Latest Breaking News On - Steve hoffman - Page 1 : vimarsana.com
>> you can't have a novel without an audience and the fact there is this eager public wanting to know about the world around, wanted to know how life works, and he keeps this kind of thread of connection within the novel i think. >> you had the feeling rebellion against delivery status quo when you stumble into money in 2000 willing to learn about it and talk to bankers about it. at the point, i since you have some animosity towards going on in london. that it wasn't just a detached interest. >> i started the novel thinking it was going to be a crash. i started a book, describing a bubble, and thinking it would be a dramatic iron in some classic sense, when the audience knows something but the people onstage don't. michael and i both had our flies undone, that would be a dramatic irony. a daytime tv kind. so my fear was the audience would know. i'm describing this at the bank is being pleased with themselv themselves, and the reader would know a crash is coming. so i was really, really interested windows crushed it, and it turned out to be something much, much bigger and scarier than i anticipated i was flat wrong when we. put all the pressure to come up to be a bubble bursting in the london property market. >> it's funny because i moved to london in come right out of college in 1983 and i saw the place but i was part of it. i worked in the city for solomon brothers, and the london i would do is hostile, was actually hostile to the market. it was an uncommercial place in an odd way. the last place on earth to think america investment banks we find a natural home. when i got there i had a grocery store i went to come and the grocery store sold the little biscuits. the only thing i could eat. nothing was edible. i had a friend from new york who said whenever he walked by in english sandwich shop you want to walk in and strangle the owner. i went into by some and one day he worked there. i went to the leader owned shop and they said, we are the biscuits i always like what she said we used to stalk them but we kept running out so i stopped. like that was the sensibility. it was like too much trouble to make money. the idea that this money crowd would roar into place entrance from the city, at the time it would've seemed preposterous. you watched that like i watched that and that bothered, in one way or another it bothered you. >> i saw the impact of the change. just in terms of the novelist on one street, i was struck by the fact you could see just the texture of life in the streets change because of the pressure. obviously the cars got more expensive, it was more work on the house with things like that. one thing interesting was it would be a house people and lived in for 30 or 40 years, and when it sold to the people who could finance it, because they started eyeing houses, you never knew the owners again because they also put the houses every 18 months. there was something quite striking about the, a place at particular human interactions and said it was like one of them dropped out in the house will be flipped and flipped and you never do them again. the other thing companies like the work of feminist science fiction because of the men get up at six, they are gone before dawn, back at night. you never saw an adult man in daytime and yet they're continuing to reproduce the. [laughter] because the wife or to unload the children in these suvs and drive them off somewhere. that was one of the terms of the book, the sense, the texture of life in an ordinary street been rearranged by these large impersonal forces. >> did you blame us for it? do you think this was an americanization of english life? >> no. i grew up in hong kong. i see it as a kind of reverse, hong kong it was the most hyper capitalist society in the world. so i see it as hong kong taking over the rest of the planet. >> that's funny because my point of view it seem like americans overrunning london. all of a sudden these people of oxford and cambridge wanting to work for america investment banks. they started to say things that they would never say. >> a change that kind of culture. those sort of hyper educated kids with the same time don't quite know what to do with their lives will do the thing they perceive as having the most risky she and money. in that oxford way to being prime minister or paul lawrie or whatever, that i want to go and work for those incredibly well-paying financial institutions. it's not just americans. a method sometimes used in england is called wimbledon position. the venue is local but the talent is international. you can see there are lots and lots of european thinkers. it's hilarious how far off you can spot them because you only see them in on weekends and there's a very interesting project. people are with their children but they're trying to do as many of the things that he would be doing if their children weren't there as possible the their always on one phone, quite often onto. clearly there at work while the children can run around and doing the unstuck to the european banks, scotland about 400 yards off there's this particular thing to do those letters. they were the over their shoulders with arms draped down and that is the european bank. there are always these interesting kashmir colors and you can sort them. if you thought a sniper be able to arrange to take them out. >> your listing to the commonwealth club rated program club. our guest is a john lanchester and were discussing of the world of finance really works. i am michael lewis. you can find a few of commonwealth program on our youtube channel. let's get to the book. the book is a dictionary. it reminded me of ambrose dictionary. you done an amazing job of taking essentially, there's an essay on either end of the dictionary of the dictionary itself is very readable. the joy of it is even if you know what a bailout is or what cdo is, that the descriptions that you provide you be thinking about them in any way. i'm curious how you decide what to include in this book. >> i would say this because i'm a writer but for me the first obstacles and the main obstacle following the subject was the level of vocabulary. it's just embarrassingly simple think not knowing what the words mean, and that was the first hurdle i had spent a list of what you did not. >> i tracked it down. whenever i was starting to read the stories, whatever their sword i did not mean, i would review it until i felt i did not the meaning. >> can i stop you? when you found you know something and presumably you to a network of financial paper you could call and ask questions of, you seem to know some bankers and -- >> i do know a few. >> do you find that when you put your questions to people who are supposed to know, they often felt misplaced the? >> very often. one of the things, i was was mortified about the fact that it struck me fiscal and monetary. i went to oxford. i got a first class degree. i worked for 10 years on a political industry magazine and i was almost 50 before i knew what fiscal and monetary meant. which is embarrassing. the guy i was talking to the worked for reuters said it's funny you should mention that. i used to us that in interviews. 80% of the professional financial journalist applying to work at the reuters couldn't define fiscal and monetary. >> there's a horrible fear of seeming ignorance in the financial committee. it creates an opportunity for all kinds of bs to slip in because nobody wants to say i don't know. >> nobody wants to be the kid that says excuse me, that emperor dudas no clothes. >> so your 20 figure what these words mean. where does it end? do you feel like you are now expert in the financial world and? >> absolutely not, no. the entertaining thing is that whenever there's any scandal or disaster, it's usually something you've never heard of. it's like the jpmorgan thing, the famous london whales which was a tempest in a teacup until turned out to be a $.2 billion. that was something about forward sadly etf derivatives. >> who knows what they are. >> whenever something blows up it's always something you've never heard of. >> i want to read a little passage. this is in his, when he's explaining the benjamin graham is. one of the things i've been doing since i began taking an interest in the world of money is ask people involved in the world what they do with their own money. my question knesset is whether they do the things we civilians are advised to do in respect to pensions, investments and the like. i've asked 40 or so financial professionals on how to get medicine the one who falls the advice given to civilians. their reasons for not doing so are always twofold and always the same. the fees charged are too high, and you can't really tell what's going on inside these companies. do you, as you wander the world of investment professionals, has it all argue what you found? let me put the question another way. so you've got this wonderful dictionary explain terms to lay people that they probably don't understand and probably explain it to officials in the ways they don't understand. do you feel it is delivered? do feel it's just an accident of some sort? >> funny enough, that was the question i was going to ask you. [laughter] whenever you have a book out, i'm sure you know this, there's always one question that keeps coming up and it's always when you're not quite expecting. my first novel was about a psychopathic snob possessed with serial murderer. he kills, i can't remember, its nitrogen people. the question i was most often as waking up, is the autobiographical? [laughter] and a decade and a half later, i still haven't worked out the correct reply to that. the one with this book is the way the braves put it is, do they do it on purpose? the thing to what i think i think about that is that actually it doesn't matter because the effect is obfuscation, and the effect is to bamboozle people. if someone is talking to you about synthetic cdos based on rmbs, it doesn't matter if that person is to literally trying to bamboozle you or just, you do, using arcane for kevin. it's the fact that matters and the effect is systematically excluded, excluding an exclusive. so what's your view as do they do it on purpose of? >> kind of, yes. it's more complicated than that because i think that often when people dream up a complicated things, the people who do getting up there what people understand. it's better if you don't. it's better for them if you don't. there's a kind of arbitrage opportunity in your ignorance. about what happens very quickly to the people dream of explain to those people who don't complete understand and they start repeating things. so the purse was deceiving often doesn't understand what he is saying. i think, so becomes less and less delivered as you get further and further away from the origin. from the source of creation. all professions have their argo, all have their short and. some of its useful. it's not all bad. the problem and the financial system is it's so much, so much of it is bad. if you think about, if you try to explain, if someone had just explained what a collateralized debt obligation was that was filled with pieces of the worst pieces of subprime mortgage bonds, some would've so those of which ones are great in history all public in one place and have been given aaa ratings, i think people would've stopped and thought about it a little more. what they didn't put it that way. the financial sector doesn't put it that way. i mean, i can go on about this and this is really your conversation. but i would say that at the bottom of it all i do feel sometimes is that the financial sector often creates for itself jobs that don't need to be done, that it doesn't -- there is a useful purpose it serves. it's a pretty simple useful purpose. it's supposed to be bringing boroughs together with lenders. people who need the capital. if you go one layer below that it's evaluating risk and it's exposing the so people can evaluate it properly. in addition to that legitimate function, it is all the stuff it shouldn't be done. it pretends to expertise that not only does it not have but it doesn't exist. protecting the prices of individual stocks, where gold is going to go for all the different things, all of the advice is given is basically nonsense. and so, i mean, it's just an unknowable. telling you, they're suggesting they know things that are unknowable. and the language is designed to prevent you from getting to the eventual truth. you kind of give yourself over to the person who was supposed with the expert and never find out that he doesn't have expertise. so i say that, it sounds very critical i know, i think it's just the way it is. i don't mean to be mean. it's just kind of the latest. i think anybody same with money, they shouldn't take much in what advice, especially the fact that they're paying for in a weird way. the more you pay for it, the more dangerous it is. i'm partial cynic about the nature, about the language but i think also a lot of the people in the financial sector don't know this about themselves. they think they know things they don't know. know. >> i heard a really interesting thing, someone came up at a talk i gave in new york and he said, you know, in addition to the things you talk about, about obfuscation and indent, but he also made an interesting point produce it is also a disassociating effect that helps you switch off what it is you're actually talking about. i was struck by this because i had thought about disassociating ability for people on the site. to look at some numbers for business. i'm going through, and they would churn in the business. there were no numbers come in periodically and you see suddenly sort of step back and realize that what you looking at was a residential care home, and the churn was people dying. and i must admit i had never thought about that. the language also gives installation to people making very brutal choices. >> when you stumbled into this subject, you probably didn't think you would be writing about it a decade later. you probably, if i asked you 30 years ago, if you be writing primers on how to understand finance. you look at me like i was off my rocker. do you feel like this is something this is now part of your life? are you looking forward to moving on from finance or is this something that is like a gift that keeps on giving? >> the stories continue to be interesting. at the same time i wouldn't, after i wrote iou, there's a saying they have in british journalism, especially in the tabloid papers, no is just an emotional way of saying yes. [laughter] and whenever iou i said that sick, never again, never another word about finance. i finished. and greatly to my surprise, i ended up to him because i kept being asked to explain. that was the common thread about explanations. >> did it surprise you, this opportunity that sort of existed for you? the people are hungry for these things are riding? >> i think it's linked to the fact that people fear that nothing has changed since 2008. i think for an awful lot of people is still 2008 and they feel like flies trapped in amber, you? that things change, their circumstances have changed, the system is changed, the bad guys got away with it. so it doesn't surprise me because of that. i think in every other way, yeah, i can't quite believe it in many respects. but i also think that, i feel a kind of point -- i'm sure you noticed people, lots of people very propped by money are quite boring i'm just starting to feel the thing that actually slightly amicable beyond a certain point, it's amicable to the writing fiction. money and economics, we seek the explanation it is the thing that's interesting about the phenomena behind the thing, the reason behind this thing, behind the veil. but at the same time if the reason for everything is always economic and money, you can't really imagine a novel. >> the mine comes to rest while short of a novel. >> actually it's a kind of antithetical project. it's the opposite of a novel eventually. as i was writing this book i was thinking i probably to have to leave it here because if i keep on with this i won't be able to do, won't be able to see the sort of human content. >> you were a man of the left in england which makes you on our political spectrum a pinko. off the. >> i don't self identify -- your the guy famous wearing pink shirts. >> i was going to say -- [laughter] your associate with left wing, vaguely left wing journals. you move and left wing literary circles, that kind of thing. do your friends think it's strange you've gone this jag? i'm curious especially if they think you're too sympathetic to the world of money? you have to be somewhat sympathetic to do the job you can explain. you can't be just hostile and that's interesting to you are not really hostile. >> i think you can't write about unless you're ambivalent about it. i think you're ambivalent about it. part of interest is to do with it. i know you've met, very interesting thing, he loves reading about this stuff and he gives this very interesting reason. he says they are like artists or like criminals in that they're just interested in getting this thing done. what's the thing that makes money? ignore the rules, they do everything from just have to get to the object? there's a kind of amorality involved in that, and actually lots of artistic endeavors and ruthlessness. part of me definitely resonates with it. people dig it, you know, there is a sort of default left thing in europe in general about anything to do with any kind of functioning of markets. it's like your biscuits lay. it's wrong and arranged and sort of morally, any enterprise that has any kind of economic component is morally bankrupt. i both disagree and think it's stupid, and it misses some of interest. >> shall we take some questions from the audience? >> sure. >> there are so for me which i'm going to ignore, but for you, you grew up in hong kong. money is also key driver in what's happening there now. in addition to beijing's british -- brutish behavior, can hong kong continued to prosper within the chinese assistant? >> that's a big would. i hope so. can i see what's going on at the moment as being more than an economic thing, and it may be almost more than a political thing. it's to do with identity. i think that both the brits and the chinese, chinese communist party were handed over the reins i think they underestimated the effect that hong kong feels. i think the notion was hand over in 1997, the elections are arguing about, the notion was the great and the good was that hong kong will be gradually assimilated with china by now, and a lot of the thing things we growing together but, in fact, what's happened is that sense of hong kong identity is growing stronger, especially for young people. the more they see the mainland the more they realize they are different from the. i do think it's about identity in a decently to take a kind of political manifestation but i very much hope that they figure out a way. hong kong is immensely useful to mainland china as an entrepreneur, and also there's no company law in china. the -- >> if they didn't have a, it would have to created. >> that's right. so i think the broad guiding principle for anything with china is the chinese communist party tends to get what it wants. i think what it wants is for hong kong continued to be an entrepreneur and food to be relatively stable. so i imagine that some kind of you will be struck maybe, the current chief executive being encouraged to take some form of early retirement. i noticed the scandal surfaced about him in th in the australin papers. f. i were him i'd be asking a bunch of questions about where the scandal came from because it makes it much easier for him to be discreetly edged towards the exit spent another member of the audience asked london epitomizes the wealth gap today. russian and chinese oligarchs buying homes. buying homes and driving up prices. can this go on in the same way? is a sustainable? >> i'm not sure it is. it's a very, very striking thing though. the rich metal parts of china are just empty. >> nobody is living there. >> nobody lives there. there's a very striking thing, kensington and chelsea, which is the richest constituency, the richest electoral constituency in the entire european union. and in the 2011 census, you have a census every 10 years, it was the only area in the entire british isles where the population had fallen. that's a sinister in weird thing. if the richest place which would be a magnet for the populations going down because things are empty, you know, it doesn't feel sustainable. but it may be that we are having an odd thing that london is effectively decoupled from rest of the uk, maybe from the rest of europe and it sort of international capital mega city that was new york and maybe the ocean version in singapore. in a weird way they aren't in their physical location anymore. they are in this other location that is purely to do with money. local version clearly not sustainable, that maybe if it sort of decoupled, maybe that's a bit different. >> is there any kind of friction between the locals and the oligarchs who role in a bobby jon's of london? is there any attention at all? >> not particularly. a funny thing because of hauling out that occurs, in those very rich bits of london t there are only rich and poor, and the poor are there to service the rich. there's no one else. oligarchs and dormant and that's it. the one thing that londoners do like is you get this during the hot months of the year in the arabian peninsula, the younger princes and princelings render supercars to london. so you see this assumption parade of maserati's, blekaitis, this, that, and the other, cars worth half a million bucks just driving up. they're doing two miles an hour just moving up and down very, very slowly. it really does, you know, it's like something out of a tom wolfe or illini or some bizarre, or monty python. [laughter] the locals all think that's hilarious. >> if i put you in charge, if i make you god of great britain, what do you change? does this growing sense of inequality can i don't know what the numbers look like, i assume you're experiencing a similar sort of thing that we are experiencing here. growing gap between rich and poor, since that's not just the 1%, but the one-tenth of 1% that are taking over more of the games. is it creating anything that looks like it class warfare to you? >> i think it creates gigantic resentment, yet. a lot of it is directed at london from outside london spent we don't do class warfare very well but you do very well. you would think if they were going to be a revolution it would start over there. >> scroll it forward a bit and i think you'll be tensions in that direction. i can was a big thing in the scottish independence referenda. there was a lot of, you know, sort of a joke version which the scots hate the english which is lots of jokes, slightly too. that's the kind of permanent sort of joke. the thing that is taken on very specifically anti-london thing. the thing about being -- the thing about london, it's 15% of the population. i look at the numbers in an american context and his san francisco plus los angeles post "new york post" chicago post by nicholas washington. i think you have to add the top 20 american cities together before you get the scale of london as a percentage of the population. it is also a media center, also to artistic center, it's where all the rich people are. it's where people go if they want to compose music, and it's the political capital. if the thing is sort of separating out from the rest, and that's where the kind of 1% and the .1% are living. there is real potential for very serious splits. >> what do you do to fix things because there's a few things you could do in relation to making it less of a magnet, ruthless international capital. our system doesn't just bend over backwards to accommodate international capital. it actually is limbo dances. if you're very rich person you can live in london completely free of tax on your capital assets. that's why the oligarchs are there. they are not there because they love on whether. they literally pay zero tax at the only pay tax on income. that's never been explained why that law was brought in. it was i think initially around the time of attracting shit this in the 1970s, and basically if you're a james bond villain who's got away with it, you come and live in london. that would be, that's an easy fix. we chase the taxes the way you guys have. >> do you think that the british should introduce a more aggressive tax structure? >> the top 1% pay about, of income tax, pay about 30% of tax. that's not obviously unfair, if you said that two marks, if you offered that deal, progressive taxation is one of the 10 things in the comments manifest, he would've said that was fun. the problem with people don't pay tax at all is more of an issue. thomas piketty has studied the assets and liabilities of planet earth and principal assets and by those always match, that's just what a county work. if look at the global balance sheet, the liabilities exceed the assets. earth is somehow in debt to itself. >> you mentioned is. i don't know where it is in your but the numbers are wonderful. what are they? remind you what they are. >> i'm a sub in a trance like state when i wrote it last night that's the crystal meth again. [laughter] since the earth can't be content to itself what's happened is the missing assets are hidden offshore, you know? nobody knows what they are because they're in trust, in tax havens, in offshore and off balance sheet structures. that seems to me something really does need fixing in a coordinated, international way. that's barely the .1%. it's the points are one or the .001. that's a marginal issue, the rich are always going to cheat. but now i actually think it's a big missing part of the democratic picture. everybody paying their fair share of tax but really meaning everybody. >> between restructuring and rights issues you have reached less. which gets to this. your point very well taken is that they are all nonsense. we don't have a very good idea at all about rich people are worth. >> if such a cartoonish wealth if you actually directly look after. i was struck by looking a at the assets of a bill is just seeing what's missing. >> another question from the audience. every profession it is to have good and bad members. do you think the compensation practices of wall street resulting disproportionate number of bad, dishonest members of the profession? >> the evidence would suggest that. [laughter] i mean, i think the problem with incentives, sounded boring way of putting it, but i do think if you very, very smart people incentivize to get around the rules anyway they can, you're going to have a problem with it. there's also the thing about the culture. we have in the recent epidemic of bank fines, it was one that was very striking that involved one of our big banks, barclays, fined 260 -- actually, i've forgotten what, quarter of a billion pounds. so 260 billion, nearly half a billion bucks for rigging libor. which is the global into right bank the its most important number in all global financial sector. rigging it, they were. in the small print of all the stuff about funds, do something about a guy being fined for breaking the gold market. there's no gold market in london's exchange market. they agreed a price. we people agree a price cut is very, very prone to be manipulated by a bunch of the stuff and you agree a price slightly above what you paid and kaboom. and this guy was fined 23 million created. the thing that stood out about that to me was a day in which he tried to rig the gold market was the day after his employer was fined half a billion dollars for breaking it. you are important for half a billion bucks rate in the market, you going to work the next day and you try and rig a market. [laughter] and what that suggests to me and to the questioner is that that's a cultural problem that is so deeply entrenched, you know. of f1 talks about leadership, we can fix it. i'm not sure you can fix that. if it's not hardwired, that baked in. >> so what do you do? >> i suspect there's another compulsion coming. because equities are paper thin. i was in washington the other day when the imf thing was going on. people are worried that things haven't been fixed. i suspect when this plays out -- >> this is an interesting point. nobody actually thinks the financial sector has been fixed the there may be people who may think you never need to be fixed in first place. there are people who make that argument. do you buy that argument? >> no. >> neither do i. so we will not argue about that. but nobody who thinks the structure of the financial sector something to do with the category. they think it's been repaired. so the question is what comes next? >> i imagine what will end up with, i think and hope the in state's banks effectively been regulated like utilities. people investing utility covers all the time and they're quite good at that. >> the job should be born like your father's job was. >> and the return on equity is a terrible for the most part because they pay themselves. so the banks are more like utilities and if you want, i think in some sense is hedge funds, the kind of a model of how it's supposed to be because people risking their money and their invested money, and in a could use a filter so imposed for domperidone, they crashed the for it to the end and a badger they go broke. we don't have to bail them out. it's kind of feral capitalism in it's supposed to work. the vast majority of hedge funds are close or have gone broke because the judges don't work. i think we will end up with a split between banks regulating utilities and all the go-go exciting stuff what they bet against each other. one guy wins, one guy loses and they cavort around a third any kind of separate sector of the economy. not so unlike the sector we have now. >> you think we get from where we are now from their was some sort of other convulsion? >> i suspect so. i don't think we will commonsense our way towards that goal last night me and the -- towards that goal. [laughter] >> i want to ask another question from the audience. there's one slight a critical of us both. let me find it. michael and john, it's easy to be a skeptic about any industry. what do you propose be the alternative? thanks, i'll wall street analyst. [laughter] >> alternative to what? i suspect you were talking about, you know, you can understand borrowers, you can understand interest. that's what banks are supposed to do to match the two up and help allocate capital. i think that function of the banking system will gradually be this invented. it's interesting in countries that have had banking, in sub-saharan africa, that you skipped a generation to which of his people transferring money directly to others by mobile phone that. your betters encourage doing transactions directly without a financial sector. the whole sector is ripe for destruction. i think we will move toward a lot of the functions of the bank sent to disappearing, being invented away. one of the ironies about it is s that is the more regulation have around it, one of the many ironies about the aftermath of the credit crunch is a lot of the things that were wrong are worse. the two biggest problem is worse because the banks are bigger. >> the people talk about it in england the same with we do here? when people be known the state affairs of the top of the same things, too big to fail, for example? >> yes. all of that, and our problem is even worse than yours because your big bank balance sheets are about the size of your gdp. >> we can afford of some of our banks fail. you can't afford that. >> our for biggest things are five times the size of our economy. >> how did that happen? it's amazing. it's not as bad as i was but it's along the same road. >> they would say they were always made international is additions to its candidate legacy but i think it's also partly the if you want to grow your financial sector really, really quickly you just deregulate, rip up the rules and the capital comes pouring in because the capital is always looking somewhere. it's no accident that quite a few of the things that will open 2008, like the aig unit, legal argument going on at the mall, aig unit was based in london. the. >> why has more political pressure been brought on the banks of? >> i think they are scared of the banks. >> a member of the audience just said they -- here, it's putting it too strongly, it's more competent than that but there is such a thing as a by center strategy. it's easy to prevent things from happening. >> it's not not true. >> the same in england. it's hard to see the connection. >> money hasn't taken over politics in quite the same way, but there's also the 800-pound gorilla problem because our banks are so huge. i think there are five times the size of gdp and did you find it very easy when they don't own the politicians, which sometimes they do, they find it very easy to bully and blackmail them. anytime in talks about anything like credit for changing the rules, they have basically put this puppy on the lab called the uk economy and they have to resolve out. what were you saying about tightening credit rules? [laughter] this is such a nice puppy. it would be terrible if something happened to it. and they back off. >> it's a wonder that people aren't more angry. here i understand because we don't get angry about the sort of things, but there, people get angry. i can remember in 2008 i had friends who worked on wall street and working your and had basis for cicada landed a were afraid to go to london because they're beating up of bankers in the street. there was a brief moment where i felt like -- >> and often misdirected. they read something about barclays making leiber and get angry at the cashier across the counter was barely earning minimum wage. it strange to sure about irish and i go there a lot. ireland had a terrible experience in the account of events that you write about. it was a real economic growth until about 2008, then it imploded. you have a thing about people being blazingly furiously angry and resigned at the same time. i've never seen anything quite like it. incredibly incontestably furious, philosophically resigned people. >> they also felt guilty but they also felt complicit in it all spent i think they realized that got out of hand. >> the irish have a real talent for suffering last night when present with the opportunity to suffer, they rarely turn away from it spent its true. my mother's family, the largest number of potential pilgrimage sites. that it spent everything about performance in their sports teams. [laughter] >> assuming we have another question the audience consuming the foundation of it, is the trust, the playing field is fair to give you there's been a betrayal of that trust that endangers our economic? >> i think there is an issue about trust, to put it mildly. i think the big, dark, difficult thing about inequality, i mean you know in some versions of political thought that is as it were a fair version of inequality which is where the more talented people do better. it's a right wing philosophy. i think the problem with where we are now is that there is a preview in the sense that it's clearly in evidence, correlation between inequality and in heritability. the more unequal society, the more life chances are inherited. so a baby is born to white on the backside and its first lung full of air draws in, its future income prospects, its future education level and even its life expectancy. rich and poor, from that one moment everything is set on course. i think that's a really, really dark prospect, i think we are actually traveling down a route of society as more and more like the. that's what the numbers suggest. i think that's a fundamental breach of trust in the way the social contract is supposed to work. >> what's the political response to that? where do you see a? >> i don't really. >> wouldn't you think in a democracy they would be a people? >> it's a bit like winston churchill who said about america. churchill said you can always trust america to do the right thing but only after they've tried everything else first. [laughter] f'ing something a bit similar is true to democracy. the fact that all of the people are very preoccupied by this will eventually translate into politicians actually addressing it. it just hasn't quite happened yet. i think they're fighting with the word inequality. >> apropos nothing to do with regional passage to give people a flavor of the book. the laffer curve, the most influential complicit john lanchester definition of the laffer curve. the most influential audience arrived in world on a cocktail napkin. an american economist who explains a duty to official in the nixon and ford demonstration in 1974. the idea was innocents government could raise more money in tax by cutting tax rates. is -- he made the .0%, the government raises no money but at 100% tax to begin the government raises no money because nobody will do any work. the government confiscates all proceeds. attackthe tax rates the reason t money isn't automatically right at the top end of the stupid government will often raise taxes by cutting rates of tax. as you can probably imagine this it is very, very popular with rich people. reagins administers was the first to put this theory into practice. the two officials to whom he pitched the idea would on from soap and dick cheney. so it is literally the case the same people who cooked up the second iraq war also brought us tax cuts for the rich. to the napkin itself, the consequences are obvious. >> you can see the photos of the napkin online. >> did you find writing this book? >> i did and i didn't. i had fun thinking about and i'd problem solutions but i think the thing i was describing, thinking that actually there's a tipping point for your worldview mayor wayne with this stuff. that thing about the explanati explanation. >> mine is already so for nerds i would've come back. i understand what you mean. >> it doesn't show in your. you continue to be interested in sometimes people, that terms with flips. that's the thing you notice with a lot of people. by nature it is subdued. that does happen. >> do you have an explanation to yourself that you tell yourself about why you're good at explaining this stuff a? >> no, but i knew things. i like being interested in new e things that i like the process of finding out about stuff, and the explanations to me first, i'm the first person to whom it's been explained. and i like the sensation of finding stuff out and working through how it works. i don't think about it more than that, but i notice i have kind of new affiliate spirit. >> it's a funny thing. you have the gift and it's a very unusual gift. i think you're not afraid of seeming ignorant. you're not afraid of your own ignorance. that's related to liking new things. but it's a fearlessness that i think is very apropos. we are towards the end of a program to is anything else want to say before close it up? are you sure? did we miss anything to really wanted to get to? >> there's one point in the book that really interests me we have a code which is if it comes out in the data, because there's an optimistic think about the state of the world. hath immortality, carved a number of people living in absolute poverty, you know, within 20 years which is an astonishing material achievement. we are having and i think which i think is never happened in history of the world. that inequality between countries is now. countries are getting closer together at the same time inequality in such countries a sharply increasing. i think you can't put that on a slope and you can't put on a t-shirt. you can't arch behind that bad but i think that's the state of the water and i think it's a strange and interesting one. the world is becoming sharply more equal and sharply more unequal at the same time. >> is hopeful aspect to it. >> there is. >> on that hopeful that we will end this otherwise depressing program. and our thanks to john lanchester, new yorker contribute and author of the new book, "how to speak money: what the money people say - and what it really means." we also think our audience here and on rare, television and internet. we want to everyone here that books will be on sale in the library on the program. we appreciate you letting john make his way to the book signing table as quickly as possible. aye michael lewis, and now this meeting of the commonwealth club of california, the place where you're in the know, is adjourned. [applause] >> [inaudible conversations] >> booktv is on facebook. like is to get publishing news, schedule updates, behind the scenes pictures and videos. videos. author information and to talk directly with authors during our life program. facebook.com/booktv. >> and this book continues its book tour of the public library where now joined by isaac gewirtz. what di do you do at the library speak with i'm curator of the henry w. and albert a. berg of english and american literature. >> how did you get the position? >> i worked at the new york public library in the past. i've been in the rare book division, was later a curator at southern methodist university and downtown at the general theological seminary, st. mark's library. and got a doctorate in renaissance history at columbia and all that led to my being here. >> how long have you been at the new york public library? >> as a curator since september 2000. >> you brought some things out to show that you have in the collection. what do you have? >> the bird is an enormous collection to about 2000 linear feet and tens of thousands of printed items. this is what i like to call the tip of the berg, so to speak. here we have the only surviving manuscript of john times holy sonnets sapphires and paradoxes that was done in his own lifetime. it's not in his hand but it is in and of these secretary and personal assistant. and this has the highest authority deriving directly from his own manuscript. you can see changes, the differences between the text presented here and the stakes in transcriptions that were made in the first edition, and they were perpetuated throughout the centuries. for instance, in this sonnets all who war, birth, age, tierney's to all those who have been destroyed by this will be resurrected on the day of judgment. and this word, darth, was transcribed as death, and it was only 20th century that it was read correctly and corrected. >> who was he? >> john dunn was a great poet among a group now called the best posts of the 17th century. who used with -- philosophical inquiry and, in order to great highly formal, complex sonnets and other forms of poetry. >> what else do you want to show a? >> we have a wonderful dickens collection, over 550 letters, all of it first edition but what is really remarkable about this is we have 13 of his performance copies, the copies he used to give public readings. this is the first one he ever did. the first thing he ever gave was, publicly was 1853. this is the performance copies for a christmas carol. he first read it in birmingham in 1853. this was not yet in existence, and he set about creating a text it to be short enough that people could listen to for over a period of our, 10 minutes or so. so he had a binder, at the leaves of the 1849 edition, put them in the blank with any went over a period of a couple years. you can see that he sometimes rewrote passages because if he would have deleted something when a character was mentioned or a scene was described and then was referred to later, he had to somehow introduce it freshly. so that's what you see here. you also find bits of? where pages that were pasted together that he wasn't going to read at all. you can see postage stamps. these have broken off. he used these to turn the pages quickly, and the protruding ends have been broken over much use. here we have a photo of him taken in new york. this is the last group of photos, the last group of photos that were ever taken, new york 1867, the winter of 1867-68 was his second final reading to her of the united states. >> how did the library get dickens material? >> well, the dickens, the performance copies came to the berg collection through the purchase of the two greatest collections of english and literature in private hands in the 20th century. this was back in 1940-41. one was from a great book publishing magnate from cincinnati, and a friend of the irish literary renaissance. a real friend of literature. he had some of these performance copies and so did john, the other great collector who was time's man of the year of 1929. founder of general electric. these proposed copies came from the collection but this particular one came from the how collection. i do want to make in one thing. this belonged to dickens. here is his pen which you may want to hold. that's his inkwell. this is is ivory letter opener which has given him to buy his sister-in-law, georgina, and she had inscribed or engraved, in gothic letters, this is one of the forepaws of his cut, recently deceased cut, bob. story has that dickens had trained bob to put out his light candle with his par, so maybe that is the same law. >> not to be terribly crass, how much is all this worth? >> we don't like to discuss price, but in one sense it's invaluable. i don't like to think of it in terms of a national value because these are priceless objects. they can't be duplicated to certainly the manuscript i suppose one could find someplace. another letter opener, although not one with the cut's paw on it. >> all injured i take a? >> the library has insurance, yes. >> one more manuscript. >> this is the first volume of three many script volumes of virginia woolf's lighthouse. virginia woolf was one of the great pioneers of the modernist novel along with james joyce. this novel was published in 1927. this is in her own binding by the way. she bowed her own books. it's not a pretty binder. it's not meant to be. she could do that kind of thing. and here you can see names to be used. she has names of characters, some of which don't appear in the published version, and she always wrote, she always drew a blue crayon line on the left and margin so she could write little notes to herself as she went along. now come in this particular page she has a couple of diary entries. and down here for march 9, 1926, she writes, i observed today that i'm writing exact opposite thing from my other books. very loosely a first, not tight at first, and will have to tighten finally instead of listening to those before. also perhaps three times the speed. .. we use the bound manuscript for her expedition 1090 minute presentations for reading groups for the public for displays for exhibitions. that is how the public gets access to these materials through special presentation. >> host: would you like to see these manuscripts online for everyone to see them? >> guest: yes, there actually is a very substantial, robust, virginia woolf website, which disc contained those digital images from digital images, the digitized images sent back manuscript and other manuscripts available at i think. and here is one of charles dickens tasks. his chair, his lamp which has been retrofitted for electricity in this calendar is set to the date he died, june 9th. the story goes when the collection open in a toper 1940, it is a bigger vent and dare look word via was indicted. that is all fact. we have through all of tradition that the mayor, being rather robust gentleman sat in this chair and burst through the keyname. so supposedly that is the only non-original part of this chair. >> host: but that is not a documented story? >> guest: i have not seen it documented in any way. but that was passed in an oral tradition. >> host: thank you for showing this part of your collection. >> guest: my pleasure. >> up next, william voegeli takes a liberal look at compassion. but they support government programs designed to help those in need can verify less concerned about what the programs actually achieve. this event was hosted by the manhattan institute in new york city. >> thank you all very much for coming. my name is brian andersen, editor at the journal. out of the welcome new out of the half as the inhabitants do. anyone on the right-hand side of the political spectator, specially in new york is familiar with the stereotypes of conservatives about kerry, uncompassionate greetings, fellow greetings, selfish, mean-spirited. [laughter] it is true in some cases. [laughter] now after yesterday's study and election, will be getting very vigorous workout. not those on the right they don't like, and there are some of us, have to varying degrees degrees -- george w. bush calls himself compassionate serious. grandpa said republicans need to show compassion for people. even the great conservative hero president ronald reagan at the right doesn't care when you said i believe the best thing program is jobs. access to government another more expansive other programs predicated on the notion that government must be ample friday, but it must show concern for the plight struggled with citizens. unfortunately, many liberals seem leather programs like head start actually work. the evidence suggests that program anyway to dispute only the programs experienced by their existence demonstrate they care. they play with this kind of narrative. neither have they completely are occurring of government priority. proving the efficiency is appropriate to put up with all been missing the forms? what if the personal first the personal first u.s. circuit in san fran ultimate as liberal progressives leave. the pity party has perhaps the greatest subtitle in the history of publishing. mean-spirited diatribe against liberal compassion. [applause] william voegeli is senior editor at the very excellent claremont review of books. he's the visiting scholar at claremont mckenna college salvatori member. he holds statute in political science from loyola university in chicago has for a long time at the foundation. he's written for numerous publications including the city turnover among other things he's offered penetrating insights into california's future is here a defensive anti-tax absolutism, which is one of our most trafficked pieces of all time. his previous book was never enough, america's undisclosed welfare state. he's also not mean-spirited at all. i still now discover, william voegeli. [applause] today, ladies and gentlemen, back in the day when i lived down the street from larry and kathy mullen and the john olin foundation but janice luttrell and jim person. i used to go to a lot of these manhattan events. i learned a lot with these great speakers, so it's a real honor to be here with you today. i wouldn't be here today. i wouldn't have what is starting to seem like a writing career if it weren't for carol mann at the peril man literary agency and most of that two of my editors, brian andersen who presented all my pieces for the city journal and outside books published pity party. you will get his growing sense of the editorial skills as you reflect on the fact that prepared today's remarks all by myself. [laughter] modern american liberalism and compassion. what's up with that? kindness covers all my political principles says president obama. a prominent liberal asserts the quality that fits progressives apart if they care about other people, not just themselves. and conservative shake their heads. can liberals really be so fatuous as to believe the profound challenges of politics which have confronted and usually got the better of statesmen and philosophers are in fact so simple and they are all we need to secure justice and peace. they are the lives to suggest that operation to about the project could be explained entirely to their opponents create, cruelty and pathological mean-spiritedness. they are yes and yes. the longest possible for the longest publishable answer is "the pity party" are now available in hard pack and e-book editions. between answer is, i know that stories and of the "the pity party" would be the problem with compassion, a big problem derives from the left. excuse me. i don't talk. compassion literally means supper together. that doesn't mean identically. it doesn't mean i'm necessarily necessarily -- i don't know what to do if they gave that thank you. together in the political contact also turns out to mean your homelessness can the elements compared to stress makes me feel that it affects me. and now because of the reaction, my reaction is so far so good. but that self regarding turns out to be sort of a trap door. because of what we see too often miss the liberal project is much more concerned with caring about kerry and then caring about helping. as a result of the more logic of passion, weirdly indifferent to whether there projects is that they wanted to do. if we are feeling better, it turns out the air theory better. i got to be the goal of any rational government side of public policies. so let me talk a little bit about how compassion wound up the intra- goal to the liberal lawyer. first of all, liberals are in favor of the most basic political problems ended peacefully asleep. they can be solved by social contracts. where we agree to disagree about the contentious questions from a religious chief among them. liberals are not alone so conservatives and so it is a large portion of the american population that doesn't think about politics from left to right terms or doesn't think about politics much at all. it wants all of these advances of the modern party because of all the offenses at the premodern party. liberals want the maximal autonomy, different strokes for different folks and may also mark togetherness for the sense of caring and sharing that pervades in a united society as hillary clinton lamented in her politics of meaning speech in 1993. we lack meaning in our individual lives have meaning collectively. they are produce a greater effort that we are connected to one another. from the liberal perspective, compassion solves this dilemma. we can have the best of both perkins, ancient and modern at the perfect liberal is someone so compassionate that he cares profoundly about how you wire. so nonjudgmental that he could not care less about what you do. it is on the space is liberalism believes the demands of individualism with those in the community. this brings me to my second compassion. like every political dispensation, and it ultimately best for certain precepts about human nature. the liberal view that's distinctly hopeful on that score we can understand the perspective by tasking with the american funding, which viewed him with suspicion and resignation in the federalist papers, for example, james madison says to navigate the narrow to interest path between tierney and anarchy to cover her ambition and apply the defect of motives of rival interests. liberals by contrast take the solution to our most fundamental political problems does not lay it supplied the defects of the motives. but we willing need are better motives. underlying on the better angels of our nature is a perpetuating self-interested conduct by making it the fuel for our political machinery. the police documents are not inherently selfish, which means their relations with one another are not necessarily borrowing heavily from jean-jacques rousseau. not coincidentally the great advocate of compassion are the best aspect was precisely why basic and accessible than the calculations necessary for ambition and to cover ambition. a third book about modern liberalism and compassion. liberals have come to emphasize compassion more and more because they have decided to emphasize progress less and less. the incident of the progressivism that laid the foundation for the new deal and enter rations of globalization was the belief in progress and learn to love for nature to explain to the physical world and their discoveries gave new capacities to control technology. now social scientists would arrive that an equally penetrating grasp for the law of history creating a science that can perceive the powers of mankind to have to then accelerated. at the middle of the 20th century however, progressivism's land continent in progress was no longer sustainable. liberalism arrived to tell a terrorism by making it all and pass on the fact value distinction of moral relativism. the spirit of liberty is the spirit which is not so sure it's right in 1944. among the problems at this popular formulation is that it renders untenable the idea that we can know the truth about progress. progressive numbers are just some people subjective purposes. rather than current solutions derived from facts that are true and empirically verifiable. compassion has proven to be extremely valuable in this regard and has played a growing role in liberals rhetoric in health understanding. yes, compassionate liberals cannot say our project for alleviating suffering does rest on nothing more fundamental than art who suffer. and whatever would it be better to formulate policies on the basis of indifference to suffering. moreover, making compassion the rationale for liberalism once it sells to apologize him about components. there is something ridiculous about the do-gooder, is an endangered species. but if the alternative is to be a due batter or a do-nothing or, the liberal do-gooder books solid by comparison. progressivism now means less coherently, but also less problematically enon the right side of history. happily, such claims do not thought of the admonition not to be too sure when it's right because all it really means is the world will fulfill its destiny of becoming a nicer and nicer place as long as the nice people committed to that my school never to the main people who want the world to be a mean place. mommy now straight to is which liberal compassion doesn't work very well on the foreign practice. first, being simultaneously compassionate and nonjudgmental, caring about how people are, but not about what they do. disregard the many important ways that what they do determines how they are. liberalism's moral paradigm for social worker programs is the relief effort after a natural disaster. for the same reasoning, try to frame every issue they can in terms of children's needs and vulnerabilities. governing entire nation on the basis of the next children necessarily and tantalizes those who are not children. it is a perverse, reckless compassion that urges people to tell him all the ways that cannot be expected to help themselves. and so, much will have the sympathy and generosity of others rather than all the ways individuals and families can discipline and determination prevail against event of severe challenges. history provides no basis for their belief that day pass for individuals or groups to acquire significant, durable social and economic damages to go sorry for themselves or induce others to feel sorry for them guilty about them. but the embrace of victimhood secure since dad is a debilitating it and teach it being primate dependent on the kindness of strangers. second point. liberals hopeful trusting view of human nature police counterintuitively to strike denunciations of those who disagree with him for his stymied the progress of the liberal project. the world's default option is to be a nice place. liberals explain all the way it remains an ugly and difficult one in terms of stupidity or psychological mythology. liberalism exists to solve problems and recurs every source of the satisfaction or discourse has a problem, not an aspect of the human condition would like to ameliorate, but can never eliminate. the belief that humans are naturally this close to one another in one another in ways that are peaceful, respect old and mutually uplifting helps explain but not justifying liberal vilification of those alleged to have caused the problems they seek to solve for who oppose the solutions they seek to implement. christopher lach wrote 20 years ago under the full tetsuya leaves when confronted with resistance to their initiatives, liberals betrayed that i miss featuring a live not far beneath the smiling face of upper middle-class benevolence. opposition to humanitarians, opposition makes humanitarians forget the liberal bridges they claim to uphold. they become petulant, self-righteous, intolerable in the heat of political controversy they find it impossible to conceal their contempt for those who stubbornly refuse to see the light. third and final point. liberals view of human nature jeopardizes many valuable things the modern art in chief among them. they are, for example, inclined to interpret by which i mean to misinterpret people who detect their way of life as people who aspire to it. tolerance, nonjudgmental liberals instinctive response when islamist terrorists commit acts of mass murder is in paul's words to suggest ways that which the apparent mythologies are anything but the colleges and terror was reasonable inexplicable and perhaps even admirable of the present beheading videos, the spectacle of black uniformed warriors conducting human sacrifices gives us at shows, but it also makes us size. we tell ourselves, here is what comes with going to provide adequate social services to do then in blighted neighborhoods. in other words, liberals first reaction is to believe that if these people simply appeal to the decency late teens and others will ultimately be well. conservatives are not always clear or in agreement with one another about what exactly we are trying to conserve or why exactly it needs conservation. i submit that american conservative task is to conserve our republican experiment in self-government because republics are permanently vulnerable to the work of sustaining the endlessly daunting a permanently necessary. conservatives oppose liberalism because we think it is mistaken, but also because we know is attractive in ways that make it especially dangerous. i am an employee of one can server to think tank thinking here is the guest of another and even irish liberalism were true. i wish that people and nations were so strongly disposed to get along with one another that eternal vigilance was not the price of liberty. i wish that wealth were so generated for the gratified by since i distributed it could be dissing nature of the challenge in process of producing it. i wish the elemental emotion of compassion harbors so much power and wisdom that it divided clear answers to bother dieting questions about how to govern republic or 380 million people in a world of 7.2 billion people. i am pretty sure however that these wishes are and always will be just wishes. to take them seriously makes a hard task of governing even harder and the dangers inherent in republican isn't even more dangerous. liberals are as proud of their idealism as they are of their compassion. conservatives are very late, very afraid of both. edward kennedy spoke at the memorial for scully property in 1968. some men see things as they are and say why. i do things that never were and say why not. the kennedy speech writers may not have informed their employers said they were paraphrasing george bernard shaw who wrote you see things that you say why. things that never were and i say why not. the lion appears that today's speaker addressing the garden of eden is the sarabande. everything is possible he goes on. everything. thank you. [applause] >> we have time for questions. just wait for the microphone to arrive on tv. we will start at this table over here. please identify yourself, too. >> i am bob weisberg. then they give you oppose trivia question. how do we know what is the authentic aim of progress for the housing projects -- [inaudible] you can also argue a great source of jobs. this was for example is really aimed at improving developments are a kind makework per program for people to know of choice other than babysitters. the true theme of progress. beats me. [laughter] but i choose to at least attempt to understand our liberal friends as they understand themselves. some of you are old enough to understand for the ensure every week was who knows what lurks in the heart of man. they may know, but i don't. i think a fair step in point is to say that the people who set up programs like head start at one point really were sincerely interested in having a good effect. but although you post is an caterer question, the ball cancer is the problem that often happens is once they both intentioned program is set up, to solve the problem turns into the effort in colonizing the problem, lives, career, reputation are all dependent upon the perpetuation management of the never the resolution or disappearance of the problem. >> my name is steve hoffman. my question is i think maybe it was winston churchill that said if you are not a liberal when you're 28, you have no heart. if you're still liberal when you're 40, you have no head. i'm having a problem with determination liberal. comes from the word liberal. the problem -- my question to you is we all understand that what they call liberals were, as to use the word about progressives, but they -- their heart is in the right place. so my question to you is what it makes sense, particularly in light of the recent election that republicans, if we changed our approach to how to help the have-nots grow up. i like the belief of you and the rest of mass would be nice if you will, believe them both for id. and also help being the have-nots. the taxi stand -- >> what's the question quick >> question is would it make sense in your opinion for great involvement between an obama who is now basically -- [inaudible] to make a deal on tax reform to get rid of all the subsidies for the rich people and only limit them to needy people, meaning taxpayers, basically ideals. would you support that kind of approach? >> first of all, the terminology , the current use of liberal for the new deal approach really is sad and that rent the rest about, a lot of his gray sort of political rhetorical achievements, herbert hoover never consider to be called a conservative. the way in which fdr used that term to amalgamate the new deal but the american founding, with the liberal tradition of shoppers then was an important event in american politics. it wasn't until the national
New-yorkUnited-statesBeijingChinaCaliforniaManhattanRussiaWashingtonDistrict-of-columbiaCincinnatiOhioLondon we start giving that back a little bit. we did see some big gains across the board. if you check out currencies, you'll see right now that the dollar is higher against the euro and the yen. euro is trading at 11.3764 and the yen is at 103.94. and the ten-year note spoke of 2.8% on wednesday. that's the highest level it's seen in just about two months. you can take a look and see it's just below that at 2.79%. andrew has some of today's top corporate stories. >> news this morning, joe referenced it earlier, citigroup federal is under investigation in a criminal probe under their mexican unit banamex. the question for citigroup is whether investors ignored signs of money laundering. they're facing a civil investigation in the securities and exchange enforcement unit. citi released earlier bamamex uncovered apparent fraud. so just when you thought is citigroup was out from under it, it has further reserve about its capital. also now taking on tesla securities, a notice it intends to appeal new jersey's ruling that would stop it from selling its vehicles in the state. the notice was filed last week. shares of tesla, you can see what's going on this morning given all of this. they are up marginally. they will keep the showrooms, but they won't be able to physically sell you the cars. >> so i know you saw that the other night. and remember they showed the tesla? i thought that was joke. >> no, it was -- >> i thought it was a joke. i did not know what a huge -- and scott pelli was like, yeah. but i heard it and i thought, that's funny because everybody knows they're silent. but they said can we put in sound effects? >> they put in noise. >> it will be like your iphone where i have that list of things that i can choose from. >> like the phone where you -- yes. >> you can put whatever sound you want in. really -- >> on honestly, i was stunned when i read that, too. >> you know, this video we have of the tesla, i guess we didn't have an audio guy there. let's put some -- we need to put some -- i can't hear this car. let's put some sound in there. can you imagine the idiot that did -- it's classic. it's really funny. but it makes me feel a little better. 60 minutes. 60 minutes. it can even happen there. i love it. >> makes me feel better about what we do all the time. >> i know, i know, yeah. wayne's world and compared to -- yeah. we're not in anyone's basement, are we? we're in the global headquarters. another record close for the s&p yesterday, fourth straight day. the index climbing five points to top 18.90. that's 42 divided by 1848 is -- we're up for the year, so i would say it's a little over 2% or so. it had been as high as 1,893. stocks getting a boost from the adp report. it was almost 200. the dow gained 40 points to finish at 16573. just a few points shy of a record close and the nasdaq gained 8 points. there will be more economic data as there always is. you have confirmed it thursday, andrew? >> thursday. >> jobless claims coming up today. and trade deficit numbers at 8:30 a.m. eastern. it does kind of all -- when you get up at 4:00, it seems like -- you know, i get up and i'm going bed again. the alarm is off again and i'm not sure what day it is. >> not only do i not remember what day it is, i don't remember what everything is nor. i used to be able to remember, if it was a pink page, it was the financial times. if it was written in the certain times, it was "the wall street journal." i don't know what i read from where. >> all i know is tuesdays because that's when the -- >> andrew's column comes out in the "new york times." >> thank you. >> you just realized the it this the way, too. >> you write a column for the "new york times," right? i was looking at ordering some cds yesterday. >> online? >> that's what i said. i'm surging into the future basis buying cds online. >> you have to buy something online. >> you are at a point where it's in the past, but this is residual? you don't think you're contagious? we have a camera over there set up. >> i know. >> your eyes are watering. you're taking like -- >> that's because i'm trying to hold the cough in. >> but do you think you should be here? >> probably not. >> you look nice. your hair looks -- the they did a good job today. >> thank you. that's gayle taking care of me. >> as much as i like andrew, the two of us -- you know, it helps. >> i missed you guys. i had to come in. >> we missed you. >> yeah. she won the jumble on monday. i thought you were going to wait until next week so you could have a 11-0 win for the week. >> no. i told them i really wanted to be here for april fools' day because i had planned out this things that i was going to get lets paper ahead of time and i was going to -- >> i would have noticed it. >> i would have won and you would have been really mad. >> it's like these are not words. >> i would have come up with maybe foreign words. >> who is this? oh, yesterday we were alternating each line when we were reading. >> oh, that was nice. >> can we do it -- three ways? >> or we could just go ahead and introduce ross who happens to be standsing by in london with the global markets report. ross, good morning. >> hey, good morning, becky. good to see you. waiting for the ecb today to make its latest decision. it comes against the back drop of inflation hitting .5% for the month of march. they have a rate of 2%. the imf is coming out and saying there is a case here for mormon tear easing, particularly in terms of the debt sustainability. you don't need deflation, just very low inflation making it incredibly hard for countries like italy to pay down their total levels of debt. the ecb might turn around and say we don't have a problem with inflation because it seems like energy and, of course, because we've got structural changes going on in the peripheral. nevertheless, it is cranking up the pressure ahead of that. european stocks are weighted to the downside. around about 5/4. we are down near the special lows at the moment. this is where we stand with the ftse 1100. fairley flat. we have pmis today out of the uk. they were a touch lower, the composite number 58.1. march 58.6. but it's still point quarter on quarter growth of .7%. a sweet spot for the bank of england. they have lower inflation. the xetra dax and cac 40 are fairley flat. 53.1, the flash is 53.2. germany, a little slower than it was for france fairley stronger. the important thing about that pmi number, though, is it speeds into the inflation story because firms are saying the best activity for three years but only at the expense of slashing pric prices. it all feeds back into what's going on with inflation. the ftse up 0.5%. down in terms of sectors in europe. this is where we currently are. there we go. the banks up 0.3%. insurance up 0.2%. retailers fairley flat at the moment. utahs, basic resources, telecom res taking the weakest point of it, as well. that's where we stand in europe. all eyes on the ecb. we do expect no action, but how dovish will mr. draghi be in his testimony and will that start to take some pressure away from the -- what many regard as an overvalued euro at the moment. back to you. >> all right. thank you, ross westgate. good to have you back with us every day. a shooting at ft. hood, another one, has least six dead and 15 wounded. jay gray joins us with more on this the story. jay. >> good morning. shock, disbelief, a lot of people wondering how this could happen in the span of five years, that two soldiers here would open fire in this latest atta attack. the suspected gunman, 34-year-old ivan lopez. he had only be at ft. hood for about three weeks. it's the largest o post in any nation. 50,000 people live and work on this base. look, this happened just after 4:00 local time yesterday afternoon. shots rang out in the motor pool here. he apparently fired shots there and then got into his car, fired shots from the car. moved on to a medical facility here on the post and continued to fire shots. he was confronted by military police and apparently, according to officials, turned the gun on himself. 16 people are jrinjured. this morning, at least three of those are still in critical condition and that's something officials are continuing to monitor as the investigation continues, as well. federal agents, the fbi on hand here. inside right now his apartment just off the base here. we talked with a neighbor who lives in that complex, said that she was with his wife at the time she found out that her husband was the one that was being suspected of carrying out this attack, that she broke down, was crying uncontrollably and didn't understand how this could be taking place. she's with authorities and is said to be cooperating right now as are investigators, state and local police are trying to get to the bottom of what's happening here. it's reopened some wounds here and brought to the surface some emotions that this community has been dealing with for almost five careers. you will remember major nadal hasan killed 13, injured at least 30 in an attack here. and just late last year, his trial ended. he's on death row right now. that was an act of terror across cord to go officials here. but what they're telling us is this was not. it was an argument that obviously escalated. they'll. their investigation. that's the latest live here at ft. hood. i'm jay gray. becky, joe, andrew, back to you guys. >> that the first one took a long time to decide that was an act of terror, too. but this one looks a lot more clear cut, jay. >> yeah. >> thanks for your report. feel bad for that -- not only did the lady lose her husband, but he's a perpetrator. it's just awful. let's take a closer look at the u.s. markets with the jobs report just a day away. here with us now, chris redford, a coportfolio management of the niedhan growth funds. >> we keep an eye on the macro. you know, we've been through a pocket here in the last few weeks where we were kind of light on news. the market traded down, but we're entering now april earnings season picks up next week. but, yeah, labor numbers are going to be what they're going to be. we know that weather was terrible in the first quarter. so if that is an anomaly, that's great. maybe we'll see better numbers. if we see weaker numbers, the fed will still -- >> is there anything that would change your approach to investing based on job numbers when you're in a niedham small cap growth fund? i can't even imagine that -- it's almost background to you. >> exactly. we're longer term investors. >> so let's talk about the small cap. i think they outperformed in the last six months, the caps. they had years of outperformance and then some underperformance, right? >> about two-and-a-half years of not great performance relative to larger caps. i think people went to liquidity, which is larger cap companies. >> are we still in that period? >> we are in a bit. i think there's a value to liquidity. and i think, you know, around this whole story of this high frequency trading, does it provide liquidity or not? i don't know. but it's -- you know, for me as a small cap manager, i'm certainly looking at companies and what volumes they trade, what's my ability to get in and out. but in many cases, companies that do have low liquidity have great investment opportunities. a lot of other managers that are shorter term won't move into there. >> one thing about this story a lot, again, just -- i don't try to. it just pops into my head. i'm convinced that -- >> circles on malaysian airlines. but actually, i'm interested in because it's what we do, obviously. as far as free and fair markets, i have no doubt that in the united states -- you think our markets are rigged? go to russia, go to china, go to emerging markets. >> and when you identify things that aren't fair -- >> i'm not saying that. i'm saying if you want to talk about something honestly that's rigged. tell me, though, that the bond market is not rigged right now. with a straight face. >> you mean because of the fed? >> yeah, because of the fed. tell me that prices are not manipulated in the bond market. >> you can say that at any point because of the u.s. government. the u.s. government can step in and change the rules at any point. that's the always been the case with any market. >> not to this extent. normally bond prices are allowed to find a more normal -- that has not been the case since the financial crisis. that is something jim chanos will talk about later on this morning. >> even libor, compared to holing the ten year -- >> one goes to trust and confidence in the government, but there's one thing -- >> no, there's not. >> but i'm saying there's an established rule and this is something very different. >> the s.e.c. established these rules. >> he thinks you're due for something. you may not pay attention to the jobs numbers, but would you pay attention to a broader macro issue like that. >> i think the fed has been supporting the market for years now. >> that goes without saying. >> yeah. they've been impacting the yield curve on the short end and in the mortgage markets and so forth. but i really don't see that they can change the course that they're on because even a slight uptick in interest rates has an impact on economic growth. i mean, yes, we had weather, but how much was the impact due to these higher rates here? >> and in reality, in the journal's piece today, it's never been cheaper for individual investors to tray stocks. it used to be -- i was a broker. it used to be $300 or $400 to trade 500 shares. it's now $700. these shares skimming that you're seeing with the htc, maybe they're front running. maybe they shouldn't be ahead of that. but in terms of it not being where individuals can't make money in the tock market because of this, that's -- >> well, they create this situation where it's so cheap or could it be even cheaper if you actually took that -- >> you're getting close to zero. it's pennies at this point. that's not going to make or -- that's going to the make you successful or unsuccessful in investing. and as you pointed out in your wonderful column, the people that -- the customers of the high frequency traders are pensions and individuals and everything else. so it does get sticky. and i can't tell that bothers you. because you're not really able to come down hard against these guys because you realize that it's not -- it's a gray area. >> it's a gray area because it's not the guy on e trade against -- >> the guy in the helicopter? >> it's just not. >> is that the guy with the helicopter? why a helicopter? because it's a helicopter. anyway, what's your favorite small cap stock, have you got a couple? >> yeah. we're certainly looking for small cap companies that are in growth. >> have you got names? or you don't do that. >> well, i really don't throw them out there right now. but the larger cap names that we do in our growth fund -- >> the larger cap/small caps? you're not going to give us any names, just the larger cap small caps? that's helpful. >> i think there's still an upgrade cycle in the optical world. you see a lot of players out there. >> do you know what he's talking about? >> i don't know. >> your broadband is growing faster and faster. there's more data out on the marketplace. >> so who is in that -- like what company are you talking about? >> there's companies like near foe tonic, a small capital company. another larger one is called sinisar. but, again, you had a tough weather, you know, first quarter and you're not out there installing equipment in the cold weather. so i would probably look to a better second half for a lot of these companies. you know, anybody that was outdoors working was probably impacted by the weather. oil and gas services, we're seeing a resurgence here. you're not out drilling when fluids freeze up in north dakota, you're probably not drilling as much the.but we will see a recovery there this summer and in the second half. >> thank you. >> thank you. when we come back, two things you would never dream would be mentioned in the same conversation. miley cyrus and russian sanctions. and as we head to break right now, economic out a stock that's been hit by a wrecking ball of its own. yelp took a hit wednesday. find out why, income. out why, . we're going to continue to see these storms firing up as we go throughout the afternoon. these storms, a possibility we could see isolated tornados. right now, we have a thunderstorm warning in place for parts of st. louis. if you're in the red today, this is not good. this is where we're going to see stronger storms, possibly retation out there. a lot of rain coming down. severe weather extends into parts of the atlantic, towards the ohio valley down towards the gulf coast states. now, the other part of the story, it says it is april on the calendar, but unfortunately we're looking at more snow coming in across parts of the upper midwest. that includes minneapolis, fargo, and you want to know how much snow we're talking? in some of these locations as we go through tomorrow, we could see a foot or more of snowfall. you can see see for areas of duluth, minneapolis, you're right on the cusp into the arrowhead of minnesota and marquette. it is april, but it certainly does not feel like it. typically, they see about 2.1 inches and some of those rotations are going to blow through that. becky, back over to you. >> right now, it's time for the executive edge. by the way, this may be the first time that miley cyrus has made the cut. one of the venues in finland that she and pop star justin timberlake is going to own this spring controlled by a holding company. those three russians happen to have been singled out by russia's annexation. according to the wording, the u.s. sanctions live nations should thee receipt cannily be barred from completing any financial transactions unless it first accepts special permissions from the u.s. treasury. guys, do you think something like this would ever have happened? >> i -- thinking back on miely, the -- maybe the -- what did she pay the guy that said do this with that thing? it was priceless. that was that, $100 million? >> wrecking ball? >> no, i just mean that performance with the cat and the tongue and the twerking and all that stuff. it had to be worth $1 hup million. that, too. what i saw that i think is even more interesting than this is that skid more college is offering a course now on miley cyrus. it's called the sociology of the miley cyrus. >> you're kidding me. >> race, class, againer and the mead kra. you can study and get school credit at the same time. and they talked, i think, one of the professors there. she provides rich examples for analyzing aspects of intersectional identities and media representation. and i think that -- >> i will say that is more legitimate than some college classes. >> some examples of what you can learn, uses of culture across race, class and gender, bysexualitity. the rise of the disney princess, gender stratification, commodities of chideholdhood. >> this is a liberal arts school. and you wornder why we don't hae people able to go into the i.t. area and get a job for $80,000. they're prepared here with liberal arts for -- this prepares them for what? >> i don't know. i don't -- did she need to? >> i think back, there was a wine making class, sex and literature was one of the courses, there was a class called bugs and dudes, which i think was really called man and insects. there were so many dumb -- >> i was all for literature. i mean, you don't want to -- >> that will help you with the -- >> but i can't believe you're saying that this makes sense, becky. >> look, i honestly think that -- it is more relevant to what is happening today and to using the media to manipulate you, if they teach it the right way. >> and actually interest students. >> i think i get that. >> i think i'm understanding why you like this now because you're alma mater has a course on beyonce, which i think that might be -- i mean, beyonce -- >> look, when you dig through college courses, there is some ridiculous stuff offered. >> but they're trying to get the kids in the class. i understand what's going on. >> that's why we can't do anything. >> becky, did you take this? poe lit advertising buyon say is the name of the course. >> you're kidding, right? >> no, i am not. it used -- >> you're making that up. >> "my life, i have it right here. >> you've got to be kidding me. >> beyonce should have a course before miely. but you're just sad it's rutgers. >> really? >> yeah. i can't believe the way everything converges and plays perfectly together here. rutgers, becky. >> like i said, i remember some of the classes that were offered and i took some of them and i would never let my kids take them. >> the entire football team is enrolled in this course. i don't think you have to work that hard, necessarily. >> that's not true. >> you could use a little help with your football team. yeah. but we keep the standards. yelp shares taking a nearly 6% head in wednesday's trading. that reflected concern over a legal request for the identities of anonymous users on yelp. the journal says the review site gets about six reviews each month. many stem from losses brought by business owners. the ftc says it got more than 2,000 complaints about yelp from 2008 through the beginning of this month. but the stock falling after that information was posted on the ftc website yesterday. guys, i know i've talked to small business owner who say this is so unfair, i have a competitor in town, i think they're the ones who are giving me these negative reviews. and there was a harvard business review that showed that your sales could actually be affected by your rating on yelp. >> yeah. >> so i'm so conflicted on this. there's part of me that likes the idea of anonymity online and that allows the free flow of information. and then there's part of me that realizes the damage that can do and to the extent that people can be anonymous, how dangerous that is. i don't know where i truly want to stand on this. i kind of want to stand with the folks on the other side of the review. >> i think because it affects the business directly like that, that's not good news. >> anonymous, anonymity and the internet is a pretty hideous combination. >> all the time. >> but we have the whole universe covered. the people that hate you and people that hate -- the they're haters. they have that in common. but we've got the whole gamut covered, right? >> i think they would hate under the wrong name, though. >> you'd rather have hate under their own name? >> i would like them to have hate under their own name. >> i see a lot of people write in on twitter, they created a twitter account just to send one hate message. >> oh, really? >> you've seen that, haven't you? zero followers and zero -- it's the first tweet that they've done and they send it. it mustn't be very hard to do that. >> right. >> i'm going to talk to costas about that. anyway -- >> he will take your tweet. >> when we return, the issues facing the ecb as they chart the future policy of the euro scope. plus, a first on cnbc report on small business confidence. right now as we head to a break, take a look at yesterday's winners & losers. at your ford dealer think? they think about tires. and what they've been through lately. polar vortexes, road construction, and gaping potholes. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. woish elcome back to "squaw box." i'm joe kernen along with andrew ross sorkin and becky quick. a busy day for us even as investors look ahead to tomorrow to the big jobs number report. we're going to get the labor department's weekly report on jobless claims. we're going to get february trade deficit. the ism nonmanufacturing index will be out at 10:00 a.m. eastern. elsewhere, san francisco fed president john williams says the federal reserve -- anything is on the federal reserve. the federal reserve should start raising rates in the second half of 2015. for the entire empire. but he says once that happens, rates should be raised only graduately, keep them well below normal levels going into 2017. williams is not a vote onning member of the fomc this year, but he will be one next year. obviously, a very busy man. and i don't think he knows -- >> he hasn't done anything lately with any movies. >> i think he can rest on his laurels. and a new look today for those who follow google shares. the google shares you're used to seeing are known as google class a. they will have the ticker symbol goog googl. the new nonvoting shares, known as google class c will get the old google ticker. >> so the one we need to follow is g-o-o-g-l. >> right. why this change? it's able to keep the cofounders in control. they hold the majority of the b shares. >> wait, a, b and c shares? >> i believe there's just -- b shares don't trade. >> that's right. b shares don't trade. >> they're super voting -- all right. i get it. let's take a look at the markets this morning. futures are indicated slightly higher. this is happening, by the way, after the markets closed for the fourth day higher. this is the longest winning streak we've seen for stocks in nearly two months. you can see futures are up slightly this morning. dow futures are up by about 16 points above fair value. and the nasdaq up by about 5 1/2 points. in europe, in the early trading, things are down, but just barely. we're talking about a couple of points on each of those major ipdsys. in asia overnight, you'll ee the nikkei finished up by 0.8%. the hang seng was slightly higher and the shanghai was slightly lower. oil prices this morning look like they're down by about 42 cen cents. crude at $99.20 a barrel. the ten-year note yesterday broke above 2.%. this morning, the yeel is just below that at 2.799%. the dow this morning has been stronger pretty much across the board. the euro is trading unchanged. dollar/yen is at 103.96. dollar is up against the pound, as well. gold prices yesterday snapped the moving streak with a gain of just about 0.8%. you'll see this morning that price is down by about $3.90. $1,287.90 an ounce. the "new york times" plushed a letter without a person's name and -- do you remember -- >> well, that's a good comparison. >> that's a good reference point. >> i just think that -- i just think that -- especially when you're talking about stuff, you can say i found a mouse in my pasta. there was a harvard business review that these yelp reviews had a big impact on sales. >> there should be less anonymity in this world. >> otherwise, it's just a libelous, slanderus mess. >> that is true. on the flip side -- >> you aren't going to flip side me? >> i won't. we're going to go the across the pond. annette is going to join us now from frankfurt. good morning to you. >> good day to you, as well. everybody is expecting the ecb to go into quantitative easing will likely be dispa pointed. mario draghi shows inflation stands at 0.5%. he and the eurozone will not take any action according to all surveys out there in the market. what are they expecting? they are expecting at the council meeting taking place behind me in that building that they're discussing the inflation reading in march. they have to have an assessment whether this is only a one off or whether this is a trend which is going to continue. they are about to discuss the credit dynamics in the eurozone, which is, of course, major concerns here when it comes to the economic recovery. in roughly two hours' time at 8:30 eastern, at the press conference will start and mario draghi is likely to reiterate the statement about the solid footing of the economic recovery. he still sees slack in the economy and that is the reason why interest rates here in the eurozone will most likely stay a lot longer at lower levels than in the united states. back over to you. >> annette, thank you very much. when we return, squawk market master jim chanos is going to be other special guest host. we'll get his feelings about china, the fed, and whether he thinks the markets are rigged. we'll get his thoughts on how bearish he's filing right now. as we head to break, let's see how things are trading in the european markets. switchgrass in argentina,marked change engineering in dubai, aluminum production in south africa, and the aerospace industry in the u.s.? at t. rowe price, we understand the connections of a complex, global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment information, risks, fees and expenses to read and consider carefully before investing. because you can't beat zero heartburn. woo hoo! [ male announcer ] prilosec otc is the number one doctor recommended frequent heartburn medicine for 8 straight years. one pill each morning. 24 hours. zero heartburn. frequent heartburn medicine for 8 straight years. save you fifteen percent or more on car insurance.d everybody knows that. well, did you know pinocchio was a bad motivational speaker? i look around this room and i see nothing but untapped potential. you have potential. you have...oh boy. geico. fifteen minutes could save you fifteen percent or more on car insurance. welcome back. time for the squawk planner this morning. the ecb needs to set monetary policy for the eurozone. a decision expected to come at 7:45 eastern time today followed by mario draghi's news conference. also at 8:30, the government will be releasing weekly jobless claims in the latest international trade data. and then after the bell, grubhub is expected to price the stock. it's an app that let's you order takeout from your smartphone without ever having to make a phone call. it's called teamwork for those of you in new york that use it. that's your squawk planner for this thursday. steve liesman, you are here early today. what do you have coming up? >> a legitimate piece of economic philosophy from a place that doesn't talk about small business. >> excellent. we'll get that next. at the top of the order, we'll bring our exclusive guest host to the table, jim chason of kynikos associates. ates. i have low testosterone. there, i said it. how did i know? well, i didn't really. see, i figured low testosterone would decrease my sex drive... but when i started losing energy and became moody... that's when i had an honest conversation with my doctor. we discussed all the symptoms... then he gave me some blood tests. showed it was low t. that's it. it was a number -- not just me. [ male announcer ] today, men with low t have androgel 1.62% testosterone gel. the #1 prescribed topical testosterone replacement therapy, increases testosterone when used daily. women and children should avoid contact with application sites. discontinue androgel and call your doctor if you see unexpected signs of early puberty in a child, or signs in a woman, which may include changes in body hair or a large increase in acne, possibly due to accidental exposure. men with breast cancer or who have or might have prostate cancer, and women who are or may become pregnant or are breastfeeding, should not use androgel. serious side effects include worsening of an enlarged prostate, possible increased risk of prostate cancer, lower sperm count, swelling of ankles, feet, or body, enlarged or painful breasts, problems breathing during sleep, and blood clots in the legs. tell your doctor about your medical conditions and medications, especially insulin, corticosteroids, or medicines to decrease blood clotting. so...what do men do when a number's too low? turn it up! [ male announcer ] in a clinical study, over 80% of treated men had their t levels restored to normal. talk to your doctor about all your symptoms. get the blood tests. change your number. turn it up. androgel 1.62%. welcome back. u.s. equities, talking about the fed -- >> he's a voting member, isn't he? >> joe, i'm out of the closet. joe kernen is not out of the closet of being a >> steve liesman has come in. he was out yesterday. i had questions. you answered them today.eclecti. steve liesman has come but at least you're here out ye questions stuff, right. >> i'm very excited. nothing's going to happen. you'e draghi stuff, right? >> i'm very anything happens is when michelle is covering for . the only timerow, michelle fills in for me one mir me. i did 111 months what becky has >> i don't know. >> you sound weird. >> i'm a little bit day that. >> maybe this would be good. do? >> i hope not. >> maybe this would be good for your -- the >> this is >> like this?andrew's read. >> andrew, take it away. >> small business owners seeing a spring thaw according to results of pnc's economic outlook. these were legitimate numbers, steve called them legitimate numbers numbers. we want to hear about the numbers. steve is at the table. take it away, tell us what this change is all about. steve hoffman is with us. >> i think it's legitimate. we've been doing it for 13 years. it this is a survey of small business owners we conducted from late january through early march. some of the worst of the winter weather. but we ask them to look ahead. 6 to 12 months and frankly, the small business owners were more optimistic, optimistic, about their company over the next 6 t to 12 months. that's the best we've seen in our'v survey since before the recession began. about 12% were still pessimistic. that's a pretty good spread between those who are positive and negative. >> what's the rationale? >> well, we don't have -- we have details. we look, we say how is that going to translate into intentions? are these intentions going to translate into actions? we think they are. 22% said they intend to hire. less than a handful are going to cut back. that's thet best we've seen in two years. they're going to raise -- a third say they're going to raise compensation. i think the numbers are pretty good. i think we'll get the first taste ofhe it tomorrow morning with the jobs report. i'm at 225,000 drop in the unemployment rate to 6.6%. in general, i think the small business survey of pnc supports, as you said, a spring thaw and better rest of this year. >> guys, there's two ways to measure economic data, one is from the bottom since the crisis and the other one is from '07. very few metrics we follow are back to their precrisis levels. that's why i thought this was a legitimate piece of optimism, not that i was questioning your survey. but if you look at these numbers here, if you go back in terms of economic optimism, those who are optimistic about the economy getting up or near the '07 level, certainly taking out some of the lowest levels and even taking outn some of the highest in the recession, that's one. two is when you look at sales expectations, the other thing. three, you didn't talk about this yet but the notion of raises and salaries out there. >> yes. >> which is, i think that's maybe the biggest piece of actual econ data in this report, that they'll give raises to their employees. >> one-third, mention is quickly, one-third say they'll increase compensation and a little smaller number say they're going to increase hours worked. i dors think we'll see, you kno some more wage increases. we talk about that 22%, we talk about w full-time employment. the results of a smaller increase in part-time employment but i think you're right. some of the most optimistic numbers we've seen since late '06, early '07 and definitely some of the better numbers we've seen on pay raises, at least all this is planned. we'll have to see if it comes to fruition. a good positive sign going forward. >> stew, the other thing is that when you guys -- as a small business has been a big missing element from here. one of the things missing from small business has been t capit spending. business have been doing okay, keeping up their end of the bargain but small business has been reluctant here. what are you hearing about the capital spending outlook, about their plans to invest and ability to get loans to do so? >> another increase, we have 67%, two-thirds that say they'll do capital investment. the last couple years that number t has been around 50 to 55%. that's a significant increase. and then when we dig a little bit, we find technology, particular pcs, computer software and hardware. that's where the money in technology will go. two out of three plan to do investing in their companies when we ask them why, we find they think f their sales, as yo mentioned, are going to be up. it reflects the greater optimism about the outlook for sales and profits in their company. i can tell you from the fed's point of view what they'd like. when we ask them about price hikes we still only see about 37% say they're going to raise prices. even of those almost half say 2% or less. so i don't see in this any signs of any acceleration in inflation or certainly nothing beyond what the fed's 2% would tolerate, indeed maybe supportte the fed' point of view they'd like to see more inflation as long as the numbers still isn't above 2. >> very quickly quarterback your outlook for growth this year and when is the first rate hike from the fed? our outlook is first quarter growth is around 2%. we think it will be 3%, 3.5% this quarter. close to 3% the second half of the year, i think the fed keeps tapering, another 10 billion at the end of april. our first rate hike is not until the fourth quarter of 2015. >> okay. thanks, stew. >> thanks, steve. >> one other benchmark we'll ht this week, i think, almost any job growth at all, we'll get to the level of private sector employment in '07, the peek. we'll finally surpass it. we've been below it. now we'll come back up to that level on friday. >> we'll take that to the bank. >> nice. >> yes. >> there you go. that's you, joe. >> you couldn't come up with this. >> burgundy? >> yes. >> i've been doing time -- >> for t some other guy's crime >> coming up next, jim chanos is our guest host for the next two hours. get the short story on the market, china and high frequency trading. how did edward jones get so big? let me just put this away. ♪ could you teach our kids that trick? [ male announcer ] by not acting that way. it's how edward jones makes sense of investing. it's how edward jones those little cialis tadalafil for daily use helps you be ready anytime the moment is right. cialis is also the only daily ed tablet approved to treat symptoms of bph, like needing to go frequently. tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. do not take cialis if you take nitrates for chest pain, as it may cause an unsafe drop in blood pressure. do not drink alcohol in excess. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, get medical help right away for an erection lasting more than four hours. if you have any sudden decrease or loss in hearing or vision, or any allergic reactions like rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a free 30-tablet trial. at your ford dealer think? they think about tires. and what they've been through lately. polar vortexes, road construction, and gaping potholes. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. good morning, everybody. welcome back to "squawk box" here on cnbc i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching the futures this morning. after a four-day winning streak that culminated yesterday, the dow futures are indicated higher once again. the dow futures are up by 15 points. the s&p up by 1.5. the nasdaq up by 5.5. the s&p 500 closed at a record high wednesday while the dow fell about three points short of its record close since december 31st. the dow pushed above that level at one point during the session before pulling back close to the close. if you take a look at the ten-year note, the yield is at 2.795%. yesterday the ten-year yield pushed above 2.8% for the first time in two months. let's get a check on where the european markets stand ahead of the ecb policy statement which is due in 45 minutes time. the markets have barely budged awaiting the ecb decision. the ecb is widely expected to leave interest rates unchanged. after the decision the ecb president mario draghi will be holding a news conference at 8:30 eastern time. u.s. authorities have opened a criminal inquiry over a $400 million fraud at citigroup's mexican unit, banimex. the inquiry is said to focus on whether weak internal controls contributed to the fraud. we'll be watching delphi automotive today. it's been named in at least two lawsuits involving gm's defective ignition switch and the subsequent recall. delphi made the ignition switch that's been cited in a dozen deaths at this point. according to legal documents, gm set the spes ficks for the switch and approved the final design, still, delphi shares we'll keep on watch. the shares are unchanged. guest host this morning is one of our very own "squawk" market masters and everyone's favorite short seller, jim cha in. os is president and founder of kiniko associates. >> i was kind of kidding about -- the malaysian airliner was a big tragedy. this is something that cnbc cannot overcover because of what happened on "60 minutes," it's number one on amazon, michael lewis's book. do you want to talk about this? do you want to talk about china? i think i was channeling you earlier today. maybe it's a stretch to say that the fed rigged the equity markets. maybe that's a stretch. but is it a stretch to say they rigged the bond market. >> good morning. it's so rare you and i agree on something. >> politically because you're a socialist? you want me to agree with socialism? is that something that -- >> joe, joe -- >> let's agree to disagree. >> let's celebrate what we have in common. >> okay. i'm not rich enough to be a limousine liberal. >> i think the that hft thing is a great story. we'll get into it later, i think, in more detail. i'm only halfway through michael's book. in the interest of full disclosure. it is a good story. what's new is that there's a group of profit seeking people between traders and investors and the exchanges. that's what's new here. but it's not unknown. i sat at my trading desk this week, we know they're there. we know they're extracting a slight tax. we turn our portfolio over slowly, about once a year. for the half a penny or penny we may be losing out on transactions, it's not material. however, it is there. i think that michael lewis raises the one good point, which is is this disclosed, are people giving up information? about clients that they shouldn't be giving up? i think that gets to the point of is there fraud upon the market. >> jim one know they're there. i'm not sure retail investors knew that until "60 minutes" this week. >> do brokers have obligation to disclose this? that really at the end of the day -- and does it chip away at the macro policy story, does it chip away even further with investor confidence? >> right. >> i have a different question. it looks like the fbi and others are now going to investigate this. >> they've been investigating for a year. >> do you think that they should go back -- what might look to some retroactively and criminalize the process if in fact you do find people to front-run the system? at the same time, at least within the industry, maybe not publicly, the last five years we've all understood this take place. the regulators clearly have. >> i leave that up to the fbi and justice department. some might say they haven't criminalized what already is criminal, apropos of today's article. which is far more important than hft. and i would urge everybody to read it. if you don't have consistent prosecution on what i believe was wholesale fraud, during the financial crisis, going after this, i think might be seen by some, it's there in front of us, we better look at it. >> the thing that bothers me is the idea that the exchanges can turn a profit by selling access. you can pay more to get to the front of the line. >> what broadband company doesn't, if you want faster or more data or access. >> we're not talking about the markets. >> you can if you're talking about watching a movie. >> let's talk about the genesis. we have the specialist system. the specialists saw the orders. we all knew that. the specialist was supposed to act contra cyclically. they were supposed to sell in panics, buy in euphoria. they had a mission. they had a role. therefore, they got to see the order book. now people are seeing the order book really that are working pro-cyclically. that's one concern. >> right. >> i think i sent this around to you. we did have an evolution of specialists and market makers and exchanges all of which sort of had these defined roles. i sent around a journal piece from 2000 about night trading and paying for order flow back then. we knew this has been around for a while. >> to me, you can make the argument like the "journal" does, it's not as bad as it used to be. the idea you identify something that you know is not fair in the markets, you see it, do you allow it to continue? it seems crazy. >> spreads have narrowed. what's the contra argument to that? would they be even more -- >> i don't know the answer. >> i don't either, actually. we're not a trading orient shop. the best we can do in our shop is create our own algorithms and know these guys are there and put them accordingly, try to best to cover our tracks. >> i don't think i blame the investor class who's participating in this so much as i blame the exchanges that allow this to happen, not only allow it but enable it. >> it's as if predators will always be there and you're letting this happen in the big game reserve in effect. that's a valid point. to me, the valid point is, is our intent to deceive and are you disclosing this to all the parties? i think that's one of the real issues. >> they've built a system potentially for the deception to take place. >> right, right. that's the question. >> to get access. if someone wanted to pay for it, they could get there faster. >> but are they ab r rabr. gi abrigating his duty to me. >> is it people knowing there's a trade, they want to get in here, get 2 cents and sell it? is there really 50% that is there fully. >> to me it's madness. i don't see the long-term business model. these things tend to be competed away. i heard something that affects the revenues of the firms already down aquite a bit. these kind of trading things tend to be arbitraged away by their very nature. >> virtue was supposed to go public this week. timing could not have been worse. >> part of their business goes to iex, are they virtuous. 75% of their business is not on iex. i don't know what that means. is that a company that could live in the public markets? >> i don't know, andrew. i haven't read their perspectives. it's hard to know some of the firms that are mentioned in the book have had their own trading glitch problems. so this whole area, i think, is notes afool proof as everybody thinks. but i'm puzzled by the ability of algorithms that just do this to make profits consistently unless they do feel they have some undisclosed edge or where a fiduciary duty is being abrogated. >> we'll dig into this later. but i do want to get out there the idea that you're feeling more bearish right now than you have in quite a while. >> when we came on the show in '09, 2010, i think we've said that the u.s. probably was the best spot to be in a world that was pretty uncertain. we were very, very negative on asia and china. now what we're telling clients and potential clients is it's time to start at least hedging some of your risks in the u.s. market. things are getting a lot more extreme and are calling for what we do. there's certainly many more opportunities in the states than we've seen in years and some of the measures we look at are starting to get flashing, if not red, certainly bright yellow. we're starting to see the activity in the marketplace at the end of 2013-2014 is getting speculative, whether it's ipo activity. >> did you say whether -- did you ever answer me? >> in terms of? >> are the equity markets rigged by the fed to be higher than they should be? >> i think the world central banks, including the fed, are in unchartered territory. >> if he's able to call the other thing rig, this is definitely rig. >> can i finish? >> go ahead. >> price discovery is being absolutely impeded or enhanced or whatever you want. no one seems to care because all of that is on the upside. >> yes. exactly. you care because you're a short -- you're mr. shorty. >> of course. is that rigging? i'll let you define it. >> what about the bond market i said equity markets. >> if you think the bond mark set being rigged by this, i think all asset prices -- >> if you set where you're going to keep mortgage rates and even try to keep the ten-year, i mean, if you say i'm going to keep it here, isn't that rigging it? >> it's an attempt to rig it. >> what about fed funds? can you call that rigging it? >> i think when you talk about -- >> it's all semantics, isn't it? >> fed funds and those reserve ratios, that's clearly within the fed mandate for policy. but targeting asset prices which is new, and is not in their mandate, that has taken us into a whole other part of the ocean. >> how many currencies in the world are rigged? >> all of them. i mean, i'm doing battle with an entire economy that's rigged over in asia. >> we need -- you know, you get money every time too big to fail says. >> on rigged. >> everything's rigged. >> that's a good title for a book, just rigged. >> did you see he has a show on showtime. >> we're making a pilot for showtime. >> we're all trying to get some bit part. he's going to be nice to you today. you were in "wall street," too, abortion of a movie. that was the worst movie ever. >> you should have seen what it was originally going to be. it was going to be an insurance seller murdering ceos. >> are you serious? >> i'm serious. >> you've never done that. >> i tried to oliver stone that usually makes stocks go up. it was counterintuitive. >> jim will be with us for the rest of the show. we have a lot more to talk about. also still to come, higher learning and hoops. the kentucky wildcats are going for the final four. the university's president will talk to us about the big weekend and the sports business later this hour. first, though, pricewaterhousecoopers chairman bob morris is talking to us about his firm closing a major deal. the next chapter for his industry, plus the biggest risks facing business leaders right now. he'll sit down with us right after this on "squawk box." let's say you pay your guy around 2 percent to manage your money. that's not much, you think except it's 2 percent every year. go to e*trade and find out how much our advice and guidance costs. spoiler alert. it's low. it's guidance on your terms not ours. e*trade. less for us, more for you. welcome back, everybody. pwc completed its acquisition of booz & company this morning. joining us is bob moritz, chairman and senior partner at pricewaterhousecoopers. >> nice to be here. >> tell us what this deal does mean. how will it change your business. >> you have to remain relative to stake holers. there's two benefits, first and foremost for our nonaudit clients that need help, it's strategy and execution. 70 some odd percent of the ceos we interview year after year have a concern about can i think about what my strategy should be and equal amounts have problems with how do i get the impact and the results? the acquisition gives us that strategy piece. where before we've been in the consulting business. it's been more around the execution. that's why we've changed the brand from booz & co. the second piece is when you think about our audit business, we need to continue to invest. and the diverse fiction ificati revenues around that entire client base is where that helps. even though we're not able to bring those services in today. >> why do you have to continue to change the strategy? >> auditing is a great business right now. what we've talked about in the past, the trends that are out there, particularly around technology, data, et cetera, our business has got to be more relevant. to the investor, what's the data we should be providing assurance? how can we do it effectively and efficiently? what are the big investments that we gather data, do the analysis and give some appreciation in terms of what does that mean for investors? that's a big cost. >> our guest host today is jim chanos. i know you just met. one of the things he was talking about is it seems how things are getting, at least in some markets, frothier, if you look at ipos, other things. do you any that in the trends you see? you're looking in so many businesses and countries right now. are people pushing limits they weren't before. >> i absolutely agree with the commentary around the bridge that we're getting close to crossing from an economics perspective, from a markets perspective, particularly when you look at the p/es, somebody's transaction will come back to m & a in a second. there's a degree of confidence out there when you go to the small market as you reported a couple minutes ago, the private company sector, et cetera. the fundamentals and how they're feeling is still pretty good. the question is am i willing to pay the m & a activity, am i willing to take the risk of an economics perspective relevant to the market? >> the ceos are coincident -- confidence is an indicator as we know. they're never wildly bullish at the bottom. >> they're doing deals at the wrong time. >> always. >> when we look at our ceo survey, the degree of confidence in the one-year is cautiously optimistic. you look at ceo confidence over the three years, it's human behavior. they're always optimisting. that's remained the same, even with the economic crisis we just looked at. the m & a activity, it's up 10% or so as you look at the quarters. >> year-over-year? this is where it comes back to the business. the offer that we're trying to provide here. 70% of them feel really good when they have an additive transaction. when you look at something that's -- >> accretive? >> yes. the m & a activity is more about that, from a technology perspective, perspective, i.t. companies, heet cetera. that's where you need help. the execution thereafter to get the real value. >> what do you compare that to? it's up 10% year over year. if you look at confidence, the number of deals, where do we watch up? are we back to 2007 levels? >> not yet. no, no, no, you're not there yet. the confidence level you talked about earlier from a small business perspective is getting there. whether it's justified and sustainable, another question. especially if you look 15 into 16. you are seeing some decent trends from health care, no surprise, why? consolidation in scale. when you look at the tech houses, particularly extrapolating out the echo system they're operating in. when you look at the real estate organizations, we've probably seen the biggest increase in m & a from real estate company's perspective as they try to consolidate as well. >> thank you for being here. again, bob moritz. >> i'll jump in as becky's coughing. coming up, much more from our guest host, jim chanos. amazon rolled out fire tv yesterday, the price tag for the set top box, $99. but there could be a shocker for customers looking for the device on the web. the music says it all. more "squawk box" right after this. gunderman group. gunderman group is growing. getting in a groove. growth is gratifying. goal is to grow. gotta get greater growth. growth? growth. i just talked to ups. they've got a lot of great ideas. like smart pick ups. they'll only show up when you print a label and it's automatic. we save time and money. time? money? time and money. awesome. awesome! awesome! awesome! awesome! awesome! awesome! awesome! (all) awesome! i love logistics. could save you fifteen percent or more on car insurance.s everybody knows that. well, did you know bad news doesn't always travel fast? (clears throat) hi mister tompkins. todd? you're fired. well, gotta run. geico. fifteen minutes could save you fifteen percent or more. e financial noise financial noise financial noise financial noise welcome back to "squawk box." this information has been kept secret for more than 30 years. on april 9th, the department of health and human services will release data on how much doctors get paid for certain procedures. a ban on the release of that information was lifted after. we'll see who was the true beneficiary of all this. we have scratched the surface with jim chanos this morning. so much more ground to cover. there's nothing like march madness. are you a badger? >> my family -- i was the black sheep. >> the president of the university of kentucky talks final four and higher learning in the next half hour. you were university of havana? >> i was. >> more "squawk" right after this. at your ford dealer think? they think about tires. and what they've been through lately. polar vortexes, road construction, and gaping potholes. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. your chance to watch full seasons of tv's hottest shows for free with xfinity on demand. there's romance, face slaps, whatever that is, pirates, helicopters, pirate-copters... argh! hmm. it's so huge, it's being broadcast on mars. heroes...bad guys... asteroids. available only on mars. there's watching. then there's watchathoning. ♪ welcome back to "squawk box," everyone. in our headlines this morning, the economic calendar becoming very busy over the next hour or so. coming up at 7:45 eastern time, we'll be getting the european central bank's latest on interest rate decision and policy statement. we'll have that for you as soon as it's out. at 8:30 we get the latest numbers on the initial jobless claims here in the united states. we'll also be getting the u.s. trade deficit. those are interesting numbers to watch for, especially initial jobless claims, ahead of tomorrow's big jobs report. tesla will be filing a legal challenge to that ruling that prevents it from selling cars directly to consumers in new jersey. tesla says that it was unfairly targeted by the recent change in new jersey's regulations. quickly take a look at the u.s. equity futures this morning. after four days of gains you'll see that the futures are indicated higher once again this morning. slight gains for the dow which looks like it would be opening up by 16 points right now, s&p up by 1.3 points and the nasdaq up by 4.5. appreciate data on job cuts in some challenger, gray and christmas. employers announced a little over 34,000 new job cuts last month, bringing the fourth quarter total to 120,000. that's the lowest total in 19 years. health care had the highest total during the month of march. >> let's get back to our guest host this morning, jim chanos, founder and president of kynikos associates. he's also a "squawk" market master. we like to talk about china. it's been three years for you. >> four. >> it's been four years. >> i talked about it first here in december of '09. >> and i hesitate to say chinese water torture but it's been drip, drip, drip. it never completely just imploded although that, i guess, people always think that's possible but most people say it's not possible because they have too much control. are you back? everything all right with you? >> everything's all right. >> i think you're sicker than i am. >> he's not sick. >> is it possible you ever go to the bathroom during a three-hour show. >> you've gone twice. >> i woke up so early this morning. we made this iced coffee in our house that we kept in the refrigerator overnight. >> is it number one or two? why do you keep leaving? is this bladder or do you have some more seriousness? >> good segue for china. >> what's going on in china? >> china, the news of the week, two piece of news, this mini stimulus, the financial markets are back feeling better. china is the only major economy that knows its gdp for the year on january 1. >> i saw you said that. the fed has its own estimates for where it thinks our economy will be at the end of the year. >> of course as things have stalled slightly from 7.5% to maybe 7.2, they're panicking. they're putting another mini stimulus. they've done a mini stimulus every year that we've been talking about china. we will accelerate more on railroad investment, housing investment. the problem is, of course, that's the problem. that's the model. >> the obama administration knew the unemployment numbers leading up to the last election, right? huh? they set those. >> what is the trigger point that ultimately topples this if you think a toppling is in order? >> i mean, again, i want to point out that if you look at -- i'm a financial markets player. if you look at the financial markets, this has been nothing but pretty much straight down for four years. and people just say, well, you know, jim when are you going to be right? well, okay, have you looked at the chinese market, looked at chinese stocks? they've dramatically underperformed. they are down on an absolute basis. they are down relatively hugely. so i think that one has to keep in mind if you're a western investor in stocks, bonds and china, you are participating in a scheme, not a market. this is important. you are basically providing capital to them and you may or may not see profits or dividends from it. i think the alibaba deal will be interesting. you don't own the corporate assets by and large. >> you say stay away from that? >> i have to see the deal. when you own shares in a chinese company, most of time you simply do not own the assets. you have an operating agreement. >> isn't alibaba technically located in the cayman islands? >> they all are. almost all of the chinese companies you can invest in in hong kong or new york, are based in the cayman islands. >> it's not in your favor at all. >> no. putting it mildly. >> all those residential buildings in china, are they still empty? >> depending, hard to get data, again, the most reliable sources we have, there's anywhere from three to six years of supply in everything but beijing and shanghai. >> a lot of sports stadiums waiting for teams. >> sports stadiums empty. chinese figures are based on production, not final sales. putting up something that's empty counts to gdp. >> in a controlled economy, chickens might never come home to roost. >> the fallacy of that, joe, therefore, no economic nirvana will be a controlled economy where you control capital and barrow all the money you possibly can from your own citizens and put up crazy things. >> i think we can do that here, can't we? >> our economy is a little bit different. we have 330 million actors acting separately. in china, it's really the state, still. anybody that thinks that can't collapse because of too much lending has not looked at economic history. >> your portfolio is short chinese companies. >> it's slightly north of 20%, where it's been, if you look at sort of the firstvative like the iron ore companies -- >> caterpillar has done very well. >> yes. >> you're still short it. >> absolutely. absolutely. you read the eft yesterday, the oil industry, the oil companies are now saying we can buy chinese equipment we like down 40% and we're trying to save money on cap ex because our investors are pressuring us not to spend so much money. there is deflation in not only mining equipment but oil and gas equipment, everything that they do, there is pressure. just to put it in perspective, capital spending in the mining area, which is $5 billion a year, in the early '90s got to 15 billion a year in the early millennium. it got to 145 billion a year at the peak in 2012. it's now down to about 120 billion. people really do not understand just how much of a boom there's been in capital equipment ordering in the global commodity boom. and caterpillar was the number one beneficiary of that. >> have you increased your shortened position? >> when the price goes up, becky, you automatically increase your short position. >> did you cover all your shorts in medical equipment? >> pretty much. >> does it make sense that you covered? >> we covered them after we read the bill, after we read obamacare. >> if you look at the news today about opening up the books on medicare reimbursement, how many people will be in medicaid when this is all said and done? >> a lot. >> aren't there going to be immense cost pressures on all the suppliers. >> i think ultimately deflation has to come for a lot of reasons. but clearly when we read the bill, we were almost horrified. i think i said this at the time on "squawk." what we read on just how much of a giveaway it was -- >> to get people to go along with it. >> some might say that, i might even agree with you on that. >> that big a view? >> the fact of the matter was it was going to be very good pore -- for profits for the health care industry. that's happened. remarkably, i think the market, whatever you think of the politics of obamacare, what's happened is we've gotten to the upper bounds of what people can spend. we're seeing health care costs as a percentage of flatten out, in some cases go down. that will happen whether we have obamacare or not. >> it was growing seven points more than the economy for years. i used to say if that happened for another 10, 15 years, it wasn't going to happen. >> i have a different washington question. there was a story "new york times" in the two or three weeks ago about the big ackman herb . herbalife fight. the piece was more of bill ackman's side. the role of an activist has also moved to the role of persuading regulators. what is your feeling about that in terms of your role or the role of big ackman in this case in terms of spending money in washington? >> i'm not going to comment specifically on bill ackman and the herbalife situation. i would point out that article either mentioned obliquely or didn't mention that herbalife spent multiples of lobbying in washington. i think that hedge funds have been down in washington for a number of years. we were part of that effort early in the millennium. i think that increasingly, hedge fund managers have made their positions known, not only to the marketplace but when asked or sometimes volunteering their views. we were vocal, for example, on the for-profit education space. we talked to people in washington about that. i'm still negative on that space. we're still short that space. i think that is federal loan fraud. i think the degrees are sold to kids, they're not earned. i think it's not good public policy to saddle lower income kids and lower middle income kids with $40,000 of debt, $50,000 of debt and make them no plor employable. the hedge fund industry may have had an impact there. so specifically on the multilevel marketing operations, it's no secret that we side with the bears on this one. we think it's a bad business. we think it's predatory. >> right. >> whether it was handled correctly, i'll defer all that. >> in terms of -- i know you have spoken in washington but in terms of spending money in washington, in terms of lobbying efforts, in terms of lobbying to have more regulations around a certain business to help a particular position if you will, even if it's -- >> that we haven't done. >> how do you feel about that? >> i think everybody has the right to do it. i think everybody -- if we'll be in a situation where it's legal and that, trust me, the huj fund industry has had tons of money against it for at least a decade if not more, by all kinds of people. if someone wants to do it, it's in their constitutional right. we don't do that. i will fight for their right to do it. on the other hand, i think it opens you up to certain criticisms as it opened up people in that situation. you have to make a business judgment. from a legal point of view, trust me, corporate america is spending lots of money against certain aspects of wall street. >> right. okay. we'll have much more from jim chanos throughout the program. when we return, the european central bank expected to take a dovish tone following its policy meeting today. that rate decision is just a few minutes away. we'll bring you the decision and analysis right after this. as we head to a break, take a look at the euro. mine was earned in korea in 1953. afghanistan, in 2009. orbiting the moon in 1971. [ male announcer ] once it's earned, usaa auto insurance is often handed down from generation to generation. because it offers a superior level of protection. and because usaa's commitment to serve current and former military members and their families is without equal. begin your legacy. get an auto insurance quote. usaa. we know what it means to serve. welcome back to "squawk box." we are awaiting the latest rate decision by the european central bank, due out in a couple minutes. in the meantime, let's talk about citigroup. federal authorities have opened a criminal investigation into a recent $400 million fraud involving the bank's mexican unit. "the new york times" reporting that the investigation is focusing in part on whether holes in the bank's internal controls contributed to the fraud. michelle caruso-cabrera is on the set with us with more on this. >> the new headline today as "new york times" reports, criminal investigation by the u.s. feds into the mexico unit. the press release came out, we talked about what a large scale fraud it was, $400 million of unpaid or fraudulent receivables in mexico. small considering the revenue that city group does in a quarter, 17.8 billion is what they do every quarter, ecb leaves interest rates unchanged by the way. but the question was really raised about whether or not there are adequate controls in mexico and the mexico unit. >> that came up when the fed was looking at whether or not they would be increasing the number of shares or dividends. >> during the stress test. they didn't pass the stress test. questions were raised about whether or not it had to do with mexico. mike mayo was on the halftime report criticizing the cfo of citi. the guy who must be under intense scrutiny is man well medina mora. this man who i interviewed a couple years ago ran bantumx. he always remained in control and still oversees mexico. his pay was docked by more than a million dollars. it was because they found internal control issues. they were concerned about internal control issues in mexico in 2013. >> does that suggest he was involved or he was lax? >> i'm not suggesting he was involved but at minimum it will raise the question, who's overseeing the place and what's going on there? bantumx has always had a great degree of autonomy. when sandy wild bought it way back when, he bought all kinds of stuff, right? every single group he ever bought was renamed citi. except banamex. >> if the crimes took place only in mexico, how does that relate them back to here? >> are you asking whether or not the fbi has jurisdiction. >> yes. >> i think they must. >> we certainly presume they do, right? but i think that will be one of the questions raised, how is it they have jurisdiction? >> lost in the hft shuffle monday. >> high frequency trading. >> was the tweet and press release by the u.s. attorney in the southern district. i don't know if you all saw it, he put out a tweet saying you can expect a major financial institution to be charged with felony or plead guilty to a felony. and it was in the context of a speech that he gave that day. the fact that they tweeted just that section out, i thought was fascinating. >> and telling. >> that they're preparing you for something. i don't know if it's in conjunction with banamex. i thought it was lost in the old hft brouhaha monday. i've never seen the district say anything like that. i thought that was big news that came and went. >> that is huge. >> michelle, you talked about how the ecb left rates unchanged while we were doing all of this. >> we don't have extraordinary measures. i'm asking the control room. it was considered possible but not probable that they would do something more extraordinary because they're worried about declining inflation and deflation. let's look at eurozone inflation. it tells the whole story. draghi has made clear, one he is concerned about long-term low inflation, one, when you see the eurozone inflation chart, you'll see what the problem is. two, what is critical in the last week is that a member of the bundesbank, the german central bank said it would be okay to do quantitative easing, central banks buying yet as long as it was private sector debt, not like we had done in the united states, public sector debt. >> it looks like there's no additional announcement. we do have an 8:30 press conference from mario draghi. anything additional could be brought up at that point, too. >> the fact that somebody from the german central bank went as far as to say they could buy private sector debt, that has led to a change. look what has happened to italian yields, greek yields, they have fallen dramatically on the expectation that eventually something bigger is coming from the ecb. look at that. that's extraordinary for countries who still have huge, huge amounts of debt on their books. they're the ones who are going to be the most in trouble if they have a problem with deflation. >> jim knows a thing or two about what's happened with these. you've watched it closely. >> the i'm marveling, the country of my people is borrowing at precirisis rates. i find that stunning. >> amazing. >> and scary. >> with the ecb having nothing to fire about at this point. >> i wish them luck. >> they talked to you, didn't they? trying to figure out what to do? >> yes, yes. it's problematic economy. it still is as is a lot of southern europe. >> you're a short seller. what do you tell them? keep doing the same thing, we love it. keep it up. >> no, joe, that's not what i told them. >> you wouldn't do that to greece. told italy that. the final four hoops edition of our higher learning series. kentucky, unbelievable, the twins making a strong run in the ncaa tournament after a lackluster season. they won last year, they con do it again. we talk athletics and academics with the university's president, next. uh, well we are fine tuning these small cells that improve coverage, capacity and quality of the network. it means you'll be able to post from the breakroom. great! did it hurt? when you fell from heaven? (awkward laugh) ...a little.. (laughs) im sorry, i have to go. at&t is building you a better network. ♪ aflac, aflac, aflac! ♪ [ both sigh ] ♪ ugh! ♪ you told me he was good, dude. yeah he stinks at golf. but he was great at getting my claim paid fast. how fast? mine got paid in 4 days. wow. that's awesome. is that legal? big fat no. [ male announcer ] find out how fast aflac can pay you at aflac.com. which will cause me to miss the end of the game. the x1 entertainment operating system lets your watch live tv anywhere. can i watch it in butterfly valley? sure. can i watch it in glimmering lake? yep. here, too. what about the dark castle? you call that defense?! come on! [ female announcer ] watch live tv anywhere. the x1 entertainment operating system, only from xfinity. path to the final four is never easy but some are saying the kentucky wildcats had the toughest draw in history, although wichita state did although they didn't fare as well. joining us now to talk about what it means for the school is eli capilouto, the president of the university of kentucky. i don't know what you put in the twins' water once the tournament started but great teams rise to the occasion, don't they? you did last year as well. >> well, it has been a great run. it's a big run for the big blue nation. we like to call it the big blue family. everyone takes great pride in this success. >> we have to touch on what we'll do with college athletics. have you got the answer? at first i thought that's all we need. i was mad at the nlrb. i don't want them to destroy college sports. and then you hear 40, 50 hours a week they spend, how much money that comes in. what's the right answer? how are we going to work this? >> well, we have 400 student athletes at the university of kentucky. we're quite proud that over the last ten years their graduation rates have gone up every year. they, this year succeeded that for our general student population. we know when they're at the university of kentucky, their studies are taken quite seriously. a couple of times i've traveled with our basketball team, football team. you get home at 2:00 in the morning, the last message they hear from their coaches, you be in class tomorrow morning at 8:00. and we're going to check on it to make sure. >> have you scouted this wisconsin team? we have a guy here, i don't know, apparently he has family members. he's serving wisconsin cheese. jim china nos jim chanos. he's throwing down to you, sir. do you want to respond? was this really necessary, chanos? he's a guest. >> i'm counting on you there. someone told me there was a kentucky fan. what do you have on? >> you know, i like -- i cannot believe that you have a louisville team -- actually louisville won last year, within miles of each other. i don't know what's in the water in kentucky for these guys. i'm a bearcats fan, a rival of louisville. i'm from cincinnati. i can't help you here although i've loved watching the twins. >> it's a great group of kids. when you get to follow them week in, week out, you spend time with their parents, a little bit their stories and how much the team's success and their success means to them. >> we're easily swayed here. the cheese looks really good. >> all the best chancellor but i felt in the interest of fairness in media, i should at least give a shout out to my friends and family back in wisconsin. i'm serving them from wisconsin's finest h esst horse cheddar cheese from wisconsin. >> what do you make in kentucky? i think you know what i'm talking about. >> we make a lot of adult beverages in kentucky. >> thank you, sir. we appreciate it. good luck. can't wait to watch both of these games this weekend. coming up, we'll have much more from our guest host jim chanos, some of this cheese as well. but did you know we also st hospitals using electronic health records for more than 30 million patients? or that our software helps over 20 million smartphone users remotely configure e-mail every month? or how about processing nearly $5 billion in electronic toll payments a year? in fact, today's xerox is working in surprising ways to help companies simplify the way work gets done and life gets lived. with xerox, you're ready for real business. and life gets lived. sometimes they just drop in. always obvious. cme group can help you navigate risks and capture opportunities. we enable you to reach global markets and drive forward with broader possibilities. cme group: how the world advances. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ ♪ [ male announcer ] help brazil reduce its overall reliance on foreign imports with the launch of the country's largest petrochemical operation. ♪ when emerson takes up the challenge, "it's never been done before" simply becomes consider it solved. emerson. ♪ an exclusive interview with a legendary short seller. >> it's time to start hedging some of your risks in the u.s. market. >> jim chanos on the u.s. economy, china and his latest bests on the market. >> mario draghi, will he strike a more dovish tone? we'll monitor and bring you the highlights. >> your window ac unit is about to get a lot smarter. corky partnering with ge to keep you cool more efficiently. >> it's freezing in here mr. biglesworth. >> the ceo of corky will join us with the product's inventor as the third hour of "squawk box" begins right now. ♪ i got a roof over my head ♪ the woman i love laying in my bed ♪ >> welcome back to "squawk box" here on cnbc, first in business worldwide, i'm joe kernen along with becky quick and andrew ross sorkin. our guest host, legendary short seller jim chanos, the founder and president of kynikos associates. we have not called you -- will you listen. you didn't like the -- i don't know why, you didn't like the name mr. shorty. we used to call him mr. shorty all the time. he'd be so mad. that's gone. so i'm not going to call you mr. shorty. i brought it up, didn't i? >> let's get you through some of the headlines. the european central bank left its key interest rate unchanged in a decision just a few minutes ago. look at the european equities, see how things are doing across the pond. i would call it almost marginal. i would call this relatively unchanged. the dow looked like it opened up 3 points higher. mario draghi will be holding a news conference at 8:00. we'll bring you the highlights. we have corporate news this morning. u.s. authorities have opened a criminal inquiry over a $400 million fraud at citigroup's banamex, according to "the new york times." in february, they revealed the discovery of fraudulent loans. joe who's eating a cracker and chee cheese. >> and a new look today. >> for those who follow google shares, the ones that you're seeing, that you're used to seeing are now known as google class "a." they will have googl. the new nonvoting shares known as google class c will be the old one, goog. the complicated transaction was completed to hold the founders in control. they have extra voting power. that's not the only stock like that, though. >> someone else pointed out. the s&p 500 has 501 stocks in it because it has both of these. >> right. >> it has more companies than -- i don't know. >> more stocks -- only 500 companies but 501 stocks that are traded on the s&p 500. there's a first for you. a shooting at ft. hood in texas left four dead and 16 wounded. the gunman ivan lopez went on a shooting industry, killing three people before turning the gun on himself. the iraq war vet was being treated for depression and anxiety. there are no indications this was an act of terrorism but authorities will not rule anything out until the investigation is complete. this is the second mass shooting at ft. hood in five years. 13 people were killed at that base in 2009. let's get back to our guest host this morning, jim chanos is the founder and president of kynikos associates. he's known as a "squawk" market master as well. we've talked about a lot of things this morning. one of the things you see as a big play for shorting is the death of the pc. >> yes. >> it is a slow death but it is happening. there's no revenue growth in this industry. a lot of the big pc companies are oriented even in their services business, their pc centric. they're tied to it no matter what happens. a lot of people have an erroneous view, if i'm in servers or services, i'm not tied to pcs but in fact some of the big vendors very much are. i should point out, we're long the disruptive companies, specifically apple and samsung. >> right. >> i find it interesting that people are willing to pay 10 to 12 times earnings for the companies that are not growing and not innovating but only 6 or 7 times for the companies that are. so i think it's a very -- >> which companies aren't? >> aren't innovating, the hewlett-packards and the ibms, the people tied to that area, disk drive companies. the companies that are showing great returns on capital, incredibly cheap, are showing revenue growth, samsung more than apple, are trading at half our multiple if not less. >> don't you need servers for all the stuff we're replacing pcs with. >> servers are pcs. >> what drives -- isn't the cloud composed of servers? >> do you know who makes google and amazon servers? >> who? >> google and amazon. >> they do. okay. you're talking about the conventional. >> yes. >> servers but not made by the people you think make them? >> exactly. that's the problem. increasingly we see these companies using accounting games. for example, over half of hewlett-packard's free cash flow is from factory receivables. they don't bra ek it out on the cash flow statement. it's in the footnotes. shockingly they changed one of management's metrics for valuation to free cash flow. the value guys love it. it's $9 billion in free cash flow. no, it's not. >> why is microsoft at $41? >> microsoft has been making a successful transition to the cloud. >> that i wouldn't be short. >> you would not. >> no. >> it's not going to be windows on a pc anymore? >> windows will be problematic. they finally figured it out. when you look at some of the old guys who are selling iron, they're stuck in the '90s in the millennium. >> when did you favoriirst tell you were short pc? >> i was chatted for caterpillar and hewlett-packard. we shorted hewlett-packard for a few years. we shorted autonomy. we were stunned that hewle hewlett-packard would buy that at a premium and not do due diligence. >> the stock has had a big run over the last -- >> it also had a big drop, becky. >> looking back, 2012. >> we were short in the 30s. >> in the 30s. okay. >> what do you think is happening? >> dell is no longer a public company. everybody fought at the end claiming he was robbing the shareholders? >> ibm re-invented itself already. >> in the '90s. >> different business model, different management team. an economy that was really -- >> don't they have to reinvent themselves again? >> i think they do. >> can they? >> the other problem with these companies, it applies to ibm, h hewlett, they basically keep the revenues constant by acquisitions. without acquisitions they would be declining. they believe companies expense their r & d like samsung and apple are being penalized when held up against companies like hewlett, ibm and others that don't innovate internally. >> does that apply to cisco. >> cisco, oracle, the old tech companies. they're not only doing financial with buy backs but playing an accounting game by capitalizing their r & d spending. >> the wrap was they had no earnings growth, they had earnings per share growth by moving stuff offshore and buy backs. >> if you actually -- for the value guys who are looking at these things as cash flow, the numbers are stunningly bad. >> go back to what you said good hewlett-packard in terms of the accounting. >> they sell receivables -- normally companies will break that out sometimes in the financing side of their cash flow statement. they just netted out above the line. you have to find it in the footnotes. they sell receivables every quarter. the number now isn't material. it's over $4 billion on an annual basis. >> wow. >> you think the street is valuing it wrong. >> first of all, hewlett's numbers are on a gap basis are well below what they report on a gap basis, another problem with value be the sector. they pay a low tax rate. the real earnings here are stated, as fully taxed are $2 and something. if you go through the other accounting maturing ae ing atma get you a better number. >> it would be nice if you tell us the next enron or united. do you have anyone that's really doing stuff with accounting that makes no sense. >> we have a few companies abroad that fit that mold that we're not talking about. >> wow, you're not talking about? >> only to clients. i have to say something for the clients. >> how much would it cost for me to be your clean the? >> we can talk. we can figure something out. >> don't you have to be a qualified investor? i'm not a qualified investor. one other thing. if china is like this, then i would figure all the emerging markets that are dependent on china i would be worried about. people said tapering would take the fast money out of the emerging markets. are the emerging markets -- >> the emerging markets seem to be monolith. >> should they rush out. >> i don't know. we look at individual companies. >> it's a double whammy. >> certainly the commodity based countries would be hurt pretty hard. >> so maybe we can become his client on a break and you tell us about the company. >> i could do it over crackers and cheese. >> are they companies we heard of. >> some of them are, yes, yes. >> all right. we'll have much more. andrew, will you cut some more cheese, please? >> i can cut some more cheese. >> i know you can. >> much more from our guest host, jim chanos, still to come. plus, comments from ecb president mario draghi. google bought ness labs. now, corky it teaming up with ge to bring technology to air conditioners. up next, we'll tell you why you should be careful when you research amazon's new fire tv. [ bagpipes play ] make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. could save you fifteen percent or more on car insurance.s everybody knows that. well, did you know bad news doesn't always travel fast? (clears throat) hi mister tompkins. todd? you're fired. well, gotta run. geico. fifteen minutes could save you fifteen percent or more. welcome back to "squawk box" this morning, among the stories we're following, tesla taking on new jersey over its sales rule. the electric carmaker filed a notice that it intends to appeal new jersey's ruling that would stop it from selling its vehicles in that state. the notice was filed last week with the state appellate division. shares of tesla, 228.56, down marginally. also, what's this story, joe? >> yes, amazon. you know about this. you'll have one. it's a set top video box fired fire tv. you will, right? >> right. here's the complicated part. >> the device is available now on amazon for $99. the company says that it offers performance three times faster than roku iii, apple tv or google's chromecast. it gives users access to hulu plus, netflix and youtube. >> correct. all of that i agree with. >> by the way, if you're going to look up fire tv online -- oh. is it white house.com or something? >> be careful. fire tv shares a name with a video on demand porn site. the porn site is spelled f-y-r-e. it bought domain firetv.com. more information about the amazon product can be found on amazon's website. >> is that whenever you send me notes using the word fire it's spelled with a y. >> how happy is that porn site that we just did this story and amazon called it that? >> they're thrilled. bad joke to be made. >> did you check it out yet? did you look? >> incognito. no, i did not. i did not. >> when you do your reviews on yelp. >> i'm going to look right now. it's a business story, right. we get jobless claims at 8:30 eastern time. of course it's a business story. you've seen inventions from quirky before but you have to check this one out. they are back with an invention that caught the attention of ge and sparked a partnership. there's a saying around here, you stand behind what you say. around here you don't make excuses. you make commitments. and when you can't live up to them, you own up, and make it right. some people think the kind of accountability that thrives on so many streets in this country has gone missing in the places where it's needed most. but i know you'll still find it when you know where to look. e financial noise financial noise financial noise financial noise ♪ i came in like a wrecking ball ♪ welcome back to "squawk box." invention platform quirky bridges the gap between an invention and production. aeros builds a schedule, powers itself down and can be controlled from anywhere in the world. joining us now, one of the inventor, he invented this thing. then ben kaufman who we had on many times before. he's the founder and ceo of quirky. tell us about this air conditioner. a lot of people have these things in the window. we do in our apartment as well. how is this different? >> well, some of the major differences -- the biggest major difference is the smarts that's built within this product. >> right. >> you can control this from your iphone. >> you can control it straight from your phone. you turn it on. the beautiful thing about it, the network in this place is funky but the beautiful thing about the unit is not only the difference in design of it, it looks unlike most window air conditioners. it understands when you're on your way home from work. >> how does it understand i'm coming from work? >> location. >> do i have to have the app open? >> no. it runs in the back ground. it actually understands your cost of energy and what your budget is for the month. it will turn itself on and off based upon the weather. the intelligence behind this thing is beautiful. working with ge to get this out and -- >> are there ge patents in here? >> there's a lot of ge baseline technologies in the kpes compre. >> how did you come up with this idea. >> the genesis of the idea came to me while driving around looking at apartment houses, commercial buildings, they had air conditioners hanging out of them. i thought, how were they controlling that. >> you have central air in your house. >> i have central air. my air, i use it almost like an on and off switch. i had to turn it up, down, leave it running all day long when i was not there, wasting money. >> did you go on to the website and propose this idea? how did it happen? >> i came to quirky by watching ben on one of the late-night shows, jay leno show. i went on to quirky.com, started looking at the site. it was very easy to put an idea out on the site. >> was this a unanimous winner early? >> what happened was, we get 4,000 ideas a week on quirky. when he first submitted it, we missed it. ge came in, air conditioners are a big thing, does anyone in your community have ideas for air conditioners? we looked back in the archives. >> how much does this retail for? >> about $300, a $50 premium. >> one size only. >> one size only. 8,000 btus this year. we'll do more next year. one of the recent developments on this product, we announced it about a week and a half ago, a lot of the energy companies are calling us up saying it's beneficial for us. there are 6 million window air conditioners in the city. they are talking about revamps. we'll see what happens. >> you always advertise you can become a millionaire on quirky if not more because you get a royalty on every sale. that's why people come to the site. they want to bring an idea to the fruition. do you know how much you'll get on every air conditioner? >> i have no idea what will be earned from this. >> do you know? >> i do. >> tell us. >> garth will make i think your influence is 47%, 48% in the unit. we share 10% of our revenue back with the community. this is an expensive product. it's a $300 product. we think we'll sell tens of thousands of these this year which will net garth in hundreds of thousands of dollars. >> good for you. >> what's the margin on a product like this? you sell it 300 bucks retail. >> yes. >> how much does it cost you to make? >> it costs us a bunch of manien to make it. i don't know. do you usually ask companies what their margin is? >> yes. we talk about margin all the time. >> we rushed this one out. we started it in december, we're shipping in march. for the first season it will probably be in the 20s. but next year it's significantly higher. that's after we pay our community, after we pay all the people involved. >> ge has been doing something with you with patents. >> they put their entire patent portfolio so people like garthen can find uses for their technologies. >> one quick plug. the air conditioner usually blows right on you. this is great. it blows up and -- what's going on here just so we know? >> most air conditions blow air out of the front and sec out of the front. the front grill pulls air in and we throw the air up so it doesn't go back into the unit once it's cooled. >> congratulations, guys. >> fantastic. >> i may have to get one for the apartment. thank you. i'll talk to you soon. joe, back to you. >> ben, are you there? >> yes. >> have you thought about france? that would be total -- do they have air conditioners to start with? are you going international. >> we have quirky in france. there's a french version of the quirky website. window air conditioners are a bit different in europe. they use split unit which is have the expresser outside. about the aros algorithms can be applied to different technologies. >> the total number of units sold per year are 3.8 million window air conditioners a year are sold. >> wow. >> do you have a patent? we're covered, man, don't worry. >> we have actual hard numbers on employment and trade data ahead of ohm tomorrow's big report. we'll be right back. and what they've been through lately. polar vortexes, road construction, and gaping potholes. so with all that behind you, you might want to make sure you're safe and in control. ford technicians are ready to find the right tires for your vehicle. get up to $120 in mail-in rebates on four select tires when you use the ford service credit card at the big tire event. see what the ford experts think about your tires. at your ford dealer. [ male announcer ] when fixed income experts... ♪ ...work with equity experts... ♪ ...who work with regional experts... ♪ ...who work with portfolio management experts, that's when expertise happens. mfs. because there is no expertise without collaboration. welcome back to "squawk box." we're just seconds away from weekly jobless claims and international trade numbers for february. rick santelli has those numbers for us. >> february trade deficit became a bigger deficit. we're looking for a 38.5 billion number, we ended up with 42.3. that's the trade balance. it is a deficit. last month was revised from 39 billion and change to 39.3. so a bit more on the deficit. this is a bit surprising. let's be honest here, one of the big dynamics that's affected our trade numbers whether it's current deficit is that we import less energy. let's look at initial jobless claims. they jumped 16,000 from a slightly revised 310,000, originally 311,000 up to 326,000 and continuing claims, just a slight lat rat moeral move high 3.1 to 2.86. the press conference has most likely begun. i don't have an ear piece to listen to it. 1 137 -- 1.37. are they going to lay additional stimulus on us? but there are several rubs. one of the rubs you know the marketplace is looking at is a lot of the paper that they might want to buy, specifically paper for the southern economies is kind of being use as collateral. it gets a bit interesting. it's always easier to talk down your currency than talk up your currency. if it trades under 1.3740 it will be a one-month low. it is very close to that level on its various lows today. i'll toss it back to you guys. as we hover at 2.80 on a ten-year, close to 1.80 on a five-year and the spread between our ten-year and the european ten-year is getting wide, wide, wide, wide as it's been through the end of the last century. back to you. >> all right. rick, we'll get more from steve liesman. rick, is the bond market rigged by the fed? >> you know what, rigged seems to be a word that everybody seems to have a problem with. i think manipulated, massaged. >> i like that word. >> you can put it anyway you want. i do think all these conversations need to be -- >> we still don't know if it will be a happy ending with the fed, though, that's the problem. >> we don't know about the happy ending. i like today's op-ed in the journal. the real issue, a lot of people at the stock exchange understand it, it's that the structure is so fragmented, that even any type of suggestion to try to put speed limits on various activities to excel musquelch t skimming going on superfelous. >> i never really asked you that, steve. >> what? >> not the equity -- you have to tell us about these numbers. the equity markets, you know, people candice agree on whether that was manipulated by the fed. when you set bond prices, yields, i mean, you're setting yields, are you not? >> the story is they've always done this, joe. what you're talking about is the idea they have gone further out the curve. they did this in the '50s. they set the rate. >> there was qe in the '50s. >> right. they've done more before and they've done quite a bit less. they used to operate only in the overnight market which by the way was so powerful and effective that a lot of times the fed doesn't have to do anything. >> do you think they ever targeted equity prices to this extent? >> i don't think they're now targeting equity prices. >> we have not been nor now done that. >> i think it's been an interesting in the development about -- >> i can see it. it started moving when you said that. >> there's been an interesting development into the thinking of equity markets. allen greene span pioneered this notion, how important the price level is to economic growth. this has been a reversal. it used to be it used to be a reflection of economic growth. alan turned this around, the higher the level of market, there's a connection between market level and growth. this has changed the thinking of the fed over how much support. >> it's a contributor to growth. because it's self-reflecting confidence issue or? >> no, no. it's wealth effect spending is really what it is, you have this kickoff of consumer spending that comes from -- >> that's worked so well so far, right? >> i judge not, jim. that's your job. i give you possibilities, you create probabilities out of them. >> let me say this. people will be talking about this with the trade deficit. the japanese -- sorry, chinese imports fell 19.5%. a big drop in trade with china. our exports there fell by 4.6%. and we don't know if that's reflective of the slowdown. february was a tough month. and rick, you're right sort of on the crude imports are down compared to a year ago in february and january. but they're flat to up when you look at all energy related products. >> i'm talking about the long-term trend. we're not having numbers in the 40s consistently anymore. >> that's right. i'm trying to figure out where we missed on this number here. it was about 3 billion more than the economists expected. there was some expectation for a decline in the chinese deficit here. guys, overall, what we're seeing, i want to mack a quick point, we are seeing, rick, that spring bounce back. we've not gotten to the point where i think it's as strong as people suggested. overall, the numbers march through february have been higher. the thaw is on but the sun may be not out as much as people thought. like doing 200, doing 190 on the adp, people expecting 200. we've had eight of nine data points. obviously tomorrow the key will be how much of a thaw we get in jobs. >> would you say the adt numbers yesterday being a march number pretty much are back to normal, that the hiring pace, somewhat below 200,000, we're seeing an accurate picture? would you agree with that? >> i wouldn't. i'll tell you where i disagree. i would have hoped for much stronger, rick. >> i understand that. >> you'd hope we made up for losses. >> looking at it for what it is. >> it's fine. it's a bounce back, higher than february, which is important but not as high as you might have hoped. >> you're a good friend with sandy. people on the fla are that do a lot of their own technical research were upset of late with adp because they don't give out the metrics or the chars or the tables like bls. so people can kind of see the way they arrived at the data. it's pretty much you get the number and nothing else. any idea why that is? >> i have a feeling if i got on the phone with mark in about 30 seconds he would give me what data i wanted. they may not publish if as a matter of course. my understanding is economists have had a chance to look at the methodology there and it's not a black box to people. >> it's a white house meeting, if you're invited you get to see, if you're not, you don't. >> i think if kuo do a job as a reporter and get on the phone and make a call, mark would be happy to share the data. >> he'll be here tomorrow. >> don't hit him, rick, just ask him. i think he'd give him the data without violence. >> just a love tap. >> thank you both. we'll be bringing you comments from mario's draghi's news conference. michelle caruso-cabrera is listening for a more dovish tone from the ecb president. we have more from jim chanos. and ted kaufman will be weighing in on high frequency trading and debate surrounding that. she loves a lot of the same things you do. it's what you love about her. but your erectile dysfunction - that could be a question of blood flow. cialis tadalafil for daily use helps you be ready anytime the moment's right. you can be more confident in your ability to be ready. and the same cialis is the only daily ed tablet approved to treat ed and symptoms of bph, like needing to go frequently or urgently. tell your doctor about all your medical conditions and medications, and ask if your heart is healthy enough for sexual activity. do not take cialis if you take nitrates for chest pain, as this may cause an unsafe drop in blood pressure. do not drink alcohol in excess with cialis. side effects may include headache, upset stomach, delayed backache or muscle ache. to avoid long-term injury, seek immediate medical help for an erection lasting more than 4 hours. if you have any sudden decrease or loss in hearing or vision, or if you have any allergic reactions such as rash, hives, swelling of the lips, tongue or throat, or difficulty breathing or swallowing, stop taking cialis and get medical help right away. ask your doctor about cialis for daily use and a 30-tablet free trial. [ girl ] my mom, she makes underwater fans that are powered by the moon. ♪ she can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. ♪ my mom works at ge. ♪ welcome back to "squawk box," everyone. michelle caruso-cabrera has been monitoring the news conference from the ecb president, mario draghi. >> a couple of things that incredibly dovish, he says don't exclude further easing. long-term, we see a period of prolonged low inflation. do not rule out unconventional methods, things we've talked about, whether they would do negative interest rates or quantitative easing of some sort. saying the risk to the economy are to the downside. mario draghi, extremely dovish. we did see a rise in the euro. there was some possibility that they would announce unconventional methods today. possible, not necessarily probable according to consensus in the markets. you see the reactions so far. we'll keep monitoring it. guys, back to you. >> let's get back to our guest host, jim chanos, ceo and president of kynikos. he's also a "squawk" market master. ipos with negative -- with losses, posting losses, companies that are posting losses up 75%, what, in the last -- >> percent of ipos that are showing losses when we go public. i don't know if we can pull that one up. >> they put it in the stack as it's called. we'll get it eventually. >> it's indicative of the speculative fever. we'll show the highest it was. you were getting excited. there it is. the one on the left was enterprise value divided by sales. that's just basically the broad market. again, the dotcom era skewed everything by a few stocks going absolutely into the stratosphere. the markets on that basis, it's like schiller's basis, it's as expensive as it's ever been. if you look to the right, it's an indicator of speculative activity, ipos with losses going public. the public is buying this now. the animal spirit to use steve -- are there. i don't know if they can pull up the sotheby's chart. the linkage is also between fed policy and what people are buying and getting spirits. there's a chart of sotheby's. that's where people are buying. >> i guess that one on the right-hand side, you were talking about this a year or two ago, sotheby's. >> yes, in fact there's been a double peak there. the 1% is people that are wealthy that are in the market may feel wealthier and may go out and spend. it's not trickling down to the other 250 million americans. and that's the issue. i think that transmission mechanism is the one we can talk about, whether you want to call it a rig or manipulation or whatever. are asset prices part of the fed's mandate? it seems they are. >> the fed chairman talks about it every time they mention it. >> they absolutely talk about it now. which tells you it's first and foremost in their policy discussions. when do they change that? and what do they do if asset prices don't adhere to their script? i mean, we're in unchartered waters. >> does it make it tough to be a short seller. >> becky, it's always tough to be a short seller. >> is more difficult, though? >> clearly. when everybody thinks the fed has their back, when there's a put option, ghobl lobally. we heard about draghi's comments, the chinese will always stimulate. globally the entire world thinks the government has their back. generally speaking when everybody thinks something, you might want to take a few chips off the table. say maybe that's not going to work out so that everybody will get rich. but i could be wrong. >> how much money do you keep long? >> we have a hedge fund, it's basically long, our classic hedge fund. what we keep long on the book is cash. when we sell a stock short you get cash. for score keeping purposes we're in effect long the market. you've heard that before. >> you, jim chanos -- >> all my money is in my firm. >> it's all in the firm? >> yes. >> you buy art, don't you? >> i own a couple pieces. anybody that buys art should be looking to hedge it right now, though. the contemporary market -- >> what are you short, sotheby's. >> the easiest way to hedge a portfolio. >> short any portfolio you could short, sotheby's, i don't want to pick on them. >> is dan low -- >> i don't want to pick on dan. >> if he's successful, you're not. >> probably. steve cohen brought sotheby's at $6. i'd rather be buying it at $6 than $46. whether or not they add value from the headquarters, that's been done two or three times in the last 30 years. at the end of the day, this is driven by art which is socially acceptable, conspicuous consumption. it's one of the ultimate barometers of the one-tenth of 1%. >> that's what's changed this cycle. >> if you go back to the '80s, they were buying impressionists. in the last ten years, they have been buying contemporary. as i like to point out to people, these people are still alive. >> is there anything more subjective than art? >> no. >> that's why i pine for the days where, you know, the classics, where you could tell he was a damn good painter because it looked real. now you don't know what the hell it is. it's a line across a thing. >> artists that were considered amazing 120 years ago, a lot of them didn't stand the test of time. >> could rothco paint like the pilgrims landing at plymouth? >> most of those artists actually can. i saw a picaso and he painted it when he was 9 years old. >> monet couldn't see, obviously. he thought he was painting exactly -- he laughed the other day. >> i did laugh. i laughed at one of his jokes. >> when we had the people from wild wings. wouldn't it be better if you had chickens that had six wings, gmo, jeannetgenetically modifie chicken from chernobyl farms. >> someone else must have said something funny. >> no. exactly. anyway -- >> coming up, jim cramer will weigh in on stocks to watch ahead of the opening bell this morning. [ bagpipes play ] make it happen with fidelity active trader pro. it's one more innovative reason serious investors are choosing fidelity. call or click to open your fidelity account today. e financial noise financial noise financial noise financial noise acknowledgement there. additionally they were focused on the exchange rate. once again, the euro going to session lows on those comments from mario draghi. back to you. >> let's get down to the new york stock exchange. i have to i have to get a couple of views and the other jim chain knows is here. citigroup, what do you make of the report? >> i think if you look at the news flow that came before they came clean on it, it was very clear that this outfit was dirty, so i'm not surprised at all that the government says, look, you know, this was ongoing and if it's ongoing they got to try to figure out who let it be ongoing, so i under astand the government is correct to pursue it. >> does it make the stock cheap and, therefore, you know, an opportunity or do you say it's got room to drop from here? >> i think it has slowing business. it's not exactly where i want to be. i was listening to jim about the emerging markets. what i want is the bank that's in texas or the bank that's in florida, the bank that's in california. and i like the regionals more and if i have to have a money center bank, i think you got a lot of opportunity in jpmorgan because it's viewed as being tainted and yet i don't think it is. >> jim, are there any banks you like? >> we're long. we're long citi and a few others because we have them as against the -- our shorts in asia. >> it's a hedge. >> it's a hedge against our global bank shorts. but as a shareholder i'm pretty mortified by this latest set of revelations and coupled with the press release last tweet, you do know, have to wonder, just a whole litany of things, it's dealing with drug dealers, dealing with all kinds of things and at some point is someone going to go after the banks themselves and it seems that he's raising this issue that they might. that's a whole new level of scary if you're a bank investor, so we're reval wait i-evaluatre. >> preet did say we're not going with the arthur anderson worry. i don't want to imply anything about citi because citi can be a very well-run bank. i totally understand the idea why you would want to own it, but the tweet that you mentioned and coupled with what he said has to make someone squeamish, we just don't know which one. you mentioned the international banks and they are nowhere near as strong as citi. i think that makes a great offset. >> jim, we'll see you in a couple minutes on "squawk on the street." appreciate it. when we come back, we'll talk more to jim chanos. >> and there's one question we must ask. >> are you teasing -- >> because we should ask him. >> we'll have jim chanos on with that. let's talk about the long bets. one we haven't mentioned is a stock you were long starbucks, why? >> besides being a coffee addict i think you have to look at it again as to what we might be short and starbucks has been a pretty good offset to one of our shorts which is also in the coffee business. >> you going to tell us which one? is it green mountain? >> your viewers are pretty smart and can probably figure it out on their own. >> i have some guesses as for that. >> i think that starbucks is still sort of executing right. the company we're short is not but has -- >> soda stream didn't -- >> it didn't -- you know, andrew, i've got a number of actually cold single-serve carbonated flavored beverages in my refrigerator right now, they're cans of soda, and it's a lot different from coffee which needs to be fresh. >> right. >> whereas cans of soda -- >> keep a long time. >> keep a long time. >> i'm turning into you. >> off camera you said that bitcoin -- >> going to bitcoin? >> -- doesn't have the sovereign ability to enforce contracts and law. >> it's basically a commodity like gold so the question is, is -- for a medium of exchange and all of the things that make it money, one of the things the sovereign governments have an ability to enforce contracts. not yet. the silicon valley gets an army and air force and navy which its court system some are asking for, maybe a drone air force to enforce this. i'm not an anti-technology guy. the technology works, i'm just not so sure it's acceptable. >> thank you for a great two hours. make sure you join us tomorrow. "squawk on the street" begins right now. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer and david faber at the new york stock exchange. the bulls begin the morning looking for the first five-day win streak for the dow and the s&p. futures are up at the moment. the ten-year has crept up, the 2 eight ahead of tomorrow's jobs numbers and the claims came in on the high side at 326,000. and europe is
DuluthMinnesotaUnited-statesDubaiDubayyUnited-arab-emiratesShanghaiChinaBrazilGreen-mountainNew-yorkBeijing left a wrong impression when i was talking with the secretary saying if you were given the same report that that probably would have solved everything. we still have big concerns about the five, and i didn't mention that when we were briefed in november of 2011 and january of 2012 that there was real concerns of members of congress that those five would be released. in fact, there was real opposition to it, and that's why we're very concerned that we weren't told if we re-enter those negotiations, you would be told and then we weren't, so those are things that we really need to have clarified and worked through. mr. thornberry. >> thank you, mr. chairman. mr. secretary, i'd like to begin with a brief additional observation on the notification issue. for the past several years, this committee has worked on a bipartisan basis to establish an oversight structure for cyberoperations, for terrorism operations and for sensitive military operations. and an oversight structure that allows the department to have the flexibility it needs to operate in a volatile, rapidly changing world and still give us the ability to exercise our duties under the constitution. now, the basis for all of those in all three of those areas is we get timely, accurate information from the department, and this failure, even if it was ordered by the white house, undermines the ability to have that sort of oversight structure. i've been a member of the intelligence committee for 10 years. our work depends on getting accurate, timely information from the intelligence community. if the president can violate the law and say, no, in this case we're not going to give you the information, it undermines the oversight process that we have with the intelligence community. so my point to you is, it's not just about this incident. it's not just about somebody having their feelings hurt. this decision undermines a lot of the working relationship in all these areas of national security. i think it's important that the whole administration understands some of the ramifications of this. let me ask a specific question. press reports indicate that sergeant bergdahl was captured a network commander and was held by the hakani network. is that true? >> what i'd prefer, as i noted, in the classified session that we get in the specifics of that 156 commander report that was done on the circumstances at the time of sergeant bergdahl's capture. i believe that was done in august of 2009. that's been sent up here, unredacted, sent up here yesterday and i assume get in but i will assified say that, in that report that the army did, he was classified s missing/captive. >> so i wasn't -- to verify as i understand it, administration people have said clearly it was the haqqani network that kept him. >> well, the haqqani did have him through periods of time. this was the complication, over a five-year period he was moved around. we had difficulty finding him. knowing where he was. different groups held him. it's a complication of the haqqanis being part of that, it's right. > and the haqqani network is listed by the foreign intelligence department as a terrorist network. >> that's right. we didn't negotiate with haqqani. >> ok. i think that's a subject we'll want to discuss if we must in the classified session. >> i want to make sure the record's clear. qataris and they engaged the taliban. if the haqqanis were subcontracting with the taliban, you know the pakistan alban and the afghan taliban, there's a difference there. o we get back into definitions of who has responsibility for whom. i just want to make sure that's clear in the record and we can go into a lot more detail. >> i think you just pointed out some of the difficulty in making categorical statements, that we don't negotiate with terrorists, when at least for some period the haqqanis were the ones who had him. let me just ask about one other thing and that is the five etainees that were released. you said there is some risk of releasing someone from guantanamo but you also said they have not been implicated on any attacks in the united states. i have some unclassified summary of evidence before the combatant status review tribunals. for example, for mr. fasal it says the detainee engaged in hostilities against the united states or its coalition partners. maybe there is a difference between them. and another was against the coalition. at some point there was evidence they were engaged in hostilities, military operations against the coalition, weren't there? >> yes. there were mid to high ranking officials of the taliban. so, yes, they were part of planning. my point was, we have no direct evidence of any direct involvement in their direct attacks on the united states or any of our troops. they were part of the taliban. at the time some were given to us, we picked up two, yes, they were combatants. >> they didn't pull the trigger but they were senior commanders of the taliban military who directed operations against the united states and its coalition partners, is that a better way to do it? >> that's right. as i said in my statement, congressman, they were combatants. we were at war with the taliban. there's no getting around that. i made that point, i thought, pretty clearly. >> thank you. >> just like bin laden didn't pull a trigger, but we went after him because he's the one that caused 9/11. mrs. davis. >> thank you, mr. chairman. and thank you both for being here. mr. secretary, i do think your i sentation did provide us think additional ways of really looking at the discussion. i do understand and -- how people feel in terms of notice, but i wanted to have an opportunity to just look at that issue and whether or not the circumstances under which he was captured or the fact that whether or not his life was in taker would have made any difference in terms of the 30-day notice. you know, it's difficult for me to imagine that members would have included that within the language of that bill. to what extent were those situations weighing on the decision of whether or not to engage in that discussion during the imminent danger period? >> well, all of those were factors that we had to consider as we were thinking through this. his deteriorating health, which was clear to us from the last proof of life video we had, the uncertainty of where he was, who exactly held him. again, i remind everybody, this service member was held in pretty difficult circumstances for almost five years. and we don't know the facts of all of that until he gets back and we were able to get the facts. the urgency of getting him, the fleeting opportunity that was made clear to us by the qataris in our negotiations. mr. preston was there through those. all these were factors. the concern about leaks, we were warned about. every one of these different dimensions we had to think through. and we did believe, as i said, nd we had information to support this that this effort might be the last real effort that we have to get him back. there were too many things floating around that we didn't control. we didn't know enough about. so we had to factor in all of those. >> did you have any other -- i guess -- entertain other pproaches to his rescue that you were looking at at that particular time? and why were any of those not followed? >> well, congresswoman, we were, as i said, in my statement, since the time he went missing, we were looking at different ways to get him back. our combatant commanders were always looking at plans, possibilities, options, rescue missions and so on. as i said in my remarks, we had to factor in the risk to our other forces to get him. if he was in pakistan, we know he was moved in and out across the border. that would also affect some different dimensions. yes, we looked at all the options, had all the possibilities, but up until this last time when we got him, this, in our opinion, our intelligence community's opinion, our military, everyone who was involved, this was the best possibility that we had to get him out and we were concerned we might lose it. as i gave you some dimension of the time frame, we didn't even know where we were going to pick him up. it was less than an hour. , was it detainees always this five or were there others? >> well, it actually started with six, some of you may recall. one of them died. and there have been back and forth, they wanted all of the taliban detainees at one point and we said no. so this is part of the whole engagement of what we need to do and where we do -- we draw lines and say, no, we're not going to do this. yes, there were different variations of that engagement over the years. >> all right. thank you. thank you, mr. secretary. >> mr. jones. >> mr. chairman, thank you very much. secretary hagel, mr. preston, it's good to see both of you. thank you for being here today. mr. secretary, on june 1, you were on "meet the press," and you expressed hope that the release of sergeant bergdahl would lead to direct u.s. talks with the taliban. mr. secretary, the taliban have stated there will be no peace with the afghan government, with the united states or any foreign presence as long as troops remain in afghanistan and prisoners are contained at guantanamo bay. they have repeated these statements time and time again and have proven they do not desire peace with the united states or its allies. with this known, why did you at at point on "meet the press" express hope -- i mean, we can all have hope -- that there would, the release of the sergeant would lead to some type of direct negotiations with the united states? and do you today feel that that is still a real possibility? maybe there's something you want to say in the classified setting that you can't say here today, but this to me, your statement was received by many of the people that i represent in the third district of north carolina that maybe there was in the negotiation about the sergeant that maybe there was some signals sent to you, sir, or to the administration that there might be an opportunity for direct negotiations with the taliban. knowing the history of the taliban, knowing how they fought the russians, alexander the great, the brits and their fighting the americans, i hope maybe you do know something you can share with us maybe not in a public setting but in a private setting. could you comment, sir? >> congressman jones, thank you. good to see you again. first, as you know, the position of the united states government regarding the taliban has always been we support reconciliation between the afghan government and the taliban. that's been a general position, as you know. as to the specific answer i gave on "meet the press," it was to a specific question when we were talking about sergeant bergdahl's release and i don't recall exactly the question, but if i could piece it together enough to respond, i think the question was set up, well, could this lead to talks with the taliban or reconciliation? and as you quoted me, i said, well, i hope. maybe, whatever. t no, that wasn't any direct hint or wink or possibility that i know something that that's going to happen. i would also remind us again, too, if you recall -- some of you do because you were in some -- hese meetings, briefings in the 2011-2012 time frame, i wasn't in this job at the time but i looked at the files on this. i've seen it all. there was a larger scope and framework of a larger reconciliation which included bergdahl's release. but the current situation that we were in was a straight get bergdahl. now, that doesn't dismiss, congressman, the hope that there can be some possibility of the afghan government and taliban finding a reconciliation somehow some way but in no way was i intending in that reply to the answer that something else was going on here. >> the taliban's history does not seem they want to see a foreign presence that's going to influence the future of their country. i was hopeful that maybe in the negotiations for the sergeant that maybe there have been some signal sent with the immediateary that may have been shared and, again, if there has been maybe you could through your staff or maybe in the classified setting let me know that there are some possibilities, because my marines down in camp lejeune quite frankly are tired of going to afghanistan and getting their legs blown off. thank you, mr. chairman. i yield back. >> we will, congressman jones. >> thank you, mr. chairman, mr. secretary and mr. preston, i want to thank you for being here today, for your testimony. as we were reminded just yesterday with the loss of five american special operating forces, afghanistan obviously remains very dangerous and battlefield for our volunteer military. i join many of my colleagues in of course expressing gratitude of the return of the american prisoner of war and the return of any u.s. service member from enemy captivity should be a priority for his or her fellow soldiers and, of course, for our country. and sergeant bergdahl is an american soldier and we're certainly grateful that he's been freed. that said, the total situation raises many troubling concerns and among them, of course, this committee has significant oversight role and there are legitimate questions regarding both congressional notification as well as long-term incentives al qaeda. iban and certainly significant personnel and other resources have been expended to conduct what could result very dangerous and disturbing incentives on the battlefield. as one taliban commander said, and i quote, it has encouraged our people. now everybody will work hard to capture such an important bird, end quote. how do you ary, ? ticipate this transfer do we know any behavior? >> congressman, i think everyone on this committee know some more than others who served in war. war is a dangerous business. so a soldier is always, always at risk. that's number one. two, you probably know that the taliban has standing orders to capture american service members and that's been a standing order for 12 years. so there's nothing new here about where the taliban have been and where they continue to be. but i would say this also. now that we have our last very much ck, this gives us more flexibility, quite frankly, to free up resources that every day we were thinking about our commanders on the ground in that area. how, if we have the opportunity, how can we get bergdahl? now that he's back, that frease up that -- that frees up that obligation. i think that actually strengthens the point. and the last point i'd make, i mentioned this in my comments and, again, those who served in uniform on this committee know this, pretty basic to military. and i expressed it in different ways by quoting different senior members of our military and retired. that to have our men and women in uniform all over the world -- some at risk more than others every day -- to have them been reassured that this country will come get them or will make every effort to go get them has got to be pretty significant. i was told that by all of our commanders. it can be issues on the specifics of sergeant bergdahl but that's irrelevant, quite frankly. he was a member of our armed forces and we went and we got him back after five years. i think that's pretty significant. and i think it also falls into the category of your question, answering that question. thank you. >> mr. secretary, thank you for that answer. as the chairman and the ranking member have mentioned in their opening statements, questions about sergeant bergdahl's conduct should be addressed with due process at the appropriate time and such, but could you settle one conflicting report, at least, in terms of regarding the number of loss of soldiers who may have been involved in searches for sergeant bergdahl? >> first, any loss of any loss to their family, to our country. i think we should note that first. second, your question has been asked a number of times. i personally asked that question inside the pentagon. in the army, in all of our reports, i have seen no evidence that directly links any american combat death to or search or finding of sergeant bergdahl. i've asked the question, we've all asked the question. i have seen no evidence, no facts presented to me when i asked that question. >> mr. secretary, you did say there's nothing new here that the taliban's always out to try to capture us. but isn't it true that there is one thing new that we have now made a trade for a hostage? >> no, he was not a hostage. he was a prisoner of war. that's not new. >> have we made other trades with the taliban? >> with the taliban, i don't know. i don't think so. i don't think so. >> thank you. mr. forbes. >> thank you, mr. chairman. mr. secretary, thank you for being here and for mentioning the need for transparency. as we talk about our inability to prosecute the individuals that were released, this administration exactly hasn't had a stellar record of prosecution of people at gitmo when you look at the lead prosecutor for the 9/11 terrorist had specifically said he would have had a guilty plea out of all of them within six months and this administration came in, shut down this prosecution, destroyed all his pretrial work and we have been five years and still haven't brought them to trial. secondly, i don't even think you would argue that the conversations that took place in 2011 complied with the law. and basically what we're trying to get across is we are a nation of laws. you can't pick and choose just because they're veept or not convenient which ones we're going to -- convenient or not convenient which ones we're going to enforce and which ones we are not. you said there are limits of trades we would make and where we draw the line. the individuals we released were essentially equivalent of releasing a deputy secretary of defense, a deputy secretary of intelligence, a deputy secretary of interior, a governor and a commander. when the president was asked if there was a possibility of them returning to activities that are detrimental to the u.s., his answer was, absolutely. our deputy director of national intelligence was even harsher. he said the latest assessment on these five terrorists said he expected four out of the five taliban leaders would return to the battlefield. and this assessment was in accord with the 2008 pentagon dossier that said all five of the individuals released were considered to be a high risk to launch attacks against the united states and its allies if they were liberated. now, you state in your testimony that if any of these detainees rejoin the fight they will be doing so at their own peril. so my first question to you is, does that mean you would put american lives at risk to go after them? >> congressman, we have american lives at risk every day. >> not the individuals we released, put back out there. so my question is, would we put american lives at risk to go after them if they rejoined the fight? >> depending on the threat. also, let me remind you of the other pieces you didn't mention in our analysis of these five. the intelligence community has said clearly that these five are not a threat to the homeland. >> mr. secretary, you've said it here that if they rejoined the fight they do it at their own peril. >> in afghanistan. >> my question is a pretty simple one. would we put american lives at risk to go after them? >> we have american lives put at risk -- >> i understand that, mr. secretary. my question is would we put american lives at risk to go after these individuals if they rejoined the fight? >> well, yes. >> ok. if that's the case, let me ask you -- >> if you use the same congressman on yemen or anywhere else. >> not because of the individuals we released. and the second question i would ask you is two parts. in the calculus you made for releasing these individuals, were you asked or did you make an assessment of the number of american lives that were lost or put at risk in capturing these individuals in the first place and did you make an assessment of the number of american lives that may be put at risk if we have to go recapture them again? >> again, i saw no evidence, no facts. i asked the question about how these five found their way to in front , and i have of me the facts on the five. two of them were detained by u.s. -- >> mr. secretary, i understand that. i only have 50-some seconds. >> the answer is no. >> so you didn't make a calculus. >> i said i did and i said, you asked if there were lives lost in capturing these. >> and you said no. >> i have no direct evidence that there -- >> did you make an assessment -- did you make an assessment of how many american lives may be put at risk if they have to be recaptured? >> no. there's risk we have to our country, threats to our country every day, everywhere. the other point i would make on this, we determine there was a substantial mitigation of risk for this country, for our interests, for our citizens and our service members when we made this decision. >> and that implies -- >> and we were satisfied that we could make that determination. >> it flies in the face of all the other evidence we have. with that, mr. chairman, i yield back. >> ms. bordallo. >> thank you very much, mr. chairman. secretary hagual and mr. preston, thank you for -- secretary hagel and mr. preston, thank you for your testimony today. i appreciate the detailed information that you had in your statement and i support your position. i do appreciate, also, your continued commitment to our men and women in uniform and your steadfast leadership during these challenging times. my first question is for you, mr. secretary, what impact would sergeant dergdal's continued imprisonment -- sergeant bergdahl's continued imprisonment would have on the security situation in afghanistan as we drawdown forces? did his continued imprisonment create a heightened security threat to our men and women in uniform? >> well, in a sense, congresswoman, as i answered the previous question about putting at risk american lives to capture him -- not to apture him but to get him back nd to do that, if it would have taken another course of action or if we would have taken another option, that would have put our men and women at risk. our men and women are at risk carrying out this one mission but fortunately it was done the right way. i don't think, again, that effort has gotten enough attention. this was all done in less than 60 seconds. not one death, not one issue, not one problem. i've seen very little recognition of that given to our forces by anybody. that was a significant effort our armed forces knowing as little as they did but planning it as well as they did and having the outcome as positive as it was. >> i agree. my next question is for mr. preston. ith the heightened media attention, how was sergeant bergdahl's investigation? >> we will pursue our useful policies and practices with respect to investigations and follow on actions. a key element of that is avoid whag is referred to as unlawful or undue command influence. so you will see that the leadership, military and civilian at the department, have been entirely neutral in their discussion of this and focused on ensuring due process without prejudging what the outcome should be one way or the other. those dealing with sergeant bergdahl more directly and the army more generally are, i believe, sensitive to ensuring that in the process of bringing him home, restoring him to health, debriefing him for intelligence purposes an then ultimately reviewing the circumstances of his capturing that fairness be preserved and that his rights be preserved. >> thank you. thank you. and my final question is for secretary hagel. prior to securing the recovery of sergeant bergdahl, had you received correspondence from members of congress requesting that you take action to obtain sergeant bergdahl's release? >> yes. >> thank you. >> thank you. mr. miller. >> thank you, mr. chairman. thank you, mr. secretary, for being here. i'm looking at your testimony and on the first -- third page -- excuse me -- it says we implied can the national defense authorization act -- complied with the national defense authorization act of 2013. did you notify congress within the 30-daytime frame, yes or no? >> no. >> yes or no? >> no. >> does the administration intend to violate section 1035 of ndaa and section 8111 of the d.o.d. appropriation act in future transfers? >> not unless there -- not unless there's an extraordinary set of circumstances, like this one, would we be in position to make a call like that. >> would you ensure this committee that they won't have transfers without notifying congress consistent with the law? >> >> we have except in every circumstance except with this one. >> you were part of the member of the united states senate. we make the laws. you are now part of the executive branch which is the ability is to enforce the law. whose responsibility is it to interpret the law, is it the president's responsibility or is it the courts? >> the courts. >> then why did the president make the decision or you make the decision not to notify congress? >> we believed, justice department office of legal council -- >> part of the executive branch. >> told the president he had the constitutional authority to do that. you had under his constitutional powers the authority to make the decision that he did. >> you said that you would put american lives at risk if the taliban prisoners that were swapped in the secret deal would rejoin the fight if they rejoined the fight in afghanistan. what if they rejoined it from somewhere else? they don't necessarily have to be on the battlefield in afghanistan. certainly we'd pursue them everywhere they are. >> we would do everything we needed to do to, as we have said, to deal with that threat as we are doing today. >> your testimony is we're doing everything that we can -- >> to deal with the threats to the united states of america, whether they're in afghanistan, yemen or they're in homeland defense. it isn't just limited to afghanistan. the threats that face this country. >> mr. secretary, you keep saying we can't get the facts from sergeant bergdahl until he returns home. have you ever thought about -- landstahl and talking to him there? >> i don't know how much medical education you have -- >> no, mr. secretary, wait a minute. wait a minute. why hasn't he been returned to the united states? we have seriously wounded soldiers that have returned to the united states almost immediately after they are stabilized. how long did jessica lynch wait before she was returned to the united states? you're trying to tell me that he's been held in germany because of his medical condition? >> congressman, i hope you're not implying anything other than that. >> answer it. >> i don't like the implications. he's been held there because our medical professionals don't believe he's ready until they believe he's ready to take the next -- >> have you ever seen a traumatically injured service member brought to the united states immediately upon being stabilized at landstuhl? >> this guy was held for almost five years in god knows what kind of conditions. we do know some of the conditions from our intelligence community. not from, by the way, bergdahl. this is not just about can he get on his feet and walk and get to a plane. >> so you're telling me he cannot be questioned because of his condition? >> i'm telling you that the medical professionals, we rely on his judgment for his health, which i assume everybody respects, have made the determination and will make the determination when he's ready to move and move to the next step, which will most likely be in san antonio, then we can proceed. that's what i'm saying. >> one other question. why is the army just now reviewing the circumstances of sergeant bergdahl's capture? >> they're not. i said in my testimony and i said in my comments they did it back after he went missing. in 2009. that 156 report was filed, completed by the general who is now our commanding general in korea, in august of 2009. that 156 report, review, complete. not redacted. was sent up to the hill yesterday to the committees. >> thank you. >> you're welcome to read it. >> thank you. >> and that will be made available to all the members in the proper setting to review. mr. courtney. >> thank you, mr. chairman. i want to thank the witnesses for being here today and secretary hagel, for your powerful testimony which, again, laid out the fact that this is not every choice in your position is always black and white. you have to weigh all the factors. one of the factors that i would kind of re-emphasize, in terms of when you were deciding this back on may 27, i mean, it wasn't like you had a lot of other options. i mean, there was no plan b or plan c that was sitting on your desk in terms of how to get this american soldier back in our jurisdiction, isn't that correct? >> that's exactly correct. >> there was no option? >> there have been members on some of the shows that said we should have sent special forces to get in to get him. we were not totally clear about where he was. >> that's right. >> so there wasn't a place to really send special forces to recover him. you also, again -- this has been alluded to earlier -- in terms of the risk mitigation of the five transferees, taliban transferees, if they do get back into the conflict, they do so at their own peril. secretary kerry, i think in some public setting, also made the comment that it's not like we're totally without options to, you know, raise their risks in terms of getting back involved in the fight. again, they don't always involve the use of military personnel. i mean, we have all been in the codels over to afghanistan, most of us, and have seen the availability of unmanned assets that we have to take out targets that, again, have been identified through the chain of command, isn't that correct? >> that's correct. >> and certainly that would be available to us -- again, if a situation arose that would not put soldiers or airmen or anyone necessarily at risk? >> that's right. >> mr. preston, you know, we've been sort of talking about the legal sort of consultation that was going on with your office and the department of justice during that five or six-day period when the decisions were being made. did d.o.j. address in terms of the legal opinions that you were given the question of consultation with congress, the 30-day requirement? >> yes, sir. pardon me. the administration sought the guidance from the department of justice on the applicability and impact of the 30-day notice requirement under these circumstances and received guidance from the department of justice. >> and was that in writing? a it was not by means of formal memorandum opinion but rather by email exchange principally. >> i know the chairman mentioned he's got requests from the committee for documents which sounds like are going to be forthcoming. i assume that's one of the requests in terms of making any sort of legal analysis, that you requested and received or offered from d.o.j. that that would be one of the documents that you would share with us. i hope you would. >> we'll certainly take that back. i'm sure we appreciate that there's interest and we certainly want to make sure interested members fully understand the legal basis on which the administration acted as to the disposition of the ocument, we'll take that back. >> again, i think it is important if the department was claiming a constitutional authority, which the secretary mentioned, in terms of that issue, i think we'd like to see that analysis. and with that i'd yield back, mr. chairman. >> the gentleman yields back. r. preston, when did you consult the d.o.j. on the 30-day notification? on what date was that? >> mr. chairman, i don't remember the precise date, but it was in the time frame in ich we had completed our discussions with the qataris over the m.o.u. before it was signed we anticipated these issues would arise, and i engaged with my counterpart at the national security council who in turn engaged with the department of ustice to ask them to consider the legal and constitutional implications in this setting. >> you recall last week when you and other members were -- other members of the administration were briefing the staff i attended and mr. thornberry attended that briefing and i asked the question, if at anytime since the january discussions started you had talked about the 30-day requirements and nobody said at that time that there ever was a discussion about it? >> i don't recall that exchange, sir, but i can assure you that the 30-day requirement was discussed. part of the lawyers in this -- my part was in working with my counterpart at the n.s.c. to solicit the department of justice's guidance. that guidance was then provided to the decisionmakers who made the judgment about whether the a umstances would -- particular circumstance in this case would permit the 30-day, the formal 30-day notice? >> this is one of the things that's bothered me about reports we hear in the press and some of the briefings that we've had over a period of time that we get different answers from one time to another. and we'll go back and check our notes from that meeting, but when i asked that specific question, it was -- nobody responded. and you were one of the briefers. >> i frankly don't know whether the question was directed to me or whether it was properly understood. i can tell you -- >> i asked all of the briefers, i said, at anytime during any of these meetings did you discuss the law that pertained to the 30-day notice to congress and -- no can only say in uncertain terms we set in motion to get authoritative motion -- guidance from the department of justice and if that was part of decisionmakers who addressed what the administration was going to do vis-a-vis congressional notification. >> so you had time to discuss this with the department of justice, the department could have used that same time to talk to congress about it. >> i can just speak from my part of it. we foresaw the possibility that these issues would arise and wanted to have -- >> what i was trying to determine when i asked the question last week was, if you had just forgotten the law or if you had purposely decided not to address it. it sounds like what you are saying right now is you thought about it, you were aware of it and you had a discussion about it and decided that the law didn't apply. >> we certainly thought about it. we did not ignore the law, and we solicited legal guidance on the legal issues that would apply in application in this extraordinary set of circumstances in which the president was seeking to repatriate a service member who was in captivity and in peril. whether in these extraordinary circumstances and -- >> so if the circumstances are extraordinary, you don't have to follow the law? >> no. the way i would put it, if the constitution vests in the president certain authorize and responsibilities to include -- >> as it does to the congress. >> it does indeed. protecting americans abroad and protecting service members in particular, and to the extent that the application of the 30-day notice in this application would interfere with or undermine the president's efforts to seek or secure the recovery of this service member, then in the exercise of his constitutional authority, the statutory notice -- >> that was your interpretation. i think somebody talked earlier about the interpretation should be made by the courts, not by a couple of attorneys talking about the law. >> the courts certainly have a role, but the president has the responsibility to execute his authority. and seek counsel of the department of justice. >> thank you. mr. wilson. >> thank you, mr. chairman, for your strong efforts to uncover the truth of what's occurring before us today. mr. secretary, i appreciate you being here today. yesterday, i had the opportunity to stand in front of polling locations during a primary where hundreds of concerned citizens, both political parties, expressed to me their shock and outrage that the president would release five terrorists who they believe will have a background of having been facilitators of the attacks of september 11, 2001. we know the taliban allowed the al qaeda to operate from safe havens in afghanistan to attack the united states. and for the top leadership of this terrorist regime, for the president to release them is just incredible to the president i represent because -- to the people i represent because the terrorists have a goal in mind and the goal is very clear, death to america, death to israel. and the thought that people like this would be released was just inconceivable to the people that i spoke with yesterday. additionally, putting this in the context of this week, al qaeda or taliban terrorists have attacked karachi twice. dozens of citizens have been murdered by the taliban. it's not just americans at risk. additionally in baghdad, there have been car bombings with, again, dozens of people being murdered. this week we had the circumstance of mosul now possibly coming under al qaeda control. again, creating a safe haven which will affect american families and the homeland because the safe havens will be used for attacks on america. the safe havens are growing across north africa, the middle east, central asia. i believe it's dangerous to provide more terrorist leadership as this is occurring. the president was wrong. last year he announced that terrorism was being diminished around the world. in fact, it's growing and the growing exponentially. and with that in mind on june 5, "time" magazine, of all people, reported in an nterview they had with the taliban in afghanistan, if this deal were inspired to capture other military personnel, the taliban commander replied, quote, definitely. it's better to kidnap one person like bergdahl than capturing or kidnapping hundreds of useless people. it's encouraged our people. now everybody will work hard to capture such an important bird, end of quote. can you now recognize there is an increased risk to our service members because of this outrageous deal? > first, let me note, again, taliban policy for 12 years has been to do exactly what that taliban representative told "time" mag -- magazine and that is to capture american servicemen. that is not new. i go back again to the factors that we all looked at to be able to substantially mitigate the risk to this country, to our allies, to our interests. and we believe the analysis -- the intelligence community, all who had a role in this that we could substantially mitt the gait the risks -- mitigate the risks through the 12-month memorandum of under unsing, qatar provided the enforcement of the security there, the other follow-on dynamics and threats and realities, which we factored in we believe were mitigated enough. these are five individuals who have been off the battlefield for 12, 13 years. doesn't mean they won't go back. this is a different world. different world for us as well. so i would give you those answers. again, i know you don't agree with them. i also remind all of us, there's risk to all this. this is not a perfect situation. i know that. we all know that and that's why we spend an awful lot of time. >> we really should look at what our enemies say. in the "augusta chronicle" on tuesday, june 3, reported that e of the five, mohammed fazl, according to taliban commander kahn, fazl's return is like pouring 10,000 taliban fighters into the battle on the side of jihad, end of quote. mr. secretary, our country's at risk. you identified the homeland as if it was far away. it's not. the safe havens are being created to attack the american people here and actions should be taken and that would not include releasing terrorist leaders. thank you. >> congressman, i can assure you there's nobody more aware of this than this secretary of defense. there's no one -- >> please act that way. my goodness. >> thank you. >> ms. tsongas. >> thank you, mr. chairman. and welcome, secretary hagel and mr. preston. it's great to have you here today. i think the issues we've been talking about today really do merit the serious discussion that we've been having here. but i'd like to begin by reiterating the point that we as a nation have a solemn responsibility to bring home every service man or woman who volunteers to put on the uniform and places themselves in harm's way on behalf of the values our nation holds dear. and on behalf of each and every one of us, it's the abiding promise we make. it was the underlying motivator in the actions that our president has taken with your guidance and advice and consent. just briefly like to address the issue of notice that's received so much discussion. it's clear that as we look at the actions that took place in 2011, 2012 in the context of a possible reconciliation process , there was indeed generallyized notice. i -- generalized notice. i think there would be five taliban that would be exchanged for sergeant bergdahl in an effort to bring him home. on that front, i don't think there's deep surprise that this has -- this is actually a possible -- would possibly take place. but a lot of the concern has been on the issue of specific notice, and i think it troubles .ll of us given the 2014 ndaa i do think the exigent circumstances you described, the events that necessitated quick action that made the 30-day notice a tough one. but i think a little heads up, a couple hours' call to the leaders of congress might have served you all very well. and that being said, i'd also note that what you have said was not a simple transfer but a military action and conducted very well by our military who was put in harm's way and i commend those soldiers for pulling this off as they did without incident. but i'd actually like to address another aspect of section 1035 of the ndaa and that is the need to put in place mitigating circumstances that do have a level of comfort, that these released detainees will be held, as promised, and not quickly put back in the battlefield. can you talk about that a bit? i know some of it you'll revisit in a classified setting but i'd like to hear as much as you can talk about in this context. >> congresswoman, thank you. you note, i mentioned about four general areas that are included in the specifics of the memorandum of understanding on the enforcement commitments made by the government of qatar. personally made in a telephone conversation with president obama. i can't get into the specifics until we get into this closed session on the real most significant parts of that o.u. assurance, which we all assessed. every agency in the government who signed off on this decision all agreed that those were -- those were strong enforcement mechanisms that would give us some significant reassurance that those five individuals would be kept in qatar and all the other assurances as to their activity. again, we can go into specifics of that. >> the track record hasn't been great. what do you have up your sleeve that you feel comfortable, are allow you to carefully monitor the situation? >> recognizing what you said, the dimensions now we are looking at, too, that have changed a bit in qatar. ou have a new leader in qatar. over the last year. we have a significant united states force presence in qatar. many of you visited our base there. we have thousands of people there. we have some significant relationship with the government of qatar. they've had difficulties with their neighbors. i think the geopolitical arrangements that they would like to see change. i can't speak for them but you asked me some of my thoughts. i think put a different face on this as well. and there are some other assurances that i don't want to address here in an open session. they ffice it to say, were all strong enough to get the commitments that we individually of each agency came to the conclusion, as did the president, that it in fact was in the best interest of our country. in fact, did substantially mitigate the risks. >> thank you. this is a legitimate and real concern i know of my constituents. >> well, it's a concern of ours. >> and the memo of understanding will be made available. again, it got to us last evening and that will be made available to all members of the committee in the proper setting. mr. turner. >> thank you, mr. chairman. mr. secretary, we've had very important issues to discuss here. obviously one the notice of congress. two, the issue of judgment, was this a good idea? third, the issue of policy, whether or not this is a shift from our policy of not negotiating with terrorists? we had a briefing on monday from mr. tony blinkan, deputy national security advisor of the president, mr. work, department of defense, vice chief, deputy director for intelligence on monday. i asked them this question. can you cite any precedent for this nape of a swap where we have swapped with a nonnation state within the last 40 years? mr. preston, you were asked this same question by our ranking member and you cited the exchange -- >> we will leave this hearing at thintpofment you can continue to watch live on c-span3 or online at c-span.org or you can listen to the rest of the testimony on c-span radio. after the hearing we do expect to open our phone lines, take your calls and also offer comments using the #cspanchat. the u.s. house is about to gavel back in. members will start work on debate rules for three upcoming bills. also, we are learning this afternoon house republicans have scheduled a closed door conference today, starting at 4:00 p.m. eastern. if any news comes out of that, we'll have it for you here on c-span. this is live coverage of the house on c-span. [captioning performed by national captioning institute] [captions copyright national cable satellite corp. 2014] the speaker: the house will be in order. prayer will be offered today by r guest chaplain, rabbi eton hammerman, temple beth shalom, new york. the chaplain: our god and god our -- of our ancestors, we rise in prayer in one of the world's most sacred spaces. this hallowed hall combines enormous power with awesome responsibility. we pray that you, o god, inspire those who stand before you today, mere mortals, women and men, young and old, the many races, colors and ancestries that make up our blessed country. in the jewish calendar we have just concluded the feast of weeks, marks, we are taught, the receipt of the bible at mount sinai. this was the culmination of a march from bondage and slavery toward freedom and responsibility. we ask that you bless the members of the august body as they work to guarantee freedom in our day so that we may all live long lives, peaceful lives of goodness and blessing, lives free from shame, lives filled with abundance and honor, lives in which our hearts' desire for goodness for one and all will be fulfilled. amen. the speaker: the chair has examined the journal of the last day's proceedings and announces hot taos his approval thereof. pursuant to clause 1 of rule 1, the journal stands approve the pledge of allegiance will be led by the gentleman from pennsylvania, mr. meehan. mr. meehan: i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation, under god, indivisible, with liberty and justice for all. the speaker: without objection, the gentleman from new york, mr. mahoney, is recognized for one minute. mr. mahoney: mr. speaker, it's with great honor that i welcome abbi eytan hammerman, temple beth shalom and serving as guest chaplain. he leads the temple at beth halom and serves his people in mahopac, new york. new york b.a. at the seminary and degree in political science. he served small and large congregations in baltimore, maryland, white plains, new york, and northern new jersey. in addition to serving as director of the jewish youth philanthropy institute in washington, d.c. rabbi hammerman has served the mahopac area and his leadership has united the community, no matter what their beliefs or background. not only a religious leader, he's long been a political leadership for justice and equality and especially for a reduction to the horrible plague of gun violence we see in our country. he's joined here today by his wife, rebecca, and his three beautiful daughters, ari, reena and lani, as well as his father and mother-in-law, margey and dr. steve hoffman. not only a religious leader, he's also my friend. and i am proud to call him my friend and i hope you will join e in welcoming rabbi hammerman mr. speaker, i yield back. the speaker pro tempore: the chair will entertain up to 15 further requests for one-minute speeches on each side of the aisle. for what purpose does the gentleman from pennsylvania eek recognition? does the gentleman ask for unanimous consent? the gentleman is recognized. mr. meehan: mr. speaker, last week i attended the transportation management association of chester county for its annual legislative breakfast. at the breakfast, the association posthumously honored james f. kilker as its executive director emeritus. it's a very special recognition by his colleagues within the transportation industry, and i can't think of anybody more deserving of this distunks than jim, and -- distinction than jim and i join the association in honoring jim. jim kilker died on wednesday, february 19, 2014. born in northeast philadelphia, jim was a proud philadelphia may tiff and a pillar of his community. he was a labor lawyer, respected by all for his ability to get a to fair resolution of any matter. and at the transportation authority as general counsel for nearly a decade. then, just as now, everybody respected jim. i had the pleasure to work with jim during his time there. he was a competent, intelligent man, and was steadfast in his own position. he was decisive and there was no waffling or ambiguity in his thinking. jim was the chairman of the board of trustees at his alma mater, de salles university. i'd like to commend jim on his devoted service to his community, to his church and his impressive career history. his life, love and devotion to his family and his wife. let me remember jim with this legacy. the speaker pro tempore: the gentleman's time has expired. for what purpose does the gentleman from new york seek recognition? the gentleman from new york is recognized. mr. higgins: i'm grateful that the house adopted my amendment to prevent communities that experienced recent population loss from being excluded from the community block grant program. since the development of the program in 1974, h.u.d. has designated entitlement communities, which included cities of a population of at least 50,000. for 40 years, h.u.d. has allowed cities that have had their populations fall below 50,000 to continue to participate in the program. unfortunately, h.u.d.'s signal desire to change course, this would have devastated 127 cities and 31 states, including the city of niagara falls in my district. the community block grant program has been a foundation for community and economic development across the nation and in western new york. i'm pleased the communities who rely on this funding will continue to have access to this critical resource. i yield back the balance of my time. the speaker pro tempore: the gentleman yields back the balance of his time. for what purpose does the gentlelady from west virginia seek recognition? mrs. capito: to address the house for one minute and to revise and extend my remarks. the speaker pro tempore: does the gentlelady ask unanimous consent? mrs. capito: today, along with my colleague, congresswoman donna edwards, who is with me today, is introduce a legislation to help heart disease in women. women have died more than men of heart disease. it has claimed 100,000 people since 2010. screening can make a huge difference in helping women learn the risk of heart disease and reduce that risk. women rely on their ob-gyn and their community health centers for primary care. and our resolution seeks to educate women of all ages on the need of the heart health and -- as an important part of their screening, wherever and whoever they are seeing. women spend so much time taking care of others, spouses, children, aging parents and the responsibilities of work. it's time to encourage all women to take better care of themselves. learn your risk factors. learn how to be healthier. learn how to live longer and healthier for yourself and for those that you love. i yield back. the speaker pro tempore: the gentlelady yields back her time. for what purpose does the gentleman from florida seek recognition? the gentleman from florida is recognized. mr. deutch: there have been 74 school shootings since the sandy hook tragedy. apostolic high school, stevens institute of business, hazard community college, chicago state university, lone star college, indian river, hillside elementary school, henry grady high school, the university of central florida, davidson middle school, new river community college, grambling state college, smonesmon college, alexander dreyfuss school of the arts, northwest high school, west seidel, carver high school, savannah state university, agape university, agona high school, stevenson high school, south dakota school of technology, west orange high school, arapaho high school, liberty technology high school, martin luther king elementary school, delaware charter high school, widener university, tennessee state, grambling state, eastern florida state college, cesar chavez, bent high school, brush high school, union university, raytown community, wisconsin, delaware, savannah state, kent state, east english prep, st. mary's, iowa west, horizon elementary, georgetown college -- the speaker pro tempore: the gentleman will suspend. the gentleman is no longer recognized. the gentleman is no longer recognized. mr. deutch: not one more. the speaker pro tempore: for what purpose does the gentleman from texas seek recognition? the gentleman from texas is recognized. mr. marchant: mr. speaker, i rise today to celebrate the launch of two new flagship routes at dallas-fort worth international airport which i respect. today american airlines opens direct service from d.f.w. to both hong kong and shanghai. these new flights are the latest additions to the growing international hub at the dallas-fort worth airport. hong kong and shanghai enjoy an impressive list of newly launched international flights from d.f.w. including bogota, ubai, lima, sowell and sidney. many -- seoul and sidney. this is because of the easiest access of the flights from d.f.w. these flights will promote further business development and make it easier for my constituents to travel to asia and across the world. more good news will come next month as d.f.w. will soon add a direct flight to doha. my sincere congratulations to everybody at the dallas-fort worth international airport, and i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from new jersey seek recognition? the gentleman from new jersey is recognized. mr. sires: mr. speaker, i rise today in support of the united states postal service six-day mail delivery. the most recent proposal offered by the republican leadership to pay for the highway trust fund by reducing mail service is unprecedented and irresponsible. the elimination of six-day mail delivery would have a negative affect on postal service and could result in a loss of up to 80,000 jobs. for decades, the postal service has sustained and created american jobs in every corner of the country, eliminating six-day delivery service will not only -- would not only slow the delivery of mail and harm small businesses across america, but it will impose the hardship on the elderly who rely on mail delivery. the republican leadership proposal po eliminate six-day mail service will take 10 years to generate enough money to fund the highway spending for just one year. oposals like these are illogical short-term fixes. come on, guys. put on your thinking caps and come up with a better proposal for america, and i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from california seek recognition? >> i ask unanimous consent to address the house for one minute and to revise and extend my remarks. the speaker pro tempore: the gentleman from california is recognized. mr. mcnerney: i call on my republican colleagues to focus on the things that the american people sent us here to do. today, i want to talk about protecting our veterans. we owe it to our veterans to do everything we can to restore their confidence in the v.a. health care system. the plan announced monday by the v.a. is a step in the right direction, but we must do much more. i stand on behalf of the veterans in my district. they're still waiting too long and driving too far to see a doctor and waiting far too long for their claims and appeals to be processed. we need to see congress spend its time getting to the bottom of the v.a.'s dysfunction and getting the v.a. leadership the tools they need to fix these problems. this is something we should do right now. instead of spending time on yet another series of politically motivated hearings on benghazi. i call on the republican leadership to use our house resources to investigate the real cause of the delays and work to find real solutions that will serve our veterans. that's a plan the whole house can get behind. mr. speaker, i yield back. the speaker pro tempore: the gentleman yields back the balance of his time. for what purpose does the gentlelady from california seek ecognition? the gentlelady from california is recognized. mrs. capps: i rise in support of smart and sustainable use of our ocean resources. we depend on a healthy ocean for so much, for food, livelihood, recreation and more. that's why scientists, managers and entrepreneurs from across the country are currently in washington, d.c. to discuss critical marine policy issues as part of capitol hill ocean week. a key issue on the agenda is the responsible management of our nation's fisheries. america's fisheries are rich, both economically and culturally, because we have smart laws that prioritize sustainable resource use. under these laws, our fishing industry alone contributed $199 billion in sales and 1.7 million jobs and that's just in 2012. these laws, however, are being threatened by partisan legislation recently passed by the natural resources committee. this bill, which i call the empty oceans act, would override key environmental laws, erode fisheries and hurt our coastal economies. it's no way to manage our ocean resources. i murge my colleagues to oppose the empty oceans act. the speaker pro tempore: the gentlelady's time has expired. from you were d -- for what purpose does the gentleman from california seek recognition? the gentleman from california is recognized. >> thank you, mr. speaker. two weeks ago, the house natural resources committee marked up amendments to the magnusson stevens fishery conservation act that manage ours nation's fisheries. mr. lowenthal: unfortunately the bill that passed out of committee was not a bipartisan effort. among its many concerning provision the bill supersedes long standing protections for endangered species and our national marine landmarks. that's why i offered an amendment in committee that would have kept the marine sanctuaries act, the antiquities being other acts from overrid bin magnusson-stevens act. it's nonet manage fisheries, not natural treasures. i urge my colleagues to work across party lines to build a bipartisan fisheries bill. i yield back. the speaker pro tempore: for what purpose does the gentlelady from maryland seek recognition? >> i ask unanimous consent to address the house for one minute and revise and extend my remarks. the speaker pro tempore: the entlelady is recognized. ms. edwards: i rise today a a -- as a co-sponsor of a resolution that provides basic health screenings for women wherever they seek primary care. i want to thank my colleague from west virginia, mrs. shelley moore capito, for co-sponsoring this legislation. heart disease causes one in four deaths among women each year. for the past three decades, the numb of de-s from heart disease for women have exceeded those of men. i'm concerned that heart disease claims the lives of more than 400,000 women each year and nearly half of all african-american women have some form of cardioclass var -- vascular disease. -- cardiovascular disease. mr. speaker, it's time for us to bring awareness to the burden of heart disease so that we can reduce heart disease among women in the united states by ensuring that wherever women seek care, they get basic, preventive heart health screen frgs heart diseasism uverage my colleagues on both sides of -- urge my colleagues on both sides of the aisle to support this timely resolution and i yield back. the speaker pro tempore: for what purpose does the gentleman from kentucky seek recognition? mr. yarmuth: i ask unanimous consent to address the house for one minute. the speaker pro tempore: the gentleman is recognized. mr. yarmuth: yesterday's one ng in oregon was the many of since the tragedy at sandy hook elementary in 2012, nearly one school shooting a week. these shootings are becoming so frequent that one company saw a business opportunity and is marketing bulletproof blankets to elementary school students. but the reaction of our friend and neighbors have been silence, moments of silence on this floor amplified by the cowardice of those in this body who refuse to stand up for public safety. 86 americans lose their lives to guns every day and americans are 20 times more likely to be murdered with guns than the rest of the developed world. the american people want us to act. in support closing loopholes the gun. enough with the moments of silence, it's time for a moment of action from congress to prevent gun violence. i yold back. the speaker pro tempore: for what purpose does the gentlelady from illinois seek recognition? >> i ask unanimous consent to address the house for one minute and revise and extend my rashes. the speaker pro tempore: the gentlelady is recognized. >> thank you, mr. speaker, i rise to speak in opposition of the misguided proposal to fund the highway trust fund by eliminating saturday mail delivery. time and again i've heard from people across my region that saturday mail service is crucially important to them and their communities. ms. bustos: i had the opportunity earlier this year to partner with a letter carrier in the city of guilford, illinois. as i have met folks along the delivery routes of the vast district, 7,000 square mile, that i serve, it is clear how important six-day delivery is to them. i've met seniors who depend on mail on saturday for prescription drugs. i've met small business owners who depend on saturday delivery to manage their inventory and i've met folks who talk about eliminating saturday mail as a blow to the communities across our region of illinois and across our country. our transportation infrastructure projects are critically important to our nation and we seek bipartisan support to make sure that that happens. but not in a way that threatens the livelihood of so many people. i stand ready to roll up my sleeves and to work with -- across the aisle on practical solutions for our country. thank you, mr. speaker, i yield back. the speaker pro tempore: the gentlelady's time has expired. for what purpose does the gentlelady from new york seek recognition? the gentlelady is recognized. mrs. maloney: thank you, mr. speaker. i rise in strong support of the re-authorization of tria, the anti-terrorism risk insurance program. this is a vitally needed program that helps the economy of our country that was put in place after the 9/11 attacks and has helped our country rebuild. after 9/11, you could not get an insurance policy for even a hot dog stand in new york. you had to go to lloyd's of london, tremendously expensive, to get any insurance. but this program did exactly what it was expected to do. it allowed taos rebuild and -- it allowed us to rebuild, it had a government backstop and did not cost the taxpayer one penny, yet it helped us build jobs and rebuild our economy. we have so many government programs that don't work, this is one that did exactly what it was supposed to do. and at no additional cost. we need to have a plan in place, god forbid if we're attacked again, we have a plan of how to respond and thousand rebuild. this is a program that's worked, we need to re-authorize it. thank you. the speaker pro tempore: the gentlelady yields back. for what purpose does the gentleman from texas seek recognition? the gentleman from texas is ecognized. >> mr. speaker, i rise today to congratulate and honor the mariachi students at fort worth's northside high school who were chose ton perform at carnegie hall on june 22. mr. veasey: this will be the first carnegie hall concert by any mariachi band in seven years. with an outpouring of support from the school district and local community, the 23-member group has successfully raised partial funds for the trip. these hardworking students continue to rally the community for support and have played for coe nations at a host of metroplex area restaurants to raise the remaining difference. this is a great opportunity for these young people to step onto the national stage and proudly represent not only their school, but the fort worth community and the great state of texas. i'm proud to represent this caring community and school and such talented constituents. i wish them a safe journey to the big apple and congratulations on this outstanding achievement. go steers! i yield back. the speaker pro tempore: the gentleman yields back. for what purpose does the gentleman from florida seek recognition? the gentleman from florida is ecognized. mr. hastings: thank you, mr. speaker. yesterday's shooting was the 74th shooting since the shooting at newtown, connecticut, in december of 2012. the list of shootings which includes 13 school shoots -- shootings in the first six weeks of this year, was compiled and demandhe website of moms action for guns in america. earlier my colleague, ted deutch, revited -- recited all 74 of them. yesterday and two other times in the last two week thecks house, rightly, held moments of silent. i and two of my colleagues did not stand. not because of disrespect for those who lost their lives, we abhor the los of life. and we are for the house of representatives taking moments of violence and then returning to the -- to business as usual and we absolutely -- abhor the house of representatives taking moments of silence and then returning to business as usual and doing absolutely nothing. the speaker pro tempore: the chair lays before the house a mune case. the clerk: the honorable the speaker, house of representatives, sir, pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on june 11, 2014, at 9:28 a.m., that the senate agreed to, without amendment, house concurrent resolution 100. signed sincerely, karen l. haas. the speaker pro tempore: for what purpose does the gentleman from texas seek recognition? >> mr. speakering by direction of the committee on rules i call up house resolution 616 and ask for its immediate consideration. the speaker pro tempore: the clerk will report the resolution. the clerk: house calendar number 111, house resolution 616. resofted, that a, at any time after the adoption of this resolution the speaker may, pursuant to clause 2-b of rule 18, declare the house resolved into the committee of the whole house on the state of the union for consideration of the bill h.r. 4800. making appropriations for agriculture, rural development, food and drug administration, and related agencies programs for the fiscal year ending september 30, 2015, and for other purposes. the first reading of the bill shall be dispensed with. all points of order against consideration of the bill are waived. general debate shall be confined to the bill and shall not exceed one hour equally divided and controlled by the chair and ranking minority member of the committee on appropriations. after general debate the bill shall be considered for amendment under the five-minute rule. points of order against provisions in the bill for failure to comply with clause 2 of rule 21 are waived. b, during consideration of the bill for amendment, 1, each amendment other than amendmented provided for in paragraph 2 shall be debatable for 10 minutes equally divided and controlled by the proponent and an opponent, shall not be subject to amendment except as provided in paragraph 2. 2, no pro forma amendments shall be in order except that the chair and ranking member of the committee on appropriations or their respective designees may offer up to 10 pro forma amendments each at any point for the purpose of debate and 3, the chair of the committee of the whole may afford priority and recognition on the basis of whether the member offering an amendment has caused it to be printed in the portion of the record for that purpose under rule 18. amendments so printed shall be considered as read. c, when the committee rises and reports the bill back to the house with the recommendation -- it do pass, it shall shall be considered without intervening motion except one motion to recommit. section 2, it shall be in order to consider the house the bill h.r. 4457, to amend the internal revenue code of 1986 to perm neptly extend increase expenses, limit nations and for other purposes. all points of order against consideration of the bill are waive the amendment in the nature of a substitute recommended by the committee on ways and means now printed in the bill modified by the amendment in the report accompanying this resolution shall be adopted. the bill as amended shall be considered as read. all points of order against provisions in the bill as amended are twhavepled previous question shall be -- are waived. all previous questions on the bill shall be considered as amened and without intervening motion except, one, one hour of debate equally divided and controlled by the chair and ranking minority member of the committee on ways and means and two, one motion to recommit with or without instructions. section 3. upon adoption of this resolution, it shall be in order to consider in the house the bill h.r. 4453, to amend the internal revenue code of 1986 to make permanent the reduced ecognition period for gains of s-corporations. all points of order against consideration of the bill are waive. in the lue of the amendment -- in lieu of the amendment in the nature of a substitute printed in the bill, an amendment in the nature of a substitute in rules committee print 113-166 shall be adopted. all points of order against provisions in the bill as amended are waive the previous question shall be considered as ordered on the bill as amended and on any further amendment thereto to final passage without intervening motion except, one, one hour of debate equally divided and controlled by the chair and ranking minority member on the committee on ways and means, and two, one motion to recommit with or without instructions. the speaker pro tempore: the gentleman from texas is recognized for one hour. mr. burgess: thank you, mr. speaker. for the purposes of debate only i yield the customary 30 minutes to the gentleman from florida, mr. hastings, pending which i yield myself such time as i may consume. the speaker pro tempore: the gentleman is recognized for as much time as he wishes to use. mr. burgess: during consideration of this resolution, all time is yielded for the purposes of debate only. mr. speaker, i ask unanimous consent that all members may have five legislative days to revise and extend their remarks . the speaker pro tempore: without objection, so ordered. mr. burgess: mr. speaker, house resolution 616 provides for consideration of three important bills. the first, h.r. 4800, the agriculture appropriations act for fiscal year 2015 will ensure continued operations for those federal agencies responsible for monitoring the health and safety of our food and drug supplies. h.r. 4457, america's small business tax relief act of 2014, and h.r. 4453, the permanent s corporation built-in gains recognition period act of 2014, are two critical pieces of tax legislation that will give certainty to the small business community, making permanent two pieces of our tax code which congress has had to continually renew annually for decades. making these tax credits permanent will allow businesses to look out for more than a year ahead and to actually evaluate their economic situations, allowing for those businesses to make staffing and investment decisions for the long term rather than just the short term. the rule before us today provides for a modified open rule for h.r. 4800. this allows all members to offer any amendments to the bill that they may choose. the speaker is committed to completing as many appropriations bills under regular order as possible. the rule before us formalizes the same unanimous consent agreement that was entered into during the consideration of the c.j.s. appropriations bill, which streamlines the debate, providing for 10 minutes of debate on every amendment offered on the bill. however, in no way does this rule restrict members from offering any and all amendments to the underlying bill. the rule further provides for 4457, sideration of h.r. america's small business tax relief act of 2014, and h.r. 4453, the permanent s corp built-in gains recognition period act of 2014, both under a closed rule. by bringing these two bills here today, members will be allowed to debate the policy of each of these tax provisions individually rather than as a single omnibus tax extender legislation currently passed at the end of the year that would not allow members to weigh in individually on each extender. h.r. 4800, the agriculture and related agencieses appropriations act of 2015 provides almost $24 billion for the department agencies in the bill. this is funded at the same evel as fiscal year 2014 and $457 million above the president's request. the bill provides critical funding for agricultural research, animal and plant health, conservation programs, the farm service agency, rural development, including infrastructure and food safety inspection, the food and drug administration, the commodities future trading commission and the food and nutrition programs, including child nutrition, supplemental nutrition assistance program and w.i.c., the program for women, infants and children. of particular importance of the work i've been involved with on the energy and commerce committee, the agricultural appropriations bill provides over $2.5 million for funding for the food and drug administration. in addition, the bill provides for the collection of user fees cupola tiffly amounting to over-- cumulatively amounting to $4.5 billion in the f.d.a. these dollars serve an important mission. from drug and device approval to food safety, the food and drug administration is at the regulatory forefront of protecting the nation's health, but it also acts as a doorway for new treatments and cures. from basic research to cutting edge treatments, america has led the way in opening new fields of discovery and taking medicine to boundaries that i could not have imagined during my medical training or career. yet, we have barely scratched the surface of medical breakthroughs that are over the horizon. and believe it or not, there are only hundreds of treatments for diseases that afflict us and thousands still without any treatment at all, let alone a cure. will the united states continue to be the home for latest inventions? if the answer to that is yes, the food and drug administration will be a key part of the future. patients and innovators are on the front lines in the fight against diseases like alzheimer's and cancer, yet, their choice -- voices are not always heard. bureaucratic rules have stood in the way of innovation. some estimates show that medical devices may be approved four years earlier in europe than in the u.s. in 2012, the president's council of advisors on science and technology recommended, quote, encouraging innovation, closed quote, as part of the f.d.a.'s mission statement in order to ensure that the f.d.a. understood its role in helping new innovative treatments for patients. however, the true impact of the medical device, pharmaceutical, bilogic, engineering, drug -- iologic, engineering, they need the tools they need to prevent disease and alleviate human suffering. the food and drug administration must have the infrastructure and programs in place to ensure all innovations are dealt with in a fashion that ensures safety for the patient as well as a straightforward and predictable and streamlined approval process. the food and drug administration can continue to streamline the approval process of single molecule drugs with which they have the most regulatory experience, but if we can't handle the fundamentals, then we've got a big problem. congress has taken several bipartisan actions in the last few years to break down the barriers to health innovation and the food and drug administration will and has seen changes as a result. the funding provided will continue to move these reforms along, but as report language notes, there is a great deal of work that remains to be done. for the good of patients and to retain our global leadership and the economic benefits that come with it, it's time to breathe new life into the life sciences sector. as a physician, i understand the importance of ensuring that the government has the next ces to lead to the generation of treatments in the 21st century while also ensuring that those treatments are safe and effective. the bill will ensure that the food and drug administration has the scientific and medical expertise that they need when reviewing products utilizing emerging science by providing adequate resources in a challenging fiscal environment. after the successful passage of the farm bill this year, the next step in that process is to fund those programs. h.r. 4800 achieves that goal, and i will add i was disappointed to see that the healthy foods financing initiative to bring grocery stores and fresh food to underserved communities was not funded in this appropriations bill. even after the house resoundingly defeated an amendment to strip the program from the farm bill, showing this body overwhelmingly supports this initiative. i understand an amendment to fix this oversight will be offered during consideration of the bill, and i hope that something can be worked out. the two tax bills before us today are, again, critical to give small businesses stability and the ability to look beyond the end of each calendar year in making decisions for their companies. extending these provisions today will be a boost to our economy. h.r. 4457, america's small business tax relief act of 2014, will make permanent within the provision in the tax code that will allow annual benefits up to $500,000 to be expensed. further, computer software and rules for the expensing of qualified real property, leasehold improvement, restaurant and retail improvement property can also be written off as well. the present tax system harms investment in many ways. one of the most important is that unlike other expenses, businesses must deduct capital expenses, such as for business equipment over many years rather than the year the expense is incurred. this raises the cost of capital and reduces investment. h.r. 4457 would go a long way to reverse this trend. likewise, the other two tax extenders that we are dealing with today would deal with s corpses or pass-through corporations. -- corporations or pass-three corporations. deductions, losses and credits will be through to their shareholders. 4453 makes r. permanent expired tax break that would enable businesses set up as s corporations to shrink the window that they have to hold built-in gains from 10 years to five. 4, the charitable contributions act of 2014, would require an adjustment to the basis of a shareholder's stock in an s corp if the corporation makes tax deductible charitable donations. recently, the house passed a permanent tax credit for corporate research and development. 62 democrats voted against the measure. their reasoning as far as i can tell was not against the policy but it was the fact that the measure was not offset. however, offsets are something in congress that we need when we are creating new programs or allocating money not previously appropriated, essentially making the american people pay more in taxes. offsets are unnecessary and not needed when in fact we are shielding the american people from being taxed. moreover, we heard last night in the rules committee, and i suspect we will hear it again today on the floor, about the fact that the two tax-related bills before us today in this rule are not offset. congress only needs to pay for tax credits if one subscribes to the belief that all money in the country, all money in the country belongs first to the government rather than the people. i reject this mindset. congress does not need to justify or offset not taking more money from the american people. congress needs to justify and pay for policies that take money from the american people. indeed, every member of the rules committee on the minority side has voted at least three times to extend these very provisions without having any sort of offset. president obama himself signed those three extensions of these provisions into law, all done without offsets. senator wyden, who's been working on a larger tax extender bill in the senate, has included the same pay-go language that's included in these bills before us in this legislation. to make hay about this issue, which is much to do about nothing, is to play politics with our taxpayers and our economy, and the republican majority in this house will not play along. in the absence of a larger comprehensive tax reform package, permanent extenders like these are common sense. they bring back stability and certainty to businesses. they are constantly waiting at the end of every calendar year to see if congress will retroactively act to provide that tax relief. i'd encourage my colleagues to vote yes on the rule and yes on the underlying bill. and i will reserve the balance of my time. the speaker pro tempore: the gentleman from texas reserves the balance of his time. the chair will receive a message. the messenger: mr. speaker, a message from the senate. the secretary: mr. speaker. the speaker pro tempore: madam secretary. the secretary: i have been directed by the senate to inform the house that the senate has agreed to s.con.res. 37, authorizing the use of the rotunda in the united states capitol in commemoration of the congressional gold medal ceremony. the speaker pro tempore: the gentleman from florida is recognized. mr. hastings: thank you very much, mr. speaker. and i thank the gentleman from texas for yielding to me the customary 30 minutes. mr. speaker, today the house will adopt yet another closed ule for these two tax extender measures which will cross a new rube con, a new threshold. -- rubicon, a new threshold. we'll break the record for the most closed rules considered by congress ever. and we still have seven months to go. the graphic i'm holding illustrates that, that we have the most closed congress ever, which allows, among other things, we don't deal with immigration reform, we don't deal with the minimum wage, we don't deal with unemployment insurance, we don't deal with unyears -- universal gun background checks, this is a closed congress. this may sound like inside baseball, but it's much more than just a procedural agreement. i've seen a lot of rules, serving nearly 10 years now on the rules committee, but this is a new one. this rule limits debate during the appropriations process. it deems passage of a provision to ignore the deficit that this legislation will create. and it sets an all-time record, as i have shown, for closed rules. we manage to do this -- we managed to do this yesterday and now have it on the floor, all in one rule. congress has, as i said, many important issues it needs to take up, including the things i've shown and reiterate now, immigration reform and raising the minimum wage and extending unemployment insurance. 2.5 million people in this country are without unemployment insurance and if we were to pass it, it would create 200,000 jobs. we stand around here and talk about creating jobs all the time. closed rules prevent the house from working its will on these measures and that's the way it appears that leadership, what's left of it, wants it to be. my friends do make some democratic amendments in order at times. and both parties have used closed rules. when they've been in control. and that's true. that's the prerogative of the party controlling the house. but you can read these closed rules like a road map of my friends' priorities. in general, the only amendments made in order are those that are expected either to pass or fail along party lines. over 30 house republicans and 64% of republican voters polled support immigration reform. but we can't get a vote. where is the immigration reform bill? where is the measure that will allow for us to answer many of the problems that this country is confronted with with reference to immigration reform. this week, as i have indicated, nearly three million americans have lost emergency unemployment insurance since it expired in december. but we can't get a vote here on the house of representatives floor. the voting rights act needs to be reformed in order to protect american voters but we can't get a vote in the people's house. leadership uses closed rules to prevent the house from working its will because they're worried about undermining their message, more worried about it than actually legislate. today's tax extenders are perfect examples of how these heavy handed tactics help the chosen few but leave everyone else without recourse. there are at least 50 other tax extenders that we could have taken into consideration but no, we choose these six because that's your agenda. dozens of other provisions that expired at the end of this 2017 and several others scheduled to expire at the end of this year have been skipped over in favor of these six extenders favored by businesses that are pretty substantial and not necessarily the big corporations of many of the large s-corporations. my friends across the aisle have passed up the chance, would you believe this? to renew the work opportunity tax credit which helps veterans get back to work. as well as the new markets tax credit which helps revitalize communities. how do you do that? they've chosen to ignore renewable energy tax credits and tax credits to help working parents pay for child care. how about that? they decided there's no reason to extend deductions for teachers out of -- for teachers' out of pocket expenses, qualified tuition, mortgage insurance premiums or state and local taxes, deduction that is critical for floridians and the people that i represent. these six extenders will be the only extenders that the house votes on because these are the priorities of my friends across the aisle. priorities that may solidify your message, my friends, particularly your message with your base and evidently you're confused about that particular matter. but you're more interested in them, in ensuring that you do nothing to help hard working americans. you're going to use the power of the closed rule to ensure that no other provisions gets a vote. and you're going to become the most closed congress ever. this a-- disallowing immigration reform, disallowing a minimum wage increase. there are states that are giving a realistic minimum wage increase to people. you tell me how it is that people live on $7.35 an hour. many of us have been to food shelters and seen people that are working, many of us have seen people that are living in shelters, working families, living in shelters, and we won't even bring a measure here, are you afraid to just say yes or no, whether or not americans ought to have an increase in their minimum wage at the federal level? million people don't have unemployment insurance, can't meat their obligations, we're not willing to help them, and you're telling me, you're going to increase, you talk all the time about the deficit, you're going to increase the deficit with some mumbo jumbo about money if it's not in the hands of, and disallow people that we know if they were to receive unemployment insurance compensation, that they would spend all of that money and that it would, in fact, create jobs, and it would sustain small businesses, if we were to do hat. a friend on the other side pointed out yesterday he had come from a hardscrabble life and his father one time had been on unemployment insurance. i said to him, and i believe it to be true, that you just proved my point. and i asked him, did his daddy get a job after he was on unemployment insurance and his answer was yes, i knew that's what it would be, and many of the people on unemployment insurance today, if we were to give them a chance, they'd get a job. get a life, republicans. give people a chance -- i reserve the balance of my time. the speaker pro tempore: the gentleman from texas is recognized. mr. burgess: thank you, mr. speaker. i yield myself some minutes for -- a minute for the purposes of response. the speaker pro tempore: the gentleman is recognized. mr. burgess: in the 111th congress, the final two years of representative pe low cease time as speaker, 2009 and 20 10, this house never considered a single bell under an open rule. let me state that again. 2009 to 201240erk111th congress, speaker pelosi was speaker, the house never considered a single bill under an open rule. mr. speaker, i would submit that's the definition of a closed process. i reserve. the speaker pro tempore: the gentleman reserves. the gentleman from florida is recognized. mr. hastings: mr. speaker, my friend on the other side of the aisle may try to change the subject, do that if you like, but i ask the gentleman, is this a new record for closed rules or not? and i answer rhetorically because it is. i don't deny that democrats have used closed rules, i said it in my opening remarks. mr. speaker, i yield five minutes to my good friend the distinguished gentleman from texas, lloyd doggett. judge lloyd doggett. the speaker pro tempore: the gentleman is recognized for five minutes. mr. doggett: thank you so much. across america, for 30 million schoolchildren, implementation of the healthy, hunger-free kids act is working. schools are literally stepping up to the plate with a plate of healthier food. indeed, for school lunches in texas, 99% of texas school districts are successfully serving meals that meet strong nutritional standards. in most of the schools i visit, 99% is an a-plus. first lady michelle obama has provided impressive leadership in getting students, families, all of taos pay a little more attention -- all of us to pay a little more attention to food quality, to encourage kids to be more physically active, to get moving and grow up healthy. active, healthy kids do bet for the school and grow up to be more productive citizens who can help in moving our country forward. today's bill presents the question of whether we are to wave good-bye with a waiver to healthy school lunch standards. and this bill that we are about to consider is not the only place where unhealthy congressional action lurks. at the very same moment that the agriculture appropriations subcommittee was weakening school nutrition standards with a waiver, the house ways and means committee, on which i serve, approved a bill to expand a tax subsidy for, quote, apparently wholesome food. sounds good. the only problem is that the statutory definition of apparently wholesome food does not actually limit itself to the wholesome. it includes halloween candy, twinkies, pop rocks, stale potato chips and other expired junk food. all of which receive a taxpayer subsidy. and i think that's a little hard to stomach in a nation where one third of our children are overweight or obese, we should neither be subsidizing junk food nor repackaging healthy school meal standards into less healthy meals. we're already spending in $245 a an estimated billion every year on diabetes. rates of dietary-related type ii diabetes are skyrocketing among children and young adults. since many of our children consume up to half of their daily calories at school through the school lunch and school breakfast programs, their health depends upon the nutritional quality of the food they are served. today, we should not take a giant step backwards. let's join against this push to lower standards for our nation's children. they deserve the healthiest future possible. i yield back. the speaker pro tempore: the gentleman yields back. the gentleman from florida reserves. the gentleman from texas is recognized. mr. burgess: i reserve my time. the speaker pro tempore: the gentleman from florida. mr. hastings: mr. speaker, returning briefly, before i yield to my good friend, to the subject of open and or closed rules, this is what speaker boehner promised right here in this chamber in his own words. i offer, quoting him, a commitment, openness, once a tradition of this institution but increasingly scarce in recent decades, will be the new standard. you will always have the right to a robust debate and an open process that allows you to represent your constituents, to make your case, offer alternatives, and be heard. it's unfortunate that my friends on the other side of the aisle campaigned telling the country how open and transparent they were going to be and then when they do the opposite and are called out on it, it's just more excuses. mr. speaker, if we defeat the previous question, i'm going to offer an amendment to the rule the bank p h.r. 4582, on students emergency refinancing act. mr. tierney, my good friend, authored that bill to help millions of people lower their student loan debt. the bill would allow borrowers to refinance federal and private student loans to the lowest rates that are currently available to new borrowers. to discuss this proposal, i yield two minutes to the distinguished gentleman, my friend and colleague from massachusetts, mr. tierney. the speaker pro tempore: the gentleman is recognized for two minutes. mr. tierney: thank you, mr. speaker. i thank my colleague for yielding the time. mr. speaker, i rise to urge the house to act on responsible legislation that i've introduced that would help tens of millions of college students and graduates and parents, middle class families across the country to be able to refinance their existing loans to the same low rate offered to new borrowers in the student loan program. . as the president said earlier, this should be a no-brainer. small businesses are so often able to refine their debt, there's no reason parents can't do the same. refinancing would be a significant financial help to
LandstuhlRheinland-pfalzGermanyQatarDubaiDubayyUnited-arab-emiratesShanghaiChinaWidener-universityDelawareUnited-states block or slow content on the internet. speaking with experts on both sides. issue in a moment. starters, get to nbc's kelly o'donnell who's following the latest from the white house this afternoon. kelly, what else did we hear from the president during today's event on deregulation? >> reporter: good to be with you, ali. it goes back to the president trying to use the promises made, promises kept metaphor, he signed an executive order in the early days of his administration. a giant stack of paper work was brought out today and cutting of a ribbon to make the point they are trying to scrub through the federal regulations, to look for ways to remove them, to make it easier for business, the intention is to do things that would allow business to operate for openly, more efficiently, more easily, and the extension would be that that would create a better environment for jobs and so forth. to give you a sense of the president's ability to try to boast about this, here's how he framed it a short time ago in this announcement. >> for the first time in decades, we achieved regulatory savings. hasn't happened in many decade. we blew our target out of the water. within our first 11 months, we canceled or delayed over 1,500 planned regulatory actions. more than any previous president by far. and you see the results when you look at the stock market, when you look at the results of companies and when you see companies coming back into our country. >> reporter: one of the few areas the trump administration has an ability to boast is the booming stock market. whether they're responsible noor dire for that or not is something they are talking about so regulation is tied to that and this is the president trying to bang drum of accomplishment. you heard the sort of hyperbolic language there, but this is something they believe is within sort of the republican view of how to govern and a trump-style view slashing regulations trying to stimulate some and president trump spoke briefly about the tax bill that is facing lawmakers after marco rubio of florida said he was not leaning towards support. president trump saying he expects to have rubio onboard and called it a great christmas present for the american people. ali? >> kelly, thank you very much for that. kelly o'donnell at the white house. digging into the other big topic today. today's net neutrality vote. as my friend tom costello pointed out today, it helps to think of the internet as a congested highway. most fast lanes taken up by trucks carrying huge amounts of data content, amazon, netflix, hulu. the rest of the car, small independent websites, start-up companies. in 2005 the obama administration ruled those big companies could not pay to dominate -- show this to you over here. could not pay to dominate the fast lanes on the internet highway. they said high-speed internet was a public utility and everyone should have equal access. those net neutrality rules prohibited internet service providers or isps from blocking or slowing websites. critics of repealing net neutrality, done today, argued internet providers could become gatekeepers of ultimately hurting consumers companying trying to compete with bigger named ones. get into it later. net knneutrality protected smal business. facebook, twitter, all small businesses because of net neutrality were able to get into the market. the people who wanted to get rid of these rules like the federal communication chairman ajeek pi argued the move to inspur innovation and invest and give consumers more options choosing internet plans and give consumers more options in general. we should note internet providers have to disclose through the fcc or on a publicly available website if they're engaging in practices like in rolg throttling back speeds and ploking those who want to pay for the comcast, at&t, verify sizen support it, facebook, apple, oppose it. they will not block throttle or disscrimmenate against lawful consent. bring in robert mcdowell, fcc commissioner from 2006 to 2013 serving both presidenting george w. bush and barack obama. also the chief public policy adviser for mobile future, association in technology and communications companies testified to congress about net neutrality last month. good to have you on the show. >> thank you for having me. >> the best argument i've heard in favor of net neutrality is that the internet as we know it today, the things most people consume. whether facebook, netflix, amazon, those kinds of companies, came about because small start jud-ups had access this fantastic internet. if we were to impose the ability to slow down some parts of the internet or speed it up for money, we may earned up freend the internet in time, they exist at big companies and never a competitor to facebook or google or amazon? >> right. there's a lot of hype and it's very confusing. get legal very quickly. what the fcc did in february 2015, put a 1934 law the communications law of 1934 on to broadband internet networksbefore that, when all the companies you cited started in dorm rooms and became some of the world's largest corporations. they did that before this title 2 thing. the term by the way, net neutrality has no legal definition. the question is, before february of 2015, what worked? how did this ecosystem work to allow those entrepreneurs to do all that? >> didn't use as much bandwidth. everything we do use the internet band width, coming over the years. >> before 2015 as well. you have the federal trade commission act, for instance. the clayton act and sherman act. three very powerful federal statutes that kept the internet open and free prior to february 2015. to hear people talk today you'd think the internet started in february 2015 with title 2. that's not the case. what title 2 has done in the wireless phase, anyway, reduced investment in the fast years by 18%. not a figure for debate and this is a crucial time for wireless making the transition to the fifth generation or 5g technologies which would be faster than cable service provides today at a gig per second. that's going to be slube absolu fantastic for consumers. we need to build out the networks and every independent wall street analyst said the title 2, possible rate regulation and 1,000 or so requirements of title 2 created tremendous uncertainty. the commission is not putting consumers at risk and certainly not entrepreneurs at risk. >> and rob, that's just not true. >> it is totally true. >> today if facebook wants to say they'll spend $1 billion to subsidize your internet plan so you pay less for your monthly fee. facebook gets preferential treatment. i decide to launch a website, i'm a start-up, don't have the money to pay, i could get slow speed. some would say, why use my system as opposeded that that paid for the fast lane? >> section one and two of sherman and section three of clayton act, antitrust violation. federal trade commission could go after them also under section five of the federal trade commission act against the law between february 2015 and against the law today. >> why illegal for somebody to pay for faster service? that's what neutrality protected. >> prevents unreasonable discrimination. you can buy in bulk get a volume discount as you could with phone service. that's a myth. back to the -- anti-competitive, if you are raising rivals costs or entering into exclusive arrangements that harm's competition or consumers, those statutes i mentioned would all be triggered and against the law. why you have ---if you're an at&t customer, you get certain directv products, can stream hbo. you're saying, a lot of -- dropping a lot of legal names. it does happen. tell me that it's -- illegal to do that, that's not true. >> no. it is true. >> it's not true. it's not true. people bundle services they own. why does at&t offer directv for free as opposed to verizon tv for free? >> they can bundle services. they can't shut out other people. bake to wireless. everybody is zero rated. unlimited data plans now. that argument is gone whether or not some wireless providers can discriminate -- >> i don't feel we're having a really fair conversation here. i'm trying to have a conversation on the merits of the principle of unintended consequences of reversing net neutrality, and you're dropping a lot of legalese. we know full well -- >> legalese of the merits. that's what's at play here. maybe you haven't read the laws and understand it. >> i'm familiar with net knew trait traknew-of--of-net neutrality. i'm no saying the companies want to pillage the internet. i'm saying there is a danger of unintended consequences. you like light touch regulation because you say that's largely been what's worked to get the internet to where it is right now. >> exactly. >> there is a danger whenever you switch things. doesn't make it right or wrong, of not enabling the same kind of growth we've become accustomed to in the last 15 years on the internet. >> before february 2015 there weren't asteroids hitting the internet every day. quite the opposite. blossoming beautifully. that was the clinton/gore policy, for 20 years gave us wonderful internet experiences we have today. what confused things was title 2. imposition of title 2 in february of 2015, that's what's being reversed. consumers protected. fact pattern, this isn't legalese. the fact patterns the parade of horribles are illegal, were before and illegal today going forward. >> i gave you fact patterns of companies that bundle their own goods and give them preferential treatment. the point is, for every point you make i can make another one and much more useful to have a broader conversation whether or not this is, there may be unintended consequences to reversing net neutrality? right? we're not in a court of law. there's no judge in front of us. >> i understand. to your point you're saying consumers are not protected. that's not true. >> i did not make that argument once. one argument, start-ups and -- i didn't say consumers, sir. you've come to the show ready for an argument i'm not giving you. >> then the argument you're merricking is not true. that's not trunchts exactly the argument i'm making. worried about freezing internet at a point in time because established players have the money to subsidize the ability to give people a lower rate. isn't the argument -- >> violations of three federal statutes and why it didn't happen before. >> one of the argument, people in favor of removing knelt neutrality, consumers get more choice in the plans they can buy. why would they get more choices if excluded from a particular plan? why drop what i pay on a monthly basis for internet if i wouldn't lose something? >> rewind the tape a little. talking about consumers and entrepreneurs in favor of your own product like comcast? >> no. we need to rewind and have this conversation again at some point. you're making an argument i'm not making. i'm saying, someone has an advantage in streaming content over the internet. established player because they have the money to buy better, faster, quicker access or prevent somebody else from getting it, that -- the incumbent is favored over the start-up. that's the only point i wanted to make. the only point. >> and that would be illegal. the point i'm making. what you said is already illegal, has been a long time and will be going forward. so that's good news. >> i'm not sure we're interpreting the same. >> it's good click bait to say the interin et is being destroyed but it's not. >> i didn't say that. i don't know why you're coming on tv to have an argument i'm not having. i didn't say the internet is being destroyed. >> you said preferred -- isp -- if it's preferred, favoring one over another that's a violation of the law. >> would have been a much better conversation if we were just actually have the conversation. >> umm trying to teach you the state of the law. what going on. >> commissioner from 2006 until 2017. >> sorry for the catastrophe. >> i didn't say say that. >> the going to be great. >> maybe he can't hear me? hearing some other -- he's fighting a different battle. i'm not having this argument. bring in steve hoffman, ceo of reddit opposed of the net neutrality rules. maybe i have this wrong, too, steve. what do you want to tell me? >> i think you and i might be more aligned. the challenge that we face today is, net neutrality is a really important concept and even though it's only been in fcc re lations two years it's really important to the development of the internet. especially in this day of age, the largest isps in the country are also some of the largest media companies. when most americans don't have choices between isp, which to use, one or two options, it creates a situation where a small company is basically competing against both a large media company and isp who controls the pipes. that's fundamentally not fair. >> to robert's point that he was making, that would be illegal? even under net neutrality laws? >> okay. that is a fine point and perhaps -- if that's the case in practice what we've seen is the media companies take advantage of the situation whether legal or not? right? when at&t blocked skype, forcing people to use their own phone service, that's a violation of the concept. that what these regulations in theory are supposed to prevent. >> what's the best case scenario fo internet service providers who say, look, we need an incentive to continue to invest in building out the system. what is the -- what is the -- what's the best way to regulate and allow them to make sure they make their money as well? >> well, i don't think the isps are running out of money. talking about comcast and verizon some of the largest companies in the world. their investment in infrastructure over the last couple of years continued to increase. that argument is nonsensical. >> the industry says some investment slowed. in other words, the rate at which new investment is coming in slowed. because of that much of the infrastructure is built out, part of that. robert's point, we're looking moving into 5g wireless requiring new investment. if companies don't think there are other strings of investment, ways of making money asking people to pay up to use 23569er lanes we may slow the actual physical buildout of the internet. >> yes. again, i'm not buying it. the companies don't mention there's slowed investments on the earnings calls, that should tell you something. furthermore, the internet will continue to grow at a rapid pace. consumers, small and large companies continue to invent new ways to use that bandwidth, creating new products good for everybody. incentive to invest in the infrastructure hasn't gone anywhere nor do i think it's going anywhere, regardless of net neutrality. >> the problem with the debate, you get yourself into one side or the other. neutrality is the answer or it isn't. we understand in the world of cable there be tiers, some people pay for things and some are paid for things. is there a middle ground here? >> well, i think the comparison to cable is probably a scary one. what's cool about the internet is everybody has a voice. small companies, individuals, large companies. and that's what's advanced humanity probably more than any innovation in our generation. so -- preserving that is what we're talking about. allowing anybody in the internet around the globe to have a voice fairly is what makes the internet so incredibly powerful. >> steve good to talk to you. steve huffman, ceo of reddit. coming up, congressional republicans are working to string together the votes needed to pass sweeping tax reform. the deal isn't done. up next, a closer look what's in, what's out, who it helps, who it hurts and why former presidential candidate marco rubio says he doesn't support the bill yet. you're watching misincomes. ♪ what i want, you've got, ♪ but it might be hard to handle ♪ ♪ like the flame that burns the candle ♪ ♪ the candle feeds the flame ♪ topped steak & twisted potatoes at applebee's. now that's eatin' good in the neighborhood. i used to have more hair. i used to have more color. and... i used to have cancer. i beat it. i did. not alone. i used to have no idea what the american cancer society did. research? yeah. but also free rides to chemo and free lodging near hospitals. i used to maybe give a little. then i got so much back. i used to have cancer. please give at cancer.org. but he hasoke up wwork to do.in. so he took aleve. if he'd taken tylenol, he'd be stopping for more pills right now. only aleve has the strength to stop tough pain for up to 12 hours with just one pill. aleve. all day strong. 40 million americans are waking up to a gillette shave. and at our factory in boston, 1,200 workers are starting their day building on over a hundred years of heritage, craftsmanship and innovation. today we're bringing you america's number one shave at lower prices every day. putting money back in the pockets of millions of americans. as one of those workers, i'm proud to bring you gillette quality for less, because nobody can beat the men and women of gillette. gillette - the best a man can get. the sprint is on after a stunning political upset in alabama. republicans are rushing their legislative goal to pass a sweeping tax bill by the end of the year. the white house says it's confident it will get done. >> we're doing very well on the tax front. we have tremendous support. we have tremendous spirit. it will be the largest tax cut in the history of our country and i will say the republican senators and congress men and women have been incredible. so i think we will get there. it will be in a very short period of time. it will be the greatest christmas present that a lot of people have ever received. >> the greatest christmas present that a lot of people have ever received, but there are significant details we're still not too sure absence the bill hasn't been released yet. what features do we know made it into the final version? starters, the top income tax rate for individuals will be cut from 39.6% to 37%. we don't know what income threshold this starts at. there's not a lot of information about the number of lower brackets, rates or income thresholds. all in the bill. that could change the cost of this bill dramatically, but the highest earners are getting a tax cut we already knew in the old bill. the corporate tax rate now slashed to 21%. a very slight increase from 20% the president demanded, but still a lot lower than the current official statute other rate of 35%. remember, the corporate tax rate is permanent. what's not permanent? the tax cuts for individuals. these are still set to expire in 2025. end of 2025 in this reconciled bill. we don't know for sure how the brackets are broken up. residents in high taxed states will still be able to deduct state and local taxes but the dedakz capped at $10,000 including property and income taxes. finally, a major controversial provision in the senate tax plan has made it into the final bill. that's the repeal of obamacare's individual mandate, which the congress' budget office has estimated could lead to 13 million people not having insurance spishgi ispiking prem. and the medical deduction, listen to what a paramedic in kentucky with a medical disability toldness medical correspondent dr. john torrez. >> increased premiumless hurt my family, hurt me. it's going to hurt our ability to keep our bills paid, keep our lights on. keep food on the table. >> following all of this on capitol hill for us is nbc's, msnbc's garrett haake. the bill is not done yet. marco rubio said this moments ago about the child tax credit provision. >> i'm reasonable about it. i recognize only two of us are pushing for it hard in the senate. nonetheless, there needs to be a lot more. what i said consistently privately, although now it's in the press, that unless they figure out a way to increase the refundable part, higher than $1,100, and figure out a way to give corporations an extra year of cuts, lower the top rate for someone making, a family making $1 million, unless they can figure out a way to add to the $1,100 figure, i won't support the bill. >> garrett, a couple things to talk about. what does the math mean if rubio is not supporting it, and the larger underlying point, rubio was saying, we've managed to give cuts to corporations and wealthy americans. could you not find a little fix to the problem he wants fixed? >> reporter: start there. politically astute move my marco rubio making the argument if all other corporate interests are addressed why can't the child tax credit? something that goes to the heart to what the president said this bill would be all about, taking care of middle class families. why not address this agency well? remember, during the original debate about this bill beforepassed the senate, rubio and mike lee, the senator from utah, had an amendment to do exactly this. it fell short. they ultimately did both vote for the bill. the republican establishment wants to get them onboard and try to find a way to address their problem. the main thing that changed since that vote two weeks ago is that once upon a time the 20% corporate tax rate was untouchable in this bill. it was the president's red line. could not be moved higher and already it's going to be moved to 21%. rubio's argument, why can't it be 21.5% to make the deal done for middle class tax cuts is politically astute. the question about votes. nothing in the reconcile bill suggests bob corker, the only republican no vote will suddenly vote for it. if wrubio and lee vote against it, that ill ckilling the bill. a lot of republicans feel senator john kennedy i talked to a while ale, don't let the perfect get in the way of the good. here's some of my conversation with john kennedy. >> i'm going to vote for this bill, even though i don't think it's perfect. it's not perfect, but it is damn good. >> do you think this process is still open enough their concerns might be addressed? a lot of different reporting where they are -- >> i just left a luncheon where we're still talking about detailing and it will continue up until -- they can't talk anymore. that's why -- i've been asked, what's in it? what's in it? i'd rather not get into the details. we've been asked not to. >> reporter: he we are again, ali a few days from the vote and it's still a moving target. >> wish they gave nor the public. i understand the issue. great to air it all out and have a national conversation about the biggest tax cuts we're seeing in a long time. garrett, thanks. we'll be checking in with you a lot. sheila bair, former chair of the u.s. federal deposit insurance corporation and founding chair of the systemic risk council. good to talk to you. thank you for being with us. i guess my main frustration with this bill is, there are certainly good things about giving people tax cuts, but it is fundamentally being framed as a middle class tax cut when the only thing certain in this bill is that it's a corporate tax cut. nothing inherently wrong with that, but why don't we just call it what it is? >> i agree and think if they had, tried to do a stand-alone corporate rate cut that paid for itself, close the loopholes lowering the corporate rate in itself is a good thing. typically smaller domestic companies is the one paying the higher rate. multi-nationals have ways to lower their effective rate. closing loopholes and low, the corporate rate on a revenue neutral basis would have been a good thing to do and could have gotten 80 to 85 votes. trying to do all this. the individual code, the a lot of those used to pay for the business tax cuts. optics are terrible. you pointed out, individual cuts temporary, where corporate cuts are permanent and obscene as far as i'm concerned. costs about $500 billion. >> talk about this a second. lowering the tax rate on corporations. the argument i've had, lots of small business, independents are corporations, but so are lots of rich people. somehow you're causing, treating labor and capital differently. right? for those who don't have a choice, just get a paycheck, they pay x amount. if you can run this through your business, you can drop down to 20%? >> right. and -- i think all the studies show truly small businesses, even if you keep the norm's individual rates will be below 25% anyway because you have to make up to $500,000 i believe under the new rates. we still don't have the final bill. and still, 25%. this is overwhelmingly going to benefit very wealthy people. and of course, investors, naming one person, you showed mr. trump earlier talking about a big christmas present. certainly for him and his family in it. it's irresponsible tax policy. cost estimates, $460 billion, it's probably going to be double that. this is going to be a whole new area of gainsmanship. everything reorganizing businesses to be pass-throughs a nightmare and unnecessary. >> most american workers can't do that reorganization. >> you get a paycheck, right. >> you don't have options. >> exactly. >> one of the interesting things here, people have lots of -- some people are absolutists about debt. never get into debt. some say, debt, in debt, fantastic. especially lower interest. the truth is probably in the middle. when you need that debt to stimulate income, one thing. it's an unusual time to be going into debt to finance what is largely corporate tax cuts at a time when the president is still bragging about how well the stock market's doing and he's right it is. interest rates are very low. he's right. capital is much more available than it was during the recession when you and i were talking on a regular basis about banks shutting down. >> for sure. generally you-of-wh lly what yo times try to pay down your debt, breathing room when the inevitable comes again. breathing room to do more spending to stimulate the economy. we're doing the opposite. adding $1.5 trillion -- we think. we don't know what the final bill will look like to the dealt over ten years and the interest costs are substantial and reduces our effecflexibility in another downturn to do something then. remember the simpson-bowles? lowered top rates, broadened base and picked up revenue. the kind of thing i hoped we would be doing. we're we have a very different animal. >> lowering tax rates is good if you broaden the base. everybody pays a lower rate. what you have here is probably the same people paying -- going to pay a lower rate. not broadening out as much as we could. >> no, we're night. >> former chair of the fdic. thanks for joining us. up next, nikki haley rolls out proof iran defied the u.n. security council and provided missiles to yemeni rebels. >> the evidence is undeniable. the weapons might as well have had "made in iran" stickers all over it. >> how iran is responding, after the break. the real gift isn't what's inside the box. it's what's inside the person who opens it. give ancestrydna, the only dna test that can trace your origins to over 150 ethnic regions. save 30% for the holidays at ancestrydna.com. when this guy got a flat tire in the middle of the night, so he got home safe. yeah, my dad says our insurance doesn't have that. what?! you can leave worry behind when liberty stands with you™. liberty mutual insurance. but on the inside, i feel like chronic, widespread pain. fibromyalgia may be invisible to others, but my pain is real. fibromyalgia is thought to be caused by overactive nerves. lyrica is believed to calm these nerves. i'm glad my doctor prescribed lyrica. for some, lyrica delivers effective relief for moderate to even severe fibromyalgia pain. and improves function. lyrica may cause serious allergic reactions, suicidal thoughts or actions. tell your doctor right away if you have these, new or worse depression, unusual changes in mood or behavior, swelling, trouble breathing, rash, hives, blisters, muscle pain with fever, tired feeling, or blurry vision. common side effects: dizziness, sleepiness, weight gain, swelling of hands, legs and feet. don't drink alcohol while taking lyrica. don't drive or use machinery until you know how lyrica affects you. those who've had a drug or alcohol problem may be more likely to misuse lyrica. with less pain, i can do more with my family. talk to your doctor today. see if lyrica can help. u.s. ambassador nikki haley displaying irrefutable evidence of iran violating the nuclear deal showing parts of a missile made in iran including one she says rebels in yemen fired at an airport in saudi arabia. >> this is blatant violation of what they are not supposed to be doing and what we are saying is, everybody has tiptoed around iran in fear of them getting out of the nuclear deal and they are allowing missiles like this to be fired over to innocent civilians and that is what has to stop. >> nbc's hans nichols joins us from the pentagon. hans, iran pushed back immediately calling it fabric e fabricated saying they categorically reject it, unfounded and irresponsible provocative and destructive. what do you make of this? >> reporter: you see where the u.n. comes down. an initial report. to what extent they agree with the assessment by u.s. intelligence officials. and ali, this afternoon, let me go back a step to yesterday. there were substance there. right? i don't want to say all optics. definitely substance, but yesterday they brought a handful of reporters, a small group of reporter, out to the pentagon to observe all of this. i was participating in that and able to ask intelligence officials, to ask a lot of defense types just what the evidence was, they took us through a lot of technical details. we would look at say, veins of the engine. tail fins. essentially what they did is took publicly available pictures of iranian mills, married it up with two missile parts, reconstructed missile, they say were fired into saudi arabia, and that's their case. it's a pretty compelling case. i'm not an iraq anatural slysise desire to change the conversation. away from isis and more towards iran and listen to what nikki haley had to say suggesting this was just the beginning. >> calling out iran for what they're doing. decertifying the process. having the president say to congress, we've got to look at this behavior. working with the secretary-general and their analysts to help them investigate information like this. the strongest report yet from the secretary-general that they are absolute undeniable violations that are happening by iran. us inviting all of the international delegations to come here, going into the security council and talking with partners about next steps. >> you know, ali, behind it there, you saw six, seven, eight, numbered vowels. one of the pieces of evidence was that only iranians make missiles of this type. short range ballistic missile. 960 kilometers. only irans have nine valves on their oxygenation tanks. that level of detail. it seems they created out of thin air a new standard, a new burden of proof for intelligence allegations going forward when they make allegations, are they going to have this open process, this open sort of -- >> yes. >> reporter: a remarkable moment. leaving assize substance, the optics, it's something new the pentagon and trump administration are doing. >> you're not a rocket analyst. if you told me you were, i would believe you. you know so much. for more on this discussion, broaden it out. bringing in a tv host and satirist with a heavy focus on the middle east known for clashing with the egyptian government with his comedy while there. made several appearances on "the daily show" with jon stewart. hans merricks an interesting point. there's a redirection. regardless what you think of iran and behind this, seems to be a redirection of the administration into concentra concentrating on iran as enemy number one despite the fact there is a nuclear deal repeatedly been shown to be working. what do you think is behind this? >> well, i mean, i really would like to, this colin powell moment of irrefutable evidence is kind of like a deja vu what we had seen before the iraq war. and broke today as a middle eastern arab talking about the middle east, but why not to talk about a concerned resident of the united states, legal resident of the united states, might i say. i mean, when will this stop? yesterday it was iraq. today it is iran. tomorrow it's something else, and this is like another justification for increasing and inflating the military budget. we talk about the spineless republican, a deal for trump, but we don't talk about the democrats who actually approved $80 billion in increase of military spending. america doesn't need that much money to spend on its military. it's like -- they are creating the demand and their supply. doing that, you know, people tell me, are you concerned about this? are you concerned how middle easterns of treated? no. as an american resident, like how so many -- problems, education, health, being cut just to feed the monster. positive feed the huge military budget. for what? does that benefit the american people? does that benefit us? it doesn't. it doesn't. >> i guess that's my point. there are a lot of people who didn't like the deal with iraq. a lot of people don't like iran. think iran is a bad player in the neighborhood but a hard one deal at least limited and contained some of iran's nuclear activity. the deal was never supposed to make iran america's best friend. there's a war going on in yemen, a proxy war. iran versus saudi arabia and the u.s. on saudi arabia's side in that one. why are we doing this? what is the u.s. supposed to gain from agitating, poking the bear in iran? >> i don't know. another war, maybe? i don't know. it seems that always the answer is war and aggression and let's just, like, bomb the hell out of some country. so our -- military complex can be fed and can be given the chance to have more money in their pockets while, like, more people are losing their health care and their chance at education. at a small fraction of the military budget, and this is what i'm concerned about more about what's happens in the middle east. a small fraction of that can go to paying so many of student debt. it can help people get their ed kangs. >> it's worth reminding people the big debt in america is not from entitlement spending it's because of 17 years of war. before you go, one other question. is it your sense that this administration actually has a plan for middle east peace with respect to what we heard last week about jerusalem? >> depends. peace. peace without justice is no peace. we've talked now about yemen. we haven't talked about the yemenese people right now in 2017. talking about iran, but not talking about the aggressors who are actually killing yemenese. the middle east, talking peace in the middle east but don't talk about millions of palestinians displaced from their homes. what kind of peace is that? peace is a very easy word. but how can you translate it? what does it look like. >> do you think there is a plan in place or is this just the president saying that he's fulfilled a campaign promise? >> i don't know. what kind of plan is it? will it be a replacement's lands? some other country will give a piece of land in order to displace more palestinians outside of gaza? i don't know. but, like -- peace without justice, without having everybody concerned and involved in this, satisfied, is no peace. it is just going to be like a band-aid, explode and's not everlasting. >> good to see you. tv host and satirist, thanks for spurneding time with us. >> thank you. after the break, the fight's not over. senator brian shotz joins me to lay out his protest of net neutrality, plus, drama at the white house. an administration official tells nbc news omarosa was escorted off the grounds. the president weighed in moments ago. >> i like omarosa. she's a good person. [ mouse clicks, keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] [ mouse clicking ] [ keyboard clacking ] ♪ good questions lead to good answers. our advisors can help you find both. talk to one today and see why we're bullish on the future. yours. talk to one today and see why we're bullish on the future. i am totally blind. and non-24 can throw my days and nights out of sync, keeping me from the things i love to do. talk to your doctor, and call 844-214-2424. for her compassion and care. he spent decades fighting to give families a second chance. but to help others, they first had to protect themselves. i have afib. even for a nurse, it's complicated... and it puts me at higher risk of stroke. that would be devastating. i had to learn all i could to help protect myself. once i got the facts, my doctor and i chose xarelto®. xarelto®... to help keep me protected. once-daily xarelto®, a latest-generation blood thinner... ...significantly lowers the risk of stroke in people with afib not caused by a heart valve problem. it has similar effectiveness to warfarin. xarelto® works differently. warfarin interferes with at least 6 blood-clotting factors. xarelto® is selective, targeting just one critical factor interacting with less of your body's natural blood-clotting function. for afib patients well-managed on warfarin, there is limited information on how xarelto® compares in reducing the risk of stroke. don't stop taking xarelto® without talking to your doctor, as this may increase risk of stroke. while taking, you may bruise more easily, or take longer for bleeding to stop. it may increase your risk of bleeding if you take certain medicines. xarelto® can cause serious, and in rare cases, fatal bleeding. get help right away for unexpected bleeding, unusual bruising, or tingling. if you've had spinal anesthesia, watch for back pain or any nerve or muscle-related signs or symptoms. do not take xarelto® if you have an artificial heart valve or abnormal bleeding. tell your doctor before all planned medical or dental procedures... ...and before starting xarelto®-about any conditions, such as kidney, liver, or bleeding problems. it's important to learn all you can... ...to help protect yourself from a stroke. talk to your doctor about xarelto®. there's more to know™. the trump administration supports the s.e.c.'s effort to roll back burdensome regulations, but as we have always done and will continue to do we certainly support a free and fair internet. that was white house press secretary sarah huckabee sanders weighing in on the fcc vote to roll back net knneutrality treating all equally. returning to a light touch approach to regulating the internet to spur investment. others saying today's rule, rule change will hurt consumers and could give internet providers the ability to block or slow content on the internet. bring in democratic senator brian shotz of hawaii. booked him the other day to talk about this. talked about other breaking news. today this is the breaking news, senator, what do you make of this? this is weird, because people who support rolling back net neutrality say that's better for a free and open internet and people who support net neutrality say that's better for a free and open internet. what's your take? >> it has always worked, you fay yo pay your isp, phone service, you get the whole internet. once these rooms are repealed, happened a couple hours ago, isp and phone service providers would be in a position to slice and dice the internet. as though they could decide that the content they own comes to you quicker, and the content that is owned by their competitors would be slower. so blocks, throttling, paid prioritization will all be legal now that net neutrality is repealed. we don't know how quickly telecommunications companies will move forward with changing the very nature of the internet, but we know now that the moment that it is profitable for them to do them to do so, they are not prohibited from doing so. this is not a close call legally and certainly on policy, people left, right and center, everybody assumes that once you pay for internet access, nobody gets to tell you what website you get to go to. look, we accept that on roads and highways that you can go faster. if you meet certain obligations, you can get into, if you pay a toll, you can go faster. why not the internet? >> because the free and open internet is why our internet economy has thrived so much. it's why the innovation economy has thrived so much. it's why we're all online so much. and with fast lanes and slow lanes, with the ability for people to stop you from seeing certain content, it's no longer a free and open internet. this is exactly the problem that precipitated tom wheeler, the -- barack obama's fcc commission chair to establish and enshrine these rules into law. at&t actually blocked the utilization of facetime because they had a competitive disagreement with facetime. so now without these rules, anybody who has a disagreement with a competitor can actually block or throttle or require paid prioritizization. it's fast lanes and slow lanes and the analogy is actually totally apt. now if you got a little company and a great idea, you can't just scale it up and have access to everybody on the internet. you now have to lawyer up and try to figure out how you're going to negotiate between telecommunications companies and all the people who are in position to block you. >> that's the problem for start-ups. i had a fairly animated conversation with robert mcdowell, the former fcc commissioner who made the point before 2015, we didn't have these rules and it created facebook and amazon and google. why does it matter? >> well, and the answer to that is that we had several instances where people were starting to test the boundaries of net neutrality. the best example is at&t blocking facetime. and once people started to realize, once companies, especially as they integrate from being just an isp to being an isp and a content provider, now you have a strong economic innocecentive to provide your content for free and your competitor's content for money. and so, sure, the open internet operated fine with some exceptions but that's why we put the rule in as to enshrine in rule the way the current internet works. now we don't know what's going to happen. i don't know whether there will be instantaneous change but telecommunications companies will be able to block content and the free and open internet is not a matter of law anymore. >> senator brian schatz, thanks for being with me, of hawaii. we finally got to have our conversation. blake farenthold is the latest lawmaker to step down. he would not seek re-election next year. nbc news confirmed the republican congressman used $84,000 of taxpayer money to settle a sexual harassment claim. he also faces other allegations of inappropriate workplace behavior. farenthold was facing a tough primary with five fellow republicans set to challenge him. house speaker paul ryan met with him yesterday and said he's making the right decision. alabama's results may represent a political shake-up for the grand old party. steve bannon is ready for the next round in the war on the so-called republican establishment. sources in bannon's camp tell nbc news he's using moore's defeat in the deep red state as ammunition against mitch mcconnell. bannon is arguing moore would have won if mcconnell and other establishment leaders had not abandoned him in the wake of sexual misconduct allegations with underage girls. is the president still on board with his former chief strategist? this is how sarah huckabee sanders responded last hour. >> in terms of their relationship, i haven't spoken with the president directly about the nature of that relationship and whether that has altered it. >> joining me is joel pollack, senior editor at large at breitbart news. good to see you. >> good to be with you. >> you wrote something just a little while ago. i don't think i've got it to be able to put it on tv. democrats are winning by focussing on c.h.i.p. and health care. the urgent task for republicans is not just to feigned a way to save c.h.i.p. but fix the health care system. the process would have to be bipartisan to succeed. jones' victory is a wake-up call and perhaps he could be a democratic partner in the process. it's a different take than what i was just discussing. the idea that doesn't matter where you are and how mad you are at the establishment. basic economic matters may govern what people do at the ballot box. >> that's 100% correct, and i think one of the reasons that doug jones won, aside from having all the money that he head from outside groups and the backing of both democrats and republicans in the establishment is that he worked harder and talked about issues people cared about, whereas roy moore had to talk about the scandal all the time. and that funding of c.h.i.p. is the number one issue, according to an opinion poll, conducted by harvard last week. number one issue by voters. daca is only number 12. republicans have to get back on track. and immigration is a huge issue in these republican primaries. you can almost say that the fight over immigration is a proxy war between the establishment and the insurgent grassroots. when candidates talk about immigration, talk about building the wall, securing the border, they do well. when they talk about other things, they don't. >> the numbers of people trying to get across the wall are lower than they've been in a very long time nepnumber of deportations is high. so enforcement seems to be working. the wall is a costly piece of business. if economics rank high, why not do what's already being done that at least in the president's view is successful. >> it has been very successful partly because of president trump's rhetoric, his leadership and because people know they're going to be arrested if they try to cross the border illegally. but it's still not complete. and president trump's voters want to see that border wall completed because it's the only guarantee that there won't be more illegal immigration after congress passes whatever it ends up passing for those who are already here illegally. americans are very generous and hospitable towards people who are here. many people, including republicans, want to give a chance to people who are here who may be d.r.e.a.m.ers, may be here through no fault of their own but they want to be absolutely sure this never happens again and the wall isso thenl way to do that. >> it would not be costly for the president to go ahead with something that solves the daca problem. >> it doesn't rank very high among americans overall, but for trump supporters, it's probably the number one or number two issue, and when republicans take a stand against illegal immigration and talk a stand for the wall, they do very well in these primaries and they connect to the broader electorate. where immigration is absent from the debate, republicans do poorly. immigration is for republicans what health care and c.h.i.p. is for democrats. >> that could be a takeaway for democrats. roy moore is an exception, but if you -- if democrats focus on those pocketbook issues, particularly for those who are impoverished who depend on these social and economic programs, that can be a winning formula for democrats. >> that's why republicans have to get their act together on replacing obamacare. the individual mandate is probably going to be repealed if this tax reform passes, which it looks like it might, but republicans have to get ahead of the health care issue if they'll prevent that democratic wave in 2018. last month in maine, the voters overwhelmingly approved anxpansion of medicaid under obamacare. people don't like obamacare. they're upset it's collapsing and costing them a lot of money and they're not able to use the insurance they're buying but they still feel insecure about health care n want to see somebody do something. that's the need that republicans have to address. many of those people who are concerned about c.h.i.p. are also trump supporters. that's the middle class, blue collar vote that trump won. he and the republicans have to get on top of that issue. >> i need to talk to you more about the tax bill and how trump supporters are going to relate to that but we're out of time. thanks for joining me. joe pollack is a breitbart senior editor at large. all right. i want to tell you a little more about outgoing white house aide omarosa. the president's most prominent african-american in the west wing. she denied she's fired and said she's resigning. she pushed back on reports she was forced out of her job by john kelly and had to be escorted off white house grounds. she went on to hint that she'll one day tell all. >> i have seen things that have made me uncomfortable, that have upset me. that have affected me deeply and emotionally. that has affected my community and my people. n when i can tell my story, it's a profound story that i know the world will want to hear. >> all right. but you'll have to wait for that. let's get a quick check on the markets. stocks traded lower today as wall street waits for the final version of congress' tax bill. the dow trading off just about 0.25%. 57 points. 24,526. and that does it for me this hour. i'll see you back here tomorrow at 11:00 asm .m. with stephanie ruhle and at 3:00. "deadline white house" with hallie jackson sitting in starts now. >> it's 4:00 here in washington. i'm hallie jackson in for nicolle wallace for the next hour. to start this hour, we want to talk about the most important hour of the president's day. the hour when he hears about the highest level secrets, the most threatening national security risks. the stuff you don't know but that he has to know. and why the russia investigation may be messing with that hour. it stems from what a new "washington post" report describes as the president's willful denial of moscow's interference in our democracy. considered a serious threat by intelligence officials. the post writes, the result is without obvious parallel in u.s. history. a situation in which the personal insecurities of the president and his refusal to accept what even many in his administration regard as objective reality, have impaired the government's response to a national security threat. rather than search for ways to deter kremlin attacks or safeguard u.s. elections, trump has waged
MoscowMoskvaRussiaAlabamaUnited-statesMaineIraqIranWashingtonBostonMassachusettsWhitehouse with regards to hurricanes and fires and the tremendous forest fires all over. we had very big numbers, unexpectedly big numbers. 25 years, i've been in this business, i've never heard an increasing deficit blamed on hurricanes and forest fires. the president had vowed to bring the deficits down. he started today by ordering his cabinet secretaries to cut their agency budgets, across the board, by 5%. not clear, by the way, if that includes defense. i want to have a conversation about this, because this is really important, especially right now as we head into midterm elections. jared bernstein joins me, senior fellow for the center on budget and policy priorities and a cnbc contributor. also with me, cnbc editor at large, john harwood. now, jared, you and i have talked, particularly after the last recession, when you and many other people felt that there are moments in time when an increased deficit is a good thing. those moments in time often come when there is a need for government stimulus and when interest rates are particularly low, to be able to take advantage of that in some fashion. but that's not a view that republicans shared at the time. >> correct. their view on this is completely upside down, in terms of the economics of fiscal policy. and by that i mean, they're engaged in something we've never done before, which is really very significant, fiscal stimulus through the tax cuts, also the spending, but mostly the tax cuts s, at a time when e economy is already closing in on full employment. and the key point that i drill down in a piece that i wrote today for "the washington post" is that the republicans have broken the connection between economic growth and lower budget deficits, because historically, wherever we've had an unemployment rate this low, the budget deficit has averaged at just about zero as a percent of gdp, besides now, at negative 4%. >> and by the way, john harwood. we had this. we had a time when we actually took in more money than we spent. and had we gone down that road, we may have been able to keep budget deficits at zero. but you know, who knows? then a financial crisis comes along. generally, financial crises and wars have led us into bigger deficits. it's unusual, as jared says, to be in a time when we are in relative fiscal prosperity, although it's not distributed as well as we would like it to be, relative fiscal prosperity, not war, not recession, to be increasing our deficits the way we're doing so under this republican congress. >> it's completely unusual. and remember, because it's so unusual and because republicans have spent so much time ripping president obama for deficits when he was president, they needed to create a fiction that their tax cut was not going to increase the deficit. so president trump, his treasury secretary, his national economic council director, the leaders of congress all said, our tax cut is not going to increase the deficit. that was false and now it's been shown to be false. and what we saw from the president today with his statement at the cabinet meeting, about 5% cuts, that is simply a political gesture meant to cover the embarrassment of the pledges that they've made being proven untrue. >> all right. jared, you have been on this show with me or with stephanie, where we've had republicans who were arguing for the tax cuts. stephanie and me have said, these numbers don't make sense. all of a sudden, everyone is going to be more profitable and everyone is going to take the extra $4,000 they're going to get and it's going to stimulate the economy and that's why there's not going to be this deficit. this government decided to reduce the amount of money that the government takes in, largely from corporations, at a time when nobody fully understood why corporations needed this particular discount. and we are seeing exactly what you and i said we would see. >> yes. i had these debates ad nauseam. i remember arguing what we were going to see is a lot more stock buybacks, as opposed to some big investment program that's going to change the underlying growth rate of the economy. and it's kind of ridiculous that we have to have this, you know, breaking news! tax cuts lead to revenue losses and much larger budget deficits. we all knew this was going to happen. this is the same supply-side trickle-down ferry dust that republicans have been banking on for decades now. and by the way, two historical points that have come out of the conversation. it happens to be the case that the last fiscal year, when unemployment rate was 4% was the year 2,000. 20 2018, 4%. unemployment rate, 4%. in 2000, because the tax code wasn't broken, it was still connected to economic growth, we actually had a budget surplus. this year, we have a large and growing budget deficit. and so, yes, it is time to stop kidding ourselves and making up stories about fiscal fairy tales and actually get away from all of this really reckless policy. >> it would be something if we didn't all see this coming. but economists across the political spectrum all had the same response to what was going to happen. >> ali? >> guys, i've got to go here, but thanks very much for joining me. john harwood, jared bernstein at the center on budget and policy priorities now, while flooding the air waves with several impromptu media appearances, president trump told reporters, quote, i'm not going to tell you in response to questions as to whether he has asked the fbi to help investigate the death of "washington post" columnist jamal khashoggi. he also said this. >> why not send the fbi in to figure all of this out? >> well, he was an't a citizen this country, for one thing. and we're going to determine that. and you don't know whether or not we have, do you? >> well, i -- >> do you know whether or not we've sent the fbi? >> have you sent the fbi? >> i'm not going to tell you. >> by the way, law enforcement in this country deals with everybody, whether you're a citizen or not. so the idea that he's not a citizen so we're not getting the fbi involved, he was a u.s. resident. those comments came just after he compared the controversy surrounding khashoggi's disappearance to the confirmation battle of his now supreme court justice, brett kavanaugh. the president continues to avoid directly criticizing the saudi arabian government. >> saudi arabia's been a very important ally of ours in the middle east. we are stopping iran. we're not trying to stop -- we're stopping iran. if you look at saudi arabia, they're an ally and they're a tremendous purchaser of not only military quilt, but other things. when i went there, they committed to purchase $450 billion worth of things and $110 billion worth of military. those are the biggest orders in the history of this country. >> the saudis are investigating themselves, essentially. what do you think -- >> no, they're just -- they're great, very talented people. they're not investigating themselves. >> okay, there's a lot to unpack there. with me now is nbc news's hans nichols. two lines of argument that the president is using. that we're in a fight with iran and the saudis are our bulwark against iran and they are buying this biggest military deal in history, $110 billion worth of arms, so we can't really be too tough on them, otherwise they'd buy those arms from china or russia. >> look, ali, for a president who prides himself on his negotiating ability, he's just signaled what his two big priorities are, domestically and internationally. domestically, he needs the jobs growth. he says those arms growth leads to nearly half a million jobs here in this country. and internationally, it's so clear they need the saudis to count counter iran throughout the globe. so throughout the president's comments, he seems willing to give him an out. that was echoed by his secretary of state, mike pompeo. he spoke to reporters, stopping up for some fuel in brussels. he also seems willing to give the saudis the benefit of the doubt. >> told me they were going to conduct a author re, complete, transparent investigation. they made a commitment to, to hold anyone connected to any wrongdoing that may be found accountable for that, whether they are a senior officer, official. >> did they say that mr. khashoggi's alive or dead? >> i don't want to talk about any of the facts. they didn't want to, either. and that they want to have the opportunity to complete this investigation in a thorough way. >> do you talk about repercussions in case the saudis are involved? >> we talked about the importance of completing the investigation. >> ali, both "the wall street journal" and "the new york times" reporting that there are grizzly tapes, the final moments of mr. khashoggi's life. if those tapes do exist, and "the journal" says they've already been handed over, this studied indifference, this idea that the saudis really have nothing to hide in all of this, that's going to be a lot more difficult if those tapes do come out. one final note. secretary mnuchin is still scheduled over at the treasury department to go to saudi arabia for this big investor conference. a spokesperson telling bloomberg news he's still planning to attend, but tomorrow they will revisit that. that's also tomorrow when mike pompeo comes back to washington. the president says he wants to hear from him. soi so i would look to tomorrow to see whether or not mnuchin does cancel his trip for an indication of what kind of response we're going to get from the white house. >> hans nichols, thank you for your reporting from the white house. at the heart of this discussion is the rise of saudi arabia's de facto leader, crowned prince salman bin salman. surrounded by yes men who saw surprising -- suppressing dissent as part of a media war and rattled by the reversal of his dreams for economic reform, mbs moved toward the fateful moment when khashoggi entered the saudi consulate in istanbul. when the brave journalist opened the door, he began a catastrophic process that has now put mbs' own future in question. joining me now is the columnist who wrote that piece, david ignatius, a close colleague of jamal khashoggi's. david, thank you for being with us here. how do you see this unfolding? >> well, i think we're now into the decisive phase in which the united states needs to pressure saudi arabia to conduct a real investigation, as complete and transparent as possible. and i think the united states, starting with the president, needs to say, your continued support from the united states, our relationship, which has gone on for so many decades, depends on your -- you doing your part to get to the bottom of this. i'm told that the comments yesterday by senator lindsey graham, in which he said, if i'm quoting him correctly, he, meaning the crowned prince, mohammad bin salman, got this guy, our correspondent, jamal khashoggi, murdered, has become viral in the arab world. it's everywhere. everybody is talking about the statement that was made by a senator who's known to be very close to donald trump. that shows you the impact that american words can have. and i'm just -- you know, we're all waiting to see what secretary of state pompeo will say when he gets back about the status of this investigation and what the u.s. position is. >> are you surprised by the degree to which the president seems to be doing saudi's pr work in washington and even mike pompeo, who said to those reporters on the tarmac, i don't want to discuss the facts. we weren't discussing the facts. we seem to be giving saudi arabia a lot of cover. and by extension, david, we are giving cover to every regime that does not respect human rights or violates press freedoms. it's a scary day for dissidents or critics around the world, to say, we can snatch you in somebody else's country and do something bad to you. >> so, we take this very personally at "the washington post." this was our colleague and our friend. and he was kidnapped, seized, and we believe that he was murdered in a brutal fashion. so, for us, it's absolutely critical that the u.s. government take this seriously. but beyond our interest in this, jamal khashoggi was a permanent u.s. resident. that means that in legal terms, he was, i think the term of ours is, a u.s. person. he may not have been a citizen, but there are certain obligations that our government has when it receives information about a threat to a u.s. person. was that information received? what was done? who acted on it? the beginning of a long series of questions that we want to put to the government, as they think about this. but, second point i would make, briefly. if you're concerned about saudi arabia, as a longtime friend and ally of the united states, it's all the more important for the cloud that is now over saudi arabia, that's led every major financial potential investor in the kingdom to pull back from this meeting that was planned in riyadh, that secretary of the treasury, mnuchin, may or may not go to, it's essential to remove that cloud if you're going to get the money into the kingdom that's going to keep the place afloat. so there's a profound interest, precisely because saudi arabia has traditionally been an important ally in confronting this directly. >> david, good to talk to you. thank you for joining us. david ignatius is a columnist at "the washington post" and a close colleague of jamal khashoggi. coming up, midterms are now less than three weeks away. democrats are laser focused on taking back control of congress. steve kornacki joins me to look at the big board. plus, recreational marijuana now legal across canada. we'll take a look at the new rules on cannabis that take effect today and a new law that will help people who have been convicted of possession before. you're watching msnbc. possessie you're watching msnbc. hi, i'm joan lunden with a place for mom, the nation's largest senior-living referral service. for the past five years, i've spoken with hundreds of families and visited senior-care communities around the country. and i've got to tell you, today's senior-living communities are better than ever. these days, there are amazing amenities, like movie theaters, exercise rooms and swimming pools, public cafes, bars, and bistros, even pet-care services. and nobody understands your options like the advisers at a place for mom. these are local, expert advisers that will partner with you to find the perfect place and determine the right level of care, whether that's just a helping hand or full-time memory care. best of all, it's a free service. there is never any cost to you. senior living has never been better, and there's never been an easier way to get great advice. call today. a place for mom -- you know your family, we know senior living. together we'll make the right choice. you know your family, we know senior living. unstopand it's strengthenedting place, the by xfi pods,gateway. which plug in to extend the wifi even farther, past anything that stands in its way. ...well almost anything. leave no room behind with xfi pods. simple. easy. awesome. click or visit a retail store today. all right. we're just 20 days from the all-important much-anticipated midterm elections. the president is already preparing in the event that his party doesn't come through with the big wins. he's already told the associated press that he will not look at a republican loss as a referendum on his presidency. he added that the people he's endorsed have, according to him, gone up in polls 40 or 50 points. i'm pretty sure my next guest can confirm, that is not entirely true. joining me now, steve kornacki, nbc news national political correspondent. so, that -- put that aside. the president is setting the table for a potential republican loss. we know the democrats need that number, 23 seats in the house. you've shown us and we've talked about all of those republican seats that they can gain. there are democratic seats in peril. >> right. and i think that is the key thing to keep in mind here, ali. because, again, 23 is the target for democrats. we've gone through, there are dozens of targets out there for democrats that they could use to get to that number. but one complicating factor is this. that number could also go up a little bit, so here's what we mean. this right here, these are the districts out there where republicans think they have a chance to take democratic seats. you know, it's not that deep of a list. compared to the democrats, this is a fraction of what the democrats think they can flip. but every one of these, if republicans were able to flip any of these, would increase that number that democrats need. let me zoom in and give you an example here. the eighth district of minnesota. you can see, this is sort of the iron range duluth. let's go a little bit deeper on that and show you what we mean here. there's a better map of it. duluth kind of the anchor city there. and let's see if we can get this to work out. >> there are some changes to the wall. >> wow, it's completely dead. oh, it worked! >> i was coming over to help you. >> ali's a specialist. something just happened. i think ali getting out of the chair might have -- >> and there's a reason we're talking about bob dylan. born in duluth. >> the eighth district. a little flavor. so this is the open seat. the incumbent not running for re-election. this is one of those quintessential, obama carried the district by six points. it flipped 22 points in donald trump's favor in 2016. so this is a democratic seat that trump won. and you see, this is the matchup for the open seat now. check this out. here's the latest polling. wow, the? has pulled ahead double digits. and so now there's talk of democrats maybe pulling out some of the financial commitment here. this would be, if this holds, a pickup. and again, from the standpoint of republicans here, if they could get minnesota 8, there's another district like it in the southern part of the state. minnesota one, pennsylvania 14. it's kind of a conflicted thing, but because of the accounting that came with that new map, this will count as a pickup here. there are a couple of places here, maybe one or two more where they can get that number higher. if they do that, ali, if it gets close, it is a big i haf, but if gets close. >> so most polls show democratic pickups in the house of representatives, right? the senate's a whole different story. but there are some polls that say in a low turnout environment for democrats, they could have pickups that don't add up to 23 seats. so in other words, the democrats could have net gains here and not win the house. >> and in fact, i'll test my luck on this. we can show you pretty clearly here, take a look at this. this is -- they need 23. this is a list of 25 districts right here. these are republican-held seats that hillary clinton carried. and for democrats, these are generally speaking, the lowest-hanging fruit on the board, a lot of these are. the question, though, and the situation you're talking about there, if the energy level isn't there, if it rises on the republican side, are there many more targets past this list? a lot of these are suburban districts. a lot of them, metro areas. republican-held, don't like trump to begin with. when energy becomes a factor, though, if it goes high on the republican side, when you get away from that formula, that seems to work well for democrats right now, you get more into rural areas, more into ex-urban areas, do they start running into problems there. that becomes the issue? >> we're going to watch this very closely for the next three weeks with you. thanks very much for that. steve kornacki. up next, canada now the world's biggest legal marijuana marketplace. could the u.s. be next? one republican lawmaker says changes to our marijuana regulations could be coming soon. you're watching msnbc. ons could soon you're watching msnbc. if you're turning 65, you may be learning about medicare and supplemental insurance. medicare is great, but it doesn't cover everything ...only about 80% of your part b medicare costs. a medicare supplement insurance plan may help cover some of the rest. learn how an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company might be the right choice for you. a free decision guide is a great place to start. call today to request yours. so what makes an aarp medicare supplement plan unique? these are the only medicare supplement plans endorsed by aarp because they meet aarp's high standards of quality and service. you're also getting the great features that any medicare supplement plan provides. you may choose any doctor that accepts medicare patients. you can even visit a specialist. with this type of plan there are no networks or referrals needed. also, a medicare supplement plan... ...goes with you when you travel anywhere in the u.s. call today for a free guide. but allstate helps you. with drivewise. feedback that helps you drive safer. and that can lower your cost now that you know the truth... are you in good hands? all right, pressure is growing on the united states to legalize recreational marijuana use after canada opened the largest legal marijuana marketplace in the world. the american cannabis company, teratech took out a full-page ad in the "wall street journal" to send out a message that canada will take over the marijuana market if the united states doesn't legalize pot. hours later, dana rohrabacher told fox business that the white house is planning to look at reforming marijuana regulations after the midterm elections. rate now, nine states and washington, d.c. have legalized recreational pot use. but it is still illegal under federal law. and that's actually important, because that means these companies can't use federal banking regulations. it makes it largely a cash business. now, canada is the second nation in the world after uruguay to legalize recreational pot sales. let me tell you how this is going to work. canadians can possess, carry, and share with other adults up to 30 grams of marijuana. however, cannabis edibles like pot-infused jelly beans, brownies, and candy will not be legal until july of 2019. each of canada's providences and territories have set up their own rules on where pot can be sold and how it can be consumed. in most areas, the legal age to smoke marijuana is 19, except for question bebec, where it's . and they've also made it easier for people with a simple pot conviction to get a pardon. >> reporter: the maple leaf is turning green. starting today, canada joins uruguay, the only two countries in the world to legalize marijuana for recreational use. fulfilling a campaign promise made by prime minister justin trudeau. >> we will soon have a new system in place, one that keeps cannabis out of the hands of our kids and keeps profits away from organized crime. >> reporter: trudeau's government also expected to pardon canadians convicted of simple marijuana possession. the details of who can indulge and where they can buy will vary by province. in places like british columbia, officials say it won't feel like much has changed overnight. >> it's very much an evolutionary process that's going to evolve over the next couple of years. >> reporter: canadian lawmakers have been preparing for today's deadline for two years, with public information campaigns. >> well, how do we talk about cannabis with our kids? >> reporter: and funny, but not joking police posters in toronto. asking what to do with your frozen meat during a power outage is not a 911 call. smelling weed coming from your neighbor's home isn't either. >> this is amazing and it's going to be busy today. it's going to be busy tomorrow. and i think the rest of the country is going to be busy. >> reporter: canada's largest bank estimates that legal cannabis could add up to $8 billion to the economy. polls show widespread support for the measure, which parliament passed in june. opposition politicians say it jeopardizes the health and safety of canadians. >> this really is about theatrics for the prime minister. it's about selfies. it's about fulfilling a promise to pot smokers. >> reporter: some fear that legal cannabis will increase the number of impaired drivers. in ottawa, police will use a controversial new device that tests saliva for the drug. as for foreign visitors, it will remain illegal to bring cannabis across a canadian border, no matter where you're going. >> don't bring it in, don't take it out. >> all right. that's stephanie gosk reporting from montreal for us. all right, we're just 20 days out from the midterm elections, and while both parties are working feverishly to win over voters, one fringe group is on a different mission. the group is identity europa. its 800 members believe that ethnic diversity is destroying the united states. the white nationalist groups is spreading its message to young gopers across the united states. ana schektner has more. >> this is patrick casey, executive director of identity europa, a group that only allows non-jewish whites as members. >> people of mixed race quite often do have identity issues. and so since we are focused on preserving our own identity and our own culture, we only allow applicants who also have significant others of european heritage, as well. >> reporter: he calls himself an identtarian, influenced by french far-right thinkers and the group generation identity. casey took the rains of identity e europa fisher severed ties with the organization. identity europa helped the organize last year's unite the right event in charlottesville. the event that would see clashes that turned deadly. casey says he wants the u.s. to only allow immigration for whites. and he's focusing his recruiting efforts on college campuses across the country. >> so we do encourage our members to go get involved in local politics, in their college republican clubs on campuses, and we've had a lot of success in not only getting our guys involved in that regard, but also using them in those positions to influence other people and turn them into ident taryns. >> casey even attended cpac, the annual mainstream conservative conference held outside of d.c. >> i did have many great conversations with particularly the younger attendee, college republican types. many of them were identarians and many more were very sympathetic to identarianism. >> reporter: he's playing the long game. ultimately, he has his sights on taking over the republican party. >> the goal for now, at least politically, so to get identarians into positions of power in the gop, covertly. >> and ana schektner joins me now. it's a remarkable story. is the gop concerned that these folks are literally trying to infiltrate the party, that's what he's talking about. >> that's right. they don't want to evaluate the group, so they're not commenting on this. but they did point me to a statement that they released after charlottesville, condemning the kkk, neo-nazi, any like-minded group. so they have come out strong. but i think they really should be concerned about this, because something is shifting in america. and it has been shifting for several years, really since 2008, this alternative right has been burgeoning and growing and really sweeping up a lot of mostly young men, also young women in their early 20s now, late teens, early 20s. i talked to richard spencer for this story. he's now in his late 30s, but he's the one who coined alt-right. he was involved or influential to the founder of identity europa. he pushed nathan domingo, an army vet, who suffered from ptsd in jail, he joined a white prison gang and found david duke's books and that's sort of what put him on this path. so that's the roots of this group. and richard spencer was right there at the beginning, as soon as nate domingo got out of jail, he teamed up with richard spencer who told him, hey, you should look at these identarians in yooump. this is that cool thing, it's like identity politics, but for white people. so it's this disturbing movement that is gaining momentum. >> thank you for covering it. the full piece can be seen on nbc news.com. ana schechter is an executive producer here. now nbc news has an exclusive look inside reddit headquarters. we asked the ceo whether the company is ready for the midterm elections after suspicious accounts from russia tried to put up thousands of posts in reddit in just the last month. >> the best, i think, approach we can take is make sure it's a fair discussion, but i think as citizens, we also have a responsibility to speak out against things we disagree with. responsibility to speak out against things we disagree with. expect from shark, and our newest robot vacuum is no exception. from floors to carpets, it tackles all kinds of debris, even pet hair, with ease. but what about cleaning above the floor? that's why we created the shark ion robot cleaning system, our innovative robot vacuum paired with a built-in powerful shark handheld. the shark ion robot cleaning system. one dock, two sharks. cleaning on a whole new level. (bright percussive music) about the colonial penn program. here to tell you if you're age 50 to 85 and looking to buy life insurance on a fixed budget, remember the three p's. what are the three p's? the three p's of life insurance on a fixed budget are price, price, and price. a price you can afford, a price that can't increase, and a price that fits your budget. i'm 65 and take medications. what's my price? you can get coverage for $9.95 a month. i just turned 80. what's my price? $9.95 a month for you, too. if you're age 50 to 85, call now about the number one most popular whole life insurance plan available through the colonial penn program. it has an affordable rate starting at $9.95 a month. no medical exam, no health questions. your acceptance is guaranteed, and this plan has a guaranteed lifetime rate lock, so your rate can never go up for any reason. and with this plan, you can pick your payment date, so you can time your premium due date to work with your budget. so call now for free information. and you'll also get this free beneficiary planner, and it's yours just for calling. so call now. iyou may be at increased riskf for pneumococcal pneumonia -a potentially serious bacterial lung disease that can disrupt your routine for weeks. in severe cases, pneumococcal pneumonia can put you in the hospital. it can hit quickly, without warning, making you miss out on what matters most. a single dose of the prevnar 13® vaccine can help protect you from pneumococcal pneumonia. prevnar 13® is approved for adults to help prevent infections from 13 strains of the bacteria that cause pneumococcal pneumonia. don't get prevnar 13® if you have had a severe allergic reaction to the vaccine or its ingredients. adults with weakened immune systems may have a lower response to the vaccine. the most common side effects were pain, redness and swelling at the injection site, limited arm movement, fatigue, headache, muscle pain, joint pain, less appetite, vomiting, fever, chills, and rash. prevention begins with prevnar 13®. ask your doctor or pharmacist about prevnar 13®. twitter and facebook have said they're taking steps to prevent the same kind of political interference that we saw on social media during the 2016 campaign. but they're not the only platforms the trying to avoid a repeat of what happened during the last election. reddit may be the most powerful social network that many of you have never heard of. it's had more than a million different community, hundreds of millions of users who are table to post anonymously. reddit has come under fire for allowing extremism, racism, conspiracy theories, and disinformation to thrive. and it says it is working to make the site safer. nbc's jo ling kent got an exclusive look inside reddit headquarters and joins me now. jo? >> hey, ali. so often those great memes you see online and misinformation and conspiracy that make it into american discord, they all start on reddit. so we went inside reddit headquarters for an exclusive interview with the ceo to find out how this powerful social network is battling information from russia and so much more. on reddit, there's something for almost everyone, from cute cat pictures to sports, to racist screeds and revenge porn. it's the fifth most popular site in the u.s., run by just 400 people. famous for its "ask me anythings," or amas, where newsmakers from major celebrities from reddit's ceo, steve huffman, take questions from millions of users. the social network also battling foreign attempts to influence the upcoming election. is reddit ready for the midterms? >> i think so. i think so. >> reporter: but when we visited, huffman admitted in an ama, that suspicious accounts from russia have attempted to put up a thousand posts in 130 different parts of reddit in the last month. so how are you responding to that? the midterms are just a few weeks away at this point. >> we actually have a handful of teams working on this topic here. the biggest thing that we can do is ensure the authenticity of the content on reddit and the -- and that the behavior on reddit is not manipulative. >> reporter: like facebook, reddit is building a war room for the midterms. protecting the platform against foreign interference and misinformation is critical, because it's become a breeding ground for conspiracy theories, violent threats, and racism that unfold in real life. like the charlottesville unite the right rally last year. and in april, reddit released a list of 944 accounts, it says, were created by russia's troll factory, the internet research agency. these accounts posted often in popular sub-reddits like funny and gifs, but also racism and trump supporters. at what point do you draw the line and say, this content that's being expressed here, that's not okay. >> no matter where you draw that line, there will be people living in the gray area on both sides. so there are examples where it's very, very obvious, you know, in both directions and those are the easy cases. but in the middle, we do spend a lot of time thinking about these things. >> reporter: reddit's millions of communities or sub-reddits are largely moderated by volunteer moderators who help enforce policies and remove comments that break the rules. but it's a near-impossible task, like twitter, youtube, and facebook, keeping a massive unwieldy deeply influential social network under control. >> the best, i think, approach we can take is to make sure it's a fair discussion. but i think as citizens, we also have a responsibility to speak out against things that we disagree, and to vote against people that we disagree, and to stand up for our values. >> now, steve hoffman, who you just saw there, the reddit ceo, also tells me they are focused on transparency and evolve aing quickly as they can to fend off those threats ahead of the midterms and beyond. >> so when you talked to him about it, he said he wants to ensure the authenticity of things on reddit and ensure behavior that was not manipulative. i saw you pushing him a few times about, are you ready for exactly that? what a lot of people blame about for misinforming people around the elections. >> they're definitely taking a look back at 2016 and looking ahead to the midterms in just a few weeks. the ceo tells me that they are constantly getting involved and they're evolving to fight this election fight. they think it's going to be a little bit easier, because they've got a team dedicated to it now and they've become more sophisticated this time around and they have more tools ready to go, but, of course, we won't really know those results until the day after the midterms. >> right. and even then, we may not know, because you don't really know what the effect of this inauthentic behavior is. you and i have covered so long on facebook. you don't know what it means. you don't know whether somebody just didn't go vote because they had misleading information or their vote was suppressed because they were seeing things that were inauthentic. i don't even know if we'll know after the midterms. >> yeah, it's really hard to measure that type of thing, especially coming out of 2016. but more than ever, these social networks are able to at least use some metrics to put together an estimate of what may have done. but they're trying to turn around. the real question for me and from my reporting here is the speed and the effect i haeffecto most important things. >> jo, thanks for the reporting and the interview. coming up, democracy is work. we have to pay attention, we have to vote, we have to take a stand for what we believe in. the problem is, too many of us don't do any of those things. up next, i'll talk to a reporter on a new piece that examines why americans aren't practicing democracy anymore. you're watching msnbc. anymore. you're watching msnbc. you might take something for your heart... or joints. but do you take something for your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life. are you paying too much and getting too little with your current medicare plan? if you have medicare, you have an important choice to make. you can purchase a separate drug plan for an additional cost; or you can choose a humana all-in-one medicare advantage plan that includes your medical benefits and drug coverage in one. in fact, last year humana medicare advantage prescription drug plan members saved an estimated $6900 on average on their prescription costs. call us to find out if you can save on your prescriptions. here's what you get when you choose an all-in-one humana medicare advantage plan. you get part d prescription drug coverage. so there's no need to purchase a separate drug plan with this all-in-one plan. you get coverage for doctor visits and hospital stays. and this benefit is very important - you pay nothing for many preventive services, annual tests and necessary vaccinations. you get all this coverage for a zero dollar monthly plan premium in most areas. your medicare coverage is an important decision, but it doesn't have to be a confusing or difficult decision. humana strives to make finding the right plan easy for you. if you want the facts, call the toll free number on your screen right now and get the free decision guide from humana. humana has a large network of doctors and hospitals, so call to find out if your doctor is in our network. see if you can save on your prescriptions and get our free decision guide. licensed humana sales agents are standing by. pick up the phone and call humana today. quick question. do you want the same tools and seamless experience across web and tablet? yes? great! then you're ready for power e*trade. the platform, price and service that gives you the edge you need. sweet! e*trade. the original place to invest online. over and over again, we continue to hear from how -- hear how from both parties, how important the midterm elections are. but it remains to be seen just how civically engaged the country is going to be. two years after the election of president trump, no matter what anyone thinks of his policies or how he runs his administration, he has gotten more people to talk about the state of politics in our last few years than one would have expected. is this going to translate into people actually voting? whether they agree or disagree in the direction in which he's taking the cup. with 20 days to go until midterms, nbc news data analytics lab found that more than 1.1 million people have already cast their vote. nearly 20 million early and absentee ballot have said requested. for more on this, i'm joined by oni applebaum. as part of your ongoing look into democracy, you wrote a piece called, americans aren't practicing democracy anymore, in which you say, quote, a nation of passive observers watching others make decisions is a nation that will succumb to anger and resentment. witness the united states. the american system of government functions properly only when embedded in a culture deeply committed to democracy. that culture sustains the constitution, in tnot the other around. tell me the argument you're making, we're not engaged in athenian style democracy so we're feeling less connected with it? >> pretty much. for two centuries, it was pretty much one of the really weird things about the united states. people would come here from elsewhere, they say, wherever these americans have a problem, they hold a meeting, they write a charter, they elect their officers, what are they doing? that's really strange. and americans really did that at remarkable rates. so it's not just in politics, it was in all facets of their life, americans turned to democratic forms to solve their problems. and we've seen a fairly precipitous decline in that kind of thing over the last 40 years. and it's dropped with generation. each generation is less likely to vote and -- >> so let me just one of the th about as underpinning of our democracy or our society is our activity, our civil society activity. the fact you do things in your society, what grown-ups call ext extraka rickulars that get you involved in your community. >> a whole lot less. and what that means is democracy is habit forming. the bad news is that we're getting out of the habit. we haven't formed that habit in younger generations, and the less we do of it, the less likely tor do more of it. the good news it's habit forming. to the extent we get back in practice, there are remedies. but at the moment, the trends are worrying. >> you think the habits should be started ed ied in school. holding all else equal, greater knowledge of civics among high school seniors correlated with 2% greater likelihood of voting in a presidential election eight years later. active participation in extracurricular activities correlated with a 141% increase. that's incredible. so if kids are involved in things, it may result in greater participation in politics. >> yeah, it's the difference between sitting back and having somebody lecture you about how the system is supposed to work and going and doing it for yourself. if you had to sit in a meeting you know democracy is ineff inefficient but it's also the best system for harmonizing and compeet competing interests. until you've lived that experience, just getting out of a textbook doesn't do it. >> gives us a framework for ow disagreements. yoni applebaum, washington bureau chief at "the atlantic." i'm joined by duwana thompson, a former national deputy director for community engagement and african-american engagement director of the dnc. thanks for joining us. one of the things we have seen in the last two years is where african-american and minority votes have made a difference, particularly in the election of doug jones in alabama. >> yes. >> to the point that yoni was just making, are we seeing this enthusiasm that we are seeing amongst democrats generally in this upcoming midterm election amongst african-americans? >> absolutelily. i think particularly in the south you have candidates african-american voters can see themselves in. the stacey abrams in georgia and gilliams in florida. also candidates up and down the ticket that african-americans feel like understand apply to the community and what's at stake right now. and they're more motivated to get out and vote for those candidates because they believe that's the way they'll impact change in their communities in the current climate we're in. >> you said particularly in the south they're seeing people that can motivate them. we've got three big races that we're looking at in maryland. ben jealous, stacey abrams which is catching a lot of attention because of the voter suppression activities in georgia and in florida, andrew gillam. >> absolutely. i think that what we saw in 2017 and even some in 2016 is in terms of motivation by candidates, a lot of our people were not motivated by the candidate but they were motivated in 2017, for instance, in alabama, by the idea that building black power through the vote could help us to do what we needed to do for our communities, even if we didn't see the kind of candidates we need. what you see with georgia and florida and maryland, it's a coupling of having a dynamic leader and an understanding of the moment we're in that's allowing us to see an impact in black voters turning out. >> is there any impact from what donald trump started saying before the last national election and what you heard from kanye the other day that african-americans shouldn't, or that the democrats take african-americans for granted and that african-americans should look at that seriously. you're a democrat. do you think there's any truth to that? >> i think the truth is historically this country has underfunded and underresourced african-american communities, particularly in the south. and so what we're seeing is a correlation between not funding political structures in places like alabama and not funding engagement strategies or engagement protocol in the south and in black communities in general. that would increase if we -- we would see a better increase in activity in turn dloout if the l of impact, the level of investment in those communities were increased. yes, there's a correlation between what we're seeing in terms of people, whether or not they'll support any party, if it's about investment, you only get what you put in. and right now the level of investment that we're putting into communities of color is not where it needs to be. >> i appreciate you articulating it. you get the return on your investment in these communities. if the investment is not there, there's no return to get. dejuana thompson is the founder of woke vote. we'll be back with a check of the markets right after the break. you're watching msnbc. eligible card members up to fifty thousand dollars, decided in as little as 60 seconds. the powerful backing of american express. don't do business without it. you're in the business of helping people. we're in the business of helping you. business loans for eligible card members up to fifty thousand dollars, decided in as little as 60 seconds. the powerful backing of american express. don't do business without it. hegimme one minute... eligible for medicare. and i'll tell you some important things to know about medicare. first, it doesn't pay for everything. say this pizza is your part b medical expenses. this much - about 80% - medicare will pay for. what's left is on you. that's where an aarp medicare supplement insurance plan, insured by unitedhealthcare insurance company comes in. this type of plan helps pay some of what medicare doesn't. these are the only plans to carry the aarp endorsement for meeting their high standards of quality and service. so call unitedhealthcare insurance company today and ask for your free decision guide. with this type of plan, you'll have the freedom to choose any doctor who accepts medicare patients. and when you travel, your plan will go with you - anywhere in the country. whew! call unitedhealthcare today and ask for your free decision guide. so let's promote our falle a homecomingtravel dealame, on choicehotels.com like this. touchdown. earn a free night when you stay just twice this fall. or, badda book. badda boom. book now at choicehotels.com all right. we're a minute away from the closing bell on another volatile trading day on wall street. the big board popped above the 0 level. see that, the two green spots at the top of the screen for about a minute or two today. the dow closing now, it looks to be 0.4% lower. about 100 points lower. stocks lost ground after the federal reserve released notes from its most recent policy meeting in which it indicated it still plans to gradually raise interest rates despite criticism from the president that it shouldn't be or that it's moving too fast. the president told fox business news that right now the federal reserve, headed by his appointo, jerome powell, is its biggest threat. taking a look at the indices. everything closing a little lower today after a very strong day yesterday. that does it for me this hour. thank you for watching "deadline white house" with nicolle wallace starts right now. hi, everyone. it's 4:00 in new york. why is the turkish government sounding more alarms about the brutal murder of a "washington post" columnist than donald trump is? trump, after all, is president of the country the columnist called home. it's a puzzling question and may have something to do with the fact that jamal khashoggi, a u.s. resident who worked at "the washington post," died in a saudi consulate on turkish soil. and the turks are the ones controlling the release of the evidence implicating individuals with ties to saudi crown prince muhammad bin salman or mbs. the real head scratcher remains, why is donald trump doing saudi arabia's public relations work for them? and do his comments about rogue killers match the information he's been given from his own intelligence agencies? trump appeared to apply the kavanaugh standard to the saudi crown prince in an interview with the ap late yesterday saying, quote, here we go again, with, you know, you're guilty until proven innocent. i don't like that. we just went
New-yorkUnited-statesGeorgiaAlabamaIstanbulTurkeyDuluthMinnesotaUnited-kingdomIranWashingtonChinaGet your own copy of this album at SwapaCD.com. If you're not yet a member, your first 2 cds and membership are free! All you have to do is post 10 cds you want to get rid of. Visit the site to find a huge selection of music!
Steve-hoffmanOriginal-master