security forces. we are receiving come flikting reports on what actually is happening right now. news 4's angie goff is at the live desk monitoring the situation. >> we wanted to begin with the newest stuff first. new pictures of the militants in the mall. this is from al shabab's unverified twitter account. take a look. in the last hour they tweeted this out saying it shows militants inside the nairobi mall in their words unruffled and strolling around. the same account previously said that there are hostages that are still alive. now as we take you outside the mall where all of this is going on, live pictures here. the extremist group claims it's still holding its ground conflicts with what we're getting from kenyan officials. security forces are in control and are now combing the complex for terrorists and any survivors. so far 62 people have died. another update on the situation is expected from kenya's president later today. meanwhile, here at home u.s. investigators are looking into one kenyan official's claims that some of the attackers were american. at the live desk, angie goff, news 4. today a north carolina woman who survived the attack is returning to the u.s. she'll arrive in dulles this afternoon. we spoke to her via skype. >> we started to run. there was a second explosion that knocked us to the ground. you could hear them going from store to store talking to people, asking questions, shooting, screams and then it would stop for a while and then it would go to another store. >> she and a friend found a place to hide. american security forces and the kenyan army rescued her after four hours. the 30-year-old moved to kenya from north carolina for work. today president obama is in new york city to address the general assembly of the united nations. this is the fifth time the president will have spoken before that international body since taking office. in the past he has focused primarily on domestic issues, but this time he's expected to address foreign policy in the middle east and in particular in syria. advisors say the president will also push for increased pressure on syrian president bashar al assad to resign. he'll ask for military force to be included in a u.n. resolution as punishment if syria does not hand over all of its chemical weapons. u.n. inspectors will return to that war torn country tomorrow. the inspectors will be looking for evidence of chemical weapons use in several attacks. they determined that sarin gas was used at an attack in late august that killed more than 1400 people. 6:04. one of the victims who survived the shooting in navy yard is waking up at home. a woman with gunshot wounds to the shoulder was discharged from med star washington hospital center yesterday afternoon. these are pictures of the emergency room as patients began to arrive a little more than a week ago. d.c. police officer scott williams remains in the hospital but doctors tell us he is in good condition. med star also treated a woman whose head was grazed by a bullet. she was released last week. family and friends of two other victims will be laying their loved ones to rest today. a funeral service for john roger johnson is being held at the good shepherd lutheran church in gaithersburg this morning. tonight a viewing is being held for kathryn gaarde. that will be followed by a memorial service at 7:30. 6:05 now. new this morning, we now know what may have caused the deadly parking graps collapse in bethesda. you see it here. according to the washington post, a malfunctioning jack or overextended scaffolding may have caused a 43,000 pound concrete slab to collapse at the westfield montgomery mall in may. one construction worker died and another was seriously hurt. county officials have not decided whether to cite the contractor. we are going through results of our nbc 4 marist poll of virginia voters. new this morning, we'll lay out how the candidates for attorney general and attorney general stack up right now. plus, keys that give access to secure areas of metro stations stolen. why metro says your security is not in jeopardy. what keeps you going back to your favorite restaurants? the most common answer in a new survey that has nothing to do with what's on your plate. right now, chilly outside right now, chilly outside for some before the sun comes today is gonna be an important day for us. you ready? we wanna be our brother's keeper. what's number two we wanna do? bring it up to 90 decatherms. how bout ya, joe? let's go ahead and bring it online. attention on site, attention on site. now starting unit nine. some of the world's cleanest gas turbines are now powering some of america's biggest cities. siemens. answers. welcome back, in news for your health this morning, the fda says it will begin regulating some smartphone apps. there are about 17,000 medical apps. most of them pose very little risk. the fda plans to focus on apps that can be dangerous if they don't work right. those include phones that can turn devices into an ultrasound machine, heart monitor or glucose monitor. forget the food. a new study found that picking your favorite restaurant is about the booze. research firm consumer edge insights says alcoholic beverages are the key to customer loyalty. the restaurant that keeps customers coming back for its selection of booze is buffalo wild wings. applebee's came in second and buffalo wild wings took the top spot for the best prices for alcohol. price is going to be a big deal. >> yeah. beer and wings and cheese fries, that's -- >> i. school bus stop forecast, seven day outlook in ten minutes. how's traffic, danella? >> tom, we have to head back out to i-66 and take another live look at chopper 4. there's a disabled vehicle 66 eastbound at nuttily. it was blocking the right lane. it moved over to the shoulder lane. traveling i-66 this morning, you are starting to see an early delay. the right lane being blocked did cause some congestion to be build. once you get closer to route 50, you are heavy on the brakes you can see here as the chopper pans down. again, travel lanes are open on i-66. expect a slower commute if you're about to leave the house just now. aaron, over to you. danella, thank you. we are reading through the results of a new nbc 4 marist poll. we'll show you the tight race for lieutenant governor and tell you why opinions might change. >> plus, a policy change for disney. disney. a courtesy for people w i'm terry mcauliffe, candidate for governor, and i sponsored this ad. for 30 years i've worked as an obgyn, my job is to protect the health of women. so i'm particularly offended by ken cuccinelli. cuccinelli wants to make all abortion illegal ... ... even in cases of rape and incest. ... even to protect a woman's health. i want a governor who's focused on schools and creating jobs, not someone who wants to do my job. who's ken cuccinelli to interfere in the lives of women across virginia? we have an update on that hotel fire in silver spring from monday night. we now know what caused it. montgomery county fire just tweeting out that the blaze was sparked by improperly discarded smoking material that was left on the ground. they urge you to please place that type of material in containers. no one was hurt in the fire at the days inn on 13th street, but several rooms were damaged. that's the latest from the live desk. angie goff, news 4. 15 after the hour right now. today you'll have a chance to hear what virginia's lieutenant governor candidates have to say. they'll square off in a debate in arlington. this will focus on the fiscal future of virginia. our northern virginia bureau reporter david culver will be there. you can watch his report tonight at news 4 at 11:00. tonight's debate could be crucial in determining who wins that race. northam leads jackson by just 3 points. these results are from our latest nbc 4 nbc news marist poll. the race for attorney general also very close. democrat mark herring leads mark obenshain by 5 points. we will have the numbers for governor in this hour including who virginians think will be better. reminder, ken kuk chi nelly and terry mcauliffe square off in a debate tomorrow night. our northern virginia bureau chief julie carey and i will be on the panel. nbc 4 will broadcast that debate live and online at 7:00 p.m. now to a news 4 exclusive. we learned a set of metro keys was stolen from an arlington fire engine responding to a call. engine 105 was unlocked and briefly unattended during a medical call in crystal city. two men stole a forcible entry tool and a set of metro keys. those keys can unlock secure areas of a metro station, including surface hatches and tunnels. metro tells news 4 appropriate steps have been taken to ensure system security is not compromised. . the arlington county department tells us they've taken steps to prevent that from happening again. today lawyers for those men challenge the convictions at a high court hearing. this was in india. the court says it will start hearing prosecution arguments tomorrow as the defense files its appeals. all death penalty cases in india must be confirmed by a higher court. this morning two men are charged in connection with a chicago shooting that injured 13 people, including a 3-year-old boy. chicago police say neither man is believed to be the actual shooter but both played significant roles in the shooting. it happened at a basebaketball court in a park. a fast-moving brush fire is quickly growing. it's only 5% contained right now. it's tearing through the san gabriel canyon where it started. 150 firefighters are on the scene trying to control the flames. some homes have been evacuated but nothing has been made mandatory yet. new this morning, a former u.s. nuclear regulator says japan and the u.s. knew of contaminated water leaks at the troubled fukushima plant early in the crisis and were slow to act. the former chairman of the nuclear regulatory commission says he was surprised at how long it took japan to address the problem. in july they confirmed contaminated water has been leaking into the ocean. the help won't stop even if the government does. that's the promise from vice president joe biden in colorado. more than 2,000 square miles have been destroyed thanks to the flooding there. the vice president spoke with the "today" show's al roker about the damage. mr. biden said he was surprised to see so much progress, but the work is far from over, he says. he'll do what he can to support it every step of the way. >> in this kind of situation, what's the best thing you can tell people at this point? >> we're not going away. >> after the camera's gone, after we're not covering this anymore, take a look at where we've been before. we're not leaving. we're going to do everything-anything possible to make people whole. >> you can see more of al roker's interview with vice president biden later on today. >> it is not something you'd expect to see every day. a hippo ppotamus swimming in a river next to you. heavy rains brought by the typhoon helped this hippo swim over a guardrail on sunday. zoo officials tried to lure him back but it did not work. a seal and two turtles also escaped. it's not clear how, but the zoo managed to get all the escaped animals back home safely yesterday. >> wanted to change the menu. >> because they were hungry. >> yeah? >> all right. once you've had a taste of the outside. well, it is official. the nats' season will end on sunday. they were eliminated from the playoffs last night when they lost to the cardinals. then the pirates and reds won their games. the nationals have five games left this year. they take on the cardinals tonight and tomorrow before they wrap things up this weekend in arizona. it is now 6:21. time for weather and traffic on the ones. let's check in with storm team four meteorologist tom kierein. >> to stay warm, you need a jacket. then you'll want to shed it when you are heading back home from school and work today. right now, quite a chilly start this morning here on the storm team 4 weather report. temperatures into the 40s. bus stop forecast will stay in the 40s to low 50s between now and about 8:30, 9:00 this morning. so a chill will be with us, but bright sunshine. sunrise at 6:58. light wind. there is the predawn glow over the potomac. midnight blue, pumpkin orange. temperature at reagan national is at 51 with a light northwesterly breeze. we'll stay in the 40s to 50s. by noon, upper 60s. by mid afternoon we should be making it into the lower 70s. beautiful day. tomorrow morning under a clear sky under 50. afternoon highs, it'll be up in the upper 70s tomorrow afternoon to near 80 degrees for a brief time. few more clouds around on thursday. afternoon highs should be in the 70s to near 80. friday, sunny. afternoon high near 80. seven day outlook, here's your look. we'll have highs reaching the mid 70s with sunshine. monday night get some showers late in the day. i'm back in ten minutes. danella, how's traffic? >> starting to see a few trouble spots already. we'll head down i-95. northbound 23in the hov lanes. a broken down car in the right shoulder lane. we'll shoot over forefolks traveling telegraph road taking the ramp to the inner loop of the beltway, there is a broken down car just blocking your left lane. police are on scene. you'll have to stick to the right to get by as you take the ramp to get onto the beltway. southbound at 109. sluggish here. they start in frederick, maryland, pretty much stop and go. once you get to clarksburg road and continue all the way through rockville, you are clear. no delays there. aaron, over to you. 6:23. angie goff has a report on our live desk. >> we have new developments out of kenya. we want to take you live to nairo nairobi. this is just outside the mall where the standoff with militants continues. nairobi's city morgue is preparing for the arrival of bodies. they're standing by. they're wearing smocks. so far no bodies have been delivered. the death stoll stands at 52. they expect that number to rise a as security forces continue to sweep the complex. at the live desk, angie goff, news 4. >> president obama says he has officially kicked his smoking habit. cameras caught him saying that in an unscripted moment after a u.n. meeting. little hard to hear, but take a listen to what he says caused him to quit. >> helped you quit smoking? >>. >> yeah. >> no, no, i haven't had one in six years. that's because i'm scared of my wife. >> did you catch that at the end? he said he put down the smokes because he is scared of his wife. the president has publicly admitted that he occasionally falls off the wagon, as recently as 2009 he admitted to smoking good reason to quit. >> yeah, i think so. >> the president's smoking habit has faced some criticism over the years, but so has his play of -- his golf game. >> that's right. this morning we are hearing a former president from a rival party backing him up. >> you know, i see our president criticized for playing golf. i don't. i think he ought to play golf. >> why is that? >> because i know what it's like to be in the bubble. i know the pressures of the job and to be able to get outside and play golf with some of your pals is important for the president. it does give you an outlet. >> it's a good release then? >> i think it is and i think it's good for the president to be out playing golf. >> former president george w. bush made those comments with a taping on the golf channel. you can see that interview at 10:30 tomt on the golf channel. minors will be able to remove embarrassing photographs and potentially damaging postings on social media websites. governor jerry brown signed off on a new bill. it's designed to give those under 18 a second chance to post something after they later regret it. the new law takes effect in january 2015. people with disabilities will not be allowed to skip long lines at disneyland and walt disney world anymore. the parks are changing their policy after widespread reports of able-body people hiring disabled people to pretend to be family members so they can skip lines. under the change you'll be given a ticket with a return time for a shorter wait. the new policy is similar to the fast pass system that's offered to everyone. well, as good as gold. the new iphone, the gold one, is one of the hottest items on the market. >> in fact, the regularly priced $200 phone, which is supposed to be the lower priced model, sold on ebay for $10,000. these metallic iphones have been the cause of out of control online bidding wars. if they're unopened and unlocked, 16 gigabyte phones are pulling in $4,000. >> come on. >> that's on the low end. more than 9 million iphones sold in the first three days they were on sale to the public. see, this is what i mean. >> unbelievable. >> they think it's no big deal. hasn't changed much. then you have people bidding thousands of dollars. >> we are staying on top of a developing story in kenya. what we're learning about the possibility that americans were involved in the attack at a nairobi mall. plus, a northern virginia roundabout is new, but changes are already needed. the startling statistic forcing crews to redo their work. talking about medical marijuana in maryland. the first step in a statewide discussion coming today. you have to see this car crash caught on camera. this is no ordinary car with no [ telephone rings ] good evening, this is flo. [laughs] yes, i'm that flo. aren't you sweet! licensed phone-ups available 24/7. call 1-800-progressive. tom, looking nice out there. >> yeah. we've got a clear sky. we have sunrise about a half an hour away, but what a chill in the air. in fact, out at hagerstown, it's down to 38. manassas, 39. many of the rural areas, maryland, virginia, west virginia, upper 30s. closer to washington. nearby neighborhoods generally in the mid 40s. in the low 50s on the bay. away from the bay it's down into the 40s the rest of the region. by 8:00, still a chill in the air. temperatures upper 40s, near 50. quickly warming by 10 near 60. by noontime, sunshine and into the upper 60s. fort washington and prince gorges counties should be into the mid to upper 60s. a look at traffic now with danella. good morning. >> good morning, tom. in the first four traffic we're going to head out to bristo. piney branch lane at wellington. crash there in the shoulder. delays are brief. going to shoot over to i-66. live look at chopper 4. 234 just jam ped unfortunately already this morning. 66 is sieg about a six mile backup. it is stop and go. as you make your way past 234, more of a stop. then you're getting closer to fairfax county parkway. stop and go. sluggish here. luckily your travel lanes are open. shooting back over to the ramp to telegraph road. still seeing a broken down car blocking the left lane. right lane will allow you access to the inner loop. 6:32. militants remain in a standoff with security forces at the mall siege in kenya. this morning we heard gunfire and an explosion. kenya says several americans are involved in the siege. nbc's tracie potts is live on capitol hill with the fbi investigation. tgrai ssi, good morning. >> reporter: good morning, eun. u.s. officials are not confirming that any americans were involved. it's certainly possible because there have been a lot of americans recruited for this group, al isshabab, especially from minnesota. at the mall in nairobi, it is not confirmed. they need the names involved. until they get that from kenyan officials, they have no confirmation. there were names given earlier by a bogus twitter account for the group al shabab. those names didn't show up on any sort of terror watch list within the united states. officials are watching and waiting to see what happens as we hear more explosions over this morning, more gunfire overnight. that situation apparently still not under control. eun. >> tracie potts live on capitol hill for us, tracie, thank you. there is new concern over mall security. a spokesman for the international council of shopping centers says the u.s. department of homeland security will likely connect with corporate security chiefs and different law enforcement agencies as malls consider boosting security. mall owners may add off duty officers as well. right now we're working to find out more details about a speech president obama will give on thursday in maryland. the white house says he'll promote his health care law at a community college in the state. he'll also defend the law today alongside former president bill clinton. some republicans are trying to defund the law to avoid a government shutdown next week. >> that effort appears to be falling short though. some of the senate's gop leaders saying they won't vote to prevent the legislation to prevent a shutdown. texas senator ted cruz says he is prepared to filibuster any legislation that funds the health care law, even if it means a government shutdown. today maryland's attorney general will become the latest democrat to enter the race for governor. doug will officially launch his bid at 12:30 in rockville. this is the start of a seven day statewide announcement tour that will take him to 16 different towns. he gave a preview of his message when he launched this video on youtube. he's in a race with anthony brown and heather mazier. you heard it here first, that d.c. would be doubling its fleet of traffic cameras. now we've learned some of them aren't watching you if you speed or run a red light. check this out. our transportation reporter adam tusk found cameras that watch crosswalks to make sure that cars stop for pedestrians. d.c. police have not said when the cameras will start issuing tickets. they said that information will be released soon. they're also responsible for writing thousands of tickets in the district. "washington post" reports that traffic control officers have issued 780,000 tickets since 2009 and not just parking tickets. they have the authority to cite you for using hand held cell phones, blocking intersections and jay walk uk. 6:36. today a panel will begin deciding where medical marijuana will be available in maryland. martin o'malley appointed an 11 member board to the state's medical marijuana commission. that commission has the authority to let academic research centers design and implement medical marijuana programs. in just a few hours the smithsonian is gaining a big piece of america's childhood. jim henson's daughter is donating more than 20 puppets and props to the american museum of history. cheryl henson will be on hand for the event at 11:00 this morning. today would have been jim henson aels 77th birthday. we know that kermit got his start right here in our studios. >> literally. >> right across the way. >> sam and friends. >> he was one of the friends back then. >> jim henson went to the university of maryland. i have to add that. safety concerns about a loudon county roundabout. why crews have to make changes just a few years after it was installed. plus, we have new results from our nbc 4 marist poll to share with you this morning. we asked which candidate virginians thought would be the best. scary wreck. 6:37. good morning. one of my twitter followers, alexandria mom tweeted, cold enough to see my breath. it's down to the low to mid 40s in the nearby neighborhoods in washington. co a lamborghini broke in half which is an actual safety feature of the car. of course it is. you see it right there. it's incredible to see it. the craziest part of the accident, after the lamborghini of the accident was split in two. both of them got out with a couple of cuts and bruises. if i was driving that lamborghini, i would have been yut set. >> tears, cuts, bruises. >> $400,000. how much does it cost to repair a car like that? >> i'll never know. >> 6:41 your time now. here is a live look outside this morning. never get sick of seeing this picture right here as the first little light of sun comes over the horizon. >> tom kierein with your forecast. hey, tom. >> 6:41. clear sky. sunrise, 6:58. it is chilly. we're down to the low to mid 40s. later this morning, by 8:00, still a chill in the air. bright sunshine. then by late morning and noontime mid to upper 60s, bright and sunny. mid afternoon we should be peaking in the low to mid 70s. you need a jacket but you'll be comfortable in short sleeves by mid to late afternoon. your seven day outlook and school bus stop forecast, that's coming in ten minutes. danella, good morning. how's traffic? >> unfortunately tracking delays in our area. folks traveling i-66 this morning heading in bound. six mile backup. that's the delay, stop and go. sluggish for you as you continue toward the belt way. we'll shoot over to 295. d.c. 295. as you travel in bound at east capital street, report of a crash. delays start in greenville. you are jammed. live look. cars at eastern avenue basically just sitting. i'm back in ten minutes. aaron and eun over to you. thanks, danella. today news 4 is driving through a loudon county roundabout to show you what vh dot says need to be changed. the alarming jump in wrecks after this new roundabout was built. the possible reason part of the garage fell. the powerball winner just revealed, and he never intended to buy a ticket. the coincid welcome back. a victim who survived the mass shooting at the navy yard is spending her first morning at home. a woman who suffered gunshot wounds was released from washington med star hospital yesterday. these are pictures of the emergency room as patients began to arrive a little more than a week ago. the d.c. officer remains in the hospital. med star treated a woman whose head was grazed by a bullet. she was released last week. several other victims' families will continue mourning today. >> two more victims of the shooting will be laid to rest. a funeral service for john roger johnston is being held at 11:00 this morning. tonight at 5:30 a viewing is scheduled in honor of kathryn gaarde in dale city and that will be followed by a memorial service at 7:30. the navy is planning changes to its security clearance procedures this morning after new details emerged about the gunman, aaron alexis. the navy wants all police reports to be included in background checks. the navy says alexis did not disclose his 2004 arrest in seattle when he filed for security clearance. the background check did not reveal a gun had been used during the dispute that led to that arrest. instead, the report said alexis deflated the tires. the president has appeared before that body five times before. this time though he's expected to focus on foreign policy, particularly sir yeah advisors say he will push for increased pressure for syrian president bashir al assad to resign. happening today, we will learn more about the plan to give heavily traveled roundabout in loudon county a makeover soon. v-dot will be making some changes to the spot where route 50 and route 15 meet at gilbert corner. news 4's megan mcgrath is live. this is a pretty new roundabout, megan? >> reporter: yeah, it's about four years old, but in trying to fix one problem, the roundabout that you see behind me here, actually created a different problem and so it's going to be changed. now, before this roundabout was built this area had an issue with very serious high speed crashes here at the intersection of 50 and 15 in gilbert's corner. that's why the decision was made to put the roundabout in place. the idea being that it would slow down traffic and make the intersection safer. well, that's not what's happened. since the roundabout went in four years ago they've actually seen quite a spike in low speed fender benders. apparently there's some driver confusion about how to use this traffic circle and they've actually seen what's essentially a tripling of the fender bender accidents at this intersection and so v.-dot is going to make some changes. first of all they're going to be creating a single lane approach to the roundabout. right now you've got areas where there are two lanes that lead into the circle and so there have been a lot of confusion with drivers about who has the right-of-way when exiting and making turns. so they're going to go down to one lane in, one lane out and they hope that that will simplify things. also, they're going to be changing the pavement markings and the signs. the work is going to get underway in october. it should be done by thanksgiving. there's going to be a meeting tonight to explain it all. that's happening at the alde elementary school at 7:00. eun, back to you. >> megan mcgrath, live in alde. angie goff is live at the live desk for news out of kenya. >> we're learning more about what security forces are finding inside that mall. live to nairobi. it's been an active scene all morning. gunshots and blasts. we're hearing it all. we're hearing kenyan forces are diffusing explosive devices set up by militants inside that mall. this as the standoff enters day four. we've heard from al shabab claiming they still have hostages still alive. they posted a picture showing militants walking around unphased inside the mall. security forces say they have control in the area and they're sweeping the complex right now for terrorists and survivors. the nairobi morgue is preparing for the arrival of the bodies. at the live desk, angie goff, news 4. 6:40. virginians weighing in on the race for governor. it puts democrat terry mcauliffe ahead of ken cuccinelli 43 to 8 38%. libertarian candidate robert saar advice al sarvis having an impact. 10% of likely voters are still undecided. we asked virginians who cares more about the middle class. mcauliffe leads cuccinelli. cuccinelli and mcauliffe square off in their first debate tomorrow night. our northern virginia bureau chief julie carey and i will be on the panel. nbc 4 will broadcast and stream the debate live at 7:00 p.m. if you use facebook on your phone, you could notice some changes soon. cnbc's bertha coombs is here to explain the new changes you'll see. good morning. >> good morning. facebook is quietly rolling out a new mobile payments feature. you can send people gifts for their birthday. reports say the function will let users automatically enter shipping and credit card information into their mobile devices. for now the auto fill feature is partnered with just a few retail apps as facebook introduces it gradually to its 1 billion strong social network. burger king doesn't want you to feel so guilty about scarfing down its french fries. the fast food chain is introducing crinkle cut fries that have 20% less calories. a small order of satis fry checks in at less than 20 call l ris. a small order will sell for $1.89 versus $1.59. so 20% fewer calories for 15% more. you've got to pay somewhere. >> that's right. the problem is i'd probably eat four orders and then i would be in trouble, right? >> you might have well have ordered the regular fries. >> thanks, bertha. what would you do if you just won $400 million? well, the newest powerball winner said he danced around the kitchen with the dog. >> of course he did. >> makes perfect sense to me. $400 million. the new mega millionaire from south carolina from the columbia area claimed his prize yesterday. he's choosing to remain anonymo anonymous, which is allowed in stanley c south carolina. he said he stopped by for gas and hot dog buns. he bought $20 worth of lottery tickets. they didn't have the buns. >> $400 million. >> congrats. let's check in with tom kierein to get a look at our forecast. another pretty fall day. >> it's cold. people who work outside are loving this. package delivery people are still wearing shorts, i've noticed that. they wear shorts in the winter, too, i think. >> they do. >> look at this sunrise over a newly shorn cornfield. we'll have a sunrise like that here in a few minutes as it's going to be breaking the horizon at 6:58. there is the live view from our hd city camera. temperatures in the upper 30s, low 40s. frederick, down to 37. manasas, 39. ma martinsburg, 40s. we've got bright sunshine on tap for the entire day ahead and a steep climb to your temperature rapidly warming into the 60s by noon. then this evening it will drop back gradually down into the 60ed. then bottom out near 50 tomorrow morning. during the day on wednesday, beautiful autumn day. a bit warmer. afternoon highs into the upper 70s to near 80. we'll repeat that on thursday and friday. storm team 4 seven day outlook, look at your weekend. all the football games on saturday and next chance of rain, not until perhaps late on monday. danella, good morning. how's traffic? >> still tracking delays in our area. drivers traveling i-66, they have a slow commute in morning. delays between the bypass and the belt way, a live look at chopper 4. what's happening, no accidents in the road for you in the road on i-66. you are sluggish for six miles. pack your patience this morning. we'll head over to d.c., 295, slow from green belt. heavy on the brakes as you approach the beltway on 295 continuing all the way to east capital street. that's where the accident is. when we talk about delays, they're solid unfortunately. cars are barely moving. aaron, over to you. >> danella, thank you. new this morning, a malfunctioning jack or overextended scaffolding may have caused a 43,000 pound concrete slab to collapse at the west montgomery mall in may. that's according to the washington post. one construction worker died there. another was seriously hurt. county officials have to decide whether to cite the general contractor whiting turner for possible violations of its construction permits. 6:55. four things to know. terry mcauliffe leads ken cuccinelli by four points. head to nbcwashington.com to get a breakdown of voters' views of the candidates on various issues. v-dot will talk to residents in loudon county to make changes about a heavily trafficked round about. this has been a hot bed of accidents in recent years. if you want to attend, head to alde elementary school tonight. nbc news will keep you updated throughout the day on president obama's address to the u.n. he is expected to push for a strong resolution against syria's chemical weapons and he may meet with iran's newly elected president. >> there has been another explosion at the nairobi mall. there is also a report that kenyan forces are diffusing explosive devices that were set up by militants. earlier the kenyan government said it's trying to get all of the militants out. stay with news 4 and nbcwashington.com for more updates on the story. you can see your breath now, but later today you may be out of breath jumping for joy as we reach the low to mid 70s. we'll keep the party going by popular demand all the way into the weekend. danella, how's traffic. >> we'll take a final look at the rales. metro vre, no delays. a minor 6-minute delay. danella, that is "news 4 today." thank you for starting your day with us. >> the "today" show is next including al roker's walking tour of the damage in colorado with vice president joe biden. with vice president joe biden. we'll be back in 2 i was honored to serve as governor of virginia. we brought folks together in richmond to focus on creating jobs and getting results. that's the virginia way. and that's why i'm backing terry mcauliffe for governor. terry won't let ideological battles get in the way of making progress. terry will work with democrats, republicans, and independents to create jobs and move virginia forward. it's important for virginia that we elect terry mcauliffe as our governor. i'm terry mcauliffe, candidate for governor, and i sponsored this ad. more gunfire and more explosions at the nairobi mall. hostages remain inside and a top kenyan official claims americans are among the attackers. we'll be there live. face to face, all eyes on the u.n. this morning where president obama a the new president of iran are both set to speak. will the two leaders make history today with a one-on-one meeting? and vice president joe biden gives al an up close look at flood ravaged colorado in an exclusive interview today, tuesday, september 24th, 2013. >> announcer: from nbc news, this is "today," with matt lauer and savannah guthrie, live from studio 1-a in rockefeller
Edith Cottrell, beloved mother, grandmother, and great- grandmother, passed away peacefully on December 4, 2023, in Wheeling, WV, at the age of 75. She was born on July 12, 1948, in Elsfleth, Germany, to the late Olaf and Elfriede (Ohlrogge) Saar. Edith dedicated over 30 years of her life to serving her community through her […]
for the security of their country. we are training afghan security forces to get the job done. those forces have searched and will peak at 352,000 this year. the afghans will sustain that level for three years and reduce the size of their military. in chicago, we will endorse a proposal to support a strong and sustainable long-term afghan force. third, we are building an enduring partnership. the agreement we signed sends a clear message to the afghan people. as you stand up, you will not stand alone. it establishes the basis for our corporation over the next decade, including shared commitments to combat terrorism and strengthen democratic institutions. support -- and support afghan efforts and dignity. it includes afghan commitments to transparency and accountability and protect human rights of all afghans, men and women, boys and girls. within this framework, we will work with the afghans to determine what support they need to accomplish beyond 2014. counter-terrorism and continued training. we will not build permanent bases in this country, nor will we be patrolling in cities and towns. that will be the job of the afghan people. fourth, we are pursuing an negotiated peace -- a negotiated peace. they can be part of this future if they break with al qaeda, renounce violence, and a bad -- abide by afghan laz. many members of the taliban, from soldiers to leaders have indicated an interest in reconciliation. the path to peace is set before them. those who refuse to what it will face strong afghan security forces, backed by the u.s. and our allies. fifth, we are building a global consensus to support peace and stability in south asia. the international community will express support for this plan and for afghanistan's future. i have made it clear that it can and should be an equal partner in this process in a way that respects pakistan's sovereignty, interests, and democratic institutions. in pursuit of a durable peace, america has no designs beyond an end to all qaeda safe havens and respect for afghan sovereignty. as we move forward, some people will ask why we need a firm time line. the answer is clear. our goal is not to build a country in america's image, or to eradicate every vestige of the taliban. these objectives would require many more years, many more dollars. most important, many more american lives. our goal is to destroy al qaeda and we're on a path to do exactly that. afghans want to assert their sovereignty and build a lasting peace. that requires a clear timeline to wind down the war. others will ask why do we not leave immediately? that answer is clear. we must give afghanistan the opportunity to stabilize. otherwise our gains could be lost. al qaeda could establish itself once more. i refuse to let that happen. i recognize many americans are tired of war. as president, nothing is more wrenching than signing a letter to a family or looking in the eyes of the child to grow without a mother or father. i will not keeping america in harm's way a single day longer than is required for our national security. we must finish the job we started in afghanistan and end this war responsibly. my fellow americans, we traveled through more than a decade under the dark cloud of war. and here in the pre-don darkness of afghanistan, we can see the light of a new day on the horizon. the iraq war is over. a number -- the number of troops in harm's way have been cut in half and more will be coming home. we have a clear path to fill our mission in afghanistan while delivering justice to al qaeda. this feature is only within reach because of our men and women in uniform. time and again, they have answered the call to serve in a dangerous places. in an age where so many institutions have come up short, these americans stood tall. they met their responsibilities to one another and to the flag they surrender. i met with some of them. and told them as commander-in- chief, i could not be prouder. in their faces, you see what is best in ourselves and our country. our soldiers, our sailors, our airmen, marines, coast guard men, and civilians in afghanistan have done their duty. now, we must summon that same common purpose. we must give our veterans and military families the support they deserve and the opportunities they have earned, and we must redouble our efforts to build a nation worthy of their sacrifice. as we emerge from the decade of conflict abroad, and economic crisis at home, it is time to renew america. america where our children live free from fear and have the skills to clean their dreams. a united america where sunlight glistens off soaring new towers in downtown manhattan and we build our future as one people. as one nation. here in afghanistan, americans answered the call to defend their fellow citizens and uphold human dignity. today, we recall the following and those who suffered wounds seen and unseen. through dark days, we have drawn strength from their example and the ideals that have guided our nation and lead the world. i believe all people are -- a belief all people are creative freedom and deserve the freedom to determine their destiny. that is the light that guides the still. this time of war began in afghanistan, and this is where it will end. with faith in each other and our eyes fixed on the future, let us finish the work at hand and forge a just and lasting peace. may god bless our troops and may god bless the united states of america. >> a british committee released a report on phone hacking inside news of the world and news international. that is next. and a bloomberg summit on the state of the u.s. economy and federal spending. >> between 1971 and 1973, president richard nixon recorded 4000 hours of phone calls and meetings. >> always agree on the little things and you hold on the big one. i have done this so often with conversations, i will concede that and make them feel better but do not give them the big one. >> every sunday, hear more of that nixon tapes. this weeks, hear conversations with gerald ford, ronald reagan, and george h. w. bush. listen on xm 119 and at cspanradio.org. >> the culture committee a command sports committee released its report on the phone hacking investigation. members found some senior executives at the now defunct " news of the world" and "news international" misled parliament. this is a little more than an hour. >> i hope that you have by now had a time to read the committee's report. i intend to give a brief summary of the committee's conclusions and my colleagues wish to make brief statements before we move to questions. i should say that the report concentrates not entirely but in large part on the issue of whether this committee was misled in the evidence it received principally during its 2009 inquiry, although we do go on to completion. it is important to say that the committee has not made any comment about the knowledge or involvement or the evidence of any individuals who have been arrested. we have deliberately refrained from doing so because we're conscious of the risk that any comment might produce it possible crippled at trial. having said that, the committee did conclude unanimously that [unintelligible] hinton misled the committee in not telling the truth about the payments made to clyde goodman and his authorizing them. the committee was but -- misled insofar as he did not divulge the full extent of his knowledge of allegations that phone hacking? bended beyond clive goodman. -- hacking led beyond clyde goodman. we concluded that they misled the committee by answering questions falsely about their knowledge of evidence that other news of the world employees had been involved in phone hacking and other wrongdoing. the committee went on to conclude that only by a majority vote that while there would no definitive evidence -- there was no definitive evidence to prove whether james murdoch was aware of the e-mail or other evidence that indicates phone hacking was more widespread, the committee was never the less astonished he did not seek to see the evidence on which the decision to pay the settlement was based. the committee also went on to conclude by majority vote that corporately, "news of the world" and "news international misled the committee. and they had failed to disclose documents, which would have revealed the truth. as a result of these various attempts to mislead the committee, the report that we published in 2010 was not based on a fully accurate picture. other results of this, the committee had decided that we will table a motion in the house of commons, asking the house to endorse our conclusion about misleading evidence and we will [unintelligible] our report to the liaison committee [unintelligible] i believe one or two of my colleagues wish to add. >> we have been led up the garden path by "news international,"but so were the public and the victims of phone hacking. two years ago, we found the organization guilty of collective amnesia and said it was inconceivable that one reporter was involved. we were right. on the same evidence that we received, the press complaints commission exonerated the news of the world and shot the messenger, the guardian. after closure of "news of the world," we had this inquiry. we do not want to prejudice any future trials following the arrests but we thought it was not right for the few people in these circumstances should carry the whole of the corporate can. you'll find strong corporate findings against news, international. one thing in relation to those findings. rupert murdoch himself who founded the organization has been the director of news international and not just of news corp.. one thing we set out is the human cost of phone hacking and other wrongdoing to which i contributed. it was not just a technical trip, a victimless potential crime, but the human cost is laid bare in some of the statements agreed finally by news corp. in open court and wayside one part of those statements that -- that of charlotte church and her family. >> thank you. the report talks about our astonishment at the failure of the company to investigate fully and uncover incidents of phone hacking from the period of the court and taylor settlement through 2010 and 2011. there were plenty of flights flashing on the dashboard to suggest a greater investigation was needed. i am looking at the pivotal role of james murdoch in the gordon taylor case, we have been minded to follow precisely the evidence we were given, which does not contradict anything he said to the committee and therefore it is not possible to say he misled parliament. we can be critical of the actions at that time. of the failure to disclose information about phone hacking. the failure to investigate it fully. i would also touch on the role that we have been critical of. there was a statement of ankara last week. there was what senior invest -- executives knew and there was what lawyers and managers and editors knew, which would have been greater. you have someone who did have the opportunity to sit down and interrogate him personally about his employment plan. he is not aware of allegations and i think this key quote that was given that james murdoch used in his defense, they are no longer here. it was intriguing as to why the reference was left in there. i think he had a pivotal role and that is why it is important we focus on that in our report. >> it has been 10 years, one month, and nine days. five days ago, rupert murdoch admitted there was a cover-up and is corporate we find news corp. carried out an extensive cover-up of its rampant lawbreaking. it is -- its most senior executives repeatedly misled parliament and the two men at the top who were in charge of the company must now answer for that. in the view of the majority of committee members, report murdoch is not fit to run an international company like bsky b . i am disappointed that they felt they could not support sections 216 through 229 of the report. many of the hacking victims have still not been informed of what was done to them. report murdoch has not said his last apology to the families of murdered children. let us also remember that the scandal cost many hundreds of journalists, anacin journalists their jobs. they find it hard to find work. i know this because i have provided references for number of them. parliament was misled. that we now know. there was issues we could not get to the bottom of because of time constraints, decisions of the committee not to proceed, or because they fall out our [unintelligible] a member of the scottish parliament lost his liberty on a majority verdict of a jury that was not in full possession of the facts. he received a three-year prison sentence. i believe the judgment is on sound. if corporate rock really is sorry, he will order an urgent review of the information his company provided to the jury in the sheridan case. now that we know that the former first minister in scotland was the target of hacking, on writing to examine we set up an inquiry by the scottish parliament in to haul and why were targeted. we asked the murdochs about phone hacking. we have reason to believe that a crown agency is in possession of seized hard drives that may show a list of victims who were the target of computer hackers. there might be -- the authorities think is right not to inform people who have had their privacy invaded by private investigators who have links to international newspapers. i am writing to the chair of the home affairs select committee today to raise my concerns and asked his committee to do what they can to establish the facts. we were not able to establish which [unintelligible] try to collect information in order to smear or influence. last week, it was in news international, not "news of the world" that ordered us to dig into the lives of mps. many executives were in the loop. the committee did not act on these but they are so serious to warrant an inquiry of the committee of standards and privileges for potential contempt of parliament. they had not had time to discuss it in committee. it was my view we should embark on an investigation into the relationship between ministers, special advisers, and lobbyists working for bskyb. the pm should allow the levenson inquiry to view the texts and [unintelligible] the truth is that whenever we have said in our report and how you choose to reported tomorrow, the public have made up their minds. powerful people were involved in the cover-up and they still have not accepted responsibility. after all this, the story is not yet over. it was reported at the weekend that rebekah brooks was prepared to release her personal texts and e-mails to david cameron to the levenson inquiry. i think she should. as the prime minister said yesterday, the contacts between rupert murdoch and senior ministers from both sides of the house. if you want to see how news corps in the u.k. operates, the current mp and chancellors, including tony blair and gordon brown and former chancellor is one -- might want to reveal their taiex and e-mails to company executives. these people crowded our country. they brought shane -- shame on our police force. they lied and cheated, blackmailed and boley. we should be ashamed to think how we cower before them for so long. to stop requires more than to agonistic retribution. those really responsible are held to account. the rich and powerful are as low in the face of the law is the most humble and week. in the words of bob dylan, the ladder of law has no top and bottom. everyone in the world knows who is responsible for the wrongdoing at news corp., rupert murdoch. more than any individual alive, he is to blame. the deeds are his. he pay the piper and he called the tune. it is his company, his culture, his people, his business, his failures, his lies, his crimes, the price of profits and his power. >> thank you. it is fair to say -- that was not the unanimous of view of the committee. >> coming back to the report, every -- the chairman was right to focus on the part of the report where we unanimously agreed. that was on the people who misled the committee and the way in which they did mislead the committee. i very much hope that people will not get sidelined by the other bits, bits of what we have just heard of. which were not the overwhelming view of the committee. but were passed by the majority. when people look for the report there might want to look at some of the amendments that were tabled and the boats that took place. and when people do that, they will see the report was passed by 6-4, particularly at the conclusion of corporate order. many people will conclude unfortunately, it maybe the unanimous recommendation. some people may conclude that some people oppose the conclusions were written before the evidence was heard or gone over. i do not -- i think that is very sad. people see that there was a majority of tb 0 on the committee for these things. people may want to notice that two of those people who voted for those things were not on the committee to listen to any of the evidence at the time. voted for the recommendations. i urge people to get back to the nitty gritty of this report, what this report were supposed to do is a serious business. we're making decisions about which affect people's lives, their reputations, and i think rather than focus in on certain people getting carried away, i would urge you to look at the things where we have made unanimous conclusions which are serious for the people concerned. those people showed be held to account and that is why we want to put forward a motion to parliament to ask them to endorse our conclusions so people realize how serious it was that those people at news international misled the committee. no one is saying that people like james murdoch and rupert murdoch had not made mistakes. they have admitted themselves amid mistakes. i do not really have much trouble in the sense that they tried to get me kicked off the inquiry in 2009. we have to be fair about these things and base our decisions based on evidence and not what we would like the evidence to be. i urge you to look at where we have made unanimous conclusions of the committee rather than getting carried away by some people who i'm afraid got carried away themselves and it seems what the conclusions were before they started out on the inquiry. >> i want to start by saying i have been -- i have the highest respect for my friend and colleague. he is a man of complete and total integrity, and i have absolutely no doubt the amendments he put forward to the report and a speech he has read out today represents his sincere views from the heart. i have the highest respect for them. it is not considered -- completely correct to say as tom just said that some members have problems [unintelligible] or whatever was. members of the press can look at the division's in the back and i encourage them to do so. conservative members did not vote as a block and disagree with each other -- disagreed with each other. it is not simply a matter of not voting for certain amendments. no conservative member was able to recommend the report itself to the house and everyone of us while we shared different views about the culpability of news corp. and the degree of culpability of james murdoch, none of us were able to support the report and we all voted against it. that would mean it would be correctly seen as a person report and we have lost a great deal of its credibility which is an enormous shame. the issue on which the conservative members felt they could support the report was aligned in the middle of the report that report murdoch is not fit to run an international company. we felt that was outside the scope of a select committee. it was an improper attempt to influence and to tread on areas that are not the province of the select committee and our report, the ostensibly, was about whether or not the prior committee had been misled. even though clearly in many amendments tabled by my colleagues were carried by the majority vote, i would nonetheless have voted for the report and explained where i disagree. so did many of my colleagues, not many of them, all of them have that [unintelligible] it was left in. on that basis, i am afraid today, despite our different views, not one of us could agree that this report should be placed before the house and it was carried on political lines and therefore, if -- after many months of work, i feel its credibility has been damaged. i do not doubt the integrity of members. this is the result will left with. i do think it is a real great shame. >> thank you. i need to respond to my colleague. as a new member of the committee, i have looked at the audience and made sure it went into detail. the rule of -- role of the committee in terms of what is being said. bingham member of this house for 18 years, i have been a minister for 12 years and have been worried about the influence of the news international over that time. we will see a situation and it's to be addressed. i do agree. if we look at where we agreed in terms of the recommendations, they are beyond doubt. clearly, this is the worst situation i have seen in terms of our democracy in the time i've been a member. >> thank you. some of what the chairman reiterated earlier, i am proud parliament initiated this inquiry. i am proud we have been able to the powers of parliament to have information laid before us that has -- we have been able to use. and without that, there is certain evidence that would not be at principal in the current inquiry. i also want to add i consistently opposed bringing to our report the evidence from civil litigations and letters of inquiry and have wanted to focus pretty much exclusively on the evidence presented directly to us as m.p.'s. evidence we were able to see all of, that we were able to ask questions about, follow up with inquiries, and that is why i consistently opposed various amendments that draw on other matters. as i said before, news international will regret dismissing the last report that was issued by the committee on this matter. it will regret forever not taking the chance to thoroughly investigate the allegations made then and the recommendations made then. i can understand that someone who has worked in a family run business, a very big family run business, about how went you are attacked by people making allegations, it can be easy to dismiss, especially at a critical -- as is critical in businesses and you see, the implicit trust the people have in their executives and in each other. what i would say to them now certainly, i hope that all the directors at news corp. and news international will read this report from front to end and not dismiss it like the last one. i am sure there will not. i think it is sad we were not able to send the report. you have heard reasons why it was not possible to vote for the reporters as expressed by my colleague. reflecting what phillip davis said, i hope we can focus on what we did agree on and the motion will be debated in parliament. i hope early in the new session. >> a brief comment here on the comments by a member shipley. i made my decisions based on the evidence presented to the committee, and out other reason. >> the committee's report is the result of nine months' work in an ever-changing and are meant -- and inquiry. it falls on parliament to -- for how it wishes to do with them. we're in a political chamber and i have no doubt that the comments that my conservative friends have made would have been the comments that my liberal friends would have made had i voted the other way. >> i wholeheartedly agree with these comments. and in particular, the level of plame that is laid against report murdoch. regardless of who said what and when, rupert murdoch is the head of this corporation, and therefore, responsible for the unspeakable actions of the people be employed. there is some suspicion surrounding the situation with the prime minister and his dealings with rupert murdoch, hence the reason why supporting this. is there for biggs the question why? even at that late stage, i would ask him to come clean and look at the report. and more importantly, published this report. as tom watson already said, --- he and his family deserve some kind of inquiry as to why that happened. >> think you very much. can i ask you, because i am not entirely clear from the division, is it your view that report are rock is or is not the proper person to run an international company? yourself and other members, as far as i can tell, you have all agreed that what james and rupert murdoch have been saying, that they did not know it was more than one reporter until december 2010 is simply astonishing?that sounds like a word a lawyer has inserted to avoid saying incredible. >> this applies not just to the passage with which you quote, but the chairman does not vote. the term in does have about in the case of a tie, but otherwise he does not vote. i would merely observe as a conservative member of parliament. in response to your second a question, at the committee did in large part find it astonishing that james murdoch stated to us that he could not become aware of the evidence until much later. -- did not become aware until much later. how you interpret that, they would like to explain to themselves why they supported the conclusion. i think we will all agree astonishing was a good word, which we could all could support, with one exception. >> i voted for that amendment, and we had a discussion about it. i said if i could vote for it, but not for the same reasons he wished to apply in the drafting of it. i think it is absolutely astonishing that this was not known at the company until later, and that is because in my opinion, it is the people with command did not make it adequately clear to their boss is what was going on. there was an attempt at a cover-up that was made. i completely agree it was astonishing that people were not more open and did not lay the facts there. for that reason, i supported the amendment. my colleagues felt she did not vote for it. i think it was indisputably amazing that this was not brought to manage but when it happened. the question is, whom does that blame fall? >> if we said they are astonishing -- this is something where we have to respect in some ways what date inquiry was about, which was about whether or not parliament was misled by people about the actions people were taking. we did not take evidence looking at corporate governance. that is why it is difficult to look at the way executives perform in the operations of other companies. there is a lot of critical language about the way in which people love the business and the decisions they took. i certainly think those that voted against protection of rupert murdoch felt this was something we had investigated and there was no evidence linking him directly to knowledge within the business. people may find that astonishing, but that is where we got to. i think it is important did draw that line. our focus was to draw the evidence out what we have found. there was an amenity, as well as crystal clear language about the way people acted. the failure to see the lights flashing on the dashboard of the company, where there is problems within the organizations. >> >> i drafted the amendment, and i am certainly not a lawyer. we followed the evidence -- all of my amendments have followed the evidence. with james murdoch, for example, giving the conflicting accounts of the history of what we were told by witnesses going back five years, we simply could not make our minds up with any conviction about whether he misled or not. time and possibly may tell as other evidence emerges. while following the evidence, it was important to just get our heads up and look at the bigger picture, because we were told that notwithstanding everything that is happening, it including the new york times, our report and the wide publication of evidence, we were just being told effectively that it was only in late december 2010, that there was an epiphany moment allegedly wear they suddenly at the top realize that the one that road at reporter -- rogue reporter was not true. i wondered, how could this happen? >> thank you. obviously you are trying very hard to avoid getting into the political waters, but surely you may be able to guide us a little bit. if someone said some of these conclusions are politically motivated, how would you respond to that? you have said he will ask the house to vote on the conclusions of the committee, my house might be a little confused as to what the overall recommendations are? >> in terms of how members voted and there are reasons for doing so are hard to say. they are all here at present. what i would say is the motions we are tabling in the house will concentrate on the issue of parliament being misled on specific evidence presented to the committee. that was the agreement for the committee in the latest inquiry, and in large part, indeed almost entirely that on those specific issues this committee was unanimous. therefore, what ever additional statements that proved more controversial, which are included in the report, the main findings of the committee, which relate to misleading evidence to the committee, this committee thoroughly agree. therefore, i hope that is the area where all of those privy to the debate will concentrate. >> >> thank you very much. could i may be asked to explain why they think rupert murdoch is not fit to run a company, and another mp to explain why they think he is fit? to those that are found guilty of misleading parliament, will you take them to the parliamentary sell, or what is the punishment? >> can i have a volunteer from either side? >> well, in terms of what the consequences are, to some extent, not for the first time come at this committee is exploring uncharted water. we have gone as far as to say we wish to have the strong to the attention of the house, and for the house to decide what consequences will follow, but there will be others with more knowledge and experience than me to advise on what potential consequences could be. >> to be clear, when we made the decision yesterday on the report we were given an amendment. as you all know, the description is something to consider when deciding whether to give a broadcast license. it is a very decisive definition. -- precise definition. the committee is making a judgment based on the regulation in the u.k., and that was not something we investigated. you may have personal opinions about report murdoch and his company, but that was not something we were in a position we thought to make a judgment on. it was an opinion presented. that is what we agreed on in unanimity. >> the alternative you? -- view. >> the reason i support the statement that he is an unfit person to run and or the national -- international organization, you have to look at the fundamentals. in my view, they acted as if they were above and beyond the world. to suggest that there was some sort of glass ceiling that did not reach rupert murdoch or james murdoch, is astonishing. to suggest that a huge amount of money was paid out to people with whom senior executives were employed is incredible. i think the general public will draw the conclusion that it is astonishing that people at that level did not know what was happening. as i said earlier, he was the top. the verdict would be not proven. >> [inaudible] to me, quite clearly rupert murdoch is fit to run an international company. he has been running businesses since before i was born. he has employed hundreds of thousands of people around the world. he has made a huge difference to the media industry. we have seen absolutely no evidence to suggest that rupert murdoch was aware of any of these things that were going on at news international, news of the world. if i thought he had been aware of what was going on and deliberately covered it up and may be committed only a crime in doing so, then i would have been happy to say i do not think he is a fit person to run a company. we have seen absolutely no evidence to suggest that was the case. of course he has made mistakes. of course james murdoch has made mistakes. we all make mistakes. we all wish we had done things differently from time to time. hindsight can be a wonderful thing, but to take that to say this person does not fit to run a major international company when he has been doing that for decades seems to be not only way over the top, but also completely ludicrous. >> the bottom line is we had no evidence on this. no member of the committee could find it in their heart to said that either james or rockford murdoch's has misled the committee. nobody. even after the report is published. nobody was going to exclude -- conclude that he or his son has misled cmitt therefore the line about rupert murdoch not being heern was stuck on the bas of no evidence presented to the committee whatsoever, and we just could not support it. as i say, even though many votes went against my point of view, i would have definitely voted for the report. >> david grossman, a bbc news night. the questioning so far has concentrated on the division within the committee. can i ask, why was it so important to get in the line about rupert murdoch being a fit person to run a major international company when the expense has been, or the cost of getting the line in has been allowing opponents of the process to portray it as along party lines and political payback or whatever? >> there is a judgment you have to make with these reports. whether you go for a weaker report and gain uniminity or stand up for what you believe, and where i came to and the majority of members came to is we needed to raise the bar. that was because of the last report in 2009, the truth is we were negligent in this -- made a mistake. we invited rebekah brooks to give evidence on three occasions, and on three occasions she rebuffed us. we decided not to compel them to give evidence because there was a huge amount of pressure placed on the committee. there was an election looming. there were also political pressures for us to do that. i did not want us to be accused of conducting our responsibilities. i wanted the committee to be courageous and confident about the most powerful media mogul in this country. it would have been wrong for the news of the world's tallest to lose -- news of the world journalist to lose their job just because of who it is. i just felt it was important that as a member, individual member of the committee in collectively that we set down. -- spoke out. >> when the game was up in terms of the one that reporter, as you will see from the text, possibly two rogue journalists, what we saw from news corp. was a clear strategy. we were being invited to blame tom crone. you will see from the corporate conclusions, and not just the conclusions regarding rupert murdoch, that we simply declined the invitation. >> quoted my good friend when he made the comment in the chamber [inaudible] i am almost certain you and the colleagues would of been asking, why are the people at the top of news international not been identified? i would just say that -- >> on the 14th of july, 2011, the committee was unanimous in the division and recorded vote to summons james and rupert murdoch. we were united in wanting to see the evidence. we disagreed on where the evidence conclusion came out. >> that is true. >> was it open to the conservative members of the committee to publish of dissenting report, a minority report, and if it was, could one explain why you chose not to do it? >> simply on procedural issues. obviously any member of a select committee could prepare a minority report, but actually, as we have emphasized, a very large part of the report was unanimous, therefore it was probably more sensible that where there were divisions it was made clear in folks that are recorded and appear on the back of the report, but the fact is a large first part of the report was supported by everyone in something that all of my colleagues felt was the most important outcome. >> not all conservative members of the committee agreed with each other on every aspect of the report. it was not that we had a block conservative view on this. it would seem to be feasible to have a minority report, because if you look at the divisions, we voted in different ways and different amendments. >> [inaudible] >> we voted against the report. >> if that sentence was not in the report -- >> we probably would have all voted for the report. >> could i just ask andrea sanders this, if you have voted the other way, then as the only member who voted on the committee, then it would have been split, which would have meant that the testing but what have come into play, and the report would have been rejected. if that is the case, i would ask mr. sanders, you have a lot of responsibility for your vote, and why did you decide to vote with the labor members, and did you consult other people in the party? >> we all have a collective responsibility as a committee to seek the truth. from the evidence that was presented, from my experience with the previous committee that looked at hacking, and the evidence presented to this one, i took a decision on that. any one member at the end of the day could be the person holding the balance of power, depending on how individuals make their mind up. it just happens it was in one section of this report alarm -- along party lines. it certainly was not in other divisions. how the chair exercised his casting vote, i have no idea at all. the chairman can only cast a vote in this circumstance in which it arises. >> indeed. what i would say is that it is a matter of some regret to me that the committee was not able to produce a unanimous report, particularly when on a large number of issues the committee was in agreement. the unanimous pollution has been diluted by the fact that the committee was unable to agree. >> gene whelan with "the wall street journal." could you clarify which aspects of the report were unanimously agreed upon? >> if you look of the voting, it becomes apparent, but in terms of the main conclusion, those relating to the individual names, specifically those that concern, crown, those conclusions were agreed unanimously. >> thank you. i am wondering what you think the public is supposed to make of this, because we have had months where they of seem this report. this is an opportunity to give a lead and say what you think come in we have ended up with a committee report that is split down party lines. i know you've disagreed on various aspects, but you come away in the end in a report that does lack credibility. that matt -- that must be a matter of great disappointment to you and members of the committee. >> the main the focus of this committee in its most recent inquiry was to answer the question whether or not we were misled in the evidence we were given, because on that subject we intend to table a motion to parliament, and it is on that whether there is in a motion in the committee. this is a unanimous report to parliament that the committee was misled on named individuals. >> you have probably noticed from the individual members of the committee that they are all unique in their strong views and wills. i happen to think that is a good thing, but it does mean sometimes you get split reports. i have no doubt you will be able to interpret the report and put both of use to the public so they can form their own view. it is my view they have are ready for the of review on his company, and this further shows how power corrupt institutions of the united kingdom. >> what is perceived out there is how your report this press conference. i take you back to the question. if you look at paragraph 163, the bigger picture when everyone knew and you look at the division in the back and look at the implications of that paragraph. the committee was unanimous because it was 9-1 in favor. this was the paragraph about astonishment. >> from itv news. the conservative members face a difficult choice in the chamber as to how to vote and whether that will be perceived as supporting the murdochs? in terms of the report, where it says the affair demonstrates -- is that the view of the whole committee and what would you recommend news corp. shareholders to do? >> the question has been answered. the motion that comes before the house will be about parliament being misled and we will be able to support that notion. that question does not arise. as for the corporate governance, i they voted in favor of that. they clearly were failures. there is no doubt about that. they have taken this task. it is not really for members of the select committee. this is wildly outside the realm of our committee. the rupert murdoch line will concentrate on what prevented us. that is a huge shame. >> the motion for the house will be to decide whether people are guilty. the substance of what we are reporting is what >> he is the editor of the new york daily news. we just found out that he has misled a select committee of parliament. i would hope a little bit of attention would be paid to the findings of the committee. this is good. if it lives to it, what happens next? we do not necessarily have the procedures in place? serious conclusions have been added. there is a loss on what the committee agrees. this is the shame that we were not able to agree. >> yes. >> did any adviser attempt to influence the outcome of this report? i know that some members have been contacted. anybody else? >> they were listening contacts between news corp. and this committee. they named a number of the previous committee. i was conducted a policy of an open door. the people wish to talk to me to give their point of view, i will listen to them. they were putting their case. they did not do anything which was improper. i hear people who came to see me do it. >> i will read exactly what the chairman said. i can put my hand on there and said nobody has tried to influence what i said. if anything knows anything about me, it is an exercise that influences. i compare my hand on my part and said this did not happen. >> it would be entirely counter productive to try to influence them in terms of changing his opinions. not contacted it during this inquiry. >> they can meet with any of them. i do not think i have received hospitality. >> this looks like a bit of a shambles. half the committee voted against it. do you say that you failed? >> no. most of my colleague have spoken with the main findings of the committee which the areas we were examining. i hope that will be but people concentrate on. i like to think that people will do that. i think that will be the message that we are relaying. >> if you believe this out, you'd be able to support the report. he decided not sit on a point of principle. they have a right to disagree on things about which they care very much. the news is that the members would not support it. it is within his right to do so. it is not a bad thing or a shamble when people have genuine disagreement in principle and but the disagreement on the record. he had every right. -- and put the disagreement on the record. he has every right. >> i think the most important issue today is that this committee has exposed criminal activity within an established media. this would not have happened. it is always out of the comfort some. they are shunning the light on what was criminal activity that will hopefully stop. >> the report says be the trail is what you consider to be a misleading one. do you consider it misleading? >> that was my amendment. it you have the text there. what we found is that they did not remember are said this was such a small part that we did not pay too much attention. there may have a testimony that is recounted. she is the to rupert murdoch every other day. this is a fruitless please. this should not be a focus simply on rupert murdoch. there is a corporate conclusion about news corp's and news international. it resounded around australia. the phrase was "collective amnesia." if there is one phrase that should at the same way it is one that is used an amendment by me. this was about willful blindness. the failure to follow up public wrong doing some undisciplined the perpetrators. i think that phrase should receive it as well. >> rupert murdoch to get evidence to the news corp.. i do not quite understand why members felt the discussion was somehow the altered virus. why did they not propose any where alternative amendments if they liked the characterization that was agreed? why did they not propose an alternative amendment statement? >> in terms of why do not put it, that was an amendment to the report. we were remaining the status quo. we do not put that on one that has not been on. i did not really understand your point to be perfectly honest. >> we have to decide whether rupert murdoch misled us. no one has proposed that he misled parliament. there is in the next section where you look at the corporate play comment that was a member that i support it. we were critical of the company as a whole. this is a criticism of robert and james murdoch as well as others. i think we have been critical. what no one is proposed is that. >> maybe he was a justifiable target for the report appeared we said we did not agree. >> if you look at the divisions of the bank, we would have agreed of the status quo. did people mislead the committee and are previous committee? i did not see any evidence that rupert murdoch misled the committee. committee. we haven't seen any evidence that james murdoch misled the committee. we concluded that the three individuals that we've already mentioned did mislead the committee. that's why we didn't agree with the conclusion about rupert murder. [inaudible] there was no evidence there to suggest that. >> you've already. it does not done by one party voting. at the end of the conclusions and accept,. [inaudible] so that his comment in the conclusions and that would've stood even without the additional line that he was soaking we have. we had to divide on the whole report. >> were there any objections from committee to one of their members putting out their own version of the book before the report was finalized? what charged you take mr. chote to make sure that no privileged information given to the gain was used in dial m. for murdoch, especially given the finest of report on page 312? >> well, what i would say is that almost all the evidence that was presented to this committee was published on the internet almost the same day, or very shortly afterwards. the terms of privileged information which is not available actually does very little which we didn't make public. the ones we did make public is where we're specifically asked not to do so. i was not aware that tom watson in his book -- which was not made public but perhaps he would like to address that. >> thank you. good to see you again. [laughter] firstly, your service held a broad so i'm told i can't see you for libel. secondly, all the information in the book comes from either public sources, and were i thought the committee may what's the evidence i submitted it, some of which was used, most of which was accused. because of the justice issue. but i'd like to put a question to you. can you tell me why paul staines held the need to destroy his hard drive after he broke the story? i'm not sure this is an opportunity for the committee to ask questions of the press to it's not normal contacts. i would ask you to pursue that after. >> josh holliday from "the guardian." you are each newsgroup in the report to waive legal privilege. why do you think that would be significant and would you consider revisiting your conclusion if it is significant? >> well, we, i think it was a chance for the committee to persuade news corporation to withdraw privilege to the loose report. but possibly we also got -- after the evidence of rupert murdoch gave to levinson last week when he was specifically asked about this by justice leveson. and he seemed to attack burton & copeland in a statement way kind of lengthy executives for the cover-up. and there was this mumbled comment to do in the corporate and i think be really important that we just clear things up to it that report in 2006 i like is that there was wrongdoing, other than phone hacking, then it shows that there is a conscious -- consciousness of the company at the time and executives should have acted. i think it was too late for us to take a view on that. but you asked, i believe it was a unanimous view of the committee that that report should have privileged and should be submitted to levinson. [inaudible] >> documents that we receive any investigation came as a result of privilege being way. clive goodman opinion, the notes from mr. pike's conversation with colin myler all came as result of privilege being way. so i think it's -- [inaudible] >> one of the difficult and committing conclusions in this report is been that many people know far more than we give it that includes lawyers, claimants and civil claims. because even though those have been settled, there were disclosures affected by court confidentiality. in the gordon taylor case, a limited waiver of legal privilege was given. some people might speculate that might have the effect of just dumping tom crone and colin myler. but we also asked for a waiver of privilege to be given in the max clifford case. we just wanted everybody to come clean and tell us exactly what they knew. and they refused to do that. i just want, there are other parts of this report apart from rupert murdoch. there's a section on the police. the police and cps failed over a long period of time, not just mr. yates and others. but one of the things we don't cover in a poor, the report covers a lot of ground, i made this comment is more interesting legal magazines come that there was a succession of lawyers, burton & copeland, indeed michael silver lease qc who continue to represent the corporation and civil claims, who we know knew that what news international was telling us about one rogue reporter for defense was untrue. now, it's come out in our conversations and discussions with the speakers council of parliament is not what is referred to not strictly accord for legal quotes. but we've not seen seen anyone of those lawyers resigning on principle. when they knew that what we've been told and the general public was being told was not the truth. >> to say, that there was much disagreement in the committee about this idea. i don't believe lawyers have to represent their clients best interests within the lockout and that is all they have to do, i don't see any occasion for lawyer to resign for having done his job as he is obliged to do under the law. on the matter of burton & copeland, i do, i'm glad you brought this up. i do think it's an important one. this is an amendment which i was very pleased to support, it's absolute a quite right and i would like to take this opportunity to call on news corporations management and standards committee to release burton & copeland from privilege at once so that we can have transparency and be quite sure that there is nothing further being concealed. that is the opposition. he was right to make the minute and received unanimous support from everybody on the committee. >> to questions for mr. woodson. neither words fit and proper are in the corporate what do you think happens with you on ofcom to look at the evidence presented to the committee? and also you call for this parliament to have been in corporate to continue to happen urgently? >> okay. just -- just to be precise we use the words not fit person but we don't use the and proper to say get that right. and on the scottish parliament part. look, we saw jack yesterday. he was a target of hacking. and we know that thomas sheraton, now knows he was a target of hacking when he was a member of the scottish parliament. when we found out similar things had gone on in the westminster partner, we ordered a new inquiry. sabah told party leaders of scotland can come together and organize their own inquiry to find out what was scope of the intrusion and the privacy was, and where the focus was. >> chairman. i wonder if you could guide us on a bit of a process in terms of the motion that is going to go before the house. you say in the report, the press release which is the own misleading committee. can you only put motion before the house to the committee unanimously agrees, or whether come down to the vote as well that they may split along same lines has done so for? and secondly, what is the cash to i know you know parliamentary guidance on what the penalty for being contempt upon my become but what with the committee must have some sort of you on what you would like to see perhaps an apology? >> welcome in terms of the motion, my hope is that segment will be agreed upon. the reason the motion will focus on specifically misleading the committee is because that is the matter for the house of commons. on other matters like committees report, the governments respond within a period, and the committee can sometimes request a debate. that would be the normal proceeding for us like many a report. but in this instance, we are reporting what we believe have been a contempt, which is a very different matter. and, therefore, a debatable motion in the house seemed an appropriate way forward and it will focus specifically on whether or not attempt a good. now, your question if the house agreed to have been content, what happens next, i believe there is precedence, although quite a long time ago, for a defendant to be called before the house, to be abolished and have the houses conclusion made clear to them. but to be quite honest i don't know. i suspect that would be a matter of debate, perhaps by standards and privileges in house by leader of the house and others. at this stage we are intending to table the motion, and no doubt that parking will be involved in consequent discussions about what would happen if it is then in the house of commons. [inaudible] spent contempt of parliament. and certainly that is not the case at the moment, but i think we need to find consequence for misleading parliament. >> we could spend hours on that particular debate, but perhaps we shouldn't. >> gene with "the wall street journal" but isn't possible then your motion will accuse rupert or james murdoch of content, our only in milder, and crohn's because it is not conclude that either rupert murdoch or james murdoch are potentially guilty of content. is made another -- other conclusions but about the specific question about misleading evidence, this committee is therefore department, we named three. >> clearly we are sad after five years not finished yet. we have not been able to go further because of the police investigation. there are other things that made emerge, which may want a re-examination of the evidence. and i just stress here the human cost. lin mulcaire was not operating in isolation. he does we have not yet had the most bound database. we have not been able to make the links between what the detective was doing, and compare the evidence we're given. other private detectives were doing the things at the same time including mounting surveillance over at least one member of the committee. it's been admitted in the civil case that computer hacking went on. with all the pieces of this which are yet to be put together. at the end of the day the human cost of this, the intrusion into the ordinaries dash the arctic peoples lives have to be at the forefront of our thoughts and i hope your thoughts. this was an organization with its newspapers that give moral lectures to public that acted as we now know them morally and criminally if so. held itself above the law. >> thank you. we [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> a bloomberg summit on the state of the u.s. economy. later, a discussion on the housing market in the u.s. dollar. then remarks by alan greenspan. >> tomorrow, newt gingrich withdraws from the 2012 presidential race. he thanked his supporters and announced a suspension in a youtube message this morning. watch him live on c-span at 3:00 p.m. eastern. >> spend a week in oklahoma city with american history television. check in on literary life with c-span2. from galileo, copernicus and others. sunday, oklahoma history on american history television. toward the bombing memorial with tory. plus a look and african american life in 1920 because of. we explore the history and literary life of cities across america. >> bloomberg custody summit on the states and the u.s. and global economies today. chris van hollen of maryland and alice of the some symbols committee agree joint -- by the simpson bowls committee were joined by congress. this is about an hour. >> with that, we would like to get the show on the road. we are beginning with the state of the a economy. my colleague is going to be moderating this discussion. we are going to do a quick discussion. let me tell you about this first. he is an editor of bloomberg news responsible for government and economic genomics. here are two of our panelists. is the professor of management. he's director of the volatility institute. he is a nobel prize laureate. we thank him for being here. you are the chairman of research associates. p r the author of the pulitzer prize. the new york times said it is necessary reading for a ceo's. by takagi experience >> -- by a technology geeks. >> you last that here we are. the economy has been growing for almost three years. what is the most confounding thing about this recovery? his response was that the recovery is still quite slow. unemployment has not dropped below 84%. should he be surprised? >> we expect this to be a long recovery. financial crisis tend to have slow recovering some. -- recoveries. it is hard to imagine to have a recovery if you're trading partners are weak. we did not anticipate the sovereign debt crisis. this is a real negative. i think it is still moving. >> the term is a modest a moderate. what has happened to get us beyond the modest part? >> i think we need to take a little look back at the great depression where we had a similar financial crisis. it lasted years and years. in 36 and 37, there was an effort to rebalance the budget to stop the deficit spending. the economy turn back down again we need to keep our eyes on historical events and recognizing the need for stimulus in the short run is still with us. cannot cut the stimulus about turning the economy back down again. >> should be chairman really be surprised? >> not particularly. >> we did a paper about a year and a half ago. but badstepping bac news. 10 years after the crisis, a level of gdp per capita it is 15% below that predicted by the chance in years prior. financial crises have long lived consequences. we always have a very pronounced leverage cycle. the office of regulatory ones. >> i think the regulatory overshooting is very interesting. >> is also about the importance of business confidence. this has a feedback loop. >> you knew what the top rate ?ill be 10 months from now ta or for what your of our mental policy will be. it is probably really valuable. >> what does the fed do now? >> chairman bernanke stressed a number of times on wednesday that there are things that with and the fed that are not. what would your advice be? >> they are not willing to get inflation above the goal. they're not willing to use the balance sheet above what they have done in much the battle softens. this is the best it can get. that is not particularly good. there is still scope for a balance sheet action that is conditional. >> about the drive toward energy self-sufficiency, what was made? >> but we look at energy the tell went and the question of growth of the as production. certainly what we have seen in natural gas helps to offset some of the prices. one thing that has become a parent is a very long supply chain. we would have less jobs created by shell gas. if the oil prices not race, we would be looking at higher oil prices. >> let's talk a little bit more about the employment as that. how is the drop in its self- sufficiency reshaping the labor market? but at a macro and regional level? >> it creates i t jobs in california. even i think i was more focused on energy security and balance of payments and not so much on if you have rogerather large dollars being invested, it has a big impact in radiate into the economy. this is a discussion about jobs. >> in terms of the economic data that is being released, the consensus is that he got off to a pretty encouraging start. now the narrative has been slowing down. are we heading for a repeat of last year or the slowdown became quite substantial? this is on the menu again? >> we're going to the middle of the first quarter. volatility dropped, will the aggregate was 45% down to well below average. this was last august. we had a blip up in the past few weeks that corresponds with the new gdp numbers. i do not think this is the beginning of the next high volatility and negative information for the economy. there are a couple of reasons to feel encouraged by the numbers even though they're not up to expectations. they are still robust. there are some reasons to look inside the numbers to fill in courage. particularly interesting is residential construction which was up 19% from previous quarters. when you couple that with the housing price varies, if you read it carefully, he can say it looks sort of like the bottom is believable but the bottom has been reached. my suggestion is that the housing market is recovering. this gets added to consumer expenditures. if we could business to get along, maybe this recovery is alive and well. >> do not count out the resilience of the market economy. they want to grow unless they are impeded. the world is a risky place. there is a banking crisis then europe. we face a fiscal cliff on december 31. in a world in which you have such uncertainties, investors reasonably lack conviction. if you do not have conviction, that brings it up to trends. eager the trend. the bad news is that it is to press. we went there a severe crisis. we grow something in the neighborhood of 2%. can we do better? most assuredly. we are impeding our own progress. >> accompanying that increase in consumption was a decline. how significant is that? >> i do not think it is. i think it is mostly about the orderly pattern of gdp. there is a lot of demand associated with the earlier rise of energy prices at the end of 2010 into 2011. we have a lot of purchases of durable late in the year. it tends to be paid close to the wealth income ratio. that is the bad news. we destroyed something like one in 3/4 years worth of income and what we did to ourselves and 2000 a and 9. as long as we do not get that door of the wealth creation, there is a need to save. think consumption is not the overall contributor to gdp growth. we had some good news. we are a big nation. we are building this on the coast. this is a contributor to g.d.p.. we have a strong external factor. this is gone to offset the higher savings rate. >> let's talk about this. most consumer confidence has been attributed to consumer prices. where are we going? >> this is partly what we are talking about. starting in november, we entered a new phase in relations with iran on the nuclear weapons. a lot of things happened. our sanctions go in at the end of june. they are already starting to have their impact. last week, there were realizations said they will have to meet in a neutral city of baghdad to continue. this is taking seven or $8 out of the oil prices. we are still on a trek to see the oil market tighten as the sanctions go into place. the question is where it the other supply will come from. that will determine the price. there is the question that oil prices are a drag on the economy. they take purchasing power out of the economy. i think this is one of your big head wind spirit >> tavis of the macro economic -- big head wind. >> patel as of the macroeconomic impact. -- tell us of the macroeconomic impact. >> in 2008, and we were basically looking at how the world discovered the emerging- market. that was the fundamental. this time it is a tight oil markets. there is the need. >> it is always of this. this is more material and prices are going up. it is global demands. this is an offset. >> two months before lehman brothers collapse, all prices hit their peak. he was hurt the most that you will that were paying some of crime mortgages. >> china was perceived to be one of the heroes. now we have china slowing. >> stimulus that out of control. it was too much of a good thing. it turned out to be very difficult to monitor. when once apiece but it is open, then every municipal -- when the once the spigot was open, then every municipal could be on a building spree. this is ultimately going to be a big problem. i think the fact that china is able to sit down and make five- year plans and design policies that are targeted at whatever particular problem they have in mind is very promising. if we were to come up with five- year plans, it might be a useful exercise if you can carry it out. >> a five week plan. >> there are a variety of things that china can do. i think it is a concern. >> i am calling the build out of china. it is one of the fundamental factors driving the economy. we tend to think that everything is well organized. there is this disarray that is going on in terms of the leadership. it is a transition point. it only happens once every 10 years in china. it adds to the uncertainty. the line between the public and private sector is at best and distinct. the good news is that it means there is a lot to leverage. the bad news is that every 10 years or so they have to take a hit associated with the mistakes he make in terms of allocating capital and credit on such a large scale. it is probably the case that chinese officials would not take that hit in the year of transition, a year in which the global economy is at risk. the problem with china over time as there is more market related activity in china, it will become less and less a decision of the official community when to take the hit. we do not think they are there yet. it will be a continuing contributor to global growth. that is good news. the u.s. is at best a trend and europe is in a recession. >> one of the undercurrent under the leadership change is the struggle about how much the economy will be driven by government and how much will be more market oriented. we're seeing the play out in front of our eyes. >> we have been talking about the debt in the chinese context. let's talk about the u.s. context. most attention is focused on what happens the first tuesday in november. we are also headed into another debt ceiling episode soon after the next administration. are there any declined about this? >> here is the bad news. we're mostly going to spend all summer looking at in trade quotes on who's going to be present and to is going to control the house and senate. we talk about what they will do in power. fiscal policy is going to be material. we have dug a 5 percentage point hole where the g.d.p. in 2013 associated with the bush tax cuts. the problem is it takes a decision. it takes the lame duck congress and the president to agree to something to avoid that 5% cliff. at the same time, the secretary of treasury will have to declare a debt ceiling of emergency. we may have a problem with funding the government. if you think back in august, the last time we have a problem, it was a funding the government problem. it was a debt ceiling problem. there is a fiscal cliff. that is a lot of uncertainty. >> doesn't sound good to me. >> if i were able to do what needed to be done, a lot of these problems will be there. i see these as political issues. there are risks associated with china. the risk that we're talking about here are made by ourselves. it is a real shame that the political system is not focused more on what is good for the country but what is good for the party. this is a across the board statements. to the economy is going to be heard by this attitude. >> the forecast is that we muddle through. >> and do not drive into the chasm. -- do not drive it into the chasm. the general principle is when you are making a forecast, the presence of the tale could say something about investors taking on risk. in an environment in which the tells are so stretch out, you do not get the creation. your central tendency is the best. if you look at the political problem, it is very dominating. as a result of the last four years, they become more polarized pay i. >> we do this counts of the party line votes of the house and senate. we are as polarized as 1870 on. it just at the previous peak, it was arguing about reconstruction. we are looking at unemployment benefits. it is the same extent as bringing the nation back together. >> they work on a bipartisan basis. they are there before. >> is there any way that washington is helping? >> give us a minute. >> the fed has provided extraordinary policy ones. a feature of the 15 things that washington could do to help -- if you drew the 15th things that washington could do to help, it is like 14 or 50. i think everyone appreciates that it is not possible given how polarized their system is. there is pressure on our monetary policymakers to do something even if they do not have an effective incident. >> speaking about the disagreements, it is sharper than a has been in many years about the role of government and what it should be in the economy. i think the overhang that we have is so awesome that it is the dominating political factor. >> thank you. >> we have a question that we like to look on the panel. how does the fed ignore non core inflation when it is the driver of the trend? you first.t that to >> this is an inner house dispute apparently. they care about inflation. price stability is something that is in the eyes of the beholder. they are not material in the decision making. you are at the display. it has the effect of energy prices. >> it seems to me that we as a global society may need to rethink our hatred of inflation. a little bit of inflation would do a whole lot for the u.s. economy. it to do a whole lot of good for europe. its could allow for the weaker economies to be more rapid and seamless. our notion of what this targets should be revised. had seriousnot inflation in decades. i think we have overdone it. >> one thing you're saying, you can see that there are policies that are buckling under the pressure. can you imagine if we had 25% unemployment? >> let me hand it back. let me put this question and answer all but you. i am ben bernanke right now. i was likely enough to put to him at the top of the news conference. what is keeping him of most at 9? what should you do about it -- at night? what should he do about it? >> a trend that wealth creation is prepared. if the major risk to economic progress is politicians, it is really hard for an independent central bank to weigh in on it. >> anybody else want to weigh in on its? it does not seem to me that the fed does not have a lot of effective tools. if i were ben bernanke, i think i would be worried that the rest of the government was not doing what is needed. we are going to go over time here. i want to go back to something. the talked about inflation. >> we have all this house is under water. how do we deal with the foreclosures tax if we had inflation and house prices went up, they would be above. there seems to be inflation as an easy way to do it. if he saw this as a benefit to the way that has a market where, i think everybody would feel like they were more comfortable with that. >> inflation has no paid tax. part of the answer is when there's a thing but hard process,, you have to think about it. historically, how did government look down on that index they had a little bit of inflation. it worked in the '50s and '60s. central bankers have asserted for reasons that are mostly flaming pit this was the goal. we never had the conversation in the united states about what the right goal is. it should be part of the national dialogue. this should be about fiscal policy and about central banking. the election to be important. >> the lot with that. >> thank you very much. we appreciate your participation. going to ask you to make way. the well head appear and talk about another profound issue -- we are going to head in and talk about another profound issue. this discussion is going to be led by my colleague, and the team leader for congress at bloomberg news. the panelists are taking their seats. he heads the u.s. government accountability office. we appreciate him being here. alice is a senior member. she also ran cbo. we have chris van hollen, a ranking democrat on the house committee. is also a member of the super committee and involved in the spending issues on capitol hill. >> we have to talk faster we can try to get there all of it. >> on december 31, a tax cut expire as as the payroll tax cut for workers. it to rise from 35% 255%. spending will begin in january. the alternative minimum tax has millions more tax payers. the u.s. debt limit will probably run out in january. given all of that and the fact congress had enough trouble extending its payroll tax this year, what are the chances -- what are the potential implications and implications for the budget deficit of congress waiting? >> do you want me to lead off on that? but me see if i can help at all. as to the first part of your question whether i think there is a reasonable prospect of less resolving these issues before the election, i would say regretfully know. having served on the super committee where we tried to resolve a lot of these issues and were not successful at achieving the outcome, i think major issues will have to be dealt with after the election. i say that out of regret. i do think the cocktail of issues that you mentioned could have a positive action forcing consequence, especially because you have the expiration of the 2001 or 2003 tax cuts. there are few people that believe we should allow all the tax cuts to expire. that is about five trillion dollars over 10 years. it does create an opportunity to take what has been described as a balanced approach, meaning a combination of revenue plus cuts. i am not suggesting you can resolve the issues at a six month lame-duck session. i do not think that is realistic if tax reform is a piece of it. i think it provides an opportunity to move it forward. if we do not seize that opportunity we are in a world of hurt going forward. >> i totally agree with that. i do not think anything will happen before the election. i wish it would. there are people talking across the aisle saying if we get the chance will will we do? i do not think that is realistic. many of these were put in place to be bad things, things you did not want to happen that would force some action that is more reasonable. i think that will help. they certainly cannot put together a grand bargain in it six weeks that everybody would sign on to in a lame duck session. but they could put together a framework that would kick the problem into the next session of congress but not too far. a deadline of six months or something like that that would say we will avoid this catastrophe and give ourselves the time to put together a grand bargain. the congressman knows this. he has used a lot of what came out of the two commissions. the super committee got close but did not get there. the pieces are all well known. this could be the chance to do it. if congress does not act, then we will have an economic catastrophe that will force the next congress to do something. ifeverybody's taxes go up, you start spending mindlessly across the board, that will be a wake-up call. we ought to have the good sense to avoid that. a more fiscally sustainable path. i am optimistic congress will rise to the challenge is to be able to do that. >> you mentioned a short-term extension, what some people call kicking the can down the road. is that not what has been happening the past few years? we have seen that with the payroll tax cut. they waited until february. we are seeing a lot of short- term extensions and the congress. >> a very bad way to run a government. absolutely terrible. i do not think we have a choice right now. if the grand bargain to come together in a lame duck session that would be better. i do not think it is feasible. it is feasible to do a framework that says we are going to do these kinds of things to entitlement programs. we are going to do this. i hope comprehensive tax reform will give us a broader based tax system with lower rates and revenue. that is what we need it. if we put those things in place and say, ok, congressional committees, you have until june 30 or april 30 or some reasonable period to get this done there is a chance you and your colleagues might actually do it. >> no pressure. >> add me say i agree with everything the doctor just said. it is hard to get it all done in six weeks, especially if tax reform as part of it. a lot of work has been done on tax reform but a lot remains to be done. there is a lot of misunderstanding to what extent you can lower the rates and expand the base. just in terms of what the numbers are. there are different numbers coming out of different analyses. that is the goal. a very important part of that is to generate some revenue for the purpose of deficit reduction at the same time. if he were to do something that created a structure for decision making and made sure you kept a short fuse on the process, that could be a recipe for success. the danger as you suggest is you get to the end of the six month period of trying to kick the ball down the road. i do believe outside pressures will be great enough to require forcing the action. we have tried -- to these efforts are designed to force action because the alternatives are worse. >> they are the law of the land. they happen if you do not do it. >> it is an action forcing event. >> does a lot of this rest on who wins and november? is there an ideal election outcome from the budget deficit? one major depressive reduction packages have tended to pass, they have been in a divided government? >> i do think it depends on the election. i do believe the outcome -- and one outcome will favor a solution more than the other. obviously, i am a democrat ranking member on the budget committee. i would just mention to everybody, what constellation of out comes in this election would best lead to a solution? every bipartisan recruit has said we need a balanced approach. that means revenue has to be part of the solution and cuts and other reforms have to be part of the solution. i would suggest if one major party candidate is running on a platform of no revenue increase, running on a platform of additional tax cuts that will lose revenue, that makes it difficult for that candidate to turn around and entered into a balanced bipartisan agreement. i have seen people turn quickly on their positions, but i think that is gymnastics on the budget that is very politically unlikely. therefore, if you believe we need agreement and he believed the only real likely outcome is a balanced approach, i would challenge people to say, how that can did it would do it. how would a republican president who has run on a platform of no new revenue, not one penny for deficit reduction turnaround and enter into a balanced -- >> i agree with that. it will be interesting if mitt romney wins to see how he gets out of this box he has built for himself. one way out for republicans in general is to say, well, we really meant lower rates. we did not mean we would raise more revenue. we believe lower rates will raise more revenue and therefore we are willing to broaden the base a drastically. where republicans have not done yet is to say how they would broaden the base of the tax. to get where congressman ryan wants to get on the taxes or where mitt romney once again in terms of lowering the rates you would have to get rid of almost all deductions, exclusions, and that means tough stuff nobody wants to talk about. the exclusion of employer paid health benefits, charitable deductions, state and local taxes. these are controversial issues. there are ways of putting together a plan that will protect home owners but be less generous to those at the top. nobody has been willing to talk about that on the republican side of the campaign. there is a vague thing of us all lowering rates and it will all work out. >> will some of these things need to be on the table for both sides to get serious? >> if you're talking about dropping the rate to 39% where it would otherwise go you will have to do exactly what the doctor said. that is my. when i say tax reform as part of the process is hard to get done in a six week period. i think there will be reluctance to make radical changes. i think there are significant things we can do. i think there are ways to do it where you are not picking on anyone deduction or another. you are taking the feldstein approach. the idea is your not picking on any one kind of deduction that reducing the valley of the deductions overall. in order to get from a 35% to 25%, that is a 4.6 trillion dollars in revenue. that is on top of the five trillion dollars of revenue -- making up 4.6 trillion dollars in revenue by reducing -- eliminating the tax expenditures i would suggest is a huge challenge. we have challenged our colleagues to show us how you do that without reduction the tax code. that is a challenge we have made to them and it not put anything on the table that shows us it would not increase the relative burden on taxpayers. >> i do not prognosticate on election issues. i differ on those issues. i would only say the size of this problem means that everything needs to be on the table in order to solve this as some point in time. revenues, spending, it all needs to be addressed in order to come up with the proper solution that will put us on a sustainable path. >> the g a zero has been good for a long time. they have been pointing out the cost of a much larger older population and their health care. >> that is really the two main drivers. state and local averments as well. we have fiscal challenges that all levels of government and that needs to be taken into account as the federal government deals with these issues. >> and wanted to ask you about that. in april report found the continue to face long term as will stress, the total receipts have only recently began to raise to pre recession levels. what can insured lawmakers and policy makers do about the state's and their fiscal concerns? what makes sense and what is a discussion about that. >> ba want to go back to the stimulus bill, much maligned but according to the cbo helped save 4 million jobs. you saw an increase in public sector unemployment. and the private sector side we have seen positive job growth for 25 months. on the public sector side, largely because the recovery bill ended after two years in tales of, you have seen that be a drag on the economy which is one of the reasons the president -- it will have a number of elements. we have very high unemployment in the construction industry. close to 15%. another component was to bring the relief to prevent the layoffs of our teachers and firefighters and police. i want to emphasize what i think -- i know the doctor has said in the past, we need to do two things at the same time. they are not contradictory at all. we need to make sure we sustain a fragile recovery and put in place a time to deal with long- term deficit and the drivers of the deficit. some of our colleagues have pushed for more austerity which would hurt the economy and then refused to take a balanced approach to long-term deficit reduction. >> i agree with that. the biggest drag on the economy right now is continued layoffs at the state and local level. you hear government employment is going down. that is not the federal government, it is the state and local governments laying off teachers and firefighters and whatever to balance their budgets. we need counter action to that immediately. we need that to keep the recovery going way should be in the context of a legislative long-term solution to the sustainability of the budget and i think we should have been focusing on how these two things are not antithetical. they need to be dead at the same time and we need to do them now. the crux i think the states and localities are already starting to take some action. they are making some provisions to their retirement program. i think on a national level there needs to be a monitoring of health care costs as impact will be on the they are the two main drivers at the national level and at the state level as well. i think that is really important. there needs to be a sensitivity in tax reform issues or the implications at state level. >> another report, this was one year ago, found there were 81 opportunities to reduce government, increased house savings and an update showed 51 areas. not much has been done since the february 200011 report. why? why is it so hard to bring in in efficiencies out of the government. would you like to take this? >> it is just hard because there may be duplications and programs, there certainly are, every program has a constituency they are serving and believes it should not be caught in a cemetery that is protecting it. it is difficult to do a grand design that says these things should be consolidated. it also does not save much money. the motivation to do these difficult hankerings -- these difficult is limited because to go through enormous effort and political cost. you have not saved much. >> i would just say there should be an added incentive for a lot of the federal agencies to make some of the changes they have proposed. as part of the budget control act we did put spending caps on discretionary spending, which is close to one trillion dollars over 10 years. that will build pressure in the process of those caps are maintained to achieve savings. those are important recommendations. some of the big drivers are health-care costs. where there are savings to be made which should make them. i think the pressure will build because of the discretionary side of the budget under the president's planet will be reduced to a lower percentage of gdp since any time since the eisenhower administration. >> i am where we are squeezing down government too much. it is true it will be hard to do the consolidations and reductions. even if you do that, there are lots of things you need your government to do that are going to be done worse if you're squeezing everybody and say, do not modernize the air traffic controller system. we ought to be investing in a lot of things that make our government run better for the future. >> a couple things important to note. about 40% areas dealt with overlap in do capacious -- duplication. there has been action taken on 60 of the 81 areas. there is only -- i have seen some encouraging signs. the administration has required all agencies to address all the 81 areas identified in the reports. congress is beginning to take action. one example is the reauthorization of the transportation program. we pointed out hundred different programs that developed over the years. congress is asking a lot of good questions based on the report. hopefully that dialogue will continue and will yield good results. >> we have been talking -- there is a lot of talk about a grand bargain. maybe it would occur last year, there was an opportunity. maybe there was a little optimism that the super committee would find a grand bargain. obviously that has not happened. what would it take in order to reform taxes, to have the tax code overhaul and at the same time not have major effects on the deficit. >> what will it take to have a grand bargain? well, it will take adopting the framework has been proposed by the commission. it all laid out a path for the said you have to get here threat combination of increased revenue and some tough cuts including reforms and modernization of the health programs. as we started up the conversation with the action force in the events we will see at the end of this year, i do think that has the potential for bringing the parties together. you have a lot of political gridlock. i think it is clear what you have an overwhelming majority from one party that actually has signed a pledge that says they will not allow one penny -- one penny from additional tax revenue to go to the purpose of deficit reduction, we have a challenge. at the end of this year, by law, all those tax cuts would expire. that is about five trillion dollars just to give you a picture, since in boats suggested to try dollars, to deficit reduction. you could sit possibility were you couple that with cuts in a number of areas, reforms in a number of areas where you can achieve deficit reduction. as your question applied, we need to be careful in the process we did not hurt the fragile recovery. i agree that investments the government makes help our economy whether it is health care, education. it >> the grand bargain has been on some cable for quite a long time now. in the history of the last couple of years is a history of opportunities missed. i just hope we do not miss the next one. a piece of the grand bargain has been done. we should be clear. there were always maybe four pieces -- entitlement reform, tax reform, and holding the line on discretionary spending. we have done that. that was in the budget control act that capped spending and saves one trillion dollars over three years. we do not need to go back to that and cut discretionary spending more. we need to solve the other two pieces and the final piece which is, how you keep the economy going while you face in deficit reduction measures. i think there are lots of ways of doing that. we need some more stimulus up front, particularly directed to easing the pain of state and local government. >> we will take one last question before we run out of time. you talk about the balanced approach. a version made it to the house floor a few weeks back. 38 votes and all. what encouragement should this audience take from that? >> as those of us who have really delved into simpson bowles, no. as i mentioned in an editorial in response to that, there was a huge difference the tune was proposed in the house and simpson bowles. it is an arcane but important debate. the proposal on the floor of the house was about one trillion dollars in revenue short of what simpson bowls supported. they assumed we would achieve the revenue we would gain if the tax rate on the top two% went back to 39% where it was during the clinton years. that is about one trillion dollars in revenue over 10 years. the simpson bowls starting point assumed that revenue -- they essentially ignored the revenue which totally changes the balance of the cuts to revenue. while that may have been paraded out as a version of simpson bowles, the math is not square. i support the frame work. i support the ratios in the accounting methodology. i do not necessarily agree with every recommendation they made. but those of us if we agree with a particular, we have a opportunity to come up with an alternative. the proposal on the house was just one trillion dollars in revenue below simpson bulls. that is a good difference. >> thank you for participating. we are going to move on to the next panel. thank you very much. [applause] >> housing and urban affairs secretary spoke about the housing market today. he addressed the administration opposed the housing policy over the past three years, the role of congress, and restructuring fannie mae and freddie mac. this is about one hour. >> we will move from one tricky subject to another tricky subject, the housing situation here in america. my colleague will moderate the next panel. i will be quick introductions. shaun donovan should be recognizable. the secretary of housing for the obama administration joining us. james a la carte as well. -- james lockhart as well. we also have jim niels been, a chief restructuring officer responsible among other things aig. please send your questions. those of us and our live audience and those watching at home or in the audience, send questions. >> thank you for joining us. i am very excited about the panel. there has been 7.9 trillion dollars in housing erased since the boom. one in four mortgages are in delinquent or for closure. there are 11 million under water borers and the united states. the first question i have that is not everybody's mind -- have we reached a bottom yet in the housing market? >> my view is that this winter has been a turning point in the housing market. first of all, it is important to recognize what we have accomplished even over the last three years. all of that loss of housing wealth he talked about happened before the president even walk into office. 30 straight months of housing price declines. we have made progress over the last three years. the number of families falling into foreclosure is down by more than half of where it was. we are seeing the -- we saw the best winter of home sales since the crisis began. the federal housing finance index, which jim knows about was up year over year for the last -- for the first time since 2007 just last month. i think most importantly whether it is on sales, on the number of contracts being signed, where credit availability is, we have not begun to see a different view in the market today from even where we were six months ago. having said that, the discussion had on economy and jobs and where support for the economy more broadly is, we have to lower the number of families going into foreclosure and limit the foreclosures coming onto the market. we have to deal with the shadow inventory dragging down too many of the hardest-hit markets. credit availability is a real issue. our sense is we have 15-20% of home buyers that could be successful home buyers who are either priced out of credit completely or are simply making the decision not to because of the cost or the hassle of getting along these days. three key areas we continue to push on to accelerate the house recovery. we made progress on each of those over the last few months but we will keep pushing on that front. >> even if housing has indeed turned a corner, there is upwards of maybe $3 million -- 3 billion at 2 4 million foreclosures expected to go on the market according to the fed. during the bush administration there was an initiative called the ownership society that encouraged an increase in the home ownership rate by a a zero down payment mortgage. yesterday the u.s. census reported the home ownership level declined to the lowest levels of 15 years. those initiatives that promoted over the last 10 years contribute at all to the financial crisis we see right now? >> there is a lot that contributed to the financial crisis. it started during the clinton administration, not just during the bush administration. it probably pushed too hard. i think the affordable housing goals were too high in both administrations and that pushed fannie and freddie too much. it is easy to blame hud or congress or wall street but we had an asset bubble around the world. ireland's bubble was almost twice our bubble. it was not just u.s. policy that caused this. my view is we are bumping along the bottom. i agree with the secretary that probably our bombs -- the up moms are a little more than the down bobs. dodd frank, all the regulations coming out of that, consumer protection finance bureau, it is really hard for that 15%-20% to get comfortable enough to buy the houses. we are having trouble making loans. it is not a money available out there in the banking sector. a housing recovery? >> i think the housing finance system is broken. 90% of every is ending up on the balance sheet today. while he talks a little bit about getting back into the market, over the past three or four years bank balance sheets dedicated to mortgages have a shot by 20%. banks are going the opposite way. this was a crisis where the providers of mortgage credit large banks, arguably government sponsored, and small banks alike and private mortgage insurers were grossly undercapitalized. they had insufficient capital to support the risks they were financing. how do we rebuild the capital and the system? we have a need to really rebuild capital to support that debt stock. when you look to fannie and freddie, we have done nothing to rebuild their capital. the treasury department has maintained their net worth at $1, having invested a net amount of 150 million or less. we still do not have a plan to unwind that support, nor has the administrator who succeeded jim really perform the statutory duty which is to restore their solvency. there is a simple path to adding capital to this part of the government sector which is to raise fees. in a historic low interest-rate environment, they could be raised without really impacting credit formation in the availability of credit and we could accomplish the task inside these entities to protect us against future losses. we have gone through the worst financial crisis in two generations. between the guarantees and the extraordinary relief the fed provided to the financial system, almost seven trillion dollars of support came into the system and has now been withdrawn. the banking system has recapitalized. the a i jeez of the world have recapitalize and we're still sitting with a housing financial sector that is still under government ownership with no clear path to exit and still undercapitalized. until we figure out how to bring capital back to fannie and freddie you will have capital formation from private parties in any meaningful size. >> i want to be very clear their part two pieces to what he is talking about. what are the actions we can take without congress and what are the actions that require congress to move? we laid out last year a set of clear steps we can take without congress moving. we have gone down that path. we raised our fees just the way jim described four times, including just in the last month. we raise them even more on the largest balanced once because you want to bring private capital back in there. we recommended the loan limits be lowered. in addition, we raise the fees for the largest loans even though congress did take the step, we are taking a step to make sure there is more capital available. and we are working cooperatively with fannie and freddie both to raise their fees -- that did happen. you can argue about whether they have gone far enough. in addition we are looking at ways to restructure their guaranteed to be able to put more private capital out. the f a j market share is shrinking as a result of that. --the fha is shrinking as a result of that. we need action in congress to let out a framework going forward. >> i am going to ask him to respond to this question and i would like to get mr. lockhart's view on this. everybody agrees with me to get capital back into the housing system. the question i have for you to respond to at this point is, can private capital come back without form -- reform? >> as long as you have holders of 6.5 trillion dollars worth of residential mortgage credit, the future of those holders are uncertain. are we liquidating fannie and freddie? are we going to engage in a ritual slaughter? are we going to reorganize them and send them back into the world? until that is answered, there will be risk takers around the edges. you are not going to have a massive research as a private capital into the system because it is too risky. it is too big a pool of debt, the fate of which is uncertain to suggest to anyone in his right mind to step in and start providing mortgage credit. you can have a radical interruption in the provision of mortgage credit which would have a disastrous impact on house prices. if the government stays involved where it is without properly pricing credit, the returns to private capital are going to remain low and not attracted to private investors. unfortunately, i agree with the secretary congress does have to act. in the interim, i think the administrator has to act as well. the need to raise to provide proper pricing the government is taking through these two entities is required as part of a peace to get private capital to come back. it really is not promoting a housing bill. is promoting a compromise on the hill. my theory as a citizen is that we have these two massive entities and the conservatorship and they could easily become a cookie jar as they did for the payroll tax cut. neither serving the goals and improving housing finance, or serving goals of improving budgetary discipline. and so i think is a really important we come up with a plan. the administration come up with a plan to at least focus congress's attention on what is to be done. what is to be done with the two giants. until we have an answer to that question, it is hard to imagine private capital coming back into the sector. >> is there anything that makes you optimistic when you look at the political landscape? i would also like you to respond to the original question. is there anything that makes you optimistic congress is willing to take up the kind of reform required? >> not a lot at the moment. we have a divided congress. there is a group that wants to kill fannie and freddie no matter what it does to the housing market. there is another group that was to keep them exactly where they are, unfortunately. it may take the november elections to break the chain. congress did raise congressg- fee. it did not go to fannie and freddie. that -- congress did want to raise the g-fee. my feel is we need a government guarantee system of some form but it has to be smaller than fannie and freddie and it should be very small in good markets and increase when we need it. that will take congressional action. we cannot do it without congress. the administrator -- the director has -- if you start to raise the g-fee dramatically, the hill will come out on him all the place. we still have a fragile market. i also agree with jim that because the guarantee is underpriced at the moment, if you will. the private sector block come back until we figure out and mechanism to encourage them to come back. that is solving the fannie and freddie problem. >> one thing the administration much like to see happen is principle forgiveness on certain loans. the you agree with the director of fha that freddie and fannie should not be doing principle forgiveness at this time? >> when i was there that was an area we looked at. we had discussions in the agency. this is an area gone on since the start of the crisis. in my view there should be start -- there should be some experimentation. foreclosures are not the answer. it will destroy the housing market so we need to figure out alternatives. my view is there is principle forgiveness, there should be shared appreciation to go with it or every time you make a payment you get a little principle forgiveness, some way to encourage people to do it. we are destroying neighborhoods with foreclosures. we need to be creative and alternatives. i do not think a massive program because we do not know enough but wishes are looking at the alternatives. >> you have been outspoken on this issue with foreclosures the facts on neighborhoods. with the administration be willing to extend their primary modification program passed in december 2013? >> a couple of things here. first of all, we are starting to see substantial principal reduction happening as a result of the recent settlement we reached with the five largest services. our expectation is we'll see tens of billions of dollars as a result, a significant amount of it on the second as well which are one of the primary barrier standing in the way of recovery. and so that is happening. at the same time what we did was to significantly increase the incentives for principal reduction. we did extend the program for an additional year. we are open to push in that direction. what we are seeing now is that the performance -- the success has been substantially improved as we pushed servicers to improve their servicing and their use theirhamp, we see a far lower default rate before hamp was produced. they're going to a permanent modification and a similar number that are successful that get successful after one year. dramatically improve the performance is why i think you are seeing not just hamp modifications but modifications that are following the model being done outside of hamp. >> the see it being extended past december 2013? >> we extended it because without that was longer enough. we are open depending on where the housing market is to considering that again. we do not think that is the media because we just extended its another year. >> he said at columbia that the principle forgiveness as a result of the mortgage settlement was, i think you said a drop in the bucket. what do you think the legacy of the settlement will be on the servicing industry? >> part of it that helps create standardization is a very important part. one of the great problems was that each was a one off recreations of the wheel. the advantage of the fannie and freddie system is there are standards that are broadly applicable across different pools. you had a vastly different contractual obligations and duties for trusties and to the extent that the settlement actually creates costs, those institutions, i think that is a real plus. >> i think there is another piece to that, too. we talked a lot about reestablishing private capital coming back into the market. we should recognize there are big barriers to even getting a fanny or freddie or fha loan today. whether it is credit screens or other things that are stopping significant number of those people who could be successful home owners today, a lot of it has to do with the uncertainty that we had around the foreclosures and also around the origination process. what was so important in addition to the servicing standards was creating a foreclosures standard that was stronger -- the net mercenary it was over when decade of litigation in 51 states around the country that came out with different results in the end it. what we need is a rich nation by backed standards. i think that is one of the things without congressional action that is critically important for fha to do. we have done that recently. we need that to happen for fannie and freddie loans to clear away another piece. >> would you care to jump in on this? >> i agree with the secretary that the cutback risk is one of the reasons banks are doing less origination of low or five ago, lower credit score mortgages at this point. that needs to be clarified. i remember fighting with fanny for five years ago to put back mortgages countrywide and it would not do it because they were their biggest customer. now the pendulum has probably swung too much the other side and we need better standards on that. one of the issues, the private label securities have not really been touched as much as they should have on the whole process. represent 9% of the mortgages. they both have about equal number of serious delinquencies. we need more in the settlement help on the private label. even now investors are rebelling. we need mechanisms to rework those and maybe even have themselves to servicers or buyers that will be able to work them better. >> just to provide a little historical context, in 1999 there was about five trillion dollars principal amount of mortgages outstanding. at the end of 2007 there was a 11 trillion dollars. we had huge expansion of residential mortgage credit but it was also a huge expansion of mortgage creation, securitization. that system grew too fast effectively to have a set of standards in uniform practices and there were tremendous defects in the creation of those mortgages. you think about the creation of a car. it just made too many mortgages too fast and there were many defects that are not coming back to haunt them in the form of cutback for violation of warranties. 55 million -- if we are going to support the system, we need national standards. we need uniform laws on foreclosure. we need to create a system that is much more transparent and much more coherent where the rules and obligations applicable and on parties are much clear and easily enforced. i actually think that the whole system of cutbacks and warranties is actually crazy and arcane. when you buy a car, the warranties last for a little period of time and they die. would you buy a company did last for a little. time and they die. it forces counterparties to do due diligence. the whole system that allows warranties to survive the life of a mortgage means nobody has to do due diligence. nobody has to look at what they are getting because they say to themselves, i can always put it back later. we need to actually have risk transfer in the system rather than the contingent risk transfer system we currently have. there is some fundamental reform in the way the whole system is currently organized and structured. so as to force people to actually understand what they are buying into the rest of what they're buying. >> this is exactly what the president pushed so hard for dodd frank, we are pushing for the process of creating standards for servicing, for what a qualified presidential mortgage would be, and it is why the next step after the servicing settlement was mortgage-backed securities working group that the president put together to try to clarify in the way that the servicing settlement did the same issues around all of the private lawsuits that are out there are around securitization. the transparency could be a huge benefit in the wage and talked about. that is exactly this next up that we are moving to. i think there is one other thing. jim mentioned we ought to be focusing more broadly than just on frannie and freddie. i do think one critical thing we have to recognize in the short term, we have the lowest interest rates in half a century now providing the same macroeconomic boost to the economy we would expect to see. one of the places the press likes to focus on where we like to disagree on certain things, there has been very broad agreement around expanding refinancing. we've been a lot of progress with fannie and freddie on that we have about half a million applications in on a refinancing under the effort that justified the it largest lenders were seeing real take up and that. what we need next for congress to do -- and there were bills that were just introduced on this -- we need them to move to the private-label market and give the home owners say opportunity to refinance. there are about 3 million families who do not have access to refinancing because they are under water. that is a boost to them, their neighborhoods, and a step we could take in the broader economy. there is a real consensus in congress it is something we need to move quickly. >> this is again from somebody here in the audience. much of the wealth lost in the crisis was greeted by over leveraged institutions. the talk is about how to revitalize the housing market. what we -- will be only be satisfied with a renewed bubble economy? >> i think the easy answer to that is, no. we are clearly not going back to where we were. our white paper last year lated this out in very explicit terms. it said the fannie and freddie model was a structurally flawed model. they need to be wound down. and what we need to replace them within the system, we have to recognize that it is will be more expensive to get credit. there will not be credible available on those same terms. we do want to get back to a place where families see homes as a place to raise their kids and an investment account on for long term -- but not as an atm. fundamentally, there is no question that we should not be going back to that -- where we had. on the other hand, we also should recognize that home ownership does have benefits. if you look at kids that are raised in homes that the parent's own, they tend to do better in school. there are other benefits to neighborhoods of that stability. and we should be encouraging sustainable home ownership through the right kind of mortgage products. today, you have the families that can be successful home owners that are getting screened out of the process where the pricing is higher than the it might otherwise be because of many barriers, the uncertainty we talked about and a range of other things. this is about finding the right kind of lending products and getting back to a place a plain vanilla products, not recreating the bubble by any means. >> we are out of time. i cannot leave without asking this one last question. if you could be brief, i will not get in trouble. if you could change anything about the housing finance system, one aspect tomorrow, what would it be? what's a think we would have the and the conservatorship said. -- >> we have to end the conservatorship said. let's do it. let's have a concrete plan and move forward. we can tell private investors what the landscape is going to look like. if we are talking about winding down the government sponsored hedge funds, let's talk about that and privatize fannie and freddie and turned back into private mortgage insurers. but we really need to get a consensus in this town between the administration and the hill on what the fate of fannie and freddie is and i think we need to do it soon because i think those are living, breathing organisms that are providing an important service to the economy right now. if we are not careful we are going to destroy these things before we ever make up our minds what to do of them. there will be talent flight and it loss of fundamental capacity to serve the markets. i think that is the most important thing thelegislation,e to find consensus on what the path forward is so people can either stay and have a career or winding down so they can leave. public, we will fill the pace. they will come back in size at a pace that will fill a void created by fannie mae and freddie mac. mckim better regulate them. i do think ththat is the most important point. >> thank you very much. thank you for participating today. we appreciate it very much. interesting discussion there. we will move onto a difficult topic, people were talking about this. bidding our conversation is the senior economist at bloomberg. -- leading our conversation this bill is dead heat is a professor of economics at columbia university -- are leaving our conversation is a professor of economics at columbia a university. >> thank you. it seems like every time we get up here the topics are as dire as the previous one. we're going to tackle the dollar here. there's plenty to be said. of this certainly a major issue in the year. there is a lot going on there. we have some brilliant speakers. you can talk about the u.s. economy. even talk about the dollar if you talk about the fundamentals. my question is for each of you. wtf, what is the forecast? [laughter] >> the currency is a reflection of fundamentals. if people believe in the u.s. economy is, it remains competitive. we have it this culture directory. we would hear it from alan greenspan. we have a central bank that focuses on price stability. this will be reflected in the exchange rate. people are concerned about this. they should be. we are growing at a very slow praise. we have lots of challenges. step to see how you will have this. >> i would add to this a couple of points. this is a fact. if you look at the average value of the dollar since august of 2007 and the crisis began, if you just read the headlines, it you think there has been this spectacular appreciation. on average, it is flat. we had a time when it appreciated. it is roughly at the same level. that is one point to keep them mind giveback backer fundamentals are key. exchange rates are always relevant. w.c. fields, how is your wife compared to what? she is doing well compared to europe. it is irrelevant. the bid for the dollar and other currencies is still relevant. i think on average, when you look at the dollar, you need to take into effect the u.s. and global outfit. risk appetite is a relevant factor. the second point i would make is that no country can devalue its way. what is the policy? i think it will be the policy. that is not to say they cannot go down. i do not think it should be a policy to think of using the dollar as a tool of the devaluation as a long-term strategy. >> the odds of a u.s. recession in 2012? >> i think they are low. if we barack obama our way through, we did see a real challenge. >> when average the rate of growth is muddling through, and i agree with him. the most likely scenario is to 1.5% to 2% growth. to the downside risk to the u.s. is a meltdown in europe. the last two years have been very similar. we began with optimism. europe becomes dysfunctional. the economy slows. that is a risk. the base line case is muddling through. >> you said you had some comments about the value and devaluing currency wars. does the u.s. have a dollar policy? do we even have a dollar policy? >> its has been a state a policy that we believe in a strong dollar. for every secretary it is different. i interpret it is an implicit pledge that we will not use this in a competitive manner. we all seem to devalue in order to play a bigger than neighbor policy game. by and large, you would agree with that. that does not mean that we do not have adjustments. it goes up. it goes down. is it a policy tool that we target? we do not. >> each nothing we do? >> i think it is derivative. it is an outcome. policy is relative to the success rates. i do not think this administration targets a weaker dollar. it is a weaker dollar as a result of policy not because of direct intervention. >> you are saying that it is just market determination saying that all the manufacturing as a consequence of a weaker dollar makes things pretty good in the rust belt which happen to coincide with key battleground state? are you saying it is just a coincidence? >> i think the point of view of forecasting, one with think of the dollar as being one way to transmit monetary policy. in that context, i think low interest rates are facilitating arrogant demand appeared to the extent that the monetary policy would leave it, it would show of their exports. on average in the last five years, we have had very easy monetary policy. appropriately so. three rounds of qe, on average the dollar is or was five years ago. that is important to remember. they have been doing qe in the u.k. and japan. on average, it is neutralized out. >> he talked about the industrial heartland. there is a recognition that we have greater chance here. we have enormous productive capacity in producing. china is more sensitive than it used to be. it is quite complicated. this is a from nophenomenon thas fading. >> this is the shale energy resolution. it is companies a cost advantage that is pretty substantial. >> can be said that the weaker dollar has contributed to the commodity price inflation? >> on average, the dollar is not weaker. he can always pick and interval. >> i weigh a lot less and i do now. this the speed into a minor crisis. -- there is the minor crisis. so many factors go into this determination. the energy is a real game changer. >> what feeds into this is the global qe. central banks has raised near zero. >> let's go global. we can pull something in from left field. is china a currency manipulator? >> our government is going over there next week. we will do some talking. are they a manipulative by the currency? >> the treasury department has never found to be an official manipulator. do they manipulate the exchange rate? absolutely. >> they run an actively managed system. it is not exactly fixed. between 2005 they moved away to allowing adjustments. that was pretty sick of ghent. close to 20% on nominal terms. they did to resume one after about 18 months. it began to adjust again. the trend is to get stronger. there are. in which the caprice station is zero -- there are a periods in which appreciations are 0. >> they are undervalued. it depends on how you do the analysis. there is an internationalist nation of the currency. they will begin to open the capital markets. i do not thing their reserve currency is anytime soon. >> anytime soon is when? >> a decade away. i do not think the chinese are prepared. >> can the dollar be replaced by a currency basket? >> currency basket of what? if you look at the official reserves globally, the dollar goes by 62%. it is up from 50% two decades ago. the only real rival is the euro. with the chronic problem of challenges in europe, it is hard to see how that will overtake the dollar. the euro still exists. >> the dollar on a trade- weighted basis is around 95 or 98. it does not deviated too much. that is pretty low by historical comparison. currently, this is arguably a depression. you look at the u.k. is a double dip. when an accident waiting to happen. the dollar is getting no respect. >> it is important to know if you replace the tape back to 2005, 2006, 2007, why are countries holding dollars tax the dollar was a great thing to hold in october of 2000 and a. predicted thousand and eight. one could have extrapolated a much larger -- was a great thing to hold in 2008. one could have extrapolated a much larger one. the global reserve currency a hold status. it is a real privilege. there is a real benefit. i can see why a lot of countries would like to have that and for now there is no viable alternative. >> we have very broad capital markets and a vast array of risk assets. we have political stability. it is hard to see who knocked us off that perch. >> the dollar is influenced by a policies. do you believe the u.s. economy fiscal policy?ore can we afford it? >> let me jump in on that. apart from what should happen, i do not think we are going to get more stimulus. we have an excellent panel this morning. i think the fiscal cliff is going to be the action forcing event. we get some in an incredible long-term fiscal plan. i do not think that will happen on stimulus. >> i am not talking about extending unemployment benefits. >> we have made the transition. the debate is about how quickly and what is the content of fiscal austerity. what would be helpful is to see a different fiscal trajectories around the world that have the actual space. china has the physical space to do more. europe is having this debate. france and greece will go to the floor to cast a ballot. what does this trajectory of a flight decks can we muster the political will? >> >> what is the result of a dollar implosion? what are the odds of that from your perspective right now? >> my european trend is to talk about that. what does it look like. if you're selling dollars, what do you by? no matter what you're buying, it gets more expensive. i am not sure what a dollar falling apart looks like. it is hard to theorize about something that just to visualize. >> compared to global financial system of 2006 or 2007, there is a lot of good work on this. there is a relative scarcity of quality nominee defaults free. all the opaque stuff was aaa. that was discredited. the bonds were trading -- that is no longer happening. there is a lot of treasury and another supply. there's also a big supply and demand. there resist reserving that. we are not going to let our competitiveness be decimated by this huge inflow of capital. they have successfully resisted that. under the scenario you outline, you can bet there will be others. other people would have to go along. >> i cannot give you to beat up on the dollar no matter how much i try. let me ask you about the euro. it is an easier bet. let me ask about that. next year when we have the summit again, how about that? what are the odds that whoever is in the euro is the same? >> it is a chronic problem. it is going to put my children through college. you have fundamental architectural flaws. it cannot have this about fiscal transfer mechanisms. we cannot have it without the. we have neither. then there is the competitors problem where you saw labor costs in its chilly winds of 37%. in spain it went at 25%. in england it went up 5%. until the europeans find the political will to overcome it, i think it is a chronic problem. we go to the brink every 90 days. we have some have baked measure to take as their. >> i would add to that i am confident that the euro survive. the membership of the euro may change. that can occur if their expulsion or recognition. the euro survives. >> to me it is just a different country club. >> it could well be a different country club. >> 17 of the countries are now in recession. the ecb apparently thought they bought the tie in december and february. we saw banks leveraging their own sovereign debt. it means their relationship just became all the more acute. is this half baked measures that we cannot find the solution. it is very difficult. >> can they get their dax share. >> remember part of the bargain and the appeal of the euro the fact that fed fac there are no longer paying a devaluation premium. one of the reasons why you had this was the borrowing costs plummeted. you can say that our squander it. -- save it or squander it. i would say it was mostly squandered. they're never going to go back to borrowing it. there better be substantially higher borrowing costs. >> do you think the fed thinks of this weaker dollar policy? it is somewhat of an impotent instruments. prop this up. to housing is pretty much stabilize. maybe the fed likes to see somewhat of a weaker dollar so that it can be some of those things? >> we really do not have inflation. >> i think the fed thinks about this mechanism for policy. they incorporate a range of models. the fed recognizes that it reflects what is going on in the rest of the world. it is more or less a wash. >> we have a question from the audience. i will put it to both of our guests here. attached is a bit on fed policy. -- it touches a bit on fed policy. why is it not ok for the chinese central bank to manipulate the purchase of treasury with think money. >> the chinese intervened directly into the foreign exchange market to stabilize the value of their currency. they sterilized it to court the impact it has on monetary policy. the fed is engaged in monetary policy. it is a derivative. one is a target and one is a derivative. it may have the same outcome. there are two different policy regime and to different objectives. >> i have nothing to add. >> would chinese policy be accessible if they manipulated the purchase of some assets other than treasury? >> if they want to open up their capital accounts and as flexible interest rates and exchange rate in use -- and use them to respond to the business cycle in china, that is fine. that is fair game. intervening directly, i think most members of the imf and the staff and others have said that is not ok. that is a different regime. >> week are also where we were in 2003, 2004, 2005. china has come a long way as far as the opening up of their financial markets. it is a marathon not a sprint. they are giving up some control gradually over the currency. >> i think they will get there. it is a marathon. it'll take a very long time. >> the move in dynasties, it to. >> one more question that we have received your again from someone watching. warren buffett says and not fixed on any dollars. what is your opinion on his view about strength in currency? >> his track record is abysmal. he should stick with companies like dairy queen. >> i do not have anything. [laughter] >> i will let you wrap it up. >> thanks to the guess here. they appreciate your time and your input for solving the situation. >> thank you. [applause] [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> alan greenspan today said the u.s. should allow markets to heal. he went on to speak about the federal reserve's role in policy. he also was critical of president obama's obama for not embracing the simpson-bowles proposal. >> we have one of the highlights of our day. he does not need any introduction. alan greenspan joining. this is moderated by my colleague tom kean. tom is the host of "bloomberg surveillance." a closeso the host of surveillance midday." thank you for this. the stage is yours. thank you for the time. we will have some time for questions from our audience. take it away. >> let me starts in the wonderful conversations we have had. let me quote from the bible. page 483. i suspect it is likely to restore policy sanity, we will first have to trudge their economic and political minefield before we act decisively. there are many fields. it is corrosive. >> i said that four years ago. i guess i can still say that. there is something very unusual going on in the political system. it is quite correct. there is a huge divide between republicans and democrats. if you are looking for the caucuses they are all basically single distributions with nothing in the middle. it struck me that this is probably unusual. i went back and looked at the data. it is not. the data enables you to construct the voting records of individuals who have voted. it goes all the back to the first congress. what it shows is that this distribution that you are getting has nothing in between. that was all the way back to 1850. that is not what the problem is. the problem is despite the fact that we have had this distribution, up until very recently there is only the capacity to reach across the aisle and come up with compromises. it is in the nature of a democratic society in which we have chosen to live together. it is tactical compromise that allowed legislation to change. >> we found the capacity of november of 1963. be found in 1986. how do we get this capacity bac? -- back? >> that is the important question. it is important to recognize what it is. the problem is to recognize that compromise is implicitly in a democratic society. unless you're going to do that soon, you do not have supermajorities, we get an election prediction. >> it would not be worth anything. >> when you look at the politics that we have, first of all, do we face the fiscal cliff? >> legally, yes. obviously you do not have to look far to find there is a huge fiscal cliff out there. this is part of what the current environment is. they do not wish to inflict pain on anybody on any circumstances. >> the problem is we are going to get out of this political and economic mess where we exist without some pain. there is no credible scenario which does that. as soon as an issue comes up where somebody is against it, they back away. that was never how we function in this country. and must be brickbat have it, we are in trouble. >> i heard secretary geithner in new york hesitate as he suggested we would get back to bowles-simpson. are you optimistic we can revisit that after the election? >> a remember the day after simpson-bowles came out, i said something of this nature -- i was asked whether an not i thought it would pass through the house and the senate. i said the answer is e.f.. it is only a question of whether it occurs before or after the crisis. i still hold to that view. the worst mistake that the president made was not embracing that particular vehicle right away. they're very few initiatives that have the capability of getting republicans and democrats on board and the exact legislative language. this is $1 trillion in tax expenditures. tax expenditures to republicans are subsidies. eliminating them is an excellent political view. for democrats, it is an increase on taxes on the rich. you cannot get better than that predicting some form of legislative compromise. i think of the amendments to them that addresses medicare. it is bipartisan. it is the ideal vehicle that will not get as fully out of this. >> in the aged turbulence, the sets around 2030. you show higher yields and lower bond prices on a path in 2030. you mentioned a bond crisis. we could find it to be constructive for washington even if it is destructive for our retirement plan. why have we seen in now? >> engine straits rise before they go up. i am not saying the bond market its -- just before the top it builds offers of that particular product very significantly. all you have to do is remember 1979. i remember that the note had gone up to 10% yield. the general consensus was that the nine did states is not an inflation prone economy. this is as far as it can get. the next three months of blood of 400 basis points. you can not anticipate changes. it made a historical interest rates. it is not a syllogism. >> this does link to fed policy. do you envision giving your historical study when we get higher interest rates it will be abrupt or will it be a path that any institution including its central bank can get out in front of? >> the general view of investors in 2007 and 2008, it does not that investors were not aware of the facts that there is potential instability later. but they remember the prince. everyone must keep dancing until the music stops. what the problem is is that nobody could leave the portfolios of for fear of losing the position. because of the huge liquidity in the market, you are getting huge liquidity. their work ceo's of all things. he cannot supply enough of them until the general view you will have time to get out where the music stops. they were wrong. one liquidity disappears, it does not disappear incrementally. it disappears suddenly. this is what i think we have to confront. i do not have a clue when or if it is going to happen. it is a definite possibility. one thing i can say for certain is that interest rates will rise over the next 10 years. 10 years from now it'll be higher. he kept pushing me. i will move it in closer. market still not be paid and the simple way we like them to be paid. >> people were all buying bonds. you mentioned this. before the move on to another topic, are we in the bond bubble right now of where we see the asset flow in just extraordinary and may need to get equity from its tax as a means stocks are cheap? >> stocks are cheap. all you have to do is look at the equity. the best estimates is jpmorgan's. that is at the highest level in 50 years. that means with the earnings still moving up, when you run up against very high equity premiums, it is a very low price earnings ratio. there is one place for earnings to grow except into stock prices. the point i have been making recently is a i think we are under estimating the extent of equity stimulus in driving this economy. >> this has been more of an effecteffect here them what we e seen from capitol hill. >> we do not recognize how important the equity markets are in a market economy. we've lost $35 trillion in the crash in corp. valued. equity is the collateral of the financial system. it is not only the equity amounts but the fact that equity prices are tells the bondholder, at the uppe. the bigger equity, the greater the quality is. >> you could have a corporation with technically the yields. the equity price doubles. the equity price rises. what does it do? it raises its to may be a double a year something. they play a hugely important this. i'm trying to underestimate this historically. this is what the relationships of equity premiums are in the real economy. we do have this discussion. that relates mainly to consumer expenditures. it is a far broader issue than that. what we will find that every time stock prices rise -- >> this is the debate of the moment. the talk about the need to reflate. one form a stimulus is to get out front. what does that mean? >> it means that someone else's the lending you money. your debt is rising. on, iithe big debate going have no objective about doing that. to the extent that you are pulling back on austerity, somebody else have to fund the gap that still exists. if you're pulling back from austerity, it means that the ongoing deficits across the one will be 17 eurozone countries. it opens up. somebody has to find it. up until now, it is all the various out of the -- various alphabets. the central bank is virtually doing all of it. what that means is that the issue asset levels are rising significantly. the fact that they're able to do that is that we have a global economy that is partially stagnant. we will continue to do so largely because the risk aversion is so high that you cannot get a grip three going. >> to our listeners comment do they have the sophistication? at some point, the dancing stops. the music stops. you have to find the chair. if the ecb continues to buy and liquidity, where is they're chair? how do we finished off the process in europe without liquidation? >> the ecb is supplying the chairs. that is what it is doing. >> they are really happy that a lot of what is going on. looking back at history, you just do not get this type of substantial expansion of monetary basis. the only problem is they can go on for years. it happens at the must inconvenient times. i do not see how we are going to get through the european situation at this stage. right at the moment they are caught in a deep dilemma. it is a very clear-cut vision of what the bank is supposed to do. the language has got to get awfully clear to reconcile what their actions currently are. everyone is uncomfortable. they all had the view of what can happen or hope. everyone likes to say we should put off the actual tough adjustments until the economy can take it. there is a presumption in that statement that the markets will allow us to do that. i am fearful of the markets are going to say no at precisely the most inconvenient time. >> are the vigilantes'? >> yes. >> when you look at europe, you continue to go back to cultural economics. not the purity of model making. cultural economics in europe is different than in america. give us the new aunt's there. particularly of eastern europe as they tried to amend to the culture of germany? >> look at east and west germany. you basically have teed of the zero countries from scratch. the same language, and the same cultures, and the same history. they grew up. when the law came down, east germany was 1/3 of west germany. when the merger occurred, there's a recognition that it would take a significant transfer of funds from east germany to west germany to change the system. that is still going on. it has not fully come together. in the europe and is a more difficult problem. i did this and the financial times. i've also done an analysis. it takes the issue of observing that. . assigned to keep my mouth shut. were you successful? >> no. . the problem is the conventional wisdom was when the euro was implemented, led the italians will be hit by germans. it yielded 500 basis points. this was before the euro went there. by the time it action moved into the euro, it had gotten down to 20 or 30 basis points. the markets believe that culture would be in force. they were mistaken. >> what we have found is that it kept the euro system together. once it went down, and culture re-emerged in a massive way. >> >> we could talk on this for hours. because the time, we want to move on. you enter non-retirement have been looking at elderly assets. what is an elderly asset? >> this is my explanation of why the american economy is stagnant. >> the thing that we talk about in the media right now? >> i think so. >> thank you. >> you are welcome. you have to ask yourself what is wrong with the american economy. the gimmick of the gross domestic product. instead of looking at us personal expenditures, look at it in terms of how long the assets will last. the software will last three or five years. hist industrial structures, 30 years. -- and daschle structures, 30 years. all of the weakness if you think in terms of structure and cut in half, you have three or four%. those percentage points actually translate into the unemployment rate. it explains the whole difference of weakness. the problem here is beth the assets under 20 years are behaving the way they always have and every recovery the post world war ii government. >> doing this to clear the government for those longer age assets or to incentivizes the building of those assets is that correct i think they have done too much. it has been counterproductive. before i got into government, i did a lot of work for major corporations. what we used to do is we would get the minister's. they would estimates the average. as a result, this is the route of potential projects which should not earned the right to return. this move into step #2. this is a range of our allies. you are expecting an average rate return of 20%. it varies between -10 m + 50. . what we're looking at right now and the reason why you're getting this economic activity is it even get the cash flow of american corporations and the proportion they choose to invest in long-term but good assets, that is at the lowest level since 1935. >> we are dealing with not only globalism but a reaffirmation of investment push a broad decks broad? >> it has not accelerated. the cannot take the orders of magnitude that we are looking at which changes in the united states. >> but i look at this, or look at the unemployment, despite step that we have seen, they would turn toward less educated individuals. how would they fit into incentivizing business to make those structures we have to leag things alone and letting markets work is the way things have to function. >> i was talking to steve roach the other day. as he wonderfully quote, how defunded in the desire for inflation targeting. >> >> i got bushels of mail. i cannot remember a single request from congress or any other political person that said to raise rates. it was not even asymmetric. that is still the case basically because the political system seeks a short-term paul -- solution. there are occasions where the wise thing to do was to find markets to liquidate. i think the best example i can give is the it experience we had -- i was on the oversight board and as a result i had to sit in on the meetings. i had a good job which i do not think we could do today. 800 failed -- this was back 30 years ago. it was easy to get rid of the mortgages in assets. then there was a large chunk which were 13 hole golf courses, 40 story skyscrapers of which eight had been built. we could see the main dance cost of maintaining all of the stuff eating away. all we could see was tax payer dollars going down the drain. we basically said we are going to sell them. that is why we got. we got even less. >> why can we not do this now. >> what happened back then was congress was up in arms but one very interesting thing happened. all of the people in wall street or looking at this progress -- this process. they were all of a sudden making money. what happened is and movable inventory was cleaned out in a matter of months. i think that particular action probably saved the american tax payers a very large amount. >> could we do that today to clear our housing miss? >> it could work. i see no political willingness of either party to move in that direction. >> we got away from monetary economics. he migrated away. you did a good job. let's get back to central bank policy. they talk about the task of central bankers being arduous. in the past, do they need to say to other institutions, no. we are not going to do this. you will find the courage to do this. he writes about this. you need institutional courage. the central banks have to say no to the task at hand? >> central banks were prohibited from doing certain types of things. yes, i would say there are some things that have to be done by governments and not central banks. one thing i thought was very unfortunate was that when the 2008 interventions occurred, the only vehicle -- the fed's actual authority to lend to anybody under any conditions. it was an amendment that was very rarely used. it was the only vehicle that would enable a quick response to occur. the federal reserve has the fiscal agent of the treasury. the accumulated a lot of assets on their balance sheet. what i hoped would happen very quickly was that the treasury would take over those assets into a subsidiary. >> and they didn't. >> that would require the appropriated funds. it is ridiculous because it is one of the flukes and the system -- expansion a bomb by the federal reserve does not require appropriated funds but exactly the same use of sovereign resources by the treasury does, and the only difference of whether the assets are held on the treasury reserve or the balance sheet is the fact the accounting procedure,. . the inability or unwillingness of the treasury department to go up to the to get appropriations is what created a big problem for the federal reserve. they were involved in fiscal actions, which is not what they should be. >> you have been criticized for not raising rates in 2003, 2004. in 1994, you dig it out in front with preemption. when you see the global debate today. the global central bank debate today about when we raise interest rates, what data should any central bank study to know when to raise interest rates? >> it basically is of necessity involved in the forecast. all central bank actions presuppose and outlook you are addressing. obviously, the impact of monetary policy drags out over time. they have to try to infer what is going on. in other words, the issue of the question of are lowering rates in 2003 -- i think it was the right thing to do. it was against the type of a deflationary forces we are looking at now. it never had any impact on the money supply. it had zero impact on long-term rates. it had no effect whatsoever in retrospect the eye can see. even such a critic of the federal reserve said the performance of the federal reserve from 1907 to 2005 was an extraordinary and excellent. >> did it lead to the housing boom? >> i think that comes out of a different force. it was low interest rates that induced the housing boom. it was low long-term interest rates. remember housing is a long-term asset. mortgages are long term. it is not affected by overnight rates. what caused this extraordinary housing boom was the remarkable change that occurred after the fall of the berlin wall. all of these very large third- world countries -- what they did was the sensually decided looking at what happened to the soviet system, they switched. china became the most capitalistic economy in the world. the extent that the growth in china is really a tribute to some, if i may put it that way. effectively what it essentially is doing was creating a huge increase and an come. the rate of increase in the developing world and the gdp from 1991 and 1992 forward and especially from 2000 forward, that was a huge increase in the developed world's gdp that got so large they cannot spend it. it was all savings that went into the marketplace and pushed long-term rates down globally. >> 75 basis points? >> far more than that. what is important to recognize is that the housing boom is not an american phenomenon. there were 20 countries with big housing booms. the question is not having to do with the united states. >> everybody else is being considered to be the bank of england. would you accept the job if it was brought up now? >> i would ask the current governor to stay in place. sir mervyn is doing an excellent job. >> we have a few great questions. i will try to place one or two in. as buyers are true that not being aware. as rates arise, does the bursting of the bond bubble have a potential to be broader than the 2008 financial implosion? >> it is difficult. it was worse than the impact on the market the that followed september 15, 2008. as far as i can see. bond prices inherently cannot move like equity prices can move. the size of capital gains and losses cannot be equivalent in that respect. if you are trying to look a what to put things we are looking at a look and 1979 and 1980. >> this is a " i am seeing submitted. deficit spending is simply a scheme for the compensation of wealth. gold stance in the way of this process. if one grasps this, one has difficulty in understanding the statist antagonism toward the gold standard. they suggest you wrote this 45 years ago. could you give us your thoughts on this essay today? >> i thought it was very perceptive myself. did ron paul write that question? >> that was not submitted by ron paul. >> i had an interesting question with ron paul when he was complaining that the federal reserve should be going back onto the gold standard. i said, the american people have chosen to have a fee at money standard because they want a welfare state. you cannot have the gold standard and a welfare state at the same time. we have made a decision as a society that will be dealing with the welfare state. i also told him, the gnome practice of the central bank is to replicate the actions essentially that the gold standard used to do. this was the gold standard before world war i. i think the markets today are telling us something very important. mainly that gold is a currency. the fee it money currency by necessity -- the fiat money currency is a zero sum game. gold is the only one that does not require somebody's credit. there is no name associated. gold is accessible for reasons and all the years i have watched and i never fully understood. what is it about human nature that goes back to this metal that goes back to antiquity. it has never changed. >> i asked my wife about that question. this conversation will continue on bloomberg television in just a few moments. thank you very much. >> coming up next, president obama's remarks on the wind out of the war in afghanistan. they release their reportn on washington journal tomorrow morning, a look at u.s.-china relations. public service prof. paul light looks at reforming the federal bureaucracy. his riding follows the recent secret service incidents. later robert saar's said it joins us for our spotlight on the magazine series. you can see washington general live on c-span. >> between 1971 and 1973, president richard nixon recorded 4000 hours of phone calls and meetings. >> always agree on the little things and hold on the big one. i have done this with conversations with people. >> every saturday on c-span radio, hear more of the nixon tapes. this we hear conversations with gerald ford, ronald reagan, and george h. w. bush. >> president obama was in afghanistan to sign an agreement with president karzai. he spoke about the plan of the u.s. withdrawal from afghanistan. this is about 10 minutes. >> good evening. this is more than 7,000 miles from home. for over a decade, it has been close to our hearts. here and afghanistan, more than half a million of our sons and daughters of sacrifice to protect our country. today i signed a historic agreement between the united states and afghanistan that defined a new relationship between our countries. the future of which afghans are responsible for the security of their nation. we build an equal partnership between two states. a future in which war and a new chapters began. tonight i would like to speak about this transition. let us remember why we came here. it was here in afghanistan where osama bin laden established a safe haven for his terrorist organization. it was here where al qaeda brought new recruits, train them, and plotted new acts of terror. it was here that al qaeda launch the attack that killed nearly 3000 innocent men, women, and children. the united states and their allies went to war to make sure that al qaeda could never again use this country to launch attacks against us. despite initial success for a number of reasons, this war has taken longer than most anticipated. in 2002, osama bin laden and is the tenants escaped and established safe haven in pakistan. americans spent nearly eight years fighting a different war in iraq. al qaeda's extremist allies have waged a brutal insurgency. or the last three years, of the tide has turned. we broke the taliban's momentum. we build strong afghan security forces. we devastated al qaeda's leadership, taking over this. tonight is within our reach. there will be difficult days ahead. enormous sacrifices of our men and women are not over. i would like to tell you how we can complete our mission and ended the war in afghanistan. we began a transition to afghan responsibility for security. nearly half of the afghan people live in places where security forces are moving into the lead. our coalition will set a goal for forces to be in the lead for combat operations across the country next year. we will fight alongside the afghans when needed. we will shift into a support role as afghans step forward. as we do, our troops of becoming home. last year we removed 10,000 u.s. troops from afghanistan. after that, reductions will continue at a steady pace with more and more of our troops coming home. by the end of 2014, the afghans will be fully responsible for the security of their country. we are training afghan security forces to get the job done. the forces have surged and will peak at 352,000 this year. the afghans to sustain that level for three years and then reduce the size of their military. in chicago, we will endorse a proposal to support a long-term afghan force. we are building an enduring partnership. they're sending a clear message to the afghan people. if you stand-up comedy will not stand alone. -- stand up, you will not stand alone. it supports afghan efforts to advance development and dignity for the people. it includes afghan human rights. men and women, boys and girls. within this framework, we will work with the afghans to determine what support they need to accomplish narrow security missions beyond 2014. counter-terrorism and continue training. we will not build a permanent basis in this country nor will we be patrolling in cities and mountains. that'll be the job of the afghan people. we are pursuing a negotiated peace. in coordination with the afghan government, my administration has been in discussions. they made it clear that they can be a part of this feature if they break with al qaeda, renounce violence, and abide by laws. many members of the taliban have indicated an interest in reconciliation. the path to peace is now set before them. those who refuse to what it will face afghan security forces backed by the united states and their allies. we are building a global consensus to support peace and stability in south asia. in chicago, and they will express support for this plan and afghanistan's feature. i have made it clear that they can and should be an equal partner in this process. there are no end to al qaeda's save havens. as we move forward, some people will ask why we need a firm time line. our goal is not to build a country in america's image or to eradicate every vestige of the taliban. these objectives would require many more years and dollars. most importantly, many more american lives. our goal is to destroy al qaeda. we are on a path to do exactly that. afghans want to assert their sovereignty and build a lasting peace. but that requires a clear time line to wind down the war. others will ask why we don't leave immediately. that answer is also clear. we must give afghanistan the opportunity to stabilize. otherwise our games could be lost. al qaeda can establish itself once more. i refuse to let that happen. i recognize nothing is more wrenching than signing a letter to the family of the fallen for a child that will grow up without a mother and father. i will not keep americans in harm's way a single day longer than is absolutely required for our national security. we must finish the job we started in afghanistan. we traveled through more than a decade through the dark cloud of war. the number of our troops in harm's way has been cut in half. more will be coming home. we have a clear path to fill our mission in afghanistan while delivering justice to al qaeda. this feature is only within reach because our men and women in uniform. time and again, if they had answered the call to surf in distant and dangerous places. in an age when so many institutions have come up short, these americans stood tall. they met their responsibilities to one another and to the flag they serve under. i just met with some of them and told them as commander in chief, i cannot be prouder. we see what is best and ourselves and our country. our soldiers, sailors, airmen, marines, and civilians in afghanistan have done their duty. we must summon the same sense of common purpose. we must get our veterans and military families the support they deserve and the opportunities they have earned. we must redouble our efforts to build a nation worthy of their sacrifice. as we emerge from a decade of conflict abroad and economic crisis at home, it is time to renew america of where our children live free from fear and have the skills to claim their dreams. a united america. sunlight glistened of downtown manhattan. we build our future as one nation. they are up holding human dignity. today we recall the fallen and those who suffered wounds both seen and unseen. their dark days we have drawn strength from their example. the ideals that have driven our nation. a belief that all people are created equal and deserve the freedom to determine their destiny. this is the light that guy does. this time of war began in afghanistan. this is where it will end. faith in each other and our eyes fixed on the future. let us finish the work at hand and forge a just and lasting peace appeared may god bless our troops. may god bless the united states of america. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2012] >> tomorrow the center for strategic and international studies hosts a conference. it will talk about the transatlantic dimensions of cyber security. >> sunday, -- >> added that regard this as a biography of lyndon johnson. i want each but to examine a kind of political part -- political power in america. seeing what a president can do in a time of great crisis. what does he do to get legislation moving and to take command in washington? that is a way of examining power in a time of crisis. i want to do this in full. >> the passage of that power. this sunday at 8:00 on cue and day. >> the cultural media and sports committee released its report today on the hunt -- phone hacking administration. some senior executives misled parliament. however the report did not find evidence suggesting they misled the committee. this is what -- this is a little more than one hour. >> i hope that by now you have had time to read the committee pose a report. i should first say that the report concentrates not entirely but in large part on the issue of what of this committee was misled in the evidence is received during its 2009 inquiry. although we do go on to draw on to conclusions. we have refrained from doing so because we are conscious of the risk that any comment might produce a possible criminal trial. having said that, the committee did conclude that the chairman did mislead the community in 2009 in not telling the truth about the payments made in his role in authorizing them and the pain of his legal fees -- legal fees. we were also misled in so far as he did not divulged the full extent of his knowledge that it extended. we also concluded that tom crane misled the community by answering questions falsely about the knowledge of evidence that other news of the world employees had been involved in the phone hacking and other wrongdoing. the committee went on to conclude, but only my a majority vote, that while there was no definitive evidence to prove whether or not james murder -- murdoch was aware of other evidence that indicated the phone hacking was more widespread, the committee was never the less astonished that he did not seek to see the evidence of which the decision to pay the settlement in the gordon taylor case was stake here yet the committee went on to conclude by a majority vote that news of the world in news international had misled the committee repeatedly about the true extent and nature of the investigation they claim to have carried out in relation to phone hacking. and that they had failed to disclose documents, which would have revealed the truth. as a result of these various attempts to mislead the committee, the report that we published in 2010 was not based on a fully accurate picture. as a result of this, the committee has decided that we will table a motion in the house of commons, ask the house to endorse our conclusions about the misleading evidence, and we will refer a report to the liaison committee that is looking into questions of the past effectiveness of select committees. now, i believe one or two of my colleagues wish to add. >> thank you. to put it politely, we have been let of the guarded happen is internationally, but so were the readers of the newspapers, the general public, and the victim's of the phone hacking. two years ago and our reports we found the organization guilty of collective amnesia and said it was inconceivable that one reporter was involved, and we were right. on the same evidence that we received, however, the complaint exonerated news of the world and shot the messenger of the guardian ad. after closure of news of the world, for credibility say, we really have to look at who misled us, which is the reason for the inquiry. clearly we do not want to impress any future trials following the arrest, but we also thought it was not right that the few people showed carry the whole of the corporate scam. you will find a strong corporate finding against news international in news corp.. i would remind people of one thing in relation to the findings, that rupert murdoch himself who founded the organization is involved. finally, one thing we sought to set out in the report is the human cost of phone hacking and other wrongdoing to which contributed it was not just a international company. i am personally disappointed that some members did not feel sufficiently convinced or confident to hold the most powerful to account. many of the hacking victims have still not been informed of what was done to them. rupert murdoch has not said his last apology to the families of murdered children. let us also remember, at the ofndal cost many hundreds journalists, in this and journalist, their jobs. they find it hard to find work. i know this, because i have provided references for a number of them. parliament was misled, that we now know. there were issues we could not get to the bottom of because of ofe constraints, decisions the committee not to proceed or other reasons. libertyeridan lost his on a majority verdict that was not in full possession of the facts. he received a three-year prison sentence. i believe the judgment is unsound. if he really is sorry, he would issue an immediate review of the information provided to the jury in the case. now we know the former first minister in scotland was also a writingf hacking, i am a recommendation to set up an inquiry into how and why they were targeted. secondly, we ask the murdoch about computer hacking, but we did not get very far. havenot certain, but i reason to believe this serious organized crime agency is in possession of seized hard drives victims show a list of who were the targets of computer hackers. there may be a case where the authorities right not to inform their who have had privacy invaded by private investigators who have links with national newspapers. i am writing to the chair of the committee today to raise my concerns and asked that his committee to what they can to establish the facts. thirdly, we were not able to establish the extent to which committee members were the targets of private investigators collectalists tried to information costs in order to smear or influence. last week, the former chief worlder of news of the said it was news international, not news of the world, that thered us to dig into private lives of those on the committee that were investigating us. many executives were in the loop. the committee did not have the new to act on the allegations, but i think they are so serious there was not an inquiry for potential contempt of parliament. lastly, i will not have time to discuss it in committee. shouldy personal view we park -- embark on an --estigation into reports into the relationship between ministers and those working for bskyb. are repeat my call to allow them to view the private e-mails and techs of mr. gramm william. the truth is that whatever we have said and our reports, and however you choose to report it tomorrow, the public has made up their mind. powerful people were involved in a cover-up, and they still have not accepted responsibility. after all of this, the story is not yet over. it was reported at the weekend preparedcca brooks was to release her personal texts and e-mails to david cameron. theink she should, but as prime minister said yesterday, the context between rupert murdoch and senior leaders crossed both sides of the house. if we want to see how the u.k. operates, than the current prime minister and chancellor, including tony blair in gordon brown and former chancellors, might want to consider releasing their text and e-mails to company executives. these people corrupted our country. they brought shame on our police force and parliaments. they lied, cheated, blackmailed into kuwait. to really stop requires more than retribution. it means conclusive attribution. the very cornerstone of justice is those are really responsible are held to account, that the rich and powerful are as low in the face of the law as the most humble and we. -- and weak. in the words of bob dylan, that andlatter of law has no top bottom. and everybody in the world knows who is responsible for the wrongdoing of news corp., rupert murdoch. more than any individual alive, he is to blame. he paid the piper, and it is his company, his culture, his hisle, his business, failures, his lies, his crimes. >> thank you. [laughter] >> that was not the unanimous view of the committee. [laughter] >> coming back to the report, which i do not think that anything to do with the report, but coming back to the report, i think the chairman was right to focus on the parts of the report where we unanimously agreed, and that was on the people who misled the committee, and the way in which they did mislead the committee, and i very much hope that people will not get sidelined by the other things we have just heard of, which were not the overwhelming view of the committee. they were passed by a majority. i think when people look at the report, they might want to look at some of the amendments that thattabled and the boats -- and the votes that took place. i think that when people do that, they will see that the report was only passed by 6-4 as a result, particularly of the conclusion about rupert murdoch. people, i think many people will conclude, unfortunately, because i think it may detract from the unanimous recommendation of the committee, i think some people may conclude that some people's conclusions were written before the evidence was ever heard, or gone over. i think that is very sad, too. people will see there was a majority of two of the committee for these things. people may also want to notice that two of the people who voted for those things were not on the committee to listen to the evidence at the time. and felt sufficiently strongly to vote for those rather controversial recommendations, geti just urged people to back to the nitty gritty of this report, what this report was supposed to do. it is a very serious business. we're make decisions about people's lives and reputations. i think rather than focusing on certain people getting carried away, i would urge you to look at the things where we have made unanimous conclusions, which are very serious for the people concerned, and those people should come as the chairman said in his opening remarks, should be held in account. that is why we ask parliament to endorse our conclusion so people realize how serious it was, so that those people at news international misled the committee. nobody is saying these people have not made mistakes. i am sure they admit themselves they have made mistakes. i do not really have -- [inaudible] they try to get kicked out the original inquiry back in 2009, but i think we have to be fair about these things and base our decisions on the evidence come in out what we would like it to be. therefore, i urge you to look at where we have made unanimous conclusions in the committee, rather than getting carried away by some people who have gotten carried away themselves and have decided conclusions before they started out on the inquiry. >> i want to start by saying i have the highest respect for my friends and colleagues, tom wilson. he is that man up complete and total integrity, and i have no doubt the amendment he put forward for the report represents his very sincere views from the heart. i have the highest respect for them. that said, it is not completely correct to say that some members of the committee the ability to look at 290. when they look at how the voting went, they will see conservative members of the committee often disagreed with each other in were divided in different ways. that was not the same with the colleagues, and not a matter of not voting for certain amendments. no conservative member on this committee was able to recommend the report itself to the house, and everyone of us will share different views about the degree of culpability of but james murdoch in particular. none of us were able to support the report. that means it will be correctly and as a partisan report, have lost a great deal of its credibility, which is an enormous shame. the issue of which most conservative members felt they could report -- support the report itself was the line in the middle of the report that said mr. rupert murdoch is not the first person to run the international committee. we all felt it was an improper attempt to influence and to tread on areas that are not the province of the select committee, and our report was about whether or not the prior year committee had been misled. even though clearly many amendments tabled by my byleagues were carried majority vote, i would nonetheless have voted for the iport and explain where disagree. many of my colleagues have the run about his unfitness to an international company. it is on that basis i am afraid widelydespite our different views, not one of us reportgree that this should be placed before the house, and it was carried on andtical alliance, therefore, i feel the credibility has been damaged. i do not doubt the integrity. this is the result we are left with. i do think it is a real great shame. >> thank you. i need to respond to my colleague. the new member of committee, i have looked at the evidence, made it sure the role of the committee. forink bringing a new focus the committee has helped the committee in terms of the details of what has been said. by being a member of this house ar 18 years, i have been minister for 12 years, and i the been worried about influence of news international over that time. i think anyone reading this report understands the breakdown and will see a it situation that needs to be addressed. i do agree with the chairman that if you look at where we ofeed, all of us, in terms the recommendations, they are beyond a doubt. this is all a political debate, and i understand that, but worsty this is the situation i have seen in terms of our democracy in the times i have been a member here. tofirst of all, i want thess that some of what iairman illustrated earlier, am very proud it is his parliament that initiated this inquiry, and very proud that we havebeen able to information played before us but has been able to be used. and without that, there is certain evidence that would not be admissible in the current inquiry. i also want to add i consistently opposed bringing into our report the evidence from civil litigations and letters of inquiry and have wanted to focus pretty much exclusively on the evidence presented directly to us as tos, evidence we were able see all of, evidence we were able to ask questions about coming to follow up with iquiries, and that is why consistently oppose various amendments that draw on other matters. as i said before, news international will take early regret dismissing the last thert that was issued by committee on this matter. they will regret for ever not taking the chance to thoroughly investigate the allegations made then, and the recommendations made then. i can understand for someone who has worked in a family-run the business about how when you are attacked by people making allegations, it can be easy to dismiss, especially as it is critical in businesses, and you see family-run businesses, the implicit trust the people have in executives and each other. what i would say to you now, i hope all of the executives will read the report from front to end come and do not just dismiss it like the last one. you have already heard reasons why it was not possible or why i certainly felt it was not possible to show the report as butessed by my colleagues, again, reflecting what philip cans has said, i hope we focus on what we did agree on, debatedmotion will be in parliament, i hope early in the new session. >> a very brief comment on the comments by the membership lake. -- member shipley. i made my comments based on the evidence presented to the committee, and no other items. >> the committee report of nine months' work and the new revelation that lies of inquiry. off the findings will all fall on collor met -- parliament for them. wishes to deal with as for political divides, we are in a political chamber, and i have no doubt that the conservative comments would be precisely the comments that my leader friends would have made, had i voted the other way. >> i do feel compelled to say something on this situation. i have to say i wholeheartedly watson'sh tom comments, and in particular the rupertf blame against murdoch. regardless of who said what and when, rupert murdoch is the head of this corporation, and therefore, responsible for the unspeakable actions of the people be employed. there is some suspicion surrounding the situation with the prime minister and his murdoch,with rupert hence the reason why supporting this. is there for biggs the question - that begs the question why? even at that late stage, i would lookim to come clean and at the report. and more importantly, published this report. as tom watson already said, --- he and his family deserve some kind of inquiry as to why that happened. >> think you very much. can i ask you, because i am not therely clear from division, is it your view that report are rock is or is not the -- that rupert murdoch is is not the proper person to run an international company? yourself and other members, as allas i can tell, you have agreed that what james and rupert murdoch have been saying, that they did not know more than one reporter until december 2010 is simply astonishing?that sounds like a word a lawyer has inserted to avoid saying incredible. >> this applies not just to the passage with which you quote, but the chairman does not vote. the term in does have about in the case of a tie, but otherwise he does not vote. i would merely observe as a ofservative member parliament. in response to your second a question, at the committee did in large part find it astonishing that james murdoch stated to us that he could not become aware of the evidence until much later. -- did not become aware until much later. how you interpret that, they would like to explain to themselves why they supported the conclusion. i think we will all agree astonishing was a good word, which we could all could support, with one exception. >> i voted for that amendment, and we had a discussion about it. i said if i could vote for it, but not for the same reasons he wished to apply in the drafting of it. i think it is absolutely astonishing that this was not known at the company until later, and that is because in my opinion, it is the people with command did not make it bossately clear to their is what was going on. there was an attempt at a cover-up that was made. i completely agree it was astonishing that people were not more open and did not lay the facts there. for that reason, i supported the amendment. my colleagues felt she did not vote for it. i think it was indisputably amazing that this was not itught to manage but when happened. the question is, whom does that blame fall? >> if we said they are astonishing -- this is something where we have to respect in some ways what date inquiry was about, which was about whether or not parliament was misled by people about the actions people were taking. we did not take evidence looking at corporate governance. that is why it is difficult to look at the way executives perform in the operations of other companies. there is a lot of critical whichge about the way in people love the business and the decisions they took. i certainly think those that ofed against protection rupert murdoch felt this was investigatedhad and there was no evidence linking him directly to knowledge within the business. people may find that astonishing, but that is where we got to. i think it is important did draw that line. our focus was to draw the evidence out what we have found. there was an amenity, as well as crystal clear language about the way people acted. the failure to see the lights flashing on the dashboard of the company, where there is problems within the organizations. >> >> i drafted the amendment, and i am certainly not a lawyer. we followed the evidence -- all of my amendments have followed the evidence. with james murdoch, for example, giving the conflicting accounts of the history of what we were told by witnesses going back five years, we simply could not make our minds up with any conviction about whether he misled or not. time and possibly may tell as other evidence emerges. while following the evidence, it was important to just get our heads up and look at the bigger picture, because we were told that notwithstanding everything that is happening, it including the new york times, our report and the wide publication of evidence, we were just being told effectively that it was only in late december 2010, that there was an epiphany moment allegedly wear they suddenly at the top realize that the one that road at reporter -- rogue reporter was not true. i wondered, how could this happen? >> thank you. obviously you are trying very hard to avoid getting into the political waters, but surely you may be able to guide us a little bit. if someone said some of these politicallyare motivated, how would you respond to that? you have said he will ask the house to vote on the conclusions of the committee, my house might be a little confused as to what the overall recommendations are? >> in terms of how members voted and there are reasons for doing so are hard to say. they are all here at present. what i would say is the motions we are tabling in the house will concentrate on the issue of parliament being misled on specific evidence presented to the committee.