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tv   Politics and Public Policy Today  CSPAN  May 11, 2016 4:15pm-7:01pm EDT

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i would hope that we will make mr. trump and everybody else understand that this is a country that is moving forward, and hopefully learning from its past. with that, i'd like to yield to our distinguished chair, mr. becerra. >> thanks, jim. i'm the proud offspring of hard-working immigrants. there's a saying in spanish -- [ speaking foreign language ] -- roughly translated -- as is the stick so is the sliver. donald trump is the offspring of republicans in congress. when you have reps who will describe immigrants as having calves the size of cantaloupe, because what what they do is bring drugs across the border, or when you rudely interrupt the president of the united states
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in the house chamber when he's giving his state of the union address and shout out "you lie" when in fact he was telling the truth. when you try to undo a policy that has helped hundreds of thousands of young men and women come out of the shadows, and go to school and go to work, and you vote in favor of that, then you're no different from the guy who yells out that immigrants are rapists, that they bring crime and drugs to this country. and so you can't try to separate yourself from the stick you come from. and no one should try to distance donald trump from the republicans in congress. they are one and the same. he is just an offspring of what we have seen over the years coming from republicans in congress. and so it's time to change, because if you're a bystander, you're allowing things to happen, and for many people, including me, this becomes very
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personal, because donald trump and republicans in congress are talking about my parents, and about me, and it's time for us to stand up and say this is not the way you do it, because many of us are very proud of having a rich heritage as the children of immigrants, and we intend to let the country know that we don't assistant for those who shout out "you lie" or describe people as rapists and criminals. we want to let everyone know we want to give them a place in this country. that's why it's so important to bring out the true facts about who donald trump is. he is the offspring of congressional republicans. with that, let me yield to the vice chair of the caucus, joe crowley. >> thank you when i visited a local mosque in my district to
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show my support and hear from the community, i was called a traitor on twitter. i was called un-american. i was told that i should resign. that's only the stuff i can reveal here publicly and feel comfortable repeating. there was much worse that was said. but that's nothing compared to the student who is bullied on the school bus because of his religion, or the shop owner in my district in queens, who was savagely attacked by someone who said he hated muslims. or the child who discussed me at that mosque, why does my country hate my religion? why does my country hate my religion? when the republicans hold a vote on the house floor to ban syrian
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and iraqi refugees from entering our country, refugees fleeing unspeakable violence and persecution because of their misguided fear and blatant hate, that's what happens. when congressman steve king says muslim members of congress refuse to, quote, renounce sharia law, or louis gohmert says islam is evil, end quote, that's what happens. when congressman peter and says, and i quote, there are too many mosques in this country, end quote, that's what happens. when their candidate for president, their extestandard br calls for a ban on the entire
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religion from their country, that's what happens. children ask if the united states of america hates their religion? my colleagues on the other side like to puff up their chests and repeat the word "freedom" over and over again. in fact they named a caucus after it. but when they not only ignore, but blatantly toss aside the very freedom our country was founded on, it makes you wonder what they're really fighting for. they have created their own stye and now they have to wallow in it. with that i lead back to the leader of our caucus ms. pelosi. >> thank you very much, mr. crowley, i thank distinguished members of the leadership, mr. hoyer for not only his statement today, but his leadership on all of these issues, lgbt among them. mr. clyburn, thank you for calling our attention to the birther issue and the tradition that accompanies it. mr. beserro thank you for
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sharing your personal story on the contribution that immigrants make to america, the constant reinvigoration of our country. mr. crowley, thank you for sharing the sad tale of what is happening in your district when you spoke out and demonstrated your support for muslims. i will add to what you said about peter king. peter king was a chairman of the homeland security committee, and he said -- this is the enemy living among us. when he referenced the islamic community in our country. rules of the house prevent us from showing you a side by side and some of the egregious remarked made bed members in not an official setting, but we'll have that another day with other members and another political setting, because they deem that to be political if we were to show donald trump's words here. but if you saw side by side, you would see his birther remarks
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and their birther remarks, his anti-muslim remarks and building -- the list goes on, you know it, you could put this piece together yourselves, but to help you along and encourage that, we wanted to present some of the facts to you. some of the nighttime comedy shows have done a good job of doing the side by side. hopefully the traditional press will do that as well. any questions? yes, sir. >> all your examples aside, there's hardly a universal embrace of trump among republicans on capitol hill to the point that speaker ryan made the remarkable step of not endorsing him next week. does that less hearten you that the speaker of the house is taking that step and calling for more civility, the softening of the tone? >> i think you missed my point was. my point was since when?
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when is the republican leadership in this house appalled by anti-muslim, anti-immigrant, anti-lgbt, anti-barack obama, anti-women comments made by their members. donald trump is a candidate. these people have power. they are chairs of committees and chairs of subcommittees. they bring that vitt rriol into legislation. so our point is since when all of on -- are all paul to the republican leadership and some of the republican establishment when this happens every day here on the floor in committee, in press conferences, in an official way, and certainly out on the campaign trail. we can't do the campaign trail here, we can't even do the trump campaign trail here.
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do we feel better about them? have a meeting -- >> i do know this. >> his position is he hasn't endorsed the nominee for president. >> and our position is why? some of the things have been said that this is agreed? because these a rejection of donald trump on the campaign? it's not a rejection. they never said boo. they never said boo when their members were saying this. is donald trump has pulled back the veil, and now people can see the connection between them, and unless the republican leadership is going to be as, shall we say critical of their own members
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for what they say it's all a show. >> a meeting tomorrow will not chan the environment that has been created over decades, as mr. clyburn pointed out. and radicalism is what however the country needs. >> i would make one other point, the young guns and possession for power, they created their own mess, now they have to wallo in it. they're response for it, and now
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it's coming home to roost. as the leader said, are they surprised that they're saying the same thing they've been saying consistently over the last five other six years? how can they be -- going back to 1948 when the full change started, really coming to fruition -- is mr. ryan really appalled? what he is saying is a mirror image of what they've been saying over and over again. about the lbgt -- it's not new. the receipt ricks is open, and she and we will expos that in the near future as well.
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al republicans kicked off their campaign to begin with goldwater. opposition to the civil rights out. if you go into the 1970s, richard nixon built it in on if ronald reagan level his convention, nully nominated for the bearer for the republicans. where was his first speech this
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what is philadelphia, mississippi known for? that's for where the workers were murdered. his fifth speech as a gnome any was in 1980. so when you see this kind of foundation being laid over time, i'm not surprised to see that donald trump has decided that this is the way to become president of the united states. >> it may be the way to be the nominees, but not the way to be the president of the united states. what we hope to do is take this to a place where we can review the past witnessed what has happened so far, but understand the country has moved on. tirnlts i believe that the american people have moved on
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from this age of discrimination. >> i wanted to ask, given the quinnipiac poll results that show donald trump and hillary clinton in a dead heat in florida, pennsylvania, and ohio, are you concerned that donald trump is appealing to democratic voters? and if so, how would you explain that? >> well, i think we have seen even since those polls came out they would boiled in too many -- i'm not a big fan of the polls that's going on. as a matter of fact it's tilted toward a person like me, white and older, rather than who illustrate actual electorate will be. i feel very proud, of course hillary clinton, they have
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through their ideas attracted people to their campaigns. i have no doubt that we will have a democratic president. i want the public to be sure to know that i hope with your help this will be elevated to the office of president, worthy of our founders, worthy of the american people, and not vitriol and character assassination and issues that are irrelevant to working people's lives, about trickledowns, and i think that some of this is a distraction from the fact that rye atbudget is a road to ruin. so there's a lot going on there.
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our purpose here today is to show a split screen of what -- i think of him as ronald mcdonald. i don't know why -- >> i wonder why. >> mcdonald trump. >> donald trump on one side and members of the house here, and don't you wonder why and since when all of a sudden are the republican establishment is appalled by the comments? >> it seems the bill about puerto rico has been delayed. are you still optimistic that something can get done before july 1st, since it seems like it's the third, four time going back to the drawing board? >> as i've said before, i
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believe that everyone is operating in good faith to get a bill done. we were disappointed that the bill we saw yesterday wasn't something we could support, so another few days of back and forth i think will produce something that we can take to the store. it absolutely must happen. we have to have it in a bipartisan way for the restructuring that does the job and in a way that helps grow the economy of puerto rico. >> so by the end of the week you're thinking maybe? >> what's today? wednesday? >> hoping maybe by friday so we can have something for next week. yes. we'll see. thank you all very much. stay tuned. on american history tv on
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c-span3 -- >> there has never been a full public accounting of fbi domestic intelligence operations. therefore, this committee haus undersustain such an investigation. >> on real america, the 1975 church committee hearings convened to investigate the intelligence activities of the cia, fbi, irs and the nsa. saturday night at 10:00 p.m. eastern, the commission questions committee staffers frederick schwartz and curt smothers, details including intimidation of martin luther king jr. >> king, there's one thing left. you have just 34 days in which to do it. this exact number has been selected for a specific reason. it is definite practical significance. it was 34 dade better the award. you are done. then associate fbi director james adams admits to some of the excesses while defending a name better of other fbi practices. then at 8:00 on lecture on
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history. >> the rest of us may in a bad life see a death or two. they see hundreds. so they're the first to sort of see patterns or shifts in how people are going out of the world. so they are the ones who sound the alarm. university of georgia professor steven barry on the role of a coroner and how they shed light on the emerging patterns of death within a society and spot potential threats to public health. sunday even at 6:30, secretary of state john kerry who served in the vietnam war and later became a vocal opponent, shares his views on vietnam at the linden b. jansen presidential library in austin, texas. >> they received neither the welcome home or treatment that they not only deserved but needed. the fundamental contract with soldier and government simply was not honored. then at 8:00, on the
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presidency -- >> what other person sitting at home watched ronald reagan deliver the speech? it was dwight eisenhower. he immediately called his former attorney general and said what a fine peeve ronald reagan had just delivered. he then called a former special assistant and said what an excellent speech ronald reagan had delivered. dwight eisenhower wrote back a multispecial political plan for ronald reagan to follow. reagan would end up following eisenhower's advice to the her, examining the mentoring of ronald reagan, and the pivotal role the former president played in reagan's political evolution. for the complete weekend schedule, go to cspan.org. next an economist says donald trump's proposal to increase tariffs on china is a plan with no economic
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foundation. gordon hansen's comments came during a discussion on china's trade practices and the impact on u.s. labor markets. jared bernstein a former economist with the obama administration also participates in this forum. let me welcome all of you today. i'm fred berg extend. i wassed founding director of the institution, and delighted to welcome you to for thick larry important and timely event we all know that trade has become a central issue in the
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domestic political debate. we know that the impact of trade on jobs and wages is central to that debate, and we now have with us today the leading experts on that topic of the impact of trade on u.s. jobs and wages, david otter and gordon hansen, along with david dorn, they have done a series of papers that i think are fair to say are the definitive work on the topic widely regarded and widely yod and cited throughout the national debate. in fact, so much so that a couple people coming up and meeting them before the event said you are rock stars, we're delighted we knew you back when, which i think is probably accurate. also, i must say, very much to their credit, they have on the one hand quite objectively analyzed some very severe adverse impacts of past china shock trade flows on the u.s. economy and u.s. labor, and at
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the same time they have said but we don't dump on free trade and open trade and globalization. we think it makes sense, but you have to deal with these down sides and costs of the situation, and they've been very clear, for example, they support the tpp, they're not saying turn your back on trade, but they are flagging in a dramatic way, i think, as well as a highly persuasive and annual lit real -- that have not been dealt with adequately. that's the topic today, dave odder is one of the most distinguished trade economists in the country, a full professor of economics at m.i.t. since 2008, associate head of the economic department there. he taught previously at harvard in the university of chicago, won many awards for his work on labor economics, in 2080 outstanding contributions in the field of labor economics, and
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many other aawards of that type. he copresenter today and co-author, in that whole range of studies is gordon hansen, who's professor of economics at the university of california san diego. as some of you know, we here at the institute refer to that as it is peterson institute west, because we have had so much coordination. gordon holes the chair in international economic relations at ucsd both david and gordon are research associatesty national bureau of economic research. david is editor of the journal of economic perspectives and gordon is a co-editor thereof. they'll make the initial presentation, and then we'll have initial commentary by jared bernstein, as many of you in washington know, jared is a
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senior fellow at the center of budget and policy priorities, prior to which for the first two or three years of the obama administration, he was a center member of economic team, as chief economist and economic adviser to vice president biden. prior to that jared has written widely in both academic and popular venues on issues of labor economics, labor reform and the like. so i think we have an absolutely central topic for today's discussion. we have i think the best possible authors and speakers to present new and critically important findings, without fur ado, i will turn to, gordon will go fir, david, jared will make
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comments and we'll all go up front for a discussion with the audience. gordon, take it away. >> thank vessel, fred. it's been an exciting project that we have embarked on in the last number of years. one of the things we want to try to communicate today in understanding the impact of trade on labor markets is in a sense how can we hold at the same time the belief that trade has had adversion consequences for important segments of the u.s. labor force and still thing that trade is good in the aggrega aggregate. that sort of subtlety is something that's gotten lost in the current political debate. so we don't need to motivate the notion that trade and politics are intimately entwined today. trade has become a purchling bag both on the rep side and
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donald trump's presidential campaign and in bernie sanders ease campaign. it's useful in thinking about why trade has become such a lightning rod to go backwards in time and think about how we got here. and the promise of globalization that was presented not just in the united states, but around the world. the idea was that globalization was going to make the u.s. commit better off. a foundation well founded in economic theory. there's a substantial amount of research that backing up that idea. what we didn't pay that much attention to was the possibility that trade could have adversion impacts on certain parts of the labor force, on certain regions of the united states that happened to be more specialized in industries that are competing. that inattention to the vulnerability of certain key parts of the u.s. economy to trade left us vulnerable to possible disrupting effects of
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other aspects of globalization. well, what was the big disrupting feature of globalization. it wasn't nafta. nafta's impact were trifling, relative to what the impact of china's growth has been. so we now are very familiar with the idea that china has had enormous consequences for the global economy, as china has lifted several hundred million people out of its own economy. it's transformed the way in which global markets operate. that's ex-post wisdom. if we go back to 1990, china's future potential wall street very much in doubt. in 189 "wall street journal" in prognosticating about what would happened in the 1990s said let's think about the three economy that is are most likely to excel. they are bangladesh, thailand and zimbabwe.
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they identified china as likely to be a laggard in the coming decade, because it wouldn't be able to shake off the -- lo and behod the world turned out much different. i don't want to beat up on journalists here, economists were just as far behind in terms of understanding what xhin's future impacts would behold. what we want to emphasize here is this was really a one in an epoch change. china had kept itself tremendously backwards relative to the rest of the world. with four decades of technological advantage, china had very much stayed in 1949. so that meant there was tremendous latened productivity growth that was waiting to happen. the process -- unleashed that growth. that is a big part of china's emergence, if you go back to 1991, imports from china accounted for only about 1% of
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total u.s. expenditure on manufactured goods in the united states. that 1% is now around 10% today. there are many call at affects, bush rather understanding their consequences on the u.s. economy. i know many that currency manipulation played in china's growth. others have emphasized the role of reform and state-owned enterprises. china's accession to the wto unleashed a complicated set of reforms in the economy that helped growth accelerate. so what did it then mean for the united states? well, if we were to take trade theory at the time and say what would china have done, we would have thought in terms of broad classes of workers. it's going to hurt blue collar
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workers relative to white collar workers. it's going to help the more educated and hurt, the less ed indicated in a relative and perhaps absolute sense. this is decades, if not centuries of economic theory on this, well founded in the traditions of -- and so that's what we had thought, that we should see these diffuse effects across the big sectors of the u.s. market. in truth, what happened was a lot more complicated. this conventional wisdom that, when we have interaction with an economic like china, it's going to spill out generally across lower wage workers turned out to be notice quite right. china's impact his much more concentrated than that and trying to understand those concentrated impacts has been what our work has focused on. so to give you a sense of these consequences, what we're going
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to do is very quickly run through what we have learned about the labor markets consequences of trade, talk about how does -- how does that learning change the way in which we think about the economics of trade and adjustment to trade shocks, and then talk about policy. what has policy done to help or to impede adjustment at the worker level and the regional level from happening, and what might effective policies be going forward in time. so one thing that hasn't been surprising about china's impacts is that the on firms and the industries that have been most directly in the line of fire from china have been hurt. so if you look at trying where import penetration from china has grown at a more rapid clip, what we have seen is higher rates of exit, of manufacturing plants, and we've seen larger declines in employment in plants that have stayed in operation.
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so that part's not surprising, more import competition, you're going to be disruptive effects. what has been surprising to us is the scale of those -- of that disruption at the industry level. so what our work subjects is that the direct impacts of increasing import competition from china can account for about 1 million lost manufacturing jobs in the united states, which is about 17% of the decline in manufacturing employment over the two decades that we look at. so more surprising still has then been to think about not just what happens at the industry level, but what happens at the local labor market level. if you think about the u.s. economy. it's a collection of community, a collection of cities that specialize in quite different things. we have parts of the southeast, parts of the southeastern midwest, we have other parts of the country that do very little
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manufacturing. then when we think about manufacturing regions themselves, there's also enormous head reasonable nayity in those lot. some manufacturing specialize in heavy equipment, some in automobiles, others specialize in more labor intensive industries. so if you map this out and just say if we go back to 1990, and ask based on the patterns of specialization across communities in the united states at the beginning of that decade, who was then -- what did exposure to the coming china trade shock look like? what we see is a checkerboard map. darker colors here show u.s. commuting zones. that were more exposed to import competition from china over the subsequent two decades. lighter colors indicate areas that were less affected. what you see is a very striking
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absence of uniformity. and what you also see, looking through the current political lens is a lot of those darker-colored areas, the areas more in trade competition look like trump country. that is, in fact, what we find. i'm going to plug work we have in progress right now looking at the consequences of trade exposure for political outcomes in the united states. you see increasing support for politicians at the extremes primarily on the right, a bit on the left, in response to increasing exposure to trade. that highlights the long-run consequences of some of these shocks. you then say, okay, fine we've got areas in the southeast. we've got areas in the southern midwest that are hit by increased import competition, what should we expect to see happen. what we thought was the standard rule of adjustment is,
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employment declines, workers leave those regions and go to areas that have greater job growth. this is just part of dynamic adjustment that's part and parcel of what makes the u.s. labor market more flexible relative to europe. what our work has found and it's not just our work, it's a growing body of work in labor economics that looks at other type of shocks to these local communities, is that that outmigration response has not been an active margin of adjustment to increasing responses in import competition. so, those reasons that have gotten hit by greater trade competition with china, they've seen declines. the regions in which those industries are located then see declines in those -- in those industries that then spill out into nontraded activities locally. and instead of workers leaving declining regions what we have instead have seen is adjustment
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along other margins. we've seen absolute declines in the employment as a share of the working age population as workers have exited the labor force or transitioned on to long-run unemployment. we've also seen as a consequence of that greater uptake of government benefits which david will talk more about in a couple of minutes. so, in the paper we kind of go through great pains to try and put precise metrics on what the nature of this adjustment looks like. and the metric we use let's think about a commuting zone -- let's think about a local labor market that's at the 25th percentile of trade exposure, that is one that hasn't been that affected by import competition from china. and let's contrast that with a local labor market that's at the 75th percentile. so, high exposure versus low exposure.
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that difference in exposure amounts over the period we examined the '90s and early 2000s to an increase of about an extra thousand dollars of imports from china per worker. what's the consequence of that greater exposure. so, in manufacturing industries it's a decline in employment as a share of the working age population of about .6 percentage points. that might not seem like a big number but this is the share of employment in the working age population which has changed over time by a magnitude of about 3.5 percentage points, so that's -- that decline is a big number. now, if workers were smoothly adjusting between regions what should have then happened, well, they move into other activities, nontraded activities or leave the region entirely. we've seen neither of those things occur. as i just mentioned what has happened is a movement out of the labor force and increases in
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unemployment that persist over a period of a decade or longer. not surprisingly, the adverse consequences, the exits from the labor force and the persistence in unemployment is more concentrated among lower educated workers. so, that's one big lesson that we've learned from our research is that there is this differential exposure of local labor markets to trade. those areas that have been hit have had persistent declines, decreases in manufacturing presence, decreases in employment as a share of the population overall without successful outmigration. one other important margin of adjustment that i'll talk about and then turn it over to david to think about putting these results in perspective and talk about policy is now instead of thinking about industries or think about regions, let's think about individual workers. let's go back to 1991 and let's imagine two workers that are similar in every observable
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respect. they have the same number of years of labor market experience. they have the same earnings history. they work for similar employers in terms of the size of that firm and the number of -- and the average wages that that firm pays. the only manner in which these two workers differ is that one works in an industry that is going to get hit by the china shock and one works in an industry that is not going to get hit by the china shock. so, what we've learned from labor economics is that workers who are displaced from their jobs have long-term adverse consequences. there are scarring effects from job loss. so, that's not new to our paper. this is work that's been -- was established by labor economics research in the early 1990s. what we find is very much the same story in the trade context. those more exposed worker if you think about that worker's twin sees a substantially lower
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earnings over that worker's -- over the subsequent two decades. what you can think as lower lifetime earnings as a consequence of that greater exposure. now, to come back to differential exposure according to worker characteristics, now let's consider two sets of twins. okay? one set are low-wage workers and the other set are high-wage workers. all of those adverse consequences happen among that lower-wage pair. that is, for workers who are lower income, they are the ones for whom greater exposure to import competition from china meant lower earnings in the long run. if we think about that pair, that pair of two high income workers, the quens consequences greater trade exposure just don't show up. so, in sum what we've seen is less flexibility in response to these shocks as a consequence of
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trade and so more concentrated losses from trade exposure. this is not that old story of blue collar workers suffering. it's about particular labor markets. it's about particular industries and indeed particular types of workers and that may be in part why the policy response to those shocks hasn't been as effective as we might want it to be. so, we're -- as in our research we're tag teaming here. i will let david, then, talk about lessons and policy issues. >> great. thank you very much. it's an honor and a pleasure and i should clarify i'm really a labor economist. not a trade economist. the collaboration and gordon and david and i have done is to try to bring a labor, economic sensibility in these trade questions in trying to use microdata and as much as possible a clear source of differentiation.
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i want to step back from the results that gordon talked about and put them in context and two questions to address. first should we be surprised by the large effects we find on workers who are displaced by trade. second, what's the problem? is it trade adjustment or is it trade itself. is it the process of getting from here to there or is it just the mere fact that we're trading? i think it's an issue that is the subject of a lot of debate. and finally i want to talk about has u.s. policy response been effective and how could it be potentially be more effective. should we be surprised by large earnings losses. this figure is from a paper on job loss. this just looks at displaced workers and it's by steve davis and a brookings paper from a couple years ago and it looks at an average of workers over a trajectory of 20 years from displacement. zero is the year of displacement. you can see for a worker displaced in an expansion they initially use 25 to 30% of annual earnings and even 20 years out they have -- they're
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still 10% down. if you look at workers displaced in recessions the initial loss is 40% and 20 years out they're 20% down. and so this finding that workers displaced from long-term employment suffer permanent scarring effects has been around. it first came out in work looking at workers displaced in pennsylvania during the big steel contraction in the 1980s and it's been corroborated by dozens of subsequent studies so we know this is a robust fact so we shouldn't entirely be surprised that workers displaced by trade also suffer large losses that's always been true. a second thing is filling in on this point, this figure shows you the relationship between the size of the earning loss over the first three years and the initial unemployment rate at the time that job loss occurs. and so as you move right you're moving to deeper receptissions as you move down those are large losses. those displaced in 1999 when the labor market was extremely tight would tend to lose 10% of earnings over the next three
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years because they quickly get reemployed. someone displaced in 1983 when the labor market was extremely slack would lose 30 percentage points over the next three years so it matters when the shock occurs. the greatest acceleration of the china shock occurred after -- after 2001 after china's introduction to wto. it was a very slack labor market. there was no job growth in the united states between 2000 and 2007. the unemployment rate was low but the labor force participation rate was falling quite steeply. if you look at 2005, 2004, 2003, you can see for the level of measured unemployment the job losses -- the earnings losses were much larger than you would have predicted and we think, you know, part of that is because the labor market was actually in worse shape than was perceived at the time. if there had never been a great recession we would say the 2000s was a lost decade for the labor market. that's how serious that was.
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to put that into context it says job losses is costly. it's more costly when the outside options aren't very good and so we -- china shock was accompanied by large quantities of job loss and people being dropped into effectively kind of labor market quicksand from which it was difficult to emerge during the 2000s. you might say why is that shock so persistent? why does it have such long-term effects. one of the thing we looked at in our data is once they are displaced from manufacturing how disposed are they to further shocks. that depends where they go. if you are displaced from textiles and go to leather goods, you'll be displaced again. if you go from textiles to aircraft engines you won't be shocked again. i'll explain this figure briefly. the blue series of dots shows you the correlation between your exposure in 1991 and your subsequent exposure over subsequent years it's initially one and it falls to about 0.5
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over the course of 20 years. if you look at the red line, that shows you a counterfact in which workers once displaced move out of manufacturing. once they are initially shocked they're no longer exposed and you can see that's a much steeper fall. what it tells you is a lot of workers who are displaced from one trade impacted sector move into another and shocked again and especially low-skill workers they tend to say in manufacturing and they keep getting hit again. part of the reason the losses are so persistent it's not a onetime event even for the individuals that first experience it. that's the kind of labor economics point and really all this says is something we've known for a long time the cost of job loss we're seeing through a trade lens at a magnitude, a za scale we didn't previously see. is it the adjustment or is it the mere fact of trade itself? and my frequent colleague and
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ever-present critic larry michelle wrote a -- on his blog recently he said tired economists misdirection on globalization. he said globalization's impact is much greater on all noncollege grads not just manufacturing workers. the results are permanent and not temporary lowering the wages of all unskilled workers. gordon and i have been emphasizing the cost to unskilled workers and the view from some quarters is no, no, that's a sideshow it's the whole economy that's being affected not just these workers. it's important to ask what is the bigger deal here. so, in the short and medium run we know that the cost of job loss are sharp and steep and they're scarring. and concentration matters. so, you know, imagine taking two different welfare experiments or, you know, social experiments. we pick one individual and we take $10,000 away from that person. another one we take 10,000 people and take $1away which
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does more harm? clearly the concentrated harm is much greater. if we take $10,000 away they'll lose their house, right? it matters that the shocks are concentrated. we know that's going on in short and medium run. what about the long run. trade theory says if you increase the supply of a previously scarce factor its price is going to tend to fall so in long run prices and wages are going to change and lower price of goods and services but also lower wages for workers made less scarce by globalization and the wage effects should not be limited to manufacturing. they should be expanded to the entire skill group. how much do we see that? well, it's a harder question to answer. there's an old line of work on this. there's a very well-known paper published in 1997, and they tried to do a kind of calibration exercise. this is basically you take all of the goods that are being imported. you turn them back into units of labor. imagine they were made
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domestically how much labor is embodied in those goods. how much are we increasing the effect of supply of low skill labor in the u.s. by importing these goods. some trade economists don't like the calculation, but it actually makes a lot of sense in an economy like the u.s. that responds to its own supplies to a great deal. so, they make this calculation. only to 1995. i'm going to update it here for you. they say, look, u.s. gdp trade rose from 2.3% to 3.9 %, that probably reduced high school dropout versus high school graduate rate by a couple percentage points and raised wages. that's not zero but that's very small on the scale of wage changes that occurred in%. high school dropout wages fell on the order of 20%. college graduate wages rose on the order of 25% in that period. so, that's real but small. but you might say that's to 1995. we know the big shock was coming and that's true. this shows you u.s. good imports
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from china as a share of u.s. gdp between 1991 and 2004 and it rose from 0.3% to 2.7% in that period. you can see a lot occurred immediately after 2001. the rise between 1991 and 2001 wasn't. seven percentage points. enormously rammed. we do a back of the envelope calculation. taking the same exercise and just applying the new data from to china to say how much did the china shock over this period affect wages in aggregate assuming that market's clear. it's not concentrated but fred through the u.s. economy. to 1991 to 2014 we would so it lowered high school dropout to high school graduate to 1.8 percentage points and it rose high school graduate wages to
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college. it's very small on the scale of the wage changes we've seen, changing return to education. the growth of inequality between workers of different education levels. we come away from that saying the real cost of trade from the really the adjustment. the long-run effects, they're not zero and we should care about them, but that's not the magnitude of the change that people are feeling. what they are really feeling is the impact of workers who lose employment on local labor markets, on industries and communities that go into decline. not the general change in the wage level for the entire u.s. economy. okay. so, now let me turn, how has the policy response been effective. in paper trade adjustment assistance is our main policy tool. but the actual policy response that we see in the data has very little to do with trade adjustment. it has much more to do with other social transfer programs. so in particular we find that
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for every thousand dollars in trade exposure of a local labor market the metric that gordon was using earlier, you get $58 per capita in public transfer benefits. where are those transfer benefits coming from. we put them in order. of that $58, $3.65 is unemployment and trade adjustment assistance. another $8.40 is disability insurance benefits people exiting the labor force and entering the social security disability rolls which is basically a permanent exit, an early retirement from the u.s. labor market. and people taking early retirement. another $15 in other government income assistance like s.n.a.p. and t.a.n.i.f. and another $18 in medicare and medicaid. they respond elastically in proportional terms they are big,
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in actual dollars and most of the dollars coming from programs that are not directed at returning people to work. right? not only -- this is not what the programs were tintended for but they don't have good incentives effects about getting people back into the labor force. how could we deal with this better. what would be the right lessons to draw. is this the right time for higher trade barriers? there's nothing in our work that says that trade is a net negative for the u.s. economy. you know, all the theory and some evidence suggests it grows the size of the by but some slices are getting in absolute terms a lot all? er even as the by gets a little bit bigger. so what we ought to be thinking about is how to better allocate or divide that by as it expands. so, what might policies look like. one policy idea that people talk about a lot is so-called wage adjustment insurance. or wage insurance. the idea is, you know, when people are displaced from a $20 an hour job they are reluctant
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to take a $10 job, i've now accepted my reduced stature in life and i won't be able to find something equally good so people tend to hang around hoping for something better. we know the longer people spend out of the labor market the less likely they are to get reemployed and they tend to get employed at lower earnings. we see you lost your job, 20 bucks an hour and take a job at ten bucks an hour and let's make up $7.50 of the first year and $5 for the second year and 2.50 and then zero. you help people make adjustments. you get them back and compensate them for some of the loss and you help get them back into the labor force quickly and programs th perhaps that leads to a better trajectory. another possibility that would be politically palatable and much more shovel ready. the earned income tax credit is
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a generous social program for people with dependent children. if you are a family with three or four dependent children you can get 3,000 or $4,000 at the margin. you are paid more for working. let's say you are a middle age man and you have children but they've gone off to college so you don't have any dependents any longer you can get $400 in the earned income tax credit. the itc is a policy that can make work more attractive and pay better for everyone if it were expanded in that direction. if we change the rules such that it was a broader set of subsidies and the other useful thing about that it doesn't have to be trade specific. people are displaced by machines all the time. do we care less about them that, you know, if they're displaced by a foreign worker as opposed to a domestic robot? i would say we don't. moreover sometimes workers -- imagine a community that loses 1,000 manufacturing jobs people will stop going to restaurants and stop buying cars. that will reduce employment in
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those sectors. should those workers receive trade adjustment assistance. very hard to figure it out. better to have a broader policy that supports work and supports reployment. and most other countries do more of this than we do. our workforce design safety net is decades out of date. has changed very little in the last 70 years. many other countries are aware of the costs of job loss and both support workers but also very strongly and actively encourage them, give them incentives and carrots and sticks to get them back into the workforce. let me make a final point on this. we'll have to make the trade adjustment should we rip the band-aid off and get it over with or should we go slowly? i think many people have the instinct shock therapy is better, get the pain over with and one and done. but in labor markets that's never going to be true. because careers are finite and if an industry is going to sunset, there will be retirements and attrition people
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won't enter that sector because they know it's shutting down so there's a natural process through which industry ebbs and flows. but if you make that same adjustment in the course of a year or a month and everything shut down that's a huge amount of disruption. even for the same amount of adjustment making it more gradual reduces the total amount of pain. the total amount of suffering that occurs because the natural adjustment process can take place much more effectively over time than it can overnight. okay. so, just to conclude, important to stress trade impacts in the future will look quite different than the past. the worse of the china shock as we've measured is over. china has now hit many of its own internal constraints. its manufacturing employment is falling. even if we did nothing at all the next 20 years would look nothing like the last 20. we're not about to experience the same thing again. i think that's the lesson that is not reaching our political
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discourse whatsoever. a second lesson we would take away that donald trump and bernie sanders are not as surprising in retrofect as they appeared six months ago and our recent work on the polarization of trade shows that the polarization of the house of representatives, was very concentrated in the last 20 years in trade impacted locations, elections of extreme conservatives and in nonwhite districts pretty strong liberal, so there's the political fracturing along geographically trade impacted lines that naturally reverberate in this election. we would say the inattention to the negative impacts of trade, trade boosterism has been the enemy of trade policy. and a mature conversation that recognizes that these costs are real, that we should recognize the benefits from trade and
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recognize that certain individuals will be made worse off and develop policy that helps mitigate the adverse impacts that's much more effective, more palatable in the long run than simply saying it's good for you, shut up, don't complain. everyone benefits. that's not true. and so our work we hope has the effect of contributing to a conversation about making trade adjustment more effective, making the benefits shared and the concentrated losses less adverse and less painful in total. okay. thanks very much. >> well, thank you. this is a real delight to be able to speak to this paper, to comment on what i'll call abh, the china shock. because it's -- i probably have read at least 100 papers on trade and wages and this one is my favorite.
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i think it's extremely strong empirical work. really a solid notch above much of what's come before including some of what david spoke about. and i'll get into that a little bit. but the nice part is that if you really agree with a paper, you don't have to spend a lot of time quibbling about co-efficients and specifications and things like that. you can get into some more fruitful discussion of the type i think david just very usefully took us through regarding the political economy of trade and this incredibly unique moment where something very important and very big, and that's the benefits of trade, not just to us, but more importantly to impoverished countries who can only improve their living standards with wealthier countries like ours. those benefits are very much at risk and i completely agree with where i think david was at the end one of the reasons they're
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at risk is because too many of us in this field have been abject cheerleaders for trade and not looking at some of the costs. i've been part of kind of a small band of economists who have been trying to do that for a long time, but we were typically skunks at garden parties and kicked out of polite places in many cases because if you said anything critical about the costs of trade, you were thought to be a protectionist. i hope my comments so far about the important benefits of trade not just to us but to our trading partners would completely obviate that accusation. not only am i not a protectionist, but my family is comprised of two children from china, so i wake up in a global household every morning, often much earlier than i'd like to. so, let me see if i can -- and, however, i have one disagreement
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that i'll get into. because i think it's more fun if you have at least one disagreement and that's vis-a-vis bullet point two. it seemed like a very -- a bigger part of their discussion of gordon and particularly david's discussion today was this argument with larry michelle who is a good and longtime friend of mine i should get that on the table, about whether the impacts of trade are acute versus diverse. is this mime true? one of the points made at a conference that i disagreed with and i think gordon and david agree with, this is a point of disagreement between us, is it's a typical mime, i'm not even sure what that word means but an internet theme maybe, something that everybody believes to be true but really isn't, it's the idea thebenefits of trade are diffuse. but the costs are acute. and that's why it's such a
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fractious political issue and why trump can have such traction here because people don't recognize the benefits because they're so diffuse. but the people acutely hurt as in adh do. i actually think that adh's results really give much more support to the costs of trade being quite diffuse. not accuse -- not simply acute. now, the worse of those costs are highly acute. but their work i think shows quite clearly that the costs of trade to noncollege educated workers are quite -- are real. but they're a lot smaller than the direct effects. one of the problems you get into here is you start throwing adjectives around and it's always bad for economists to do. smaller, i don't know how to -- yes, definitely. the indirect effects are smaller than the direct effects but i don't know how to rank those on a scale of what people really
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care about on a utility or political margin. i'll say more about that as i go along. and by the way you heard gordon say that noncollege educated workers have been hurt. well, what i think you really should say when you say that is that most workers are noncollege educated workers. that actually the -- the share of workers with a four-year college degree or above is maybe a third now. so, the costs are much smaller in their work. absolutely much smaller in their work. you might want to call them trivially small if you want to throw that adjective around. but they're definitely there and they're definitely diffuse. that's the one thing we disagree with. let me just keep going here. and then i do want to -- i see my friend jay is here who knows a lot about that fourth bullet. jay, i hope you jump in here at some point. jay is with the council of economic advisers. i think there's a set of
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problems in global macro right now. i'm sure gordon has thought about these. and there are problems in global macro right now that loom large here at the peterson institute that i think threaten to amplify some of the effects that adh find. and then i'm completely with david, in fact, he did such a good job on the last bullet point i could save some time. i'm going to spend very little time on this. i was going to talk about -- actually, david didn't get into this because he was being modest. but this -- there's nothing obviously wrong with the factor -- well, the work on factor content and trade flows in my view is far inferior to what adh have done. that's what i meant when i say
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they didn't advance the debate. you know, frankly it's a lot easier to do, you don't have to crunch the microdata the way they have done. but the problem with the earlier work on factor content which david said it takes the shifts in supply in national skill proportion and it maps those onto wage effects using elastici elasticities. when you are using factor content you cannot find anything other than the fact that it's going to lower wages. and i don't particularly -- that happens to be something i believe to be true, but i'm very wary of confirmation biases and i don't like statistical exercises that predict the answer before you get there. in their work, if import penetration from china didn't have the kind of effects they found, their co-efficients would have been insignificant. so, i think the factor content work both because it's highly agrigate aggregated and because it has
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the answer built into it is inferior to the work they've done here. other analysts will take the trade deficit and map it onto job losses and through an input and output matrix and talk about the costs. i have subscribed to some of that research but that's a level or two down analytically from what adh have done so it's a great improvement. i did want to talk a little bit and maybe i'll get into and i know jay has thought about this as well. china shock, yes, as david pointed out the china shock at some level may be seen as over. i'm not so sure, but certainly i think china currency is -- is reasonably aligned. i don't think china's manipulating their currency now. but there are other countries who have very large trade surpluses. germany most notably of a trade surplus of 8% of gdp, it creates serious imbalances and shocks to
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other countries and other parts of the globe. to what extent can you extend this work to other places other countries even if the china shock is behind us. i'm going to argue i'm not so sure that doesn't mean other shocks aren't out there. they would not disagree with that. hmm. i seem to have mis -- oh, okay. so, let's -- okay. this is the part where we argue a little bit. and i don't want to overdo it, because i'm going to make this sound like a bigger argument than it is. i frankly think -- i think they've got it right which is that the direct costs are -- you could say large if you want to use an adjective. the direct costs are the size they showed and they look quite significant to the incomes of affected workers. indirect costs are considerably lower. and i don't know what they are exactly but i do know that they're diffuse and i think their research shows that. josh bivens has a model in which
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he finds the impact on the noncollege educated workers which is the majority of the workforce -- that includes people with some college but about two-thirds of the workforce does not have a terminal college degree of some sort. it's very much an upper bound. it's very much higher than what adh would find and josh's work comes from a cge model that is much more in the fiis spirit. and it works off of factor price equalization when your trade with low-wage countries go up and i think david and gordon talked about this in the context of samuelsson, the impact on your scarce factor which is we have a lower share of low-wage workers than they do is going to be negative on the wage side and that's where the adjustment takes place in the bivens model. but that may be an upper bound. it certainly, again, is more of the assumed impact than the
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measured one. but josh is a very smart trade economist. and, in fact, adh confirmed that factor price equalization is very much operative, they just argue it's not particularly diffuse. but i would actually like to hear them talk more about by what model do these impacts not diffuse or even standard do you say they are not diffuse. if you look at their map which i won't throw up here, if you look at their map on "b," which looks at the quartiles of exposed workers. commuting zones or parts of the country that are exposed to the china shock and you look at the top half, the tom two qp two qu, a lot of the map is dark or less dark. i can't do colors and i hate these maps. they make no sense to me. but i can see that a bunch of this map, a lot more than not, you know, is affected. again, affected in a way that
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they may want to call small, but affected in terms of wage losses. they tell you that 70% of manufacturing job losses have been -- are accounted for by the china shock. now, not every community has manufacturing in it. but those that do are certainly highly visible. [ inaudible question ] 17th. what did i say? i wrote 17. 70 would be a disaster. 17 to me is -- five minutes. great. 17 to me is a very, very significant share of the problem. but, again, calibrating this stuff is -- may be a matter of adjectives. on the other hand, i think that the diffuse costs and the fact
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that they're small, adh are definitely right that they're smaller than the direct costs, get much too -- they get overweighted in the political debate in ways that are familiar to all of us and that david and others have talked about. here mike froman said something that is quite profound. somebody said to him in this conference why is there so much anger about trade when we can look at these and we can say, well, you know, if they are right, 17% of manufacturing employment lost through the china shock, i think that's important and sounds pretty diffuse to me but it's not 83%. and do you know what, what froman said nobody gets to vote on technology which is a kind of obscure way to say that the thing that people get to vote on, argue about, take a stand on is trade. that's the thing that -- that's the phenomenon, the structural change within the economy that
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carries a hugely disproportionate part of the weight for everything that ails us. david talked about the 2000s as a lost decade and i've heard other people say that and if you look at median household income it's a fair statement. trade is not the only reasonable for that by a long shot and david and gordon would agree with that. but it's -- it carries that freight. because people get to vote on it, to have an opinion on it, to take a position on the tpc. that brings us to this unique moment. yesterday i read in "the new york times" last night while i was trying to have dinner and reading about trump which is a terrible idea, digestionwise, donald trump said trade is killing the country and then he said the markets would be fine with the 35% tariffs on multinationals that outsource. that is bat crazy. and may be our next president. so, we are in a unique and
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critical moment when statements like that can be heard. where does that come from. why does that resonate with so many people, which it does by the way, and if you don't think it does you need to get out more. well, one reason has to do with this little slide. the squiggling line is the trade deficit as a share of the gdp on the right axis and the other line is the manufacturing compensation in real dollars from the 1950s to now. and i'm not saying that these two caused each other directly by a long shot two lines on a graph. by the way, you can see the china shock as a share of gdp goes to negative six percent in the 2000s but people would reasonably associate when the trade deficit was zero manufacturing compensation, blue collar workers, by the way, doubled from by about 12 to 25
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bucks and as the trade deficit has been persistently negative and that's large in economic terms, that's a lot of growth to offset, that that wage hasn't grown at all. so, that's one reason why this message gets to be resonate. people make that connection. the other reason is hillary clinton opposes the tpp, that's another discussion we can have. certainly when an esstrabment politician on the democratic side said i don't think it's going to help workers enough that will elevate it as well. the thing i wanted to say especially since i'm here at the peterson institute where joe gagnon does a lot of great work, i definitely agree the china shock is over from a perspective of the kind of import penetration lines that the they showed but china holds large reserves and the work shows -- i've talked to joe about it -- simply holding, you know, trillions in reserves does put
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upward pressure on the dollar. i think it's probably de minimis relative to some of the more direct interventions but i wouldn't write it off. and while donald trump is wrong when he talks about china currency manipulation, as i'll show in a second from a slide of jay's, that thing still goes on. and most notably by the way and the most important thing is our adh effects what you just heard. and adh are very clear in making the political connection between this unique moment and so-and-so. i'm going to stop in a second. elites have been cavalier about the costs of trade. i said that. let me just do this and then i'll stop. give me another minute if you would. my policy points were largely made by david. and maybe we'll have more chance to talk about them in "q" and "a." so, beyond adh, i think we have a problem in global macroeconomics that is
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exacerbating trade deficits and triggering the kinds of -- if not shock effects but triggering some of the pressures that adh find in measuring the china shock. bern bernanke talks about a savings glut. when countries many whom acting in a fashion that have suppressed investment and increased their savings. exporting savings here, importing labor demand there. this is something that ben bernanke was writing about in 2005. he thought it would be kind of a temporary problem and the stagnation have recognized it's a tougher one than that, and an important paper shows that star right there those are capital flows and this is a typical macroeconomic formula for the growth of outbut notice in open macro now these guys are including capital flows as a negative factor. and, in fact, one of the things we've seen in recent months is
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that as capital flows have come here seeking safe assets, you've had this savings investment imballblance that larry summers tells you underlies secular stagnation such that the desire for savings is greater than the desire for investment. puts downward pressure on interest rates and puts upward pressure on the dollar. i would include this and, again, i hope jay will comment on this, i would include this as a relatively new or at least newly recognized pressure in a zero-bound economy that's creating a global macro problems that exacerbate adh effects. i should just show this because it's jay's slide. this is a slide from jay showing the extent of current account imbalances. that's the 8% germany surplus and the imf sustainability target showing that some currencies are undervalued. some currencies are overvalued.
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even while china is just about appropriately valued, it doesn't mean that everybody else is. just closing here, what -- here i'd like to make a proposal, too, my friends at the peterson institute, to fred and adam posen, if you are listening, adam, i think that -- i think we have a real difficulty with free trade agreements. i, like many others, and i think this comes out of gordon and hanson, i think there's a big difference between trade and globalization which can be and should be a force for good and free trade agreements which have become a process by which stakeholders often from a sector that doesn't represent working people are having too much influence. and so i would argue that the fta process is kind of broken and even if you don't believe that, i predict that we're not going to see much in the way of ftas for a while. it happens to be that there are 300 ftas already in the world and perhaps we can work on negotiating rules within them. and i have some other ideas that
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i think would help in the interests of time i won't go through them right now. tfas are trade facilitation agreements. we might have a margin to do more there. but at the end of the day i think it's a unique moment and i think we can usefully tap it together if we stop having the fractious fights about free trade agreements which i think is a cul de sac to nowhere right now and start thinking about ways to do what i think david said particularly at the end of his talk. promote the benefits of trade which is going to mean really taking seriously in a way that we haven't before winners compensating losers. you know, theoretically free trade has been a big seller because the winners can compensate the losers but they don't and, in fact, the power that the winners have accumulated in an era of wealth inequality has made it a persistent problem for folks and now we're seeing it in our political economy. thanks very much.
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>> okay. many thanks for all three speakers for putting an enormous amount on the table. i want to start with one question and then we open it to the floor. to david particularly and gordon. your bottom line was that the u.s. labor force is not sufficiently flexible and adaptable to adjust to this particular source of dynamic economic change. why has the u.s. labor force become less flexible than we all thought it was and so thereby cause this problem? >> it's not obvious that it was ever as flexible as we thought it was. and i think that's what we see from the -- i think that's what we see from the evidence on
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displaced workers, you know, in steel in the 1980s that actually involuntary job loss for midcareer workers extremely costly. we hadn't seen it associated with trade because the trade adjustments hadn't been of the same magnitude. there's a school of thought and i've been in discussions with people, well, this is all because of the social safety hammock that has discouraged workers. i'm really not convinced that's true. i really think we're seeing a very large shock and we're seeing displaced workers and that's the typical response that occurs when you have impacts of that magnitude. that may not be 100% of it. we know that geographic mobility across states and counties in the u.s. has been on decline for several decades. the workforce is older so there may be other structural changes. i do not think it is primarily due to the creeping ivy of the social safety net. >> okay. floor is open for questions. yeah.
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we've got a traveling mike. we've got a standing mike in the back. start here. ralph, identify yourself and then fire your question. and then we'll go to bob next. >> hi. thanks, ralph carter with fedex. in the first presentation the last bullet point talked about gradual adjustments that if we could have gradual adjustments through attrition and other things the impact would be reduced. but are you saying that we can control the pace of those adj t adjustment or is there a policy fix that can look at that? i didn't understand what the conclusion point there was or action point was. >> we can't control it all. but we can at least be aware of it. a lot of the china trade shock are about internal adjustments in china that allowed it to grow to the place it should be. a lot of that was not in our control but the wto was in some extent. in negotiating further treaties
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if we are going to cut tariffs we can sunset them rather than do it overnight, for example. the point is not that we have complete control over the way economies integrate, but we can when we do decide to open ourselves up, we can think about the trajectory of that as opposed to simply the end point. >> i think another important point there is once you have openness to trade and capital flows, you are then exposed to big shocks tha s that happen in rest of the world. chire chi china was a big shock and we were remiss in the planning over the last couple of decades. >> i would amplify one thing dave had said. when we negotiate trade agreements we do frequently use long phase-in periods for the liberalization in order to ease the transition over time. and in sensitive sectors where there's a lot of domestic concern that is frequently done.
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time is sort of the great leavening force and that's been a traditional technique in trade agreements. some of the transitional phase-ins in tpp exceed 20 years. so, that is a technique and that's one way to go about the question. bob? >> bob samuelsson, "the washington post." this question is for dave and gordon. exports must have some effect both on consumer welfare but more importantly from your point of view on the local labor markets. and i'm unclear from your discussion as to whether or not you take that into account and what you're talking about are the net effects of the china shock or whether you simply for whatever reasons did not take it into account. >> great question. and we did very much focus on u.s. exports to china as well. the results i showed you were for gross imports from the u.s.
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to china. we look at net imports u.s. imports minus those exports to china. over the time period in part for some of the reasons jared mentioned is that trade imbalances made it such that u.s. imports from china completely dwarfed u.s. exports to china and to first approximation the china trade shock was an import shock. in the long run we expect an adjustment that will allow u.s. exports to expand and create new job opportunities in the industries that export to china. we would have thought i think if you were asking us this question in 1991 that 2016 would have been the long run, but you look at u.s. trade accounts today and we aren't there yet. >> if i could just say a word about that, if that's okay. >> sure, jared. >> just quickly. you know, the trade deficit as a share of gdp is about 3% right now. that's about the average over the last 15 or 20 years and that's a considerable drag on
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gdp. neil irwin wrote a smart piece i shouldn't say this but in "the new york times" where he said the trade deficit is not a scorecard. it doesn't mean big trade deficit, bad. trade surplus, good. and, in fact, we've had periods of full employment with large trade deficits but we've gotten there through bubbles and these dynamics i tried to describe in the slide on global macro suggests to me that those phenomena are related. that in a world with capital flows being what they are with the dollar as the reserve currency and with some currency manipulation, that trade balances are going to be offset by bubbles unless we take better action. >> just want to add one final point on this. important to stress it's not exports good, imports bad. but if we run a large trade deficit it does mean that the reallocation that has to occur is larger because you won't have
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manufacturing -- it will be very nonneutral for manufacturing employment because when we export we'll be export manufactured goods, so if we just have a large trade deficit it means a lot of workers who leave manufacturing need to find employment elsewhere in some other sector altogether and that's harder. i would say the scale of the worker adjustment that has to be made in the face of a large trade deficit is different from the scale when we had a lot of imports and exports simultaneously because there would be more manufacturing activity to absorb. >> next at the mike. >> hi, voice of america. we don't have a lot of specifics but by now we probably heard a little bit about what donald trump wants to do in terms of foreign policy. i'm just wondering if any of your studies have actually factored in the cost or perhaps the impact of what a donald trump presidency would have on global trade. >> so, you know, all the work we've done is retrospective. we can understand what trade impacts have been on the u.s. economy.
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i think journalists have shown that they are as good at forecasting as economists are -- >> but we count on you as our experts. >> yeah. so, but -- but what you can say, you know, we -- we have -- we now live in a global world. and enacting 45% tariffs on china is not going to take us back to 1955. if we forced u.s. shoe production to come back to the u.s. it wouldn't be the same labor intensive shoe production that we saw in new hampshire in the 1960s. it would be something fundamentally different. so, it's -- it's a -- you can see why he does it politically but the economic foundation for it shockingly enough isn't there. >> i would refer you to a piece that i posted on the institute's website about two weeks ago. i didn't give a quantitative estimate to answer your question, but i did note that u.s. domestic law would preclude
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trump from doing a lot of the things that he says he would do. so, even if you took him at his word that he really wanted to do those things, there would be some severe limits on how much he could carry them out. they would still be very damaging. they would still be extremely costly. i would strongly oppose them, but to put it in perspective, the possible outcomes u.s. domestic law and the international system, which we've adopted in our legal system here at home, do fortunately put a lot of constraints on what can be done. i mean, ironically the u.s. led the creation of a global trading system in order to put constraints on what other countries could do against us, it might turn out that out that luckily we put constraints on what we do ourselves. >> but to follow-up, even if he does -- is unable to follow-up on some of his proposals including a 45% tariff tax, i'm hearing a lot of economists
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telling me that that would lead to a possible trade war if he were to propose such things. >> well, there's no doubt -- well, u.s. law permits a president to raise tariffs by 15% for 5 months. period. unless he declares a national security emergency. he might do that. but short of that, 15% for 5 months. but whatever he did, i think there's no doubt, at least in the case of china, they would retaliate. they would take the u.s. to the wto as a violation of our obligations there. but they wouldn't wait the three years for the cases to run. they would retaliate in the meanwhile being fairly confident they would prevail in the case at the end of the day. so, if one means -- if one calls a trade war a retaliation of that type, as journalists frequently do, then, yes, you would have it. what my analysis suggested was two simple things. if you limit imports from a single country like china, those
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imports are going to be available in most cases from other countries. so, the reduction in u.s. net imports would be very modest. by contrast, the countries that we hit would retaliate against us. they could buy most of those products elsewhere. we would lose much more on the export side than we gained on the import side in the trade imbalance and job terms. so my headline in my piece was trump's trade policy a big loser for the united states. not that we're going to win again. but it would be a big loser for those fairly straightforward reasons. you've had your question. excellent. >> hi, steve sylvia from american university. i have a question, workers, of course, are going to be in an economy that doesn't only have china but has a whole range of competitors who are sending imports. when you take china alone the way you've done it, you're going to exaggerate a rise given the
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time period that you've taken in terms of trade exposure. have you ever done a robustness check with your data looking at all trade and seeing how that played out? >> gordon. >> so, what we have done is not look at all trade but all -- but trade with all low-wage countries and say, maybe what we're picking up is -- there are full substitution effects here so any expansion of china means a loss of exports from central america and vietnam and so forth. but what we find is almost identical answers when we look at trade with low-wage countries like china and that's because of the magnitude of china's growth during this time period is so enormous. >> next. >> hi, judd palmer with politico. i just wanted to follow-up on one of the points in the presentation. when you said you thought the worst effects of the china shock were over, i mean, is that the -- is that the same as saying that the worst effects of globalization are over?
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i mean, is there another shock that's out there that could be comparable to the china shock? i mean, mr. bernstein referred to germany's trade surplus. i mean, is that of the same magnitude as china's? >> so when we say, you know, the worst of the china, you want to qualify and remember that globalization does lots of really good things for the u.s. economy. so i wouldn't -- instead of saying the worst of it, you might think of the most disruptive aspects of china's development we have, in fact, lived through. and that's because you've already moved 250 million workers from the countryside to cities. china has developed its manufacturing sector and as a share of its economy, it's now pretty stable. that transition is something we're not going to witness again. and there's no other part of the world where we're likely to see as momentous of a shift from agriculture backward parts of the economy to manufacturing in as short of a time period.
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>> just in terms of magnitude, the only possible parallel would be an india shock. but to put it mildly, india's international competitiveness is not nearly what china's had. their policy orientation is not in that open direction at least at this point, although theoretically with that kind of population and still 60% of their economy in agriculture, at least in theory it would be a possibility. >> and let me just say something about the german shock because i want to be clearly understood. the analysis here was the impact of the china shock, of course, on u.s. labor markets. my thinking and there's been some analysis of this point is that the german shock is not one that's felt here. it's one that's felt in countries with whom germany trades considerably, which is going to be typically peripheral europe. it's one of the reasons why some countries in the eurozone have had such difficulty recovering. essentially germany is exporting excess savings to other countries in the zone in the
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eurozone, importing labor demand from them. and even that -- so that has been a real shock, but i think even that shock has mitigated a bit lately. >> last question. >> yes, hi, i'm kim franken from gao. thank you very much for your research. it's certainly incredibly thought provoking. i wanted to ask a question about kind of practical application in the tpp context, and in specific, is there anything that could be done now that would avoid, you know, maybe it won't be the size of the shock, but the kind of shock or a shock from tpp? for example, i mean, it looked to me like the uptick in government programs are income support programs, not the kind of, you know, remedy you're talking about, which is something where you actually get a job. so is there something where, you know, those programs can be made more flexible to deal with these kind of situations?
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is there a picture of the current economy that could be painted that would help identify which parts of the country are most vulnerable where we might see more demand for resources? i mean, i'm just looking for some things here. also, it seems like there's really no champion in congress for the kind of help for workers that you're talking about. so is there something practical that workers themselves can do to remedy or to prepare for this kind of thing? >> so it's important to stress, tpp is mostly about trade promotion. it's not about reducing tariffs that countries fa is to import to the united states. so it's not going to be nearly as consequential for employment. however, there will be some concentrated impacts, and it would be possible to forecast those looking at specific sectors. i think the -- in terms of what to do about it, i do not think this is something that
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individual workers can take on. you can't insure yourself against unemployment in the short run. i do think there is opportunity to do this better. and hopefully this public debate -- and very, you know, politically charged but nevertheless somewhat productive debate can lead to policy, can create an opening where more people would be willing to acknowledge -- i mean, a lot of the discussion about trade has been on the one side people saying it's great for everybody, and other people saying, you know, it's really harmful and so fractious that there was no consensus that anything needed to be done about it. either you were for it or against it. i think more people now would be willing that you could be for it understanding it has adverse consequences for some. i fully expect that if hillary clinton becomes president, she will want to put in place policies like something like the expansion of eitc or earners credit that are a broad-based
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labor market, employment and wage promotion effort. i think we could learn from the efforts of other countries as well. so i don't think the shock would be as bad. i think we should be better prepared to anticipate it and that there are things within the realm of political feasibility that could be done about it. >> i want to clarify one thing about this. a couple times david -- and i know he knows this difference, i just want to make it clear to everybody else -- has talked about the eitc and unemployment and re-employment. it doesn't help you if you don't have a job. so one of the things that i'm concerned about, i do think expanding the eitc particularly up higher up into the income scale would be a helpful remedy for the problems we're talking about but i also think we may need to think about direct job creation particularly in some of the communities that have been so hard hit. >> we could go on for a long time. and we even have questioners waiting, but we've reached our witching hour, and we're going to have to quit.
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i want to thank david and gordon and their absent colleague, david dorn, not only for being with us today but for really doing the kind of in-depth work on these issues that needed badly to be done, for having enriched really the country and the world's understanding of these issues and therefore helping pave the way for policy changes that will help preserve the benefits of globalization. we're all deeply in your debt. we thank you for being with us today. jared, thanks to you for your comments and policy advice. thanks to the audience for being here. meeting adjourned. >> thanks very much. >> madam secretary, we proudly give 72 of our delegate votes to the next president of the united states. ♪
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sean spicer is the communications director and chief strategist for the republican national committee injoingous the phone here in washington. thank you for your time. >> you bet. thanks, steve. >> walk us through the mechanics of the morning. what will happen? when will the meeting get under way? and who else will donald trump be meeting with besides the speaker? >> well, there's actually three meetings occurring tomorrow. the first meeting starts at 9:00 a.m. here at the republican national committee just steps from the canon house building.
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the first meeting reince priebus called between donald trump and speaker paul ryan. that meeting is likely to last about a half an hour where just the three of them will discuss the state of the race and frankly be a chance for speaker ryan in particular to get to talk to donald trump about his issues, about some of the agenda items and policy issues that speaker ryan has been advocating for. at 9:30, it is expected that that meeting conclude. then speaker ryan and mr. trump go kind of across the hall here in the rnc to what we call the reagan room which is a conference room where mr. trump will meet with house leadership, ryan, scalise. then he'll meet with majority leader mitch mcconnell and potentially some other folks that i'm not really as aware of what happens on that side of the
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hill. and then, you know, my understanding is mr. trump is headed back to new york. >> will we hear from any of the principals tomorrow? will we hear from the chairman of the party? >> well, i don't anticipate that. i know speaker ryan hosts a weekly press conference on thursdays at 11:30 that's in the capitol visitors center that's mostly about an opportunity for the speaker to talk about the legislative agenda for the week. my understanding is that that is still on. but again, that that would largely focus on the speaker's legislative agenda and priorities for this week and maybe coming out -- but i don't expect chairman reince priebus or mr. trump to make any on-camera remarks to the media tomorrow. >> speaker ryan has a nice office in the u.s. capitol. why meeting at the rnc? >> well, one is just across the way, so it's not far. but two, it is a political matter. and i know generally we like to keep political matters out of the capitol building and over, you know, and since this is a party business matter, the meeting was called by chairman reince priebus.
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and so it's appropriate that it occur at the republican national committee. >> and are there talks now between the republican national committee and the trump organization in terms of the upcoming convention in cleveland? >> absolutely. we met this past monday with the entire trump senior leadership team here at the republican national committee. there's an opportunity to brief them on the various aspects of the republican national committee. what we've been doing to prepare for november, the year-round ground game that chairman priebus has put into effect, the data and digital upgrade he's made to our operation to make sure we know as much as we can about voters in terms of voting patterns and where they are going to be, our opposition research file on hillary clinton, et cetera. we basically spent several hours updating the trump campaign. they are now going to head out to cleveland, part of their team, and get a similar briefing from the team that's in cleveland preparing for the convention as far as updates and preparations that they've been making for cleveland. >> your nomination has been settled but still a contest on the democratic side of the
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aisle. senator sanders winning in the west virginia primary, winning significantly. >> that's right. >> what's your take about the race and where it stands? >> so i think it's really interesting because this is -- hillary clinton won west virginia 20 -- excuse me, 67-27 in 2008. she clearly, you know, was the clear favorite over then-senator barack obama. this time it was almost a roll reversal. she got just north of 30%. there was two counties in particular that she won in 2008 where she actually placed third. i think that while the superdelegate count gives her a major cushion as far as the count for democratic delegates, bernie sanders, when you take those out, is actually giving her a good run for the money. he's now won 20 states including the overseas military caucuses, the dnc has part of their process. so if i were hillary clinton, i think that, you know, she might be taking some of these unelected party boss superdelegates to add to her total, but it's not as secure as i think she would hope to see because the thing about those individuals is they are not
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committed. they could switch. and if sanders continues to chalk up wins, they can -- they are not committed by any means and they could flip over to sanders and i think really make this a tight race going into their convention in philadelphia. >> sean spicer is the communications director for the republican national committee, also serves as chief strategist. as always, thank you for your time. >> thanks, steve. former supreme court justice john paul stevens talked to students at a university of miami law school symposium about udent rights ocampus. he was introduced by university of miami president julio frank. this is about 45 minutes. >> thank you very much and good afternoon to everyone. i'm delighted to be here and thank you for this opportunity. this is my first sort of official -- first official appearance after the inauguration, and i couldn't think of a higher honor to do so than to introduce our very distinguished speaker today and
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also speaking on a vitally relevant issue currently unfolding on all of our fashion's campuses. born in 1920 in chicago and growing up during the great depression, u.s. supreme court justice john paul stevens overcame early challenges to become the third longest-serving justice in the history of the supreme court. john paul stevens did not allow hardship to slow him down. instead, he excelled in his studies at the university of chicago preparatory high school. shortly after earning a b.a. in english at the university of chicago, justice stevens enlisted in the navy and served as a code breaker during world war ii for which he was awarded a bronze star. after the war he attended northwestern law school with funds from the g.i. bill and graduated magna cum laude with the highest gpa in the law school's history. after completing a clerkship with supreme court justice willie rodlich, justice stevens
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returned to chicago and joined a prominent law firm where especialized in antitrust law. he gained a reputation as a talented antitrust lawyer and soon left the firm to start his own practice. he was invited to teach at the law schools of northwestern university and the university of chicago. and he also held several positions as special counsel to the u.s. house of representatives and the u.s. attorney general's office. in 1970 president nixon appointed justice stevens to the u.s. court of appeals for the 7th circuit. as an appellate judge, he continued to establish himself as an expert legal thinker. five years later, he was elevated to the supreme court when justice william douglas stepped down. justice stevens retired in 2010 at age 90 and has since written two books. he's redefining retirement. because even in this, quote,
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retirement, remains a very active participant in the formation of supreme court decisions. and very relevant to today's symposium, he has written numerous opinions on free speech and students' rights. so please welcome a great public servant, scholar and educator, justice john paul stevens. >> president jordan, i'm sorry, judge jordan, and president frank, thank you for that very
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kind introduction and for that nice welcome. it's always a pleasure to address an audience in this forum. i've been here before and you've always enjoyed it. and i hope i'll enjoy it today. as i understand it, we are celebrating the miami law school's program. the topic for discussion at this symposium is, quote, the constitution on campus: do students shed their rights at the schoolhouse gates? because the question closely parrots the excerpt from the supreme court's opinion in the student speech case tinker against des moines independent community school district, i infer that among the principal rights at issue are those protected by the first amendment.
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mr. justice for his opinion for the court provided a creaategorl answer to the question. he wrote, quote, first amendment rights applied in light of the special characteristics of the school environment are available to teachers and students. it can hardly be argued that either students or -- that neither students -- i'm sorry, that either students or teachers shed their constitutional rights to freedom of speech -- i'm having trouble with my speech here -- expression at the schoolhouse gate. but then rather surprisingly, instead of citing cases interpreting the first amendment, he continued, quote, this has been the unmistakable holding of this court for almost 50 years.
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in meyer against nebraska and bartels against iowa in 1923, this court in an opinion by mr. justice mcreynolds held that the due process clause of the 14th amendment prevented states from forbidding the teaching of a foreign language to young students, statutes to this effect, the court said, unconstitutionally interfere with the liberty of teacher, student and parent. thus, the tinker case which at first seemed to point only at the first amendment rights actually suggest that our topic should be more encompassing. the answer to the question whether students have shed their constitutional -- shed their rights necessarily depends on what rights the student seeks to exercise and the setting in which he does so. clearly no student has the right during a mathematics class to argue at length and without
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interruption about the importance of minimizing global warming. but it is equally clear that you cannot be punished for expressing her views about that issue in response to a question in a science class. and even assuming that five members of the supreme court correctly held that the second amendment protects a citizen's right to possess a handgun in his home, it does not follow that the right has been shed if a court concludes that it does not extend to carrying the weapon in public places such as a college campus. in short, it is necessary to determine the scope of a given right before deciding whether the right has been shed or imper missably burdened in a school setting. presumably students have the same fundamental rights as those enjoyed by other members of the
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public. on at least two occasions, however, a majority of the court has drawn that principle into question, at least as it pertains to high school students. in both cases, i dissented from the majority discussion decision limiting the constitutional rights of public school students. in 1986, i dissented from chief justice berger's opinion for the court in bethel school district number 403 against raiser. in that case, a washington high school student named matthew frazier had given a speech at a school assembly nominating a classmate for student elective office. frazier's speech contained sexual innuendo and suggestive conduct. is there water somewhere? here we are.
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the school suspended him for violating a rule prohibiting the use of obscene language on camp campus. thank you. i'll try not to spill it. a majority of the supreme court upheld the disciplinary action. although i agreed that frazier did not necessarily have a constitutional right to deliver his suggestive speech at a school assembly, i thought it clear that he had not received adequate notice that he might be punished for doing so. the school agreed that frazier had violated its rule against, quote, disruptive conduct, unquote.
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but in my view, that general prohibition was insufficient to notify frazier that his speech would elicit disciplinary consequences. particularly as there was no evidence that frazier's speech had caused any material disruption to the school's educational activities. in light of the interest in free expression protected by the first amendment and the interest in fair procedure protected by the 14th amendment, i would have held that the constitution barred the school's punitive response to frazier's speech. in 2007, i disseptembnted from justice roberts' opinion for the court in morris against frederick. in that case, alaska high school student joseph frederick was disciplined for displaying a 14-foot banner bearing the puzzling phrase, quote, bong hits for jesus.
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you have to pause for a minute and reflect on the meaning of that, on that message. that case was quite remarkable because the majority first concluded that frederick's ambiguous message could reasonably be construed as advocating the use of illegal drugs and then held that his message could be censored for that very reason. contrary to a mountain of precedent, the majority determined that the first amendment did not merely permit censorship based on the content of the student's message but more perversely, that it permitted censorship based on disagreement with the speaker's viewpoint. the majority's opinion in morris
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limited protection for a student's speech in the manner that was wholly unsupported by the court's first amendment jurisprudence. essentially morris adopted a blanket rule that student speech may be censored any time a public school official reasonably perceives that speech as advocating illegal drug use. as an initial matter, i doubt whether frederick's nonsense phrase, quote, bong hits for jesus, unquote, could be reasonably understood as advocating anything. in any event, the principal of fredericks high school interpreted the words on his banner as promoting marijuana use, a message with which he disagreed. under first amendment doctrine, viewpoint-based regulation of speech is presumptively unconstitutional. and advocacy of illegal conduct
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may be punished only when the advocacy is likely to incite lawless action. yet the majority ignored those basic first amendment principles and upheld fredericks' punishment based on school officials' opposition to his message, or one possible interpretation of the message. before morris, quote, the police of third parties, reasonable or otherwise, unquote, never dictated which messages amount to prescribable advocacy. that's a quote from my dissent. i see no reason why the subjective views of state officials should control the extent of first amendment protection on campus when listeners' perceptions do not earn did the scope of first amendment rights in other contexts. even if frederick had intended to promote marijuana use, moreover, there was no indication that his speech could
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have -- would have any persuasive influence on his classmates. as i noted in dissent, quote, most students do not shed their brains at the schoolhouse gate. and most students know dumb advocacy when they see it. the notion that the message on this banner would actually persuade either the average student or even the dumbest one to change his or her behavior is mostly implausible. the majority opinion in morris is particularly troublesome given that the tinker decision had already established that basic first amendment protections amy in public schools. in tinker, several public school students in des moines, iowa, planned to wear black arm bands to express their opposition to the vietnam war. the des moines public school district adopted a policy
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calling for the suspension of any student who refused to remove the arm band. the students challenged the policy on first amendment grounds, and the court determined that the policy violated the constitution. the school district had argued that if censorship was justified because it feared that the students' expression of a controversial and unpopular opinion would generate disturbances. but the court held that the school district's purported fear of disturbance without more cannot justify the suppression of students' speech. rather the court explained in order for school -- public school officials to justify prohibition of a particular expression of opinion, they must be able to show that their action, quote, was caused by something more than a mere desire to avoid the discomfort and unpleasantness that all was
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accompany and unpopular viewpoint. where there was no showing that the forbidden conduct would materially infringe on the rights of others or disrupt the school's educational programs, the censorship cannot be sustained. tinker thus stands for the proposition that nondisruptive student speech cannot be banned merely because it expresses a viewpoint that is unpopular or contrary to the school's preferred message. i would have applied this rule in the morris case to hold that frederick would not be punished for displaying his banner. the tinker rule is not only consistent with first amendment doctrine but also has the important benefit of protecting students' intellectual openness and exchange. when the tinker students wore their black arm bands in 1965, mainstream public opinion regarded opposition to the vietnam war as, quote, unpatriotic, if not treason,
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unquote. as i noted in my morris dissent, the des moines school district was not unreasonable for fearing that the arm bands might start an argument or cause a disturbance. nevertheless, the tinker court insisted that under the constitution, we must take that risk. it is this sort of hazardous freedom, this kind of openness, that is the base of our national strength and of the independence and vigor of americans who grew up -- who grow up and live in this rell toughly permissive often dis. disputatious society. i've lost something here. i don't know what. okay. oh.
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you may not remember what i say, but you'll remember the event. it seems to me that protecting this openness is no less important on campus than elsewhere in society. for even in high school a rule that permits only one point of view to be expressed is less likely to produce correct answers than the open discussion of countervailing views. ironically on the same day that the chief justice announced the decision upholding viewpoint-based regulation of student speech in morris, he also announced the judgment of the court in federal election commission versus wisconsin right to life. that case was a 5-4 decision that later paved the way for the court's most unfortunate decision in citizens united.
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in wisconsin right to life, the court declared that when it comes to defining what speech qualifies as unprotected advocacy, quote, we give the benefit of the doubt to speech, not censorship, unquote. students of the first amendment might wonder why that rule applies to corporate entities that wish to contribute unlimited sums to influence elections for a public office but not to students who wish to express an unpopular point of view inside the schoolhouse gate. thank you very much.
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>> okay. thank you. well, it's a pleasure to be here with all of you and with justice stevens. i had the pleasure to meet with him for the first time when i set foot in the supreme court as a clerk, although i didn't have the honor of clerking for him, i clerked for somebody -- i think justice goode. but i always thought of him as, you know, one of the most deep independent thinkers on the court. every time you saw the voting blocs go one way or another on very difficult cases, justice stevens would have his own sort of individual way of telling one side or the other why they had sort of gotten things badly wrong. and i think that sort of independence, i think, endeared him to the hearts of many, even
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those who didn't clerk for him. so he's been gracious enough to take questions, friendly ones only, of course. so if anybody has questions about the topic that justice stevens made his remarks about or maybe about something a little bit less related, we'll be happy to try to get those questions to him and get them going in some way. but we need volunteers first. yes. >> i always loved your dissent in morris versus justice roberts majority. i wasn't nearly as persuaded by it. but i was curious about the opinion in the case that was most, i don't know, different but also interesting, was justice thomas's dissent. >> what was that? >> justice thomas's who said, you know, everyone in high school and elementary school has no rights under the first amend
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ame amendment ever and the schoolhouse is for teachers to control, which as a law professor is really nice to think about, but i was curious, you know, you were there for all the tinker, frazier and then the morris case. why, you know, everyone especially at the lower education level seemed pretty okay with the idea that students do have these free speech rights, in general, and only justice thomas was sort of on the other side all alone arguing that teachers should be able to control their law school -- i'm sorry, not law school, that was freudian there -- control their classroom with complete impunity. so i was just curious why all the justices have always felt, except for justice thomas, that students do have these free speech rights. >> well, of course, justice thomas is pretty unique, i think, in his approach to this issue.
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but he is a very independent thinker. he has his own ideas on a number of issues. and he's pretty consistent in his views. and he expresses them in a very intelligent way. and the question is why does everybody else on the court disagree with it? well, of course, in the morris case, there was disagreement among the justices. and he was, of course, the strongest on the side of prohibiting that particular banner. and i always thought that -- i always wondered exactly what that banner meant. and never could figure it out. and i must say, i was sort of troubled by the notion that you construe the banner in the way that's most likely to support discipline, which doesn't seem to be the normal rule he kept in the other direction.
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but that's, of course, not the only time i was a little unhappy about the way a case came out. >> you know, you've always talked a lot about context matter, no matter what area of law you're dealing with. and to take up on that question, do you think that the first amendment rights of students differ, whether up or down depending on what grade they're in, like would you have a different view about the first amendment rights of fourth or fifth graders than high school students or college students? >> well, i don't really know. that's a very interesting question. it's kind of hard to imagine some fourth grader having a first amendment right to make an objection to the curriculum or something like that, but i suppose they might. >> they're posting on social media these days left and right. so you never know. >> but you ought to at least listen to them and understand what they're saying before you respond with discipline.
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>> yes. >> thank you so much for speaking with us today and for your remarks. specifically jumping off the point of so many students posting on social media, the student who created this inane banner in morris, he delivered his speech -- he delivered his content just off campus. one of the more common types of off-campus speech these days is cyber off-chus speech or cyber harassment where students may not be using a school computer. they may be at home, but they may use that computer to target students they know from school. based on these series of opinions that the court has offered, some of which are in the dissent on, what do you think is the -- what do you think is the extent of the school's power to regulate
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off-campus cyber harassment that affects the campus, nonetheless? >> well, that is a very interesting question that i haven't considered. but i suppose off-campus speech would be pretty much like the speech of a member of the general public. and if it did some harm, i suppose there could be situations in which one could either respond effectively or try to suppress the speech. but i don't see why the person's status as a student or a nonstudent would affect the analysis. >> switch over to the other side. >> at universities these days, both private and public the issue is often not the ability to speak but rather the
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university's desire or needs to manage the cacophony of speech and the notion of fairness to the speech of others, the controversies we've seen over speech codes. how far do you think universities' management rights and needs should extend over the manner and extent of conflictual speech on a campus? >> you're talking about content-based management or procedural management? >> it's sometimes hard to separate those, of course, but it is -- i'm not in the administration of the university, but the universities do have to confront both groups that are -- can be hostile toward each other or demand a kind of safety and comfort and security that other students may
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find trenches on their abilities to speak. these are difficulties at universities, private and public, seem to be facing today more than the kind of high school-level issues of administrative control over students, but rather student-student relations involving speech on campuses. >> well, i think to give an adequate answer to that may take a little time. but it seems to me you have to know what the particular dispute is that the students are talking about in any sitting. you have to determine where the dispute is being -- where the disagreement occurs, not just what they have to say. and of course, there are limits on what one can say if class that would not apply in the public arena. so i think it's difficult for me
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to isolate the precise issue where the disagreement arises. but it's like any other large institution. you certainly have to have rauls that control behavior, and you can't say anything you want in any area. but i'm not quite sure how i can make it more specific than that. >> the back? >> justice stevens, thank you very much for coming to our university and giving us this opportunity, and judge jordan, great to see you again. there's awe case called the american insurance association versus garamendi. it's a 2003 decision where justice suiter wrote a 5-4 decision holding that the state of california did not have the authority to require global insurance companies like
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allianz, he held that the state of california did not have the power to require those companies to produce records about their treatment of holocaust victims during that period of time. and what was unusual about the decision, it was the first time he cited no precedent preempting a state law based upon the so-called policy of the executive branch. there was no statute. there was no constitutional provision. there was no treaty. and there were four dissents in that case. the dissent was written by justice ginsburg joined by you, justice scalia and justice thomas. so -- and this was a case where despite the lack of precedent, it seemed to me the majority went out of its way despite the context to put holocaust victims at a disadvantage after elected
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governments had done what they could within their regulatory authority to hold these foreign and international companies accountable based upon no precedent whatsoever, infringing traditional notions of federalism as well as separation of powers, and it's always struck me that the four dissenters were probably four dissenters who weren't on the same side on a dissent very often. and i've always -- since i've been representing the holocaust survivor community, and this decision was a devastating blow to help people whose rights had been infringed and whose elected officials were doing what they could to try to level the playing field in today's world and to see a majority of the supreme court deal such a devastating blow to that class of people and given the nature of how that vote went, i wanted to ask you if you had any recollection of that particular case, how many other times it
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had been yourself and the other three dissenters together. and, you know, again, if you can comment on it, having dealt with the victims of that atrocious decision, i always wanted to, you know, just ask a person particularly on the dissenting side to reflect on that to the extent you're allowed to do so in public. >> i haven't thought about that case in a long time, but i do remember it was a close case because it was a 5-4 vote. and the author was a very fine judge with whom i happened to disagree on that particular case. but i really have trouble recalling the specific issues in the case that turned the tide on that. but i do remember that i was unhappy about the case and thought it was incorrectly decided. but i'm not sure i remember it as well as you do right now. >> thank you very much.
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>> hi. getting back to student speech, so tinker actually said there were two reasons that schools could limit students' speech. one has been much more developed than the other, which is that disrupts the educational process. >> right. >> but they also gave another reason, which is that it interfered with the rights of other students. >> it interfered with what? >> the rights of other students. so schools could discipline students if their speech interfered with the rights of other students. and i was just wondering how you would develop that particular line of tinker, what kinds of speech do you think would fall under that, and particular, would that cover sort of degrading, demeaning, sort of hateful speech targeting people based on a protected characteristic like sexual orientation or race? >> i may not get the thrust of
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the question, but i have difficulty understanding how allowing the students to wear arm bands would have interfered with the rights of other students. >> her -- i think what she's trying to ask -- >> clearly tinker -- the arm bands did not, so my question is, what kinds of speech might interfere with -- in your mind, what would you include under speech that could be regulated because it interfered with the rights of other students? >> in other words, is there some student speech that could interfere with the rights of other students, and on that basis could be curtailed, prohibited, disciplined, et cetera? >> well, of course, as in any context, if the speaker makes too much noise and uses all the time for himself and doesn't allow other speakers an adequate opportunity to express their own views, speech can interfere with
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other speech. but apart from just the physical interference with expressing other points of view, i don't think the mere fact that the people wearing the arm band expressed the point of view would actually frustrate the opposition speech. in that case. >> i think part of it also depends on how you define the rights of those who are sort of bothered or infringed upon by the speech. >> yeah. >> i mean, is it a right to not hear something, or does it go deeper than that? you know, how far can the school administration decide that it can make policy choices about that sort of language? >> certainly they would have to allow those who disagreed with the speech to express their own points of view in an equally unobtrusive way, i would think.
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>> yes. >> thank you for taking my question. >> hold on. wait for the mike. >> thank you, your honor, for taking my question. it's about morris, in your dissent in morris, you noted that the court should -- that the majority should be cautious against creating special circumstances limiting speech regarding drugs or alcohol, in general, and in support of that, turning to our national experience with prohibition where alcohol was once something that was frowned upon and then completely illegal and then made legal. since morris, the state of colorado and washington along with many other states have legalized marijuana for recreational purpose, and i was just curious that if the nation were to say that lift the ban on its categorization of maurn, how would that affect the way morris is applied in future cases in
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both a broad and narrow sense? >> translate the question for me. >> i will try. his question is, i think, and you can correct me if i'm wrong, if the country as a whole shifts its views about marijuana being illegal and marijuana use is decriminalized in some way, shape or form, how do you think morris will be applied in that sort of world, in that sort of circumstance? >> well, of course, you're asking me to tell how the chief justice would apply morris, which i didn't agree with the chief justice. but i suppose it would depend on how he interpreted what the new banner said. i mean, if the new banner opposed some other drug, i suppose they could also say that's prohibited, too. if it continued to be contrary to school policy. for the majority in morris, i
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think the test what is the school policy a favor or disfavor. and if you agree with the school policy, you can say whatever you want to. if you disagree with the school policy, you'd better be careful. i think that's the way it boils down. >> you know, and flipping the legality of marijuana may not solve any problems because if marijuana is a cash crop in the state, then opposing it may be against the views of those who bear some benefit from the coffers of the state. >> good afternoon. i just wanted to get your opinion on political correctness and the wave that is coming about in america of every little thing that you say can be construed as being something that's not the way it was supposed to be meant. thank you. >> any general thoughts on political correctness? and the topic of free speech,
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whether we've become too attuned to what might offend someone else in public discourse? >> well, i do not get the impression that people are terribly afraid of offending anybody in some of their speeches, which is okay. of course, they should be free to say what they think. but the big omission, to be honest with you, that occurs to me as i see secondhand, i don't watch very many of them, is the omission of any intelligible discussion about important issues such as global warming. you wouldn't even know that was an important matter to listen to the debates that's going to be going on now. >> yes. just wait. >> my question is about speech with regards to college campuses, specifically. so college campuses are a little
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different from high school. ands you alluded to earlier, fourth graders and elementary school or even middle school. so it seems that we are more of a community on college campuses. so if a student says something, for instance, the two situations in the missouri situation with the football team or at yale where i believe some administration or staff members put on sombreros and then there was a huge protest. do the students have the right -- has student speech gone too far where the student speech has affected the employment of administration or faculty where faculty hasn't necessarily done anything wrong? specifically? >> i guess his concern is that if individual s on a college
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campus feel that they are offended, attacked by certain types of speech, whether or not the institution's failure or the failure of certain administrators to take action to prevent that from continuing allows a university to take punitive actions against those people who are in charge. so if a set of students does something that is offensive to another set and an administration is seen as being lackadaisical to it, whether or not those you think are proper grounds to take administrative action against those individuals. >> i think i should refer the answer to the question to the president of the university. >> and he will graciously pass. yes.
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>> justice stevens, we're honored to hear from you today. so thank you so much on behalf of everyone for speaking to us. i wish you were teaching a class that we could all take for a couple semesters or a year. so my question picks up on the person's question from the front and some other comments that were made. but if we analyze speech and threats by students against other students individually and as members of a gender or a class, in the context of title 9 and title 9's promise and guarantee of equal access to educational opportunities and look at how a sexual threat, so like at yale when fraternity members surrounded the old dorm where freshmen girls lived chaptering "no means yes, yes
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means anal" at night, this was a very serious thing taken very seriously by yale students who perceived that as a threat in the context of yale's inaction in the face of reported sexual assaults. that question might welcome up certainly during this conference, but really thinking about when students with power make statements that really might be infringing on the equal access to educational opportunities of other students, specifically men making sexual threats against women? >> in the context of title 9? >> yes. >> or the constitution? >> all of it. that's what we're talking about today, the constitution on campus. >> right. but those two things are different in the way that at least courts deal with them. >> of course. so in the context of title 9, and as schools and campuses import constitutional values, so they won't be directly
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applicable, but we import the values of the constitution in our campuses. >> i think what she's trying to ask is a very deep and difficult question about how far title 9 should go in protecting individuals on campus and give them the promise of an equal education when speech by others, especially speech by others who might be seen in a position of power or authority prevents the victims, for lack of a better term, from having an equal educational opportunity. >> i have to confess, i haven't thought that through. that's not something that i can easily come up with a simple answer. the question is if the -- if some students prevent other students of having an adequate
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opportunity of getting an education because of what they say, there should be some way to impose sort of a moratorium allowing people -- all people to have a chance to get an education. certainly that's true, and you should not let somebody drown out the opposing points of view. but i'm not sure i'm actually answering any specific controversy that you're concerned with. i guess the best advice i could give is always you have to understand the facts very thoroughly before you try to answer what goes on. and you should let both sides have an opportunity to explain why they're saying what they are and what they're trying to do. and you should not suppress all of the speech because it may cause disagreement or friction, as you go along.
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>> okay. i think we're out of time, right? okay. well, i want to thank, on behalf of the whole university of miami community, all of you for coming here and obviously justice stevens for giving of his time and gracing us with his remarks. we really do appreciate it. >> thank you very much. >> thank you very much. >> thank you. the event continued with a panel of educators, lawyers and free speech advocates looking at school standards for contentious political speech and hate speech and the extent such speech should be regulated. this is a little over an hour.
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>> hello. we've got a great panel for you. we have susan kruth who has a background in short film and documentaries, and she decided to go to law school to study the ways that constitution protects filmmakers. she did a free speech fellowship with the thomas jefferson center for the protection of free expression. she's also had some other very cool civil rights internships including one with a transgendered legal defense and education fund as well as the aclu, lgbt and aids project. and currently she is with the foundation for individual rights and education. professor carrie brian, or k.b., is professor of higher education at the university of mississippi. his areas of expertise are college and university law, finance and public policy. he is a member of all kinds of things. he's on the authors committee of
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west education law reporter, the book review editor for "the journal of law and education," the contributing editor to "the higher education law blog," and a member of the editorial board of "the journal of cases and education." the journal of case and education. and she's worked as a higher education policy analyst for the florida legislature and research associate for the florida postsecondary education planning commission and we also have len niehoff, professor at university of michigan school of law and of counsel to a law firm with lots of names. he is the author of numerous publications in the field of 1st amendment law and higher education law and for more than 30 years, he's litigated cases on behalf of media entities and colleges and universities. and he got his b.a. and j.d. from the university of michigan and he studied at the
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theological seminary. so each will speak for about 12 minutes. i'll ask a couple questions then it will be up to you all to follow up with more questions. okay. >> well, good morning. thank you for inviting me to participate in this symposium and including me in distinguishes company. when i accepted the presentation i didn't know i'd be a follow-up speaker to a legend and had i known i certainly would have decli declined. i view my job to lower your expectations. i think you'll agree. i want to use as my launching pad the remarks, doe v. university of michigan. as all after you probably know, doe is the seminal case on campus speech codes and it has just recently passed its 25th
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anniversary. i thought the symposium might be a good occasion to look back, see where we were, assess where we are and ask whether we've made any progress in the way in which we think about and discuss these issues. spoiler alert. the news is not good. as you will recall, in doe, a federal court found unconstitutional a policy that the university of michigan had adopted in response to a number of racially charged sne ed incin campus. as a legal precedent, i don't think doe actually offers many extraordinary insights. the policy was pretty clearly overbroad and vague and it was dead on arrival at the federal courthouse. we don't need to perform any elaborate autopsies today to confirm the fact or the cause of death. so why should we care about doe? i think there's several reasons. first, doe was an early
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excursion into territories and tensions that have now become familiar to us. the case was, therefore, decided before these controversies had grown, encrusted with some of the framing and language and concepts that burden them today. second, although the university policy in doe was badly flawed, it seems clear that the school acted in good faith, at least i believe it's clear. the issues the university faced were real. they were significant and they demanded some kind of response. similarly, it seems clear to me that the professor in that case acted in good faith. if i had been teaching at the university of michigan when the challenged policy had been in place, i would have had concerns, too. these days when those on each side of the debate are so eager to caricature those on the other as clueless or even villainous, it seems refreshing to consider a case where i think both sides
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had a point. third, the passing of 25 years provides an occasion for calling to question, are we thinking about these issues now better than we were thinks about them then? it does seem fair to expect some forward movement over a quarter century span. so have we seen any? i have three theses. the first is that since doe was decided, we have, indeed, seen significant change in how we think about and discuss the conflicting values of speech and equality on campus. the second is that the change is overwhelmingly for the worse. the third is that things are unlikely to get better any time soon. it is a grim and discouraging assessment that i bring you today. nor is it likely to win me any friends or perhaps any additional invitations to symposia. because as you will see, i believe that the blame for this
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situation lies with both sides of the debate. i think everyone has had a turn at the switch in creating this train wreck. i think everybody has tossed some fuel on this dumpster fire. before we get too far into our current disarray, though, i'd like to remind you of what happened in doe. so the university of michigan community was rocked in the late 1980s when a number of racist incidents occurred on campus culminating in a rash in early 1987. there are a number of examples. i'll give you just one. it involves the distribution of an anonymous flier that used a series of racial epithets regarding blacks and declared, quote, open season, unquote, on them. the university's president issued a formal statement condemning the incidents, the state legislature held hearings about racism on campus. some 48 witnesses testified about racial tensions and issues on the university of michigan
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campus. in response, the university set about drafting an anti-harassment policy. the final version of the policy reached very broadly. it applied to classrooms, libraries, laboratories, recreation and study centers. in these areas, persons were subject to discipline on a number of grounds including for engaging in speech that, quote, stigmatized or, quote, victimized someone based on a characteristic like race, ethnicity, gender, or sexual orientation. sanctions depended on the gravity of the offense and they were potentially severe. the university also issued a guide and in some ways the most interesting thing about doe is about the guide rather than the policy the guide purported to be an authoritative interpretation of that underlying policy. the guide offered some troubling examples of speech that it deemed discriminatory or harassing. some examples involved speech that appeared pretty clearly to be protected under the 1st
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amendment. others involved speech that didn't seem to actually fall within the broad language of the underlying policy. at the time the policy was adopted, john doe, our anonymous plaintiff, was a psychology graduate student at the university. he taught classes that explored some controversial theories that he worried some students would view as sexist. concerned that his teaching might violate the policy, he sued. he was represented by a law professor, bob settler of the wayne state university. judge avron cone who presided over the case concluded policy was unconstitutionally overbroad. he also ruled that a number of critical terms in the document, like stigmatize and victimize, rendered the policy unconstitutionally vague. in the course of the litigation, the university withdrew some provisions of that mopolicy and actually withdrew the guide in its entirety but it would be fair to sayneuvers did
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not impress judge cone. indeed, judge cone had a number of grievances with the university, how the case was litigated and so forth and cataloged them twice, once at the end of doe and again in the "law review" article he later wrote about the case. one gripe may in retrospect strike us as ironic, toward the end of doe, in thinking about its policy, michigan may have learned a great deal by looking to the experiences of another great university, yale. i'm not sure today anyone on either side of the debate thinks the perfect solutions to these problems resides in new haven. but here's the point. although judge cone found the policy unconstitutional and had a variety of grievances with the institution, his opinion reflects genuine respect for the university's concerns, for the complexity of the problem before it. indeed, the first sentence in doe, this case that strikes down
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one of these policies reads, "it is an unfortunate fact of our constitutional system that the ideals of freedom and equality are often in conflict. the difficult and sometimes painful past of our political and legal institutions is to mediate the appropriate balance between these two competing values." in the same spirit, the opinion concludes by recognizing the university's, "obligation to ensure equal educational opportunity to all of its students," and by expressing sympathy with that goal. even the lawyer who represented doe voiced similar views in a "law review" article that he published about the case. so look for a minute at where doe left us 25 years ago. it acknowledged the value of both free expression and equality. it recognized collisions between these two values were inevitable. it understood that mediating the conflicts between these values
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was hideously complicated. it grasped that people of good faith would make mistakes in trying to work through those tensions. and doe was in many respects the perfect starting point for a civil, informed, respectful, productive dialogue all toward the end of a dramatically improved campus environments. well, so much for that. so where are we now? doe arose from concerns about a racially hostile campus environment. some data strongly suggests that the situation nationally has gotten considerably worse. the number of racial harassment incidents reported to the department of education rose dramatically from 2009 to 2014 and studies estimate only about 13% of such incidents are even reported to campus authorities. i suspect that number's very high. furthermore, studies suggest that the problem has grown worse as affirmative action has become less available in some

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