Other immigrants. But we did not take account of it and youre right. The data dont tell us. I am dr. Caroline a physician and Health Policy analyst. Did you look at what seems to be the financial in the economy what stieglitz distinguishes between people that make the pie bigger and just take a larger part of the pipe, equity, capital where they come in and make the company more efficient by the staff and then they dont take that money and invested into another business to do the same thing so the money doesnt go to new companies producing new things and offering new jobs. It just goes to the reverse mortgages. We avoided a lot of the issues that you raised, however, by looking at ed and rather than average income. So a further to average, than the fact you have these enormous gains at the top of the average. And so, thats why we choose the median. So we wash out some of that. Is that an independent fact your ensuring to explain whats happening to the economy, that job creation in wages and salaries, however you measure it. This just happened to be too neat the perfect way to measure for the best available. But all he can say is there are economists who think that it is a significant independent factor. And you know, weve seen the share of National Income claimed by finance double. It came out of somewhere. So now, there were a lot of arguments about the value that they were producing. There are lesser arguments at the decreases because now we have not only the value that they produce, which i think, you know, we have the best system of financing for newbies is, for new businesses in the world. We do better at. Theres a lot of reese. You know, on the b. C. Funding the so on. But now we also have the cost to consider. And you know, the cost of the financial crisis were enormous. You made the point in criticizing the Bush Administration for not recognizing the problem sooner, calling the advisories and yet in terms of prescription for policy change, the only two things ive heard from you or one can make in public free and available. And two, opening at Community Colleges for free training. Certainly in the form of that was a major fiscal policy change and would take decades at best for free public i think you could do it very quickly. In fact, i proposed it to president clinton in 1995. There is states that these programs. A couple of states have it. It was really modeled on the hope scholarship georgia, where anybody with any High School Graduate with the average in georgia could go to any church or university for free. I said lets make that a national program. But youre right. Im thinking of longterm responses. Shortterm responses look, i think the president has given a number that he wished bush could done, which were you recognize you have a particular problem, a new problem with creating jobs. It used to be if the economy grew at a certain rate, we were a childs machine. In the 70s and 80s and 90s come you didnt have to do anything in particular to get businesses to create jobs. For some reason, that stopped. That fell sharply. The relationship between how this economy grows and how many job business has created changed by about 50 . Very sharp coming discontinuous change. You dont see that often in economics. So thats the problem. So you say okay, what do we do to create jobs . You know, one of the things i said to this administration at the job summit in 2009, i said reduce the cost of business of creating new jobs. The create more of them. The best way to do that is reduce the employer side of the payroll tax. For new job hires. In fact, they did go to a version of that. But thats an example. The president has other proposals for coming you know, credits for particular kinds of businesses to create jobs, a new deduction of salary costs for new hires, for increases in pay. You know, i dont know that the particular designs of these policies from my atari deal. I do know thats thinking about the problem and saying hey, weve got a real problem which ive creation. The economy on its own is not doing this for some reason. We will eventually figure out the underlying reason. In the meantime, how do we stimulate it . Look, theyre rather at the job summit i had a discussion with alan lander, an old friend of mine. He had a different approach. He said public jobs, public works. 1930s. I dont think were there yet. I dont think we could ever do it. But we certainly could can justify it and indeed there is a demand for an increased investment in infrastructure across the country are. And they create jobs and thats part of the president s jobs will, jobs for postal. How does that affect the left of the job market that has to do with construction . Its not just construction, but in the short term it only affects people involved in the planning and construction of highways and airports, brought to, et cetera. Thats not on the construction workers. Their design people in the Service People of all kinds. But is there, you know, do we have, you know, theres no silver bullet. What im saying is you can begin to think about this in lots of different ways and say lets try a range of ways and see what works because we got this persistent, real, structural problem. This is coming you know, part of my argument and as is whats happening. This is not simply about the financial crisis in the slow recovery that typically follows the financial crisis. This is about a larger structural change in the economy for which we have hard evidence from the last decade. And so, this is not simply a matter of an emerging the respawn. We need something more serious. Thats why were talking about the longerterm thing. The shorter term things, which didnt try any of this. And how they got away with it and the 2004 election, you know, at this point in the 2004 election, the Bush Administration had created less than 2 million jobs. Weve created over 5 million jobs. And you know i dont know how they got away with it, but they did. Karl rove in the seat i guess. The National Association [inaudible] [inaudible] i would be spending 10 of gdp on education. In my view, i think history tells us that thats the level, which the best performing economies in the world typically were now at about eight. We used to be at 10 and we are now at about eight. Korea, the single most successful economy of the last 50 years is that 10 and has been at 10 cents that was a poor country. And to me, thats what i would do. And so, all im saying is that we start with the public system. I think that the government should do, but in my view, i would also provide assistance to vary income dependent assistance to president editions as well. [inaudible] [inaudible] [inaudible] well, look, its the markets have produced the growing inequality. These are inequalities pretax income. The posttax income is a little less unequal, but the truth is, you know, we provide lots of tax benefits for people in the top two as well. So were certainly not doing anything to counter it, to counter what the market is producing. For some reason, and its got to be changes in the market and the conditions under which it operates, you know, the market was producing broad income gains for leslie h. Did not stop doing that. The policy responses look, there were policy response at high Government Spending and very accommodative monetary the, those are policies in response to the particular problems that have arisen from the financial crisis and the recession that followed. I actually believe that the constituents for a stronger, much stronger expansion are in place today and that for the First Time Since the crisis, and it a little push because the psychology, people dont believe it. For example, we had five years of deadly falling housing prices. In very high foreclosure rates, the house is the virtually only asset that about half of americans had. Fiona has enough said they filed by about 35 over five years. Well, that is what economists trust that the call negative about the fact, which is to say you get poorer and you respond in some way. You respond by paying down your debt because you feel poor. The fact is, housing prices have stabilized and are beginning to move up. And so, we are moving past the negative wealth effect into that these appositive wealth effect. People dont yet believe it, or they dont feel confident about it because theyve lived through five years of declining wealth in their homes. And so, itll take a little while for that to settle in and people to begin to respond to that by saying hey, i can afford to spend more than i thought i could. Consumer spending has been the big problem in the recovery. This disinvestment follows from that. So i think those pieces are in place. And i think you retreat is an attempt to kind of give it a push, frankly. But you know, government is not so good at giving that push. [inaudible] [inaudible] [inaudible] well, depends on the advanced economy are talking about. You know, you look at the 90s, for example, in japan performed very badly, japan continued to perform badly into the last decade a couple years exceptions. So they didnt have a lot of the gains we had. France looks a lot more like the United States, frankly. The western hat name in the last decade is also true you do see it. I havent done this kind of analysis because as data arent available to me for other countries. But all the normal indicators of how well those economies are performing say that theyve been underperforming in much the same way the United States has been underperforming for the last decade, which it can lends credence to the notion that the this is about is globalization and Information Technology in the ship and the relative value of intangible assets is tangible assets. Isnt the real point of difference in the health care you are making quick there is a big difference in health care. Youre right. [inaudible] mind this kind of twopronged twopronged [inaudible] [inaudible] [inaudible] well, on the question of womens earnings, yes, the fact that women are the primary caretakers of children in society as compared to their husbands and a lot of women with children dont have husbands, is certainly a factor. And i felt the biggest factor here was a greater proportion of parttime work rather than fulltime work. Now, you know, thats in part of our childcare policies. It tells us that might be a very good investment would be to expand public support for childcare, which you could do lots of different ways by increasing public support for the childcare expenses, the businesses tears part of benefits for their workers. So yes, i think that the parttime issue is large. I think the choice of professions i think is a big issue. And in outcome you just think of maybe this will change, but you know, you go to, you know, google or facebook or microsoft and the preponderance of the show workers they are men. There are a lot of women, but this is still a profession that meant feel more calm to berlin and women for whatever end. I dont know if thats because thats how Computer Science is conducted in universities, or you know, i think its all social and not physical. But on the other Financial Literacy well, we didnt address that to your because were only looking at earnings and not income from financial assets. We purposely made that decision to focus on earnings. As it is, thats an issue for the top 20 of the country. 93 of the value of all financial bets, and that includes pensions and retirement accounts and savings accounts in stocks and bonds, all financial assets, which is to say every asset of the economy except comps and origin gold or whatever. Our budget held the top 20 of the country. The bottom 80 control 7 of the value of all financial assets. So, but Financial Literacy in the top 20 i think probably does have an effect on the ultimate income a, would it be a good thing to have greater Financial Literacy across the Income Distribution . Absolutely. And he would be even better if we could figure out a way, and there are lots of ways to do it, for average people to accumulate assets other than their own homes. Thank you were a very stimulating presentation. Id love to hear more. [applause] would you support military action in iran . If need be, yes as a last option, yes. Under what conditions click if sanctions dont work, if they are close to and about to have the ability to develop a nuclear bomb, we use every option possible as will israel and that would be the last option would have to use, but we do have it ready to use. I think we stand with israel and to let iran develop a nuclear weapon. Military option should be on the table. Under what conditions would you recommend . I cant tell you what that would be, but we better exhaust Everything Else. At the end of the day, if that is what is needed, i dont know what they need maybe i can wash windshields, but ill be the first volunteer. Were going to have a discussion about what is needed. Former white house budget your jim nussle said everything should be on the table in dealing with the socalled fiscal cliff. Mr. Nussle is under consideration as an omb director of the white house. This is just over an hour. Thank you, john and thank you to everybody for being here. We come here today at a rather auspicious moment, on the brink of the president ial election, the results of which are still very much in the air, with the looming budget sequester that everybodys idea of a great time any potential tumble over the fiscal cliff at the same time. So it all adds up to quite an interesting set of circumstances and a lot of the uncertainties that will happen. What will be the guest this morning that will tell us exactly whats going to happen. He is jim nussle and for 16 years he represented iowa in the house of representatives where he earned an effective leader and fiscal hawk. He served in agriculture and banking committees and became an expert on such issues as taxes, finance, world trade, health care to energy. Some 2001 to 2007, and mussels served as chairman of the house budget committee. There he was successful interaction shepherding sixth of akita budgets to congress, which in this day and age is some kind of accomplishment. And from there, jim took an even more fun job moving to become too rector of the office of management and budget under president george w. Bush. Kerry led the development and management and implementation of the president s fiscal agenda. Currently, chinas president and ceo of growth energy, trade association made up at them all countries industry partners. Last week, Government Executive National Journal was about to names being discussed in the republican circle as omb dirt in the romney administration. Although they will come its unclear if nasa would return to omb. Maybe he can clarify that for us. A little bit about the ground rules. This is about you and your question, so were going to get right to them. Its your opportunity to ask whatever questions you want of a man whos really an expert on the budget process and the current situation. Im here to facilitate things. I think i have an easier time of it than the moderators at the president ial debate had, but well see. When the interrupt you sorry. So, id like everybody now, if you have questions, we have people stationed with microphones around the room. So just give an indication in the dtp before that, it will exercise the moderators privilege to ask the opening question. And that i cant resist just going straight to top a, which is the sequester, the fiscal cliff, the great deal of uncertainty. President obama said at the sequester that it will not happen. But at the same time can be certain to veto legislation thats not to his liking, relative to the broader fiscal picture. What you think is going to happen in the next few weeks . Will first come the thank you for inviting me into the government executive Meeting Group in the hospitality and pwc for hosting. It is a fun event, particularly to have the opportunity to come back and speak with so many important Public Servant to the success of whatever happens next. As we all know, it is one thing to take a vote in congress would like to think were in charge of everything. I remember that very distinctly. But we know theres good people that have to come and implement the decision, whether its by the president or by the congress and hopefully jointly. And thats all of you, sit thank you for your service. There were a couple of people who had i. Guess the audacity to come up and tell me they are either current or former omb years. Im sorry for that. I wont identify you to the rest of the folks in the room because i know how dangerous this situation can be. Whats about to happen . Nobody knows. Truly, nobody knows. I have listened to the talking heads. Ive been part of different discussion groups. An part of an Organization Called the committee for responsible federal budget, which a number of us has been brassard of an organization to help guide people with ideas and decisions in a bipartisan way. Im also now part of a group called fixit that, which Just Launched a letter from a number years from fortune 500pound denise come to see and do something to fix the debt because the situation is unsustainable. The reason im involved in that is because i know policymakers are the ones that are going to make the decisions, its not going to be me anymore. They need help. They need support, help, they need ideas. They need creativity at this time and then you come back to in order to make this next decision because theres absolutely nothing easy about where were about to head. None of the decisions are easy. Politically, not that marries the fiscally. None of them are going to be anything but destructive comet. It is the situation we found ourselves than it is a bipartisan reason why we are here and its going to take a bipartisan pollution in my judgment to get us out of it. The fiscal cliff. Obviously, quite as chairman bernanke about what is evidently about to happen at the end of the year. When he made that statement, he said it was basically involved at that time three things, but then evolved into four and now its back to three. Now its actually back to two. It originally started with these four, sequestration, exploration of the bush tax cuts. It evolved into what may have been exploration of a continuing resolution for the budget and not in terms. And it was the debt ceiling. All four of those things couldve happene