Skip to main content

tv   First Ladies Influence Image  CSPAN  December 17, 2013 12:00am-2:01am EST

12:00 am
lawyer, reagan official mark levine will calls in tremendous it 234 depp. s ve this morng, book tv in-depth, the first sunday of c-span 2. on >> we want to know what your favorite >> the outgoing chairman and c.e.o. of general motors said that g. smfment investing more than a billion clars in plants mainly in michigan. he called her rise in the company historic but not surprising this. s an hour.
12:01 am
for more information about the national press club please visit our website to donate to programs offered to the public through our national program journalism institute visit on behalf of our members worldwide i would like to welcome our speaker and udience. >> i'd like to welcome our c-span and public radio
12:02 am
audiences. you can follow the action on lunch. using the #m.p.c. i will ask as many questions as time permits. i would ask each of you to stand briefly as your name is announced. from your right william wilkins, he road information program. >> vice president of global communications and public policy. allison fitzgerald finances and
12:03 am
vestigative reporter >> john hughs editor at bloomberg first word and the treasure of the national press club. michael lindenberger washington correspondent for the dallas morning news. and tim national reporter covering business and international trade for the ashington times. [applause] . >> our guest today rocked the auto world last week when he announced he would step down as
12:04 am
chairman and c.e.o. of general motors, the world's second largest auto maker. he announced plans to retire next month to care for his wife of more than 40 years. >> he came in 2010 as the ceo to turn around the biggest of the ig three from. that work ended last week. one can imagen the champagne popping when that news was announced. general not or thes led global sales for 77 consecutive years longer than any other auto maker. the global downturn said beginning 2008 also turn into a crisis for the u.s. automotive industry. it was further weakened by increases in gasoline prices, discouraging sport utility vehicles, the bread-and-butter
12:05 am
of the u.s. industry profits. gm feil chapter 11 bankruptcy in 2009 with 82 billion dollars in assets and 100 $70 billion in liabilities. they shed several brands. they were in general motors $30 billion in return for a 60% stake in the company of following an ipo. the treasury last week said it recouped $39 billion of the 50 billion in spent on the gm bailout. gm has turned a bailout and renovated dealerships. nder his leadership, gm placed
12:06 am
first in the initial quality study, putting an american automaker on top for the first time in 27 years. gm cars and trucks have won accolades from consumer reports and motor trend. before joining gm, he was a managing director and head of global buyout for the carlisle rew. washington and served as ceo or president of several telecommunications and technology companies including nextel communications in general instruments. please join me in giving a warm national press club welcome to dan akerson. [applause] > thank you, angela. many thanks to the national press club for inviting me to speak. this is an auspicious time to speak to an audience of reporters. s you may have heard, gm has
12:07 am
been in the news a lot lately. last week the transformation of eneral motors passed two major milestones. first, the united states treasury sold it last share of eneral motors stock, closing a emarkable five-year chapter in american business history. that got immediate attention. the next day we announced that mary borrow will become the next ceo. that did not go unnoticed either. on that day, for the first time
12:08 am
in decades, all eyes at general motors turned toward the future the end of government motors era has cleared the way for general motors to truly soar forward. we are building a gm that america can once again be proud debt. it has not been easy. the path forward for mary and the team will not be easy either. the enormity of the task became crystal clear when i became ceo. the new gm was fragile. when they emerge from bankruptcy that lasted only 39 days, that was good because we did not do it reparable damage to our brands or dealer networks. a 39 day bankruptcy only gave us time to repair the debt side of our balance sheet. ruly transforming a business would it take much more. we had to remedy decades of poor decisions, in decisions, and no
12:09 am
decisions started to pile up in the 70s and 80s like so much running firewood. i categorized of the problems we face into three broad buckets. they were out of control costs, wasteful complexity, and a diminished quality funded by ruinous debts. you can pick almost any point in time and find something to shake your head over. for example, in 1978 general motors paid almost as much in benefit as it did in net income. the next year, the company agreed to the largest pension increase in uaw history. eventually, general motor pensions, the largest in the world, became chronically and dangerously underfunded. despite tens of billions of dollars in cash, stock infusions to make it whole. these actions actually weakened
12:10 am
the company because they treated the symptoms and not the disease. robbing precious dollars for product development. more recently, u.s. hourly costs increase an average of 4% annually from 2003-2007 even though the company had total operating losses of 17 and a half billion dollars in 2005-2007. while management figuratively burning furniture to keep warm, we were automatically increasing our fixed costs. complexity was everywhere. a few short years ago general motors had more than 30 different the all architectures supporting sales of about 9 illion vehicles worldwide.
12:11 am
then it was ridiculous. he company had almost 70 different advertising agencies around the world to us to support the chevrolet brand. it is staggering but it also shows how we lost focus and our advantage. in another move, it gm leaders outsourced nearly all of the company's information echnology. we effectively dismissed data capture and proprietary analytics as a core competency just as the internet was about to transform all modern dismissed models --business odels.
12:12 am
we ended up with 23 partially owned data centers which is not only costly but risky. we are in sourcing our i.t. and growing it as a core competency. the 23 data centers will be reduced to two which will increase our performance, reliability and cost. t 1 point i would barely close her own books in a timely manner because they were on different letters. for those who are financially trained that finance 101. the list goes on. we almost will happen next. thus we know what happens next. the company that top to be fortune 500 when it was first listed in 1955 and stay there for 35 years fell into disgrace. something even more sobering, gm have lost sight of the customers and what the truly valued. quality, compelling design, and reliability. in my heart of hearts, i knew gm was fixable if a new leadership team laid ball and systematically addressed the company shortcomings. i made a promise to myself and
12:13 am
the board to deliver on three mportant initiatives in my tenure. the first was the restoration of gm's good name. secondly, the transformation of the company basic operations. my third goal was to put quality and the customer back at the center of every decision we ade. every aspect of our business, every angle we took was to make every system and every operation best in class. e do not set out to become
12:14 am
competitive or average. we wanted to be best in class. for example, we have committed $3 billion of our precious balance sheet to build our dealerships and create the best customer sales and service experiences in the industry. e have reduced the time it takes to resolve complex customer issues from 28 days to a week. it is our objective to get it down to one day. we are launching the industry's largest deployment of four g lte -- 4g lte to bring the analog cars of today into the digital world. we are investing more than half $1 billion to build an information technology capability that would make silicon valley proud. e have invested more than $4 billion to grow gm financial around the world.
12:15 am
we had been the innovation leader for years. decades. we were slow to commercialize our intellectual property. we are now innovating for the enefit of our customers. i will give you a good example. reducing the weight of our cars will improve our mileage/fuel economy to meet the new demanding standards. that means we are going to have to use more aluminum. some engineers in this group. no one has ever figure out how to weld aluminum. we have. we patented it. we are unable to use more aluminum, steel in things such as car doors. you see them in error plays --
12:16 am
airplanes and cars. we no longer had to do that. it takes complexity out of our assembly lines. it uses investment. it gives us competitive advantage. we revamp this. we were not even able to figure out profit line profitability because we had different letters around the globe. on the product front, we will reduce the number of vehicle architectures by half within the decade. we have also defeed $40 billion of our pension liabilities. we have doubled our revolving line of credit and have dramatically simplified our
12:17 am
balance sheet. we have worked hard to earn the trust of our employees, both ourly and salaried and get everyone aligned on straightforward trough it and quality targets. today when a salaried employee gets a bonus, hourly workers get a profit share. we are aligned. we are not at odds with each other any longer. i could keep on going but i think you get the picture. we have been trying to fix this airplane while in air. the bottom-line result has been encouraging. we had a 21 point 3 billion-dollar ipo, the largest nd i feel history at the
12:18 am
time. we have generated over 600 $4 billion in global automotive revenue sent our reorganization in 2009. we have had 15 profitable quarters in a row and earned more than $30 billion in earnings before interest and tax. we have announced more than 9 billion in capital investments in u.s. facilities. we have returned to the s&p 100. all of this is good for our employees, our investors, our industry and our country. none of that will matter for uch of we go back to his roots s usual. that is why it is critical to put the customer back in the center of every decision we make. i keep returning to this being
12:19 am
because it is what the world's strongest brands do, embrace the customer as foundational. this is the biggest cultural change that we have been able to infuse into the new dm. i think our products tell the story best. it was only a few years ago that president obama rhetorically asked "why can they not make a corolla?" please. no one is asking that anymore. today we are taking on the best of vehicles in the world and winning with products like the cadillac cts and chevrolet impala. we are entering new segments like midsized truck so that our domestic competitors have abandoned to the japanese. our trophy case is filling with quality awards. we became the first and only
12:20 am
american automaker to top jd powers initial quality study, ver. consumer report ranks the chevrolet silverado and impala as the best sedan and truck you can buy. just last week, auto week magazine named the corvette and silverado as the best of the best. it is ok. it is the first time that one manufacturer ever won both categories in the same year. this is a 2013 north american car of the year. it has a 2014 that is up for best north american car for 2014. this will be named next month. i anxiously await the outcome.
12:21 am
it is an embarrassment of riches that i am not there is about. as good as all of this sounds, the truth is we are still in the early chapters of our comeback story. we have a lot to room. especially to those who left us from other brands. the only way to bring them back to keep making cars and crossovers. we will keep doing this to corrosive economic up-and-down spirit today we are taking another step forward by announcing new investments otaling $1.3 billion in five u.s. plants. this will take this to more than
12:22 am
$10 billion. there is the $10 billion again. we are investing in. we will keep paying dividends to the american public support of this company in the darkest hour. this will be spread from detroit to our birthplace city of flint michigan and two hard-working communities like romulus michigan, toledo ohio and bedford indiana. about 7500 people work in the cities. today's announcement will create or retain another 1100 jobs in america. that brings our total of new and retain jobs to 26,000. it is by two different administrations dared the entire u.s. industry is back. rather than allowing the industry to collapse and turned the great recession into another
12:23 am
great depression, our nation stood by us. we come to work every day determined to restore gm as the american standardbearer in the lobal automotive industry. someone asked me recently if the government motors tag still hurts us. o be honest, we do not hear as uch anymore. t reminds me of a comment that should be to to ronald reagan. he said he knew his economic
12:24 am
lan was working when they stop offering it reaganomics. gm is working again. we have put together the leadership team with experience, optimism, and a strong competitive streak. we're making vehicles that are the pride of the industry. when i became ceo, i wanted to help build a sound foundation for the next generation of leaders to build on. i cannot wait to see how far they can take it. i think it is going to be greeted -- great. thank you. i will be glad to take any uestions you might have. [applause] >> we know chrysler received money as well. you mentioned $10 million that
12:25 am
gm gained and the taxpayers did not gain back. do you think gm should repay the taxpayers that money directly? >> well, first let me contrast to something there. the center for automotive research estimates that between ot having to pay for unemployment, social costs in the various communities in the midwest and particularly in lost tax revenue that it was about a $38 billion gain. we had a 26 billion-dollar pension deficit that is ever been thrown into the pbgc account. that being said, one of the vantage i have, i wasn't there. when you go through a bankruptcy court at a private equity,
12:26 am
everybody takes a haircut at the table. we have paid back all the ebt. they could have cast the big group see differently. they were taking a ride just like you do when you buy stocks. we have new shareholders. we went to the market. we sold tens of dollars of equity. when you come in, you're buying hat stop a step on how it is rapped in stacked.
12:27 am
to go back and pay that back. i can tell you there would be shareholder suits that would be difficult to defend. the die was cast in 2009. it played out for the national guard for many years there were decisions, no decisions, bad decisions. all of it has been rectified in large measure. the automotive industry in this country is 3.5% of the total gdp. the foreign competition would have been a serious mistake. i would not accept the premise of this is a bad deal. >> gm had applied for low interest loans from the government and then rescinded the application before decision was made. how would gm be different if you had gone through and received the loans? >> at was one of my first actions. figured we had taken enough from the government that we would stand on our own two legs or not. we turned those loans it down and decided to go. some of our competition are more indebted to the federal government in terms of almost $7 billion.
12:28 am
maybe that is a question you ought to ask someone. ford. >> the invitation stands. why does gm deserve the taxpayer money instead of hostess i got a lot of attention for its bankruptcy? >> i think the automotive industry, in my opinion countries do several things well. the manufacturer and add value and grow their food. they are traders. in an industry such as ours, i see it every day, the question is was it a good investment? was the automotive industry more central to the prosperity of his country then hostess winkies or cupcakes? these are high-paying jobs in
12:29 am
communities that the government had a compelling interest. i think this was a positive for he u.s. economy. >> will you have an easier time repairing now that government or sections are no longer in effect? >> i do not know. we have recruited a very good team. i will tell you it was not about money. it was about being part of the transformation of a one great company and restoring it back to
12:30 am
great. not everybody works just for money. i did not come to general motors for a paycheck. i came because it was an interesting business paradigm. probably the most challenging industry in my generation. more importantly, what this country represented to this economy and to this nation. i do not thing pay was the fact tour -- factor. that said, our competition has seen what we're doing. at higher a number of people from our european competitors. they thought we would come out of the gate and feel. they thought they were going to be the 2009 version of the health care program. it didn't. it was tough. there were many long nights and hard work. it has been one of the best business experiences for our team. what i think they will remember for the rest of their life. we're going to have to pay better. we are viewed as attractive again. we have a lot of young, capable executives.
12:31 am
>> how has the bailout effected the culture of the gm? >> the bailout allowed us to put the customer at the core of everything we do. to focus on what is important. the prior administrations and xecutive teams, it was a point of, d. it was a health care -- oddity. it was a health care plan. how to fund the retirement plans and take money from peter to pay paul. we were robbing from product development which kept us
12:32 am
competitive to the point where the jews cannot lay any more golden eggs. now that we have the structure of the company properly stated, we have a allen sheet. we are focused on profitability of the core business. at the same time focusing on brands and marketing. we are a hard-core business again. we're still one of the biggest private pension land in the world. >> one of the things that was agreed to in the restructuring was a two-tiered wages system. tell us how that is working now with new hires working alongside veteran employees who are getting paid more than the new workers. >> lemmie casted this way. - let me cast it this way. i thought we needed to open up a new chapter in industrial rent relations -- in industrial regulations. this is nothing like a crisis to bring focus to a particular
12:33 am
issue. what i asked, the washington post said i was either a neophyte or a visionary. they tended to gravitate toward neophytes. mike ought was that no increases for four years would never the accepted by the uaw. i went to dinner with the uaw leadership every month for almost a year and worked it and worked it and try to sell my vision and said basically we will link management of bonuses. e will link management bonuses to uaw profit share.
12:34 am
this is of arguing for a one or two percent cost-of-living. let really sure the profits. it will be tied to performance and quality. quality is a new center part of our initiatives. they have prospered under that. when you got $6,500. i also try to total transparency. there will be good years and there will be bad years. there will be years that there are not bonuses and there'll be years there are not profit share. you cannot have people going like this. whether it is tier one or tier two, we had to get our labor costs on an hourly rate and nonunion states such that at the end of this four-year contract hat our hourly cost were going
12:35 am
to be equal to or less than our foreign competition. the uaw is a business partner in you can argue over a 2% or 3 are sent rays are you -- raise for you can get a job. it was tough. we had to rejigger our own retirement plan for management, too. we still have people on undefined management plans. that is very unpopular. we had to make a lot of unpopular decisions that people in the company know we are making decisions for the long-term longevity of the company. you have buy-in, whether it is union or salary. i think the employee base is unified in the purpose here. >> you mentioned the news out of treasury got a little bit of
12:36 am
attention. do you plan any advertising campaigns around that? >> i do not think people eating tacos in chile are going to pay attention to the american axpayer. i might be wrong on that. we do not have anything planned right now. we may do something. it would not be within the super bowl atmosphere. >> salaried retirees have been waging a very public campaign for years now in which they contend they were cheated out of a large share of their pensions. what is your take on that? do delphi salary retirees have a legitimate gripe? where should
12:37 am
the blame lie? >> i'm going to address that uestion. that was done well before i arrived. this was a fully funded pension plan. the company ran their own pension plan. we ran our own pension plan. he company spun off. that is where the courts decision was along that line. i know it is a very volatile subject. i was not there when the decision was made. i was not there when the delphi was spun out. i know it was spun out with a fully funded pension plan. >> what does the future hold for former delphi facilities that are now part of gm, such as the former facility and lock poor, new york. it will gm have to make further cuts in the operation? >> i have no idea on a specific
12:38 am
basis. me make one comment here. -- let me make one comment. >> some successors have downplayed the significance of mary barra being the first female ceo of a major automobile maker. what are your thoughts? > i have not read any putdowns personally. nor do i think it should be. it is a story. i think mary barra was picked purely on her talent, hard work and success. nothing else. e do this because of stem, science, technology, engineering and math. raduates coming out of
12:39 am
colleges. about 25% of our plants are wned by women. a young woman that runs our manufacturing engineering. folks in the plans. a complex woman runs our supply chain global purchasing. our quality initiatives and customer experience, woman. they serve on the executive committee. we are proud of that. i'm not surprised that mary rose
12:40 am
o the top. she has been with the company for i believe 30 plus years. she graduated from gmi, think of that like you would west point or annapolis. they had their own service academy. she went to stanford. she came back and has performed exemplary. it is noteworthy. it should be. i think she was well deserving of the appointment. > your announcement today is bout the 1.3 billion dollars invested around the u.s. a questioner asks about plans to increase investment globally. >> between product development and capital expenditures, you would spend $15 billion a year. when we spend a billion three sound like a big number. we are doing this around the globe. you see business opportunities and the likelihood of success. we are going to continue to invest at this rate.
12:41 am
one of the things we came into this we are so burdened with the debt and we are underfunded. now what we do is we have a fortress balance sheet. we went into bankruptcy at think we have 40 plus billion dollars in debt. now we have a liquid position about $37 billion in cash. shareholders are saying that is too much. we will balance that about what we need. we used to have the start and stop. coming out of the recession, we would be short on new quality product. we want to be able to invest economics up and downs. we will have a strong portfolio. we are in a capital intensive, cyclical industry that is determined by long-range planning.
12:42 am
e have to think out 10, 20, 30 years to make sure we are competitive. >> gm has invested half a billion in the arlington texas facility. why such a big bid in texas and on suvs in particular? >> why do you rob banks? that is where the money is. why do we invest in this particular plant question mark we make suvs there and they are highly profitable. - plant? we make suvs there in their highly profitable. we want to invest in all segments of the market. arlington is one of five truck plants that we have. this is the last one to get the capital upgrade to produce the
12:43 am
new k2xx platform. >> how long will it take chinese cars to become like the japanese market and start capturing a share? is this taking longer than you ight expect it to? >> that is a difficult question. the chinese market is the largest market. i do not think they feel the need, think it was a different time and different place in a different set of circumstances back in the 60s and early 70s when the japanese came in this
12:44 am
market. there is no question in my mind that there'll be one or two global chinese champions that will come out of the domestic markets. it is only a matter of time. our partner there is shanghai auto. it is robust. it is strong. we have the lead market share jointly in china. we hope to hold that, it. it has been a very robust partnership and one that we value and cherish. >> speaking of japan, transpacific ardor should negotiations are ongoing. there are hangups including safety and other regulatory issues. what kind of provisions do you xpect to see if an agreement
12:45 am
isn't reached in those bilateral talk? is a currency position necessary to close the deal? >> i was on the japanese board for three years. i could count the number of american cars i saw in three years on two hands. there's not an american manufacturer in japan. throughout asia the japanese yen has weakened to the point where they have a 20% advantage not only versus the united states and the dollar but other major currencies to include the korean won and euro. the united states has been called a fiscal manipulator. this is an important part of the tpp and one that needs to be watched very carefully. >> david strickland announced last week that he is stepping down. what is your assessment of his
12:46 am
tenure? >> i think our cars have got nothing but safer. i think that transcends political parties. he has done a good job. i think he is a funny -- he has done a great job. >> any ideas where he will land next? >> i do not think you will come to general motors to work. >> i think he has a career. i do not know him ersonally. i think public service is unappreciated in this country. there are public servant that do great work that are highly unappreciated. i feel like he is whether that have done a good job. >> what about the future of electric vehicles in the
12:47 am
market? sales have not been what gm wants. we're d.c. see electric vehicles going both for gm in the u.s. market more broadly? >> we will sell more votes in this market then audi markets. we are right knee mill. not that this is a sore subject. this car is a step forward. thing about other cars that have had fires and things of that nature. we never had a fire with a volkswagen. never. we were able to start when in a est cents.
12:48 am
we tivo did. we do not conduct it or drain the gas out of it. we do not drain the electric battery. never had an accident. we have something like hundred 50 million car miles. we tivo and them. we have been total. they are safe. you do not have range anxiety. you have an onboard generator. he can take that car and drive it from washington to l.a. and back and not worry about it. you say, 80% of americans and drive 40 miles or less per day. that car will run 40 miles without a charge. pretty dam good. i have one. i have put less than $75 of gas in the in 2.5 years. it provides utility i want but he keeps the air clean. if i want to drive it for long distances i can without worrying about range anxiety. this is the future. say we could develop a car that
12:49 am
could go 200 miles on a charge. i have an onboard gas generator. yet to get the nomenclature light. it is electrical. under there are not a lot of lectrical engineers in the crowd, but engines produce alternating current. you have to convert it to d.c. to charge that battery. emissions, co2. this is a great car. we're going to come out with a new one this month called the elr which is a cadillac not unlike the volks. i do think it has a future. battery technologies have gotten better. it is going to get better. they're going to be breakthroughs. you have to be there early and often.
12:50 am
the interloper that shows up 10 years and says where were you when the party started? >> as you alluded to, after the post crash test fire on the gm was subject to a congressional hearing, etc. you did not name names but i will. tesla has not been called before congress. do you think there's more attention paying attention? >> company should be judged and ow they handle crises. there is a good safety percent of the car. this is our tylenol moment. we offered to buy back any car. we offered to get a replacement hile we tested it. we crashed eight other cars, the same circumstance.
12:51 am
they did. we did. we cannot replicate it. to get nine experiments and have eight over here and nine over here, you did that. we stuck with it. we took the battery out of the car. we are still with a one inch sphere. we put it on a spit. we broke the seal. we broke the seal. we continued to spill: onto the battery. rotated. the fact that we handled it so differently than other car companies. e offered it back. we offered replacements. we put additional buttressing to shed the load if we were to take hit if we were to get
12:52 am
t-boned. i think 150 million miles an assist on the road today. not one fatality. not one fire. we are proud of the safety wrecker. i have no comment about what tesla should do. i do think it is interesting in a politically charged environment. this is not president obama's car. this was conceived back in 007. it was not my car. i am proud of it. i do inc. this car is a huge
12:53 am
step forward. a lot of other companies are interested in this. we will develop this portfolio further. >> what do you think of you hamas -- elon musk's strategy. it is different from the gm strategy you just told us. >> there were many things i wanted to change when it came to general motors. one of them was the safety issue climate. we were going to be part of the solution and not part of the problem. you cannot just fold your hands and arms and say that is not the way i see it. engage in the dialogue. come to come -- try to come up with a sensible solution. that is the general motors approach to the problem. others will have other
12:54 am
approaches to it. >> what about help driving cars? jim is developing along with your competitors. are they over height -- over-hyped or would they be part of our future car market here in he u.s. and the world? >> you can get active cruise control, which puts you off. he come up on a car and think you should be 100 feedback and your settings will slow you down or stop the car. in my grudge things i little too close to the side and it stops me which is a little bit unnerving. that being said, i think you will see self driving cars in the right circumstances. cannot imagine quite frankly,
12:55 am
and maybe i am just old and don't understand, in a crowded urban environment where a child chasing a ball could dart in front of you. i can give a hundred examples that i would want to have some positive controlled by a human. if you're on the road going 70 miles an hour, 65, whatever the speed limit is, you ought to have that. we have that. we can talk to you and the car will pretty much take care of itself. it will speed you up and slow you down. in a confined urban environment, i can think of the weather, light spreading out of an intersection, a dog, a puppy. i can see all sorts, maybe the plaintiff's bar with love that.
12:56 am
the software. it is a ways off. i think it will have to be another generation before it comes. >> let's squeeze in a wetjen since we are in washington. what do you think the automobile industry should be at the midterm review. is it an opportunity to weaken the 54.5 standard? i was involved in the new café standards. i thought senior executives were not actively engaged enough. little things came up. for example, we produced trucks. hyundai didn't. i driven a rural area in innesota were dual axle trucks
12:57 am
trucks, you needed heavy duty trucks where you hall in heavy equipment and livestock. -- haul in heavy equipment and livestock. we were serving a market that some of our competitors did not. we wanted to bifurcate trucks and cars. level the playing field. some do not want to play in the market across the board. the second thing was if you produced 2499 and these pacific the and of you, do not have to pay the guzzler tax if you have that mileage. what is mercedes and bmw need in he home markets?
12:58 am
we have the clinical scientist versus physical sciences determining what this can do. this is some high-end thermodynamics and engineering. we asked for a mid-term review to cs the physical science kept p with the political science the senate just mandating this and waking up in 2022 and saying e are part of the problem. e wanted to be part of the solution.
12:59 am
it is not an opportunity to renegotiate. i think this is a responsible industry to take and one that i was glad to see that our regulators agreed with. >> we're almost out of time. before asking one last western, i have a couple of housekeeping matters. i would like to remind you about our upcoming speakers. on december 19 we have a grammy winner and bluegrass legend and on january 9 general frank j graft, chief of the national guard. i would like to present our guests with the traditional national press club coffee mug. i do not drink coffee but i will try. >> a month from now when you are in the private sector what is he first car you will buy? >> i think i am in the private sector. i will only buy a gm car. then i will check with my wife first. >> a politic answer. thank you. thank you for coming today. thank you for coming today.
1:00 am
how about a round of applause? [applause] i would also like to thank our foronal press club staff helping organize today's event. finally, here is a reminder. you can find more information about the national press club, including a transcript of today's event, on our website. thank you. we are adjourned. [captions copyright national cable satellite corp. 2013] [captioning performed by national captioning institute]
1:01 am
1:02 am
>> c-span, we bring public affairs events from washington directly to you, putting you in the room at congressional hearings, white house events, briefings and conferences and offering complete coverage of the u.s. house, all as a public service or private industry. cable or your local satellite provider. now you can watch us in hd. >> next, an update on the affordable care act and the website. journal," thisn is 45 minutes. >> in a few moments, an update on the affordable care act. in 45 minutes, a national consumers league for identity theft and data security.
1:03 am
>> next, an update on the affordable care act. this is 45 minutes. " continues. our next guest this morning is alex wayne.
1:04 am
out about thet insurance plans. walk us through what it means. 365, up to about they are still about half the pace to reach this goal they had before the launch of the exchanges of enrolling about 7 million people by march. they hope to get a big bubble of people this month to have coverage starting on january 1. host: how likely will it be they will reach that benchmark? guest: they have a long way to go. they do not use that 7 million figure very much anymore. showing 11% had tried to get health insurance using
1:05 am
they said they ran into problems. how alarming of a stat is that for the administration? guest: i do not think it is much of a surprise. they knew there were problems into early november. that is why they launched the repair effort. they think they fixed a lot of consumer issues. there are problems communicating after you enroll and select a plan. they have to send a form and there is some jargon. they have had some trouble sending those forms. host: our guest this morning is alex wayne, health policy reporter for bloomberg news. republicans, 202-585-3881.
1:06 am
democrats, 202-585-3880. independents, 202-585-3882. heard criticism coming from republicans and democrats. what are you hearing in terms of these latest numbers? guest: democrats are getting relieved the administration appears to have fixed the major problems with the site. a lot of people have a bad sentiment about statess bled over into that are running their own enrollment states that i work better. the have been lower enrollments in those states than they expected because these problems have stinged the entire system.
1:07 am
the administration needs to work through that. host: has the administration said have a plan to restore public confidence? guest: they have talked a bit about a large public awareness campaign they are going to launch at some point. they have enlisted celebrities to promote the law, the lead singer of maroon five. he is going to try to convince people to sign up for the health-care law. i do not know if having a favorite celebrity is going to convince people to sign up for health insurance. obama got annt ie of the the la
1:08 am
year. walk us true what is -- walk us through what is true. guest: the president was selling his health-care law and said if you had a health insurance plan you like, you could keep it. do notthat award -- i fax ofwith politica awarding this lie of the year. people who had insurance plans they're happy with are losing them around the country. we are not sure how many people are losing their plans. it could be hundreds of thousands to 4 million, 5 million. andle are losing plans being forced to sign up for new plans that might be more expensive. it was and unfortunate
1:09 am
use of words. he deserves some criticism because he used that phrase to public. law to the this law is not going to affect you and in fact it has. host: st. louis, missouri, from brenda. caller: hello? host: good morning. name is which one would you get on? would you do the affordable care act? is there medicaid or medicare? guest: it depends on your age. caller: i will be 60. guest: you are not eligible for medicare unless you're disabled. depending on your income, you
1:10 am
sign up for the affordable care act programs or medicaid. if you're of low income, either medicaid or an exchange plan is going to be very low cost and perhaps even free for you. caller: thank you very much. host: question on in e-mail this morning from ron. guest: that is a great question. they are not enrolling as many people as they would like to. 50%,ntire country is about half the pace they would have needed to be at to reach the 7 million goal. it is safe to figure the states have signed up about half as many people. michelle in minneapolis.
1:11 am
caller: good morning. the subsidies. two spots there are that say people do not get a subsidy through the federal exchanges. only if their state has created the exchange. everybody gets out there and says it is so affordable because you will get the subsidy. what will happen if the people in the states did not create their own exchanges? the people that live in 37 states may not qualify for any subsidy. we are talking about the people supposedly can qualify for a subsidy. that is going to hit the fan. i work for a large company.
1:12 am
i cannot imagine what is going to happen next year when small companies start kicking people off their medical plans. thank you. is the subject of a couple of lawsuits that are working their way through the courts right now. the obama administration has been sued in states covered by the federal exchange. the subsidies are only available in states that run their own exchanges. what the administration has said and they are backed up i democratic members of congress and the congressional budget intent of congress was to make subsidies available everywhere, regardless of what the law may say. there was a regulation that makes the subsidy available across the sky and he.
1:13 am
you can sign up for insurance and get subsidies in 2014. we will see how these lawsuits turnout. they probably will not be resolved until the next supreme court term. people in states covered by the federal exchange can rely on subsidies for at least this year. is going to be some problems with the law. congress may have to rewrite it. we may is not possible, have an effective health care intem or affordable care act states that choose to run their own exchanges. host: kathleen sebelius was questions about enrollment numbers last week. [video clip] 360,000oncern is the number is fraudulent because it is not those who have purchased
1:14 am
plans yet. thoseou return, give us who have purchased plans. >> we did not take over the private insurance market. people will purchase from insurance -- i have told you who has enrolled. >> that is why we are frustrated. host: your response. guest: he is attacking the way the administration defines enrollment in the health-care law. enrollment ifrted you select a plan and you put it in your shopping cart and leave the site, they consider you to have been enrolled. that is not the last step in enrollment. the last step is you pay year
1:15 am
ensure. you make that payment directly to your insurer. they have been reporting numbers to us about people who of selected a plan and put it in their shopping cart. host: robert is on our line for republicans. robert, are you with us? go ahead. you are talking with alex wayne of bloomberg news. anyone i do not see have could think that this is going to work. by any means. the guy can sit here and make why things will be a certain class that gets i do not understand
1:16 am
how he can defend himself. i am a little nervous. what i am saying here -- host: it sounds like we lost him. guest: i don't know if he was talking about me. i am not here to defend the law. generally it was intended to address a problem in the country of 48 million uninsured. it has some operational problems. we will see how they sort out. host: question from twitter this morning. guest: that is a great question. it looks like they will wind up enrolling fewer people into the affordable care act then will lose their plans that they had
1:17 am
before january 1. we may wind up with a net loss of coverage, which would be a practical problem for the administration. host: michael is on a line for independents. caller: ys, good morning -- yes. in relation to the state now we have one insurance company which is blue cross, blue shield. states that are instituting the exchanges, trying to entice other insurance companies to join in the exchange, particularly in the states where you have only one insurer, which kind of the feats the purpose because there is no
1:18 am
competition. massachusetts, the system first started with a great deal of issues. basically once those issues were ironed out, health care was top- notch. massachusetts is one of the great states of the health care program. hospitals and doctors, the denial of insurance almost one away within the first year. i have my treatments that i required. they are trying to have insurers two.only one aror
1:19 am
guest: the administration has pointed to massachusetts. this is a six month period. they have until the end of march to and role. they say look what happened in massachusetts. they started slow. of itsusetts has only 3% population uninsured. they were the example of where this can work. as far as competition, new insurere has only one and their other states in a similar situation. i think west virginia only has one ensure. insurers have been attracted to states with large urban centers. new hampshire doesn't have a lot of large cities. one thing they have done to
1:20 am
create more competition. there was some money put aside to fund insurance companies in every state. they have scaled the money back. there is only about 24 of them. i do not believe there is one in new hampshire. if they are successful, perhaps they will move into new hampshire. care lawn the health first started out, with heard about the technical holdouts it difficult for people to get in. guest: the problems with the consumer side of the website have largely been fixed. we have a difficult these as reporters judging that. we call these navigators to help
1:21 am
people and role. -- enroll. they use the website all the time. we call these organizations and ask how it is going. late november, they said things were getting better. now they are pretty much able to use the website without too many problems. durham, north carolina on our line for democrats. caller: good morning. point on your a behalf. you are talking about millions of people. that is a lot of people to have to put into this new system. i think people think it is supposed to happen overnight. like bill gates putting windows together. it took a while to get it right.
1:22 am
medicare.get i do not know how it compares with whatever plan was available for the affordable care act. a woman said she might qualify for a program in which you might have to pay anything. they are paying 80% on medicare. the other part would come out of your disability income. they would have to find you some other plan. the whole thing about medicaid, it is different state-by-state. the only way i can get medicaid, the money i am paying out adds up to a certain number. or he could be $100 on my
1:23 am
disability income every month. i have a cousin that has disability as well. she only worked half her life. she is on medicaid. i have worked a lot longer with medicare. the premium comes out of my pay for the medication portion of it. i have not heard other people talk about it. other other plans for people who get medicare that we can pick up some in the affordable care act in the programs you are talking about and maybe not have to take money out of our premiums, which we need that. guest: if you are eligible for medicaid, that makes you ineligible for subsidies on the exchange. you cannot buy an exchange plan and get a discount.
1:24 am
eligibility for medicaid is extremely low in north carolina and other states that have chosen not to expand. if your child is an adult, generally you're not available for medicaid. that will not change in north carolina. if you're a childless adult and earn less than 100% of the federal poverty level, you are not eligible for medicaid or for subsidies on the exchange, i am afraid. host: we have a question on e- mail. guest: no, he's not. he has not ordered insurers and
1:25 am
state to restore those policies. tohas asked them nicely please extend those policies for people that would otherwise lose them at the end of the year. there has been a variety of responses to that. some states have refused. e a not going to let people continue with these plans because we need them to join the presents in order to what they call a good risk profile." of peoplea good mix in the exchange. a lot of those people are pretty healthy. you need to be healthy to get on an insurance plan. the president's requests has been met by a variety of responses. host: gordy is on the line for republicans.
1:26 am
caller: hello. host: good morning. caller: when the affordable care act was being debated and when it was rolled out, i just heard through a couple of sources that clause in obamacare at the federal level and that the whole program as it was set up would be turned over to the states. i never heard much about that since. is there any truth to that? guest: there is a clause that allows states to get out of the exchange system starting in 2017. they can create their own health reform plan however they would like to do it starting in 2017. the plan has to
1:27 am
cover as many people as the affordable care act would cover. the only state that is planning to do that is for mont -- ve rmont, which wants to go single- payer to cover everybody in the state. host: and a question from twitter. i know.o, not as far as host: david is on the line for an dependents -- for independents. caller: if you could, about the quality of health care. havercial base insurances whittled down providers, doctors, nurses and to reimbursement and contracts
1:28 am
using loopholes and antitrust laws and getting very little reimbursement. that has caused these offices to double or triple up on seeing patients. a medical provider cannot possibly effectively think about a patient well enough in order to get things right the first time. .e have the affordable care act the government has the relative value. that has become the gold standard. state insurances have pickup the fall and trying to do what the relative value is. used to have insurance you may be managing some of the plans for the state employing the same old shenanigans in whittling the
1:29 am
providers, especially community providers, which increases access to care. me oran your speaker tell foresee some of the policies or if he can direct me to some of magazines orks or the policy thinkers, what can he tell me about how deficiency is going to be maintained when you have commercial insurances doing what they can to cheapen the relative value of the medical service? guest: of for like the caller might be a medical rider. you raise a great point about access to care. the health-care law is supposed to cover a lot more americans. just because you have an insurance card does not mean you can see a doctor.
1:30 am
we will start looking at how good the access really is. a lot of these plans have -- they have a narrow set of doctors and hospitals you're able to see with your new insurance card. it remains to be seen how the public will accept that. there were things back in the 1990's called hmo's. they are still around. there was a backlash against a narrow network of providers. people wanted broader choices of health care. that is where you got the ppo's, because of the backlash. hmo's.ans really resemble let's go to lisa from kentucky. caller: hello? host: good morning.
1:31 am
have been living with my significant other for the past 10 years. it is his home. during the course of the 10 years, i have been taking care of my elderly parents in north carolina. i have been watching the difference and how the health care laws have taken states in the different states. one governor is trying to cut everybody off. now i am stuck in a quandary. in 2008 and my mom last spring. my significant other has decided to end the relationship. i have to move back to north carolina to my sister's.
1:32 am
housewife. a i heard you tell the lady from north carolina that i would -- i know i am not eligible for medicaid down there. i would not be eligible for subsidies. will i be stuck paying fines? guest: no. , youu don't earn enough will be exempted from the individual mandate penalty. you won't have to pay that. in north carolina, you will have trouble finding insurance unfortunately. host: south carolina. republican line. has beeny husband trying to enroll in the affordable care ever since october. onhas constantly had errors
1:33 am
his file. he cannot complete the process. i am wondering if there has been any investigation into this -- the selection criteria to determine eligibility and complete the process. has pre-existing conditions. i feel like there is some type of selection criteria that does not allow him to enroll. due to his status. could you comment on that place? guest: that is not the case or should not be the case. entire point behind this law is to allow people like her husband to get insurance even though they have pre-existing conditions. it is now illegal for insurers to refuse coverage to people with pre-existing conditions. you trysuggest resetting the application.
1:34 am
the government added a feature just a week or two ago -- there now should be a reset that in somewhere on the screen when he goes into his application. just start over from scratch and try it again or call the health -- help number and see if they can walk them through it. host: over the last couple of days the administration has announced more parts of the rollout that will be delayed. can you talk about those? guest: sure. getting hard to keep track of all the delays. they have delayed an insurance program for small businesses. it is called the shop exchange. it is not available right now online. you can sign up through brokers or over the phone, but you cannot use the website. they have extended an insurance program for people who are very ill.
1:35 am
those people joined the pre- existing conditions insurance plan back in 2010. whos designed for people are sick and could not get insurance from commercial insurers. they have extended that through the end of january to give those folks more time. they cannot go a month without coverage. host: oklahoma city, oklahoma. independent line. caller: i was calling to find out -- the president decided there would be a list of required items that everybody will have, nobody gets an option, this is the one and only plan that everybody will get and then you have for payment options and different deductibles. what uv -- what if you have religious objections to anything on the plan? will the federal government create an option?
1:36 am
a person of faith, do you have to choose between od?ernment and got -- g what is the federal government going to do? exemptionre is an from the individual mandate penalty for people whose religious faith forbids them from carrying insurance -- the abortion issue, which i think it's what you're probably talking about, is a little trickier. law if you exemption don't support abortion. republicans have asked that the administration make it clearer which plans actually cover abortion and which ones don't. i don't think that is very easy information to get as you were signing up right now. i'm not sure whether the administration has made that more transparent. host: a question from twitter.
1:37 am
guest: sure. the united states spends more money on health care than any other country in the world and doesn't get better outcomes than most western european nations. cost is an issue. the administration has pointed to data showing a pretty dramatic slowdown in the rate of growth of health care costs. they are not going backwards. for sure. this health-care law, for all that it does to try to expand coverage, the things that does on the margins to reduce cost ash we don't really know how much of an effect they have had yet. how much of it is retired -- tied to the recession, putting off health care services and how much of it is tied to the
1:38 am
affordable care act. host: west virginia. democrat line. caller: good morning. there is a serious problem. i don't know if you are aware of it on medicare part b, supplement plan. i don't know if you have ever known this, but it has been this way for years. if you got a supplement plan with these companies -- they have to give you coverage when you first sign up in your initial sign-up period from october to november when you turn 65. if you want to switch companies after two or three years because of the price being different, so you want a cheaper price, the company you try to switch to has the right to deny you for pre- existing conditions -- and that is underwritten in the
1:39 am
guidelines the insurance companies have and it has been that way for years. nobody is going to address that problem, so i am trying to bring it is somebody's attention. if the aca says it is illegal for insurance companies to deny you with pre-existing conditions, but medicare has got it in there, it needs to be fixed. that is what i wanted to ask you about. guest: there is no medical underwriting, as far as i know, in medicare. i don't think private insurers are able to deny people with pre-existing conditions coverage. they wind up denying most medicare patients coverage. host: pleasanton, california. democrat line. caller: hello. this.een listening to there is a couple of things this guy said that bother me -- that
1:40 am
bothered me when i first heard it. these startup insurance companies that are supposedly being created -- being created by whom? those sound like a scam. like the house mortgages. these organizations are a few people selling a mortgage to somebody, but the financial company that had to approve it -- they were just skimming people. i am afraid that these new private insurance companies, so- called, are going to end up being the same thing -- a big scam. where are they getting the money to cover these health problems of the people that are signing up for them? , it still sounds to me like
1:41 am
the current major insurance --panies have their plans they divide up the least expensive and the most expensive into different plans. how was anybody supposed to know what kind of illness they are going to have tomorrow or next week? sick and this illness is not in your plan, they could deny coverage. also, the costs are not going down. overall, the insurance costs are going up. guest: the caller makes good points there. the cost of health care is not going down. nothing in this law has reduced the cost of care. what the administration says is that the slowdown in the growth
1:42 am
of health care costs we have seen over the last few years is somehow tied to the law. we don't have any agreement among health-care economists about whether that is true. as for the startup companies, they're getting money from you and me. it is loans from the federal government to private organizations, nonprofit groups basically, who are launching these companies. people are right to wonder whether they will exceed. health insurance is a competitive market. it is difficult to be a start up in that kind of market. we could well see some of these companies fail. taxpayers could lose money if that happens. host: we are talking with alex from bloomberg news. tim on our independent line. caller: i have a comment and a question. comment -- i think the biggest problem with the affordable care act is taking
1:43 am
away our freedom of choice. you are telling us we don't have the choice to go to the doctor we choose because we are not enrolled in the plan. revenuetion is how much did they anticipate making on those that don't enroll on the fines? -- i don'the fines have the number right in front of me. it is a significant figure -- in the billions of dollars -- that they expect to collect from people who refuse to take insurance. is $95 or oneyear percent of your income -- whichever is higher. host: ohio. democrat line. caller: a comment. i'm a democrat. this health-care program is going to work. now, i'm a medicare
1:44 am
recipient for disability. i have medicare part b. medicare part b is going to work. i don't foresee any problems. i haven't really dealt with a supplemental insurance and i don't see why they just can't have some of these exchange programs where you can walk in and somebody could help them out when they have trouble. the deficit and relieving the debt to the kids -- i believe the president is doing the right thing by creating the affordable care act to cut into the national deficit. car people have to have insurance, so why not have health insurance? that with the government won't have to worry about the indigent. guest: i will take the contrarian point of view. the thing about car insurance -- you hear that analogy a lot -- there is nothing in the law that requires you to buy a car. it is not a perfect analogy.
1:45 am
host: one more question from twitter. guest: yes. you could do that. you could get insurance by doing that. it is not a terrible idea. the only thing that come -- might come back and bite you is that in 2015 when you file your taxes and you don't have the income you said you had, you may have to pay back the subsidies you got before. jack in wilmington, north carolina. independent line. caller: good morning. i have been sitting here watching this segment and i just want to say, first of all, i am extremely impressed with your knowledge on the range of questions that you have taken your this morning and answer them all admirably. i would also say -- if i was
1:46 am
there, i would take you out to lunch after this because i feel that the work you have done answering these questions has just been impressive. if in fact you were an affordable care act apologist, i would also say i feel you have been very honest to the issues. you have not sugarcoated anything at all. i think you have a great job. -- done a great job. up my question is i understand recently i came across a piece with there was the largest of carriers pulling out of large markets like california, for instance, and considering that this is a policy -- or rather a law that the insurance companies have had a big hand in writing, i wonder if you could speak to if that is something that the aca does in fact have some control over and what you think might be the inevitable outcome of all that.
1:47 am
guest: sure. you are right. a couple of the big insurers -- united health care -- have decided to sit out the first year of the affordable care act. united health care is only participating in 4 or 5 states. they want to see how this all sorts out. there are a number of insurers who are still in the game. etna has gotten into the exchanges in a significant way. blue cross blue shield plans are involved time. -- big time. wellpoint also has a huge stake in exchanges. some insurers all sitting on the sidelines -- are sitting on the sidelines. host: that is all the time we have. we have been joined
1:48 am
>> on the next "washington ," we will talk about labor government trade policy. we will speak with former senator blanche lincoln, currently the chair of small business for central regulations. is liveton journal" every morning, beginning at 7:00 a.m. eastern on c-span. >> so i'm standing in front of the world's first radical airplane. this was the third and final experimental airplane that the wright brothers built. this airplane was considered the world's first practical airplane when it was constructed and flown in less than six years between the time that they built their kite and the success of
1:49 am
this particular airplane. this is also a plane that was built less than two years after their first flight at kitty hawk, north carolina. what is interesting to think about is that the wright flyer flew four times on one historic day. they were very much in the proof of concept. the aircraft behind me was capable of repeated takeoffs and landings, repeated flights not just for a few seconds at a time, but upwards of 40 minutes. this airplane could fly graceful circles, figure eights, it could bank and turn and fly very much like a modern airplane flies. this is very much a modern airplane, capable of being controlled through three independent axes of flight.
1:50 am
from wrightmore brothers aviation center next weekend as both tv and american history tv look at the life of dayton, ohio. >> up next, a national consumers league conference on identity theft and data security. the event opened with a panel on the evolutionary trends of cyber criminals and look at how consumers can protect themselves from identity theft. this is a little less than 1.5 hours. >> thank you. i am rob, or so you believe.
1:51 am
>> my name is andy. verizon handles hundreds of data breaches around the world. we are in a unique position where we get to see what happens when security fails. as we travel around the world, investigating crimes, we feel on need to share research that perspective with the rest of the world. we put out the data breach investigations report every year. that, i joined the secret service. i have been involved in investigating and consulting on identity theft and about 2001. i will be sharing insights from the law enforcement side of it as well. >> i am abigail davenport with heart research. research. i do research on a wide variety of topics and have the privilege of doing research for the family
1:52 am
online safety institute for the past few years on issues related to parents and teens and their attitudes about privacy, security, and online safety and identity theft, most recently lookingsurvey of teens more specifically at their attitudes regarding identity theft, what their behaviors are, what they are doing to protect themselves, what they might be able to do more of. inan bring that perspective terms of parents and teens and the way they approach this issue. >> my name is alan friedman. i am at brookings. i used to be a computer scientist and i was not very good at it, so i got a degree in public policy, which makes me a mediocre economist, a mediocre lyrical scientist, a mediocre behavioralists. when you are mediocre at that many things, you have to move to washington. i wrote a paper on identity fraud from the systemic risk
1:53 am
perspective. i am also here to plug a book coming up in january, which actually ties together how these different issues are related to these broad international discussions. is i am the assistant u.s. attorney in the district of new jersey. i worked in economic crimes unit and more specifically, i am part of the computer hacking and intellectual property section in our office. our office is one of the first ones to start up a so-called chips unit, the coolest unit in the office, obviously. cases on these types of pretty much every day. >> let's go to the first question. a lot of research on identity theft. the problem is financial terms begin 2005. to only $20.9
1:54 am
billion in 2012 read which is great, except the percent of u.s. customers is around five percent in the last seven years. just getting ahead of the profit margin, but not enough -- >> i do not know the population statistics, so i apologize. what is interesting about looking at the numbers, we see that the number of data breaches -- when we look at our data 621 casesort, resulted in data breach. you look at the evolution of the criminals and their desire to go after a central location of large amounts of data. >> building on the idea that a lot of the risk we are seeing is
1:55 am
, arging from data breach study that came out of carnegie mellon a few years ago found that data breach notification laws actually helped. the ftc collects state by state reporting data so they look at how states adopted the laws and found that, on average, about six percent reduction, which is a large number and you are talking about the numbers that we have been talking about, make a difference. the bigger question is how people are using this eta. -- this data. these are criminal acts. the question is, how are people actually tracking these are the system? reddit card numbers trade on the open market for dollars. trade on card numbers the open market for dollars. and he has done a lot of work on that. the heavy lifting is not getting the data. it is using the data.
1:56 am
if i have your credit cards -- if i have one credit card, i can have a day on the town. if i have all of your credit cards, it is not as easy. it is about efficiently and automatically extracting data. anytime you can remove the computer as a tool and make them do things by hand, you have helped reduce crime. >> that is an excellent point. , a lotread up on malware of the focus is on technology. it is a business. if you can make it more expensive to try to make a living this way, realistically, if criminals wanted to work hard, they would get a real job. >> i hate to disagree right out- of-the-box. >> that is why we are here. >> i think a lot of the criminals that we look at,
1:57 am
especially the sophisticated ones, really do treat it like a job. i get up in the morning and go to work. these guys get up later than i do, probably, but they work just as hard. it is remarkable, when you are sitting across the table from someone who you have arrested and are now proffering and you realize how much work it is. just to build on what alan said, monetization is not a simple thing. are obtainingyou large amounts of data. you need, oftentimes, you need a network of lower-level people. you need runners, people who you can sacrifice if things go wrong. it is much more difficult than you would think to actually pull the dollars out of identities.
1:58 am
>> the bigger cases they came out, you probably remembered it, it was linked to compromising about 30 million credit card numbers. the department of justice filings have demonstrated that he had earned $200,000 over three or four years. that is not a lot of money for a smart guy in the tech industry. >> that being said, albert gonzales had $1 million buried in his backyard. >> right. we are focused on the infrastructure that the criminals are leveraging. over time, and you will see it as we go through the panel, the evolution of the cyber criminal, those that were committing the crimes that were affecting us 10 years ago are now the ones that are commercializing and industrializing. the innovation of malware, bulletproofing, other types of infrastructure. making it easier for most who would not have a programming background.
1:59 am
that is going to continue to provide anonymity. does, thehat his team recent arrests he has prosecuted on, i do not think the public understand how difficult it is to merge the online identity with the real world identity. that is a very daunting task that becomes quite cumbersome. the effort that goes through his office and those investigations, they do a good job being able to merge that. ae results of that give us bigger, broader picture that we will paint for you today. >> the second question might shed a little bit of light on this. notified data% of breach victims were victims of identity fraud. it seems that we are talking about industrializing and getting a mechanism exploiting this. obviously if you can get a bunch of credit card numbers, other
2:00 am
data points about someone all at once, it is easier to monetize that. to what extent can you drive up the cost of that. besides, if we assume that data breaches are still going to happen at some level, what is the next step in to try to increase the cost of actually getting the money out of the data you have acquired? >> i'm going to speak for my law enforcement background here and not necessarily from the verizon brand. what is interesting about the evolution of the infrastructure is that it is built upon a certain mindset. that mindset has been embedded within that culture for well over a decade. in order to operate within that environment you have to have certain skills, you have to have a certain respect for the community, if you will. it polices itself. as that evolution and mindset has beenme


info Stream Only

Uploaded by TV Archive on