, and rallies in los angeles to protest appar tight. but she was still an assemblyman, she lead and sponsored the legislation that outlawed california's pension plan maintaining their money in the south dakota -- south africa i are sheem. south africa regime some $13 billion. [applause] in 1990, the year nelson mandela was released from prison, she served as chair of the reception committee that honored nelson
mandela in los angeles on the eighth city tour of the united states. congresswoman water served as a national co-chair of the presouth africa movement, the chair of los angeles free south africa movement. her work has earned her national recognition but international recognition. she earned the highest honor that can be stowed on a civilian. the award as i indicated, press pretentious award in 2008. it's my pleasure to introduce a fighter. that's an understatement. not only nelson mandela's values. but the values she's lived by and not only a congresswoman we
recognize here in america but also internationally. maxine waters. [applause] the congressional black caucus lead by congresswoman calls us together today to honor and celebrate the life, legacy, and values of nelson mandela. the most significant historic figure in the world in the past 100 years. even as he lies in a hospital in critical condition, and even as we must face the inevitable at some time we celebrate mandela's 95 years of life. happy birthday, president mandela!
[applause] as we celebrate his life, what is the legacy we inherit? what values do we embrace? he taught us so many lessons about determination, leadership, unity, and love. if it can be summed up in one quote, it would be this. he said, i have walked that long "road to freedom." i treed not to falter. i made missteps along the way. but i have discovered the secret that after climbing a great hill one only finds there are many more hills to climb. i have taken a moment here to rest, steal a view of the glorious distance to surrounds me. to look back on the distance i have come. i only rest for a moment. for with freedom comes responsibility. i dare not linger for my long
walk is not ended. the lesson is that all of us are on that long walk to freedom. and we must all pick up the the mantle and go forward. let us do so understanding the long road we have already come. the people of south africa suffered century of colonialial rule which was institutionalized called apartheid in 1948. he joined other freedom fighters in the african national congress and early 18950s to advocate for freedom and democracy. in the early years, the world's attention was not focused on africa, but as we witnessed the collapse of colonialial rules and neighboring countries like mo mozambique in the mid '70s and zimbabwe's political independence in 19 80s we soon turned our eyes toward south
africa in the 19 70s many of us in america began hearing the powerful african voices of activists, musicians including -- known as momma africa. they were waging new wage of strikes and young people fed up with separate an unequal. system of education where standing up. the risings of 1976, and the police mass cur of hundreds of people provoked sustained national resistance and brought about unprecedented international reaction. among african-americans the similarity of the uprising as a civil rights and inspired a new wave of empathy and solidarity and a new wave of activism and solidarity was unfolding in the u.s. antiapartheid movement.
student demonstrated at more than 100 universities across the country forcing university administration to devance funds from companies involved in out calf. -- africa. national and groups multiplied. they took action. it was under the leadership of randall robinson and the congressional black caucus that lead america to get involved in the struggle in a profound way to bring nelson mandela and end apartheid. i was moved by nelson and the people of south africa. in los angeles the free south africa movement played a active role in equal boycotts in front
of shell stations. we spoke at town halls and city halls. throughout the 1980s we organized marcheses and rallies in los angeles to protest apartheid. we lead sit in the south african office in los angeles. and put our freedom on the line. when i was arrested for protesting the apartheid regime in front of the south africa consulate d.c. it 1986 i called for i divestment and helped to make the call for divestment a national movement sweeping from state to state and city to city. i did this by authoring assembly bill 134 to record $12 billion from pension funds in california plus fort fying california's opposition to the apartheid
regime. the divestment movement grew and at one point there were over 40 state legislature considers a divestment bill. in 1987, the los angeles free south africa movement, which i chaired welcome president oliver, the president of the africa national congress, in standing room only gathering at trinity baptist church, it was during the time i learned about or met other important freedom fighters. for me 1990 was a particularly memorable year. in february when we learned of the news of mandela's release. from 17 years in prison, the member of the los angeles free south africa movement organized an all-night vigil about 5:00 a.m. in the morning in l.a. we watched on tv mandela walking out of prison.
he id as i walked out the door of the gate that would lead to my freedom. i knew if i didn't leave my bitterness and hatred behind i would still be in prison. a few months later i chaired the committee which welcomed nelson to los angeles hosting a six-hour rally and concert attended by close to 90,000 supporters at the los angeles memorial coliseum. in november, i was elect to the united states house of representatives. with all the talk of transition to democratic rules, mandela stressed that sanctions must continue until the country was sat on an irreversible course lead together transformation to a united democratic and nonracial country. thus providing us a clear mandate for the continuation of sanctions. the following year when the
african national congress was finally unbanned, organizers were allowed to surface from the underground and others were able to return home from exile. in july of 1990, while i was in durbin, out south africa as a special guest participating in the historic first natural conference of the after mandela was released from 27 years imprisonment and robin island. president bush lifted sanctions with congressional approval. i said i would not agree to lifting sanctions until i heard from nelson mandela himself. two years later in the fall of 1993, in the middle of the night, i got a call from overseas. it was nelson mandela calling. he said, maxine, it's time. by november, the amc publicly declared the transition process irreversible and preparations for the first all south african
election that was to take place in april of 1994. a month later, i was a member of the official u.s. delegation to witness the historic swearing in ceremony for nelson mandela as the president of all of south africa. so today we celebrate the 95th birthday of the first president of the democratic south africa. nelson mandela. more than that, we celebrate the life, the legacy, and the values of a true long freedom fighter. happy birthday, nelson! [applause]
rare is the leader who rises to such prominence that his name becomes globally recognized as a symbol for causes greater than himself. rarer still is a leader who directly challenge and establish order up in nearly every convention of a society and still find a way to establish u himself as a unified figure. not just for his own people, but for people the world over. across the divide of continents, across the borders of nations, the frontiers of ideologyies.
even though that kind of leader might be a rarity, it's exactly what the world has in nelson mandela. the man we celebrate today. a leader whose name is ?an mouse with ideas like hope and e determination and reconciliation. we admire this man. , nelson for his endurance all the years in prison when he never lost his faith in humanitarian, but we also admire him for his insistence on what some might call the more excellent way. the more excellent way to unity. when others at the time urge the easier road to venn --
-- and hate. it is that quality which helped transform him from the leader of a cause in to the father of a nation. so this morning we honor this leader and we do so both republicans and democrats both senators and members of the house. by read his own words so he might inspire those gathered today to the same kind of courage and foresight he had. i believe my colleague, senator durbin, will be leading us off. >> let me thank the congressional black caucus and maxine waters. not only for bringing us together for the birthday
celebration. but the singular determination to make certain that the united states congress was on record opposing an condemning apartheid. it sounds like an easy task today, it wasn't at the time. it took remarkable courage and i commend my colleagues for that leadership. [applause] this is what he wrote. this is what nelson mandela wrote about his own childhood. at birth my father gave me the name which literally means pulling the branch of a tree or more accurately troublemaker. my english name, nelson was given to me by my class teacher on the first day attended school. nobody ever sat with me to give me a clear evicted account of the history of our country. i acquired knowledge by asking questions to satisfy my
curiosity. as i grew up learned through experience, watched adult, and tried to imitate what they did. i came across few whites as a boy, the local magistrate, of course, was white. as was the nearest shop keeper. occasional white travel leers or policemen passed through the area. they appeared as grand as god. the role black blank and those curious in remote figures. [applause] >> nelson mandela, freedom fighter. i had know e epiphany, no single revelation, no moment of truth. but a steady accumulation of a
thousand slights, a thousand indignities, a thousand unremembered moments. produced in me in anger a real bell useness, a desire to fight the system that imprisoned my people. there was no particular day on which i said i will devote myself to the liberation of my people. instead i simply found myself doing so and could not do otherwise. the national day of protest on june 26th, 1950, was the first national campaign in which i took part. at the end of the day, i felt the exsill ration that springs from success. in the leading cities, the majority of the workers stayed away from work and black businessmen closed their shops.
the success of this day raised our morale and served as a warning to the government that the people would resist apartheid to the bitter end. [applause] nelson mandela, freedom fighter. june 26, 1961, a letter from underground. i'm informed that a warrant for my arrest has been issued. that the police are looking for me. i've had to separate myself from my dear wife and children, from my mother and sisters to live as an outlaw in my own land. i shall fight the government side by side with you, inch by inch, and mile by mile until victory is won. will you come along with us?
are you going to cooperate with the government in its efforts to suppress the claims and aspirations of your own people? or are you going remain silent and neutral in a matter of life and death to my people to our people? for my own part, i have made my choice. i will not leave south africa nor will i surrender. only through hardship, sacrifice, and militant action can freedom be won. the struggle is my life. i will continue fighting for freedom until the end of my days. [applause] >> the accused. april 20th, 1964. i'm the