tv Today in Washington CSPAN June 8, 2010 6:00am-7:00am EDT
why can't you accept the previous agreements? this is their argument. it's like you have to remember that arafat recognized israel. but what was his end? he was given nothing athe end. and why repeat the same mistake of arafat. why to give from the beginning? it's like you have to sit on the table to negotiate over things, then, you know, you can give-and-take. but why to recognize israel first without getting anything in rurn? and that's the mindset of hamas. and it's very telling of their supporters. the steps to lift the stooge, i think first you want to go into . comes to the borders. you need fatah and hamas. you need security establishments. you need joint security forces. and that will be, of coue, accepted to all. so i think e.u. is willing to
play this role. in engaging in this, i think. it will be really like -- you cannot -- you cannot go for lifting the siege unless you go ahead with reconciliation first. and i think you can -- you know, you can start easily by the formation of secuty, you know, forces that will be in charge of the border. i'm talking about the border here. the crossing. that's where they can go first. and then, you know, they can move ahead with rest of the reconciliation. >> yeah, i agree. regarding practical steps that can be taken. i mean, just -- let's remember, yoknow, what this flotilla crisis showed. this was not a humanitarian crisis. the flotilla crisis did not show, you know, humanitarian conditions in gaza are so deplorable or whatever. what it was about was the --
that the international consensuses of maintaining this closure of gaza has broken down badly. and it's no longer sustainable. because you have significant actors like turkey who are willing to take actions to undermine the sie and have done so effectively. you don't have -- you know, and this idea that gaza would continue to be sort of an island with no internationally recognized authority at the border is just sort of drifting off on its own. this is -- this is what has become unsustainable. and so just let me agree with taghreed. that whatever kind of steps can be put into placeo allow access to goods to gaza and give israel some reassurance that those will not include arms and so forth, have to involve the palestinian authority. and that it would really be mistake and i'm sure the united states would not move in this direction st to give hamas
that authority on its own. briefly, what can be done to legitimatize an israeli investigation? what we're talking about now, it seems to be an argument about wi it be an international investigation with israeli involvement or an israeli investigation with international involvement. and obviously the latter is possibly acceptable to israel. something that the israelis are arguing about amongst themselves now. >> let me just venture into the -- wt can be done in terms of alleviating -- in terms of lifting the siege. look, we also have to understand these area have domestic politics and as long as saleed is there, it's going to be very diffult for the israeli government to suddenly say, okay, we're going to change our policy. so we have to come up with some sort of global deal, a, for the
united states it's released and the modalities as to the inflow of goods into gaza. and third some kind of assurances that there won't be any more rocket attacks. you know, somebody asked about gaza being an independent area without any kind of international restrictions. israel has to live up to its responsibilities that it will not attack any other country. that has to be part of the deal. in given the debate that's going on now and given the fact that the israelis would like to to get out of the corner that they find themselves in, that would probably be a very acceptable -- they may not like it but still he will have to go along with it because it will be the domestic support for . we have to be imaginative and
construct such a deal. >> please join me in thanking of taghreed, michele and henri. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] >> continuing to aid wildlife affected by the gulf oil spill which is reached more than 100 miles of beach. this is at the port jackson rehabilitation center in louisiana.
committee holds a hearing on the exxon valdez court decision and oil spill liability caps. members will focus on a proposed bill that would allow punitive damages in oil spill cases. that is on c-span 3 at 10:00 p.m. -- 10:00 a.m. eastern. president obama will hold a town hall meeting in wheaton, maryland to talk about health care. citizens will be able to participate across the country by telephone. live coverage on cspan and cspan radio. >> candidate in this race has given voters in new hampshire or america up more opportunities to ask him questions and see what he is made of. >> these are the faces you see every day. see some of their early television experiences on this cspan video library. it is 25 years of a video all
available free on line. >> federal reserve chairman ben bernanke says that despite declines in financial markets, he does not think the u.s. economy will slip back into recession. he was interviewed by former abc newsman sam donaldson at the woodrow wilson center for international scholars. this is a little less than one hour. >> would you spend so we can reach you? [applause] he was chairman of the board and his wife judy is within. we are delighted to have floms
with us. david m. burke and his wife -- david anmburg, you and betty spam up. [applause] he was president of the carnegie foundation. he is one of the great humanitarian and this country. there are several former colleagues of mine here that i want to introduce. andy ireland, congressman from florida and his wife nancy, would you stand? [applause] i will test your knowledge of politics. we have a former vice presidential candidate. i think the correct year was 1976 part he was vice president for ronald reagan when he ran for the presidency, dick and
clear schweigert are here. he was the senator from pennsylvania and secretary of hhs a few years back. we are heavily loaded with pennsylvania's. tom ridge is here tonight. we are delighted to have the governor here. [applause] the former secretary of the department of homeland security. i want to introduce two people who are very important to us because they helped us with the appropriations of the wilson center at the united states congress. they may be the most important people here so far as i am concerned. [laughter] janey james and chris tobeck are here. [applause] they do marvelous work on the step of the appropriations
committee. i am delighted that jim leach is here who is chairman of the national endowment of the humanities and a former colleague of mine on our board. [applause] i will be introducing sam donaldson in a moment, but i want to say that his wife jan is here and we are delighted to have you here as well. [applause] we have the president of s iemens usa. we have several ambassadors with us tonight ambassador su from the republic of korea, will you stand please? [applause] the ambassador from the embassy of sweden is with us. [applause] the ambassador from japan is here. [applause]
the ambassador from mexico is here and we are delighted to have him. [applause] i think the brazilian ambassador arrived. i did not see him personally. [applause] and we have the;djv charged affr from the embassy of south africa. [applause] i hope i have hit everybody i am supposed to. this is a wonderful evening. i want to thank joe gilde nhorn about his gracious remarks. i planned to be here four or five years and have stayed here 11 or 12. one of the principal reasons i have this because i have had the honor to work with joe. i will tell=a you palle loyal je is. he is so low that the wilson
center that he is here tonight when his granddaughter is graduate from high school. that is really something we appreciate your leadership. [applause] tonight, we welcomed the chairman of the federal reserve, ben bernanke, to the center. he is an academic thinker and a policy maker in the tradition of woodrow wilson. he is a world-class scholar and like wilson, a princeton professor. dr. bernanke has become one of the country's most important and most respected policy makers. he happens to be greatly indebted to woodrow wilson. one of owen wilson's major legislative achievements was the enactment of the federal reserve act of 1913.
not to put too fine a spin on that and skipping over a awful lot of history, i just want to point out that i don't think he would have a job today if it wasn't for woodrow wilson. [laughter] for the past five years, he has faced tremendous challenges, adversity, and frustration. that is the lot of an avid washington nationals baseball fan. [laughter] which he certainly is. he and i and the sports fans all know that with the first pick in tonight's amateur draft and stephen strassberg's debut on the mound, things are looking up for the nationals. [applause] that is not really my purpose tonight to talk about them. we know him best as the 14 chairman of the federal reserve
, first nominated by george w. bush in 2006, renominated by barack obama for a second four- year term last august. his scholarly expertise is the great depression and its causes and that prepared him for the historic task of responding to the second greatest financial crisis in our country's history. he has been at the center of the extraordinary efforts of this country, indeed the world, to rescue us from the frightening near-collapse at as the financial system in the fall of 2008, by making available trillions of dollars of officials bowens and helping us to understand better what happened and how to respond. for his work, we can only offer our appreciation, our support, and our fervent hope that he and his colleagues will succeed in
enabling healthy and sustainable economic growth. the other day, i saw a picture of him standing on the great wall of china. he was much more than an ordinary tourist. for some reason, my thoughts turned to one of his predecessors, william martin, the chair of the federal reserve from 1951-1970. as i recollect it, his travel schedule consisted of trips between washington and new york. that must seem like ancient history where a globetrotter like dr. bernanke who is responsible is taken from the capital of europe to the great wall of china to jackson hole, wyoming and many other places,
inter -- illustrating the interconnectedness of the 21st century global economy. prioryfss(8 to his government , he was the howard harrison and gabriel snyder professor of economics and public affairs at princeton university. he served as chair of the economics department from 1996- 2002. he began his academic career at stanford's business school before arriving at princeton in 1985. he received a ba in economics in 1975 from harvard university summa cum laude, a ph.d. in economics in 1979 from the massachusetts institute of technology. he and his wife and i have two children. born in georgia, he grew up in south carolina. the format tonight is not for a speech by dr. bernanke, but he and eric inevitable president of the wilson council, a
distinguished newsman sam donaldson, will provide the program. sam will interview the chairman. i would ask the two of them to come forward now and after the interview we will have questions from the audience. sam and chairman bernanke? [applause] >> hello? chairman bernanke, i am delighted that you would do this. by the way, what do you think of the great wall of china? >> can see it from the plane when you come down from beijing. very impressive. >> that matches mr. nixon's statement.
let's get to substantive matters. we seem to be in a recovery from the great recession we have gone through, fragile but it may be. hull convinced are you that that recovery will continue at a reasonable pace? do you see troubling signs we may indeed slip back into a double dip recession? >> we have gone through a number of stages. we have a tremendous contraction, a deep contraction, after the financial crisis intensified in 2008 and early 2009. the stabilized in the middle of last. last the natural business cycle process began to read -- on wide itself heading toward recovery. the recovery probably began late last summer and we have been expanding, this is the fourth quarter of expansion that we have had. at first, the expansion was caught primarily by firms
building up or at least accumulating -- not accumulating their inventories as quickly and by the fiscal programs. those are our official sources. the real question we were facing was -- come the beginning of 2010, with the recovery get its own legs? would the private sector demand takeover for inventories and government spending and provide a sustainable recovery? the news so far is pretty good. we have seen in the first quarter and in this quarter, we have seen the consumer coming back, about 3% real growth during 2010. we have seen firms spending more on equipment, and software. there are signs the private sector is picking up the baton and moving the economy forward. there are various caveat, as always.
macroeconomic forecasting is like looking through entrails. one caveat is that for this deep recession, this is a fairly moderate paced recovery. it is sort of a 3% growth-type recovery. the concern about that is it takes about 3% growth to provide work for the people coming into the labour force. at 3.5% growth, we will not bring the unemployment rate down quickly. it will stay high for some time and that is a risk because people are not sure about the labor market and they will be less willing to spend and to take risks and the entrepreneurial. that is one concern. another concern is in the financial sector where we have made a lot of progress, but the banking system, for example, is
not completely healthy. we are not getting the full credit availability we would like to see. >> why not? >> because the banks took a lot of losses during the downturn. they lost capital. they raised capital which was very useful. they are still deleveraging and reducing the size of their balance sheets and being relatively cautious in terms of the. that is not so much a problem for big firms but small firms that can be difficult. >> people said the banks using government money to help shore .xe(qáhp'd help their stockholders, but are not lending and why don't they use the government money to lend? >> the government money was critical in preventing the collapse of the system in the fall of 2008. it did do that. that was the first and foremost important thing because we have
takeskated very close to a globl collapse. i don't want to overstate the case. banks have stabilized quite a bit and they are earning profits. they are making loans, but not at the level we would like to say. part of the reason that the government money has not gone into lending as much besides the caution in deleveraging bay have done, is that for political reasons, banks have decided they don't want to have government money. they want to give it back. almost all the big banks have paid back the government money. the good news is that they paid it back in full with interest so the taxpayer is making money on those particular investments. the bad news is that the give the capital back to the government and they don't have available for lending. they have gone to the private
sector and raise capital there and they will be lending, i think, but so far they are still recovering and stabilizing from the crisis. >> if i understand you correctly, you do not fear a double dip recession? >> this is like looking through the entrails. nobody knows with any certainty. there seems to be good momentum in consumer spending and investment. my best guess is that we will have a continued recovery but it will not feel terrific. that is because it will not be fast enough to put back 8 million people lost their jobs within a few years. it will take awhile. even though technically we will be in recovery and the economy will be growing, the unemployment rate will still be high for a while and that means many people will be under
financial stress. >> help worrisome is what is happening in europe? -- how worrisome is what is happening europe? >> we are watching the whole situation carefully. it is very complicated phenomenon. as you know, the europeans have a broad based, call it european project, the call of which is to restore peace and unity to europe after many, many years of conflict. an important part of that project was the creation of the euro, a single currency which many european countries share. the bureau had many benefits in the beginning. it lowered interest rates because people no longer had to fear devaluation of their currency. countries like greece were able to borrow at relatively low interest rates, not much higher
than very strong credit countries like germany. the result was that they over borrowed and they were not completely clear about what their debt situation was recently, it has become clear that they have in fact very large outstanding debts which are difficult for them to service. this is a problem because even though they have a single currency, they don't have a single fiscal authority. f to move tax money from one country to another within the european zone like we can move money from state to state in the united states. providing help to greece has proved to be a difficult proposition. nevertheless, the europeans are committed to avoiding default increase and in other countries on the periphery because they
fear that the default of greece, even though it is a small economy, would encourage defaults and other country. that in turn could put pressure on their banking system which holds many securities from those countries and the banks and other businesses in those countries. it has been a relatively slow process, but europeans have put together a program, a special purpose vehicle with 5 million bureaus in it which is being partially match by the international monetary fund. >> is that enough? >> it is quite a bit 37 after 5 billion here and 5 billion there, you're talking real money. [laughter] it is a lot of money. it certainly covers the
obligations of greece and portugal and spain for a number of years. to is a lot of money and the imf is there if you're more money is necessary for there is work that these to be done to make sure countries can apply for it and make sure they can take the tough steps they have to take in their own countries to reduce their debt and stabilize their there is a lot of uncertainty about this in the market. we have seen a part 9% decline in the stock market because investors have gotten more risk averse. that is because it is not clear and investors aren't convinced this problem will be taken care of. we are watching it very carefully and have been trying to support their efforts wherever we can and one thing i am persuaded of is that european leadership is strongly committed to doing whatever is necessary to preserve the euro and bureau's own and -- and the euro
is owned -- and euro zone. >> you have begun to warn this is a danger to us. at the same time, the fed and the congress continues to believe that stimulus is needed at this moment. how can reduce the deficits when we are still stimulate the economy and at what point can we change? >> first, the fed still is does that have any implications for the death of a separate that as a separate issue. the question is the fiscal stimulus. it is a matter of time frame. on the one hand, is not really possible for us to balance our federal budget this year or next year. the recession was too deep, the loss of tax revenue was too great, the spending to support
the economy was too large we have had some very big deficits the last couple of years. >> do we need to raise revenue? >> let me finish the first part of your question. we cannot reduce the deficit, we can eliminate this year or next year but over the medium term, over the next six years or so, as our society gets older and people become eligible for social security and medicare, we need to get control of the debt and the deficit. we need a medium-term plan, an exit strategy, if you will, that will allow us to bring our fiscal house in order over a longer period of time. >> do you have one? do you see one? >> no, i don't. among other things, we have a presidentially appointed deficit reduction commission which is made up of a very distinguished
group of people. they will present a plan presented to the congress at the appropriate time. >> today have any teeth? >> you are right. when you started out your question, we mentioned this quite a bit of the federal reserve rethink it is important. we can see what problems can arise in a country if investors lose confidence in the fiscal position of that country. it is very important that we address this problem. we have not done it yet. we continue -- we will continue to advocate strong action on this. it is important to understand the difference between having a balanced budget next week and over the medium term birt. >> do we need to raise revenue and cut spending in these
entitlements? >> those are the tough decisions. that is why it is so hard. if it was easy, everyone would have a balanced budget quickly. arw possibilities. i have often said in testimony that there is one law which always a part which is below of arithmetic. that says that the deficit is spending-taxes. we do have to cut spending or raise taxes or do both. and one of those things is painful. that is what congress gets paid the big bucks to go out and figure out how to do that. that is a political question. i will not make decisions for congress. they would not listen anyway. [laughter] they have to find some ways to reduce spending.
>> the regulatory reform bill will be going through congress. the senate passed the ball roll -- past the volcker rule, keeping banks from using proprietary information for their own purposes rather than their clients. are you a fan of that role? >> this is 8 yes and no question. >> you can answer either yes or no. >> there are many times in which a bank has to do something that looks like proprietary trading for good reasons. that might hedge its position if it has loans that than may
need to buy loans to hedge their position, if they buy a fund -- if they have a fun, they may have to take a share of that fund and so on and so on. there are many ways in which a bank may need to be exposed to a position in order to service customers. i think chairman volcker would agree that there are circumstances where you don't want to prevent banks from buying at the -- assets because that makes the more risky, not less risky. the way the senate bill would work is that it would ask -- it would create this separation between proper -- proprietary trading but would ask the regulators including the federal reserve to figure out what that means. they would want to find out when the purchase of a derivative or
secured a legitimate hedging and when is it gambling with bank capital or the taxpayers backstop ? as long as there is a process for distinguishing between those two sets of assets, this can be made to work. as one of the regulators, we will work with our colleagues to make it operational. >> derivatives, as the bill seems to be written, most of the derivatives go into exchanges. credit defaults what which are the most dangerous might not. isn't that a bad thing? shouldn't we regulate them? >> they will be regulated. credit defaults what are essentially insurance you can buy or sell on the credit of a country or company and they come in different flavors. there are some that are specific
to an individual company like ford motor co. and there are some which are much broader and cover an industry or a mix of cds'. these are very important and valuable instruments because they can help you hedge against various kinds of risk. >> it would not have to be on exchanges? >>the cds is an instrument that grew quickly and did not have an infrastrucre that group with it. this is one place where the federal reserve was ahead of the crisis. the new york fed in particular and tim geithner who was the president at the time and is now the treasury secretary had a big role in this. there were very much involved before the crisis in trying to get better organization and better control of the trading of these cds',. at the time it was very
chaotic. there's effort to get the trading better documented and more transparent the fed is continuing to work on that process. the issue on exchanges, exchanges are good. they allow for price discovery and setting up margins and providing capital so that you don't have to worry about your counterparties when you make a trade or derivative. but exchanges are not always practical for a very idiosyncratic and small special types of derivatives because it changes something where you trade large pools of homogeneous product. it have to have the ability to trade specific individualized securities off the exchange. that does not mean they are not regulated. in the new bill, but therthere e
substantial capital and transparency. it would have to be public what your critics and considerable responsibility for regulators to oversee it. one big concern that to know in the edgy case was that they were selling credit insurance and when things went bad, they could not pay. that is why aig was in such deep trouble. in that particular case, there was nobody looking at them. thrift supervision looked at the rest but there was no one looking at what they're doing. under the new proposals, there would be a broad supervisor and in many cases it would be the fed. that would mean that somebody would be looking at aig and making sure that if they were selling insurance that they had
enough capital that they would not go bust them. >> richard bernstein said that it is not real reform. richard fisher of the federal reserve bank in dallas says it will do very little to rein in the big banks, in his view. he said regulators will continue to tiptoe if this bill is passed. what is your overall impression of the impact of this bill? >> overall, there are lots of pieces to it. overall, it is a sensible approach and the many pieces fit together. the one thing that made everybody so mad including the general public and all of us here in washington was the bailout. and having to intervene with the failing firms like aig and bear stearns. i don't regret being involved in that because i know for a fact
that we know those firms had to be protected in the context of the global financial system. the global economy was a great rest but that was in a -- that was a situation we did not want to be in them or again. the acid test of the reform will be, will it control too big to fail? it is hard to know for sure. there are many strong measures which address that issue. one is that there will be a tougher set of regulations that will be used to make sure that the largest firms have adequate capital and liquidity so that they do not fail so easily. secondly, there will be a
resolution gene which means that if a large financial from comes close to failure, instead of having to allow it to fail because we have no tools or legal ability to prevent it, we would have a set of rules and procedures whereby the fdic would be able to come in and close down that company in a way that was safe for the system. that is absolutely critical. the third idea would be that every company would have to have a living will which says it tomorrow morning they cannot make their payments and this company is on the border bankruptcy, here is a detailed description of how this company will be disassembled and broken down and put into receivership in a way that will be quick, clear, clean, but will not destroy the financial system. too big to fail is the acid test
and if we can make sure that does not exist, we will have eliminated the most dangerous aspect of this. >> you think this will be more helpful overall? >> i do. there are many different parts to it. i would not deny that there are some things i would change. overall, i think it does address the too big to fail problem. part of this is the legislation but there is also what the regular as are doing and they are working right now to raise the amount of capital requirements and liquidity that banks have to hold. the regulators with the congress and between them can toughen up the standards quite a bit and that is what is happening. >> when you are going to raise
rates, if i could ask you, when you think you would raise rates? >> in the future. [laughter] >> what would be assigned to you and your colleagues that it is time to r4>zeq that part of the stimulus and begin to raise interest rates? >> the reason we don't tell people is because we don't exactly know when. i know what we are looking at. our statement has laid out what the conditions are. the conditions we are looking at are things like high unemployment and low capacity utilization. >> and unemployment. >> subdued inflation trends. we have that right now. the third is stable inflation expectations for those of the things we primarily look at which are the state of the economy, the real economy and unemployment, and also where
inflation is and where it is going. those are the main things we look at. we look at financial markets and other things as well. those are the broad areas and that is what our mandate tells us we are supposed to look at. i should say that monetary policy takes a long time to work. we have a very easy monetary policy right now. interest rates are close to zero. we cannot wait until unemployment is where we would like to be. we cannot wait until inflation gets out of control before begin the process of normalizing. we will have to make a judgment or forecast of when the appropriate time is to begin moving toward a more normal policy. we need to do that in a way
that anticipate where the economy will be one year down the road. that takes awhile for monetary policy to work for it will be the case that when we start the process of tightening the policy that the economy will not yet be back to a point of normal. we have made a lot of progress already in our exit in some sense because many of the lending programs we put in place like the commercial paper program and the money market mutual fund program and others have been dismantled and put away and that process has been completed. they were put away without losing a penny and had a profit for the taxpayer. we moved away from the extraordinary steps we took in the crisis. i view each step as a step toward a more more normal policy. >> six months ago, people were betting that you would raise the rates and now people are betting at the end of the year
or towards the beginning of next year. do you think the criteria you outlined helps? >> my colleague used to read the paper and try to predict? [laughter] >> several questions have been raised and people have said to abolish the fed. ron paul was one of the early ones. what would happen if in fact we abolish the federal reserve system? >> that would make us the only country in the world without a central bank. the question would be what would you put in place? >> i would let the money grow at about 3% at the rate of the increase in population. >> there are serious alternatives. milton friedman gave that particular idea and there is a
gold standard and other things. i don't know if i can test your patience but for various reasons, my own research was on the great depression. one of the contributions that i and others made was that the malfunctioning of the gold standard which tied together the monetary policy of every country was one of the major causes of the depression when it became international. there are many dangers and risks to the gold standard not to mention practicalities that would be difficult to put in place. there are good reasons why we left the gold standard in the 1930's and got rid of it entirely later on. my question would be that the fed is not a perfect system but compared to what? there does not seem -- the evidence of 180 countries in the world, there are a couple that share a central bank but i don't know of any bad doesn't have a
central bank unless they used other currencies. somebody has to determine how much currency is to be issued. somebody has to deal with the issues of national stability in modern economies. of the central economies i believe that will be the case for the united states and i hope it will be independent and a highly qualified central bank. >> this important question -- coming from our group, i cannot see because the light, who has the microphone? right over there, sir. please try to ask a fairly short question. >> i m.a. banker and real estate man from illinois. we just opened a new branch in the washington area last week. we are a good bank. i would say that wall street is
on the hook for their unethical practices. i am one of the real estate disciplinary board members. the eight subprime mortgage and these problems are really caused by excess of real estate brokers, mortgage brokers, and some greek public -- " what is your question? >> to correct these deep-seated routes, i think america needs said a consumer education. some countries have concerned consumers.
america has an different consumers'. >> you may be right but we are limited in time. can you give an answer? >> certainly, the subprime problem was part of the crisis. it was not all that but there were many reasons for including inconsistent regulation. the federal reserve bears responsibility there. we have put together regulation on mortgage lending but it came too late. another aspect of it certainly was the understanding of the borrowers. financial literacy is incredibly important objective. we worked for that at the federal reserve. now that we have seen the dangers of people not knowing what they are signing, i am hopeful there will be much more committed effort in our school systems and our colleges and for adults, as well, to help people understand how to navigate the financial marketplace. i agree with that, absolutely.
>> yes, ma'am, right over here. >> over the years, you have made a number of statements about rising in, and the quality and the united states and the decline in real wages. in light of that backdrop before the financial crisis, i was wondering if you could offer some thoughts about what that signals for the future about the free-trade agreement between countries. >> i spoke about inequality, rising inequality is a problem in the united states. there are many reasons for it. they include technological change which favors more skilled workers over basic workers. there are factors like the weakening of the union movement and some trade factors which favor a more skilled workers over less skilled workers. there are many reasons for it.
there are dangers because one of the political implications of increased inequality might be protectionism. it might be that people will say we have to close our borders because we want to prevent a cheap goods from coming in. economists are broadly agreed that a very big source of growth and prosperity is trade. we do not want to have trade cut off. we're also concerned about the inequality at the same time. they are not easy solutions but fundamentally, there is a problem with skills and the problem is getting skills. i will go on wednesday afternoon to richmond to talk at a conference which is about worker skill acquisition junior colleges, community colleges and so on. give people skills and they can get the kind of work that will give them a decent wage. that is even more critical today
than normal because one of the very disturbing aspects of our labour market situation is that about half of the unemployed have been unemployed for six months or more. that means they are losing skills and contact with the job market if they simply sit at home, when the economy gets back to normal normal state, they cannot find good work. even now, it is more important than ever that we make available in every way we can opportunities for people to get skills so they can get decent paying jobs them up the final question right over here. >> is it likely that this country will ever have much leverage in negotiating with china? >> i just came back from china. i attended the strategic and economic dialogue which is both
strategic and has a bearing on state department-type issues and economic, fed-type issues. i am one of the few people, perhaps the only person on the american side, who has been to all of them because they were founded by secretary paulson in the previous administration. it continued with modifications into the current administration. it is a meeting of essentially the entire cabinet of the united states plus the fed chairman and others with their counterparts in china. what i felt was the genius of this meeting is that it recognizes the wide range of issues in which the u.s. and china have common interests and concerns. when we go, we don't just talk about exchange rates and some things that have been a
troubling part of our relationship, we talk about ways where we can cooperate on energy the says, and many other -- on visas and many other issues. the fact is, we need us -- a fact is, they need us and we need them. these are the largest developed economies in the world and we have a great deal to gain in working with each other. one of the benefits of these meetings besides the concrete achievements which are sometimes establishing a working relationship. having a working relationship with people so you can call and talk to them and get a frank answer is an important objective. my answer is that we are talking to china and we need to keep talking to them because it is not just one or two issues.
these countries need to work together. >> are they listening to us in areas of monetary policy? >> they have their own views and interests. we don't always agree. they are very interested in what the united states is doing and thinking. they understand there is a code dependency relationship. --co-dependency relationship. we're not happy with every out, and certainly they are not. there are issues we are currently debating with i am saying that there is a real desire of both sides to engage. for me, that is an important achievement to have those lines of communication be open. >> some day, they will re-value
their currency. when you can't oppose, you said you want the fed to be more transparent. we certainly bid -- we certainly believe you have been tonight and thank you for coming. >> thank you very much [applause] >> before we leave tonight, may i recognize that we have several awardees who are president -- who are present. thank you former awardees for the wilson center. please give him a round of applause. [applause] and we are very appreciative of chairman bernanke and his comments tonight. i thought sam donaldson did a great job, too. didn't you? [applause] we appreciate that, sam.
i hope you have had a wonderful evening and it has been our pleasure to have you here. godspeed to all of you and a safe trip home. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2010] "washington journal" is next with today's news and your phone calls for it at 11:00 for easter, live coverage of president obama's healthcare town hall with senior citizens. and we will look at today's primary races in 10 states. at 8:30 eastern, we will talk with the