Transcripts For CSPAN2 Capitol Hill Hearings 20130918 : vima

CSPAN2 Capitol Hill Hearings September 18, 2013

Justice ginsburgs words were, i remain convinced that handedly is a consideration of race, is preferable to stealing it. And maybe that goes also to your question. If these are proxies, to what extent our schools, our schools entirely safe come even if they say, look, we know the top 10 is a proxy for race in which is using it for that purpose and that purpose alone. Our educational institutions given the distance language safe in using proxies that are intended to offer that and conceal it . I dont believe that the university could find a safe harbor, build themselves that theyre completely invulnerable, that the use 100 proxy for race. I think the courts would look behind that decision, but there are, there are ways of classifying folks that are courts approved. Geography is flexible enough and allows for movement so that you could move to another school district, move to a close down, and, therefore, have control of whether you fit into that category or not. So geography is one that the courts would say, thats not a proxy for race. Just like i cant decide i can decide tomorrow i can move to this lovely city of san francisco. So geography is one of those instances where it wont turn into a racial quota and, therefore, wont result in a legal challenge. I would agree with that. I dont think its a care plan because it does, one of the reasons politically it was able to pass is because a lot of representatives from the Rural Counties across texas voted for because they recognized that their students in the small high schools that often would not be given the opportunity to go to the Flagship School in the state, were going to have that opportunity. So the geographic diversity that it yields is also a benefit. And geographic diversity with it, the background of being from a town of 100 people as opposed to being from an open environment which adds something in and of itself. So i think youd have to strike pretty hard to find something thats 100 proxy for race thats going to get you into trouble. Im pretty sure at least five members of the court, maybe a couple more, are okay with these proxies. Theres some members of the court, obviously, very, very against any kind of race Justice Thomas concurrence, but in any case i think as long as youre just looking for five members of the court, i think youre okay with most of these in proxies. Well, absent any additional questions from the audience, i will then close with one final question, which is as universities go forward in a postfisher realm, are there any other pieces of advice that you would have for admission offices, university administrators, anything else that they should keep in mind in designing a process that fosters diversity in education pipeline . I would end by saying that a policy decision is what were talking about here. Its more policy than law. The admissions committees are having to do the political work of engaging faculty and engaging a lot of stakeholders. Their regions, their education leaders, the k12 pipeline, the parents, the students, the business leaders, the regulators, the white house, Civil Society in general, they are all stakeholders and what admission committees do. And so it is a political process not a partisan process. Its a political process of working out a solution that fits the needs of that campus. Ultimately, its about the university or the college being effective. And when admissions works really well, so does the campus. My piece of advice would be for admissions offices to work very closely with the faculty of the academic institution, to understand the mission of the academic institution, and make sure that the admissions processes are aligned in a way that supports of that mission and seeks to advance that mission. Because i think more and more, the mission processes will have to be tied to that mission, and there are some law schools that dont have the nation. To law schools really need to think about formulating a mission of the faculty and think about how diversity relates to that mission. I would agree with everything that dean pratt has said, and i actually have to talk to you later about some of these ideas and putting them out as vice i think to law schools. At least i didnt a lot of focus has been on law schools, and i think those of us have been in these institutions know we have spent less time than we probably should to what were trying to achieve with policies like these and what kind of Critical Mass were kind of get in the classroom. And so i think a lease in terms of our own backyards, we serve should have more conversations, not fewer, about what we are trying to achieve with our mission policies. For institutions, undergrad institutions, obviously its a much more difficult and wide ranging discussion. So i understand the complexity of that, but really i think it highlights the need for more outreach. You know, again, in spite of whats going on, getting the message out, the welcome mat really out in terms of these institutions to people of different backgrounds. And so, so again, thats one of the things we can all do. I want to thank her for secrecy, dean pratt and norma cantu. And want to thank robin who stepped out of the room again it was very busy managing multiple committees for all her efforts, and thank you, the audience, for being with us today. Thank you. [applause] this weekend look for booktvs life all the coverage of the National Book festival featured authors include kb hutchinson, taylor branch, a. Scott berg and rick atkinson. Looking had to october, young people come Young Children come up and say, how can you do in the congress, you got arrested . [laughter] you violated the laws. And i said they were bad laws. They were customs, they were traditions. And we wanted america to be better. We wanted america to live up to the declaration of independence. Live up to our created. Make real our democracy. Make it real. So when i got arrested the first time, this book is saying that i felt free. I felt liberated. And today, more than ever before i feel free and liberated. You know, Abraham Lincoln 150 years ago freed the slaves. But it took the modernday Civil Rights Movement to free Unemployment Rate the nation. Civil rights leader and congressman john lewis will be our in depth the guest sunday the sixth. He will take your calls and comments for three hours. Also scheduled, november 3, kitty kelley. December 1, Christina Hoff sommers. January 5, radio talk show host mark levin. Now a look at u. S. Housing market. On monday the chief economist and Senior Vice President of Mortgage Lender fannie mae gave a report about the economy and housing at a conference of the American Institute of certified public accountants. This is an hour 15 minutes. Very much. I grew up on a dairy farm, so the whole esb greek thing, that was pretty straightforward. And yes, i am cognizant of the heroics of the thundering herd of north dakota state. Its a pleasure to be back. Its a couple years ago i think itll some joke that question the difference between a congressman and an accountant. I thought, i have a collection of thousands of single panel cartoons. I owned a bunch of originals. Its one of the things i like, but you can develop. You can with one small picture you can transmit humor. So its looking to my collection, there was a picture of a bar and theres a gentleman sitting at the bar with his back to you, the reader. There are two women sitting down at the table below and one of them says to the other, but, you know, he has the added element of danger. Hes an accountant. [laughter] that was published just shortly after enron. So i would run with that. Go with it. Theyre going to give it to you. Anyway, thank you for allowing me to come back and speak with you. And lets see growing up on the farm i figured me say before, my father used to say, if it has more than two moving parts, dont call the. He meant that. He was right. Let me Start Talking for couple of minutes about what has been our theme for 2013. Last year when i spoke, the theme for last year was the year of the political economy at the kind of talk through why we felt that was dominating things. There was 65 of the gtp underwent potential National Leadership change. They were huge volumes of legislation regulation coming into place. So this year in december 2012, as we were thinking things to observe a couple things in our surveys of consumers, which we been doing for years, all that information is up on the website available to you free. We do a press release each month. In november of last year, after watching one question, the responses to one question which no one else asked, which is, is it a good time to sell a house . We decided in our november press release to use the words firm footing in describing housing, even knowing that the fiscal cliff still had to be dealt with, and i did all those tax proceeds, or tax provisions went into law as they were described at the time, we expected a small recession in the first half of 2013. Thankfully we didnt run that experiment, but using those words firm footing, and then thinking forward, that indicated a sort of transition to a different direction for housing, and since housing is an important element of the economy, we felt it would also impact the direction of the economy. Youll notice we put the word normal in quotes and we put at the end of that a question mark. The reason we did that, it wasnt that we werent certain there would be a transition. It was we werent certain where the transition would take us with respect to what we have thought in the past was normal. And so what weve been doing each month when we put out our economic commentary is were putting out one or two very short papers, for a five pages, on a topic that relates to housing in the economy and what would be normal for that in the aftermath of the crisis. Sydney said in her opening comments, looking for in 2008, it wouldve been hard to predict the magnitude of the downturn. That certainly is true, full disclosure. I did not predict the magnitude of the downturn, nor did any of my peers, frankly. So the question is, given the depth of that, what will normal be . And i will talk a little bit about some of those things in the course of my comments. And as always, any human will be incidental. Is just basically means that i will do not i was every. Although there are some of my peers here that i think will hold me accountable, so ill try to behave pretty much, or maybe not. So for about five years running now, weve had lower expectations for Economic Growth that has, for example, the central bank. In each of those instances, unfortunately thats turned out to be true. Part of that is the fact that at our company would have a lot of insights into housing that others dont have. That was our understanding of how Consumer Attitudes are changing, which youll see sprinkled throughout comments this morning, have led us to believe that it would be difficult to see a robust economy. So when we said housing was on a firm footing, we also said that does not mean that it is robust. We continued to believe this year, our forecast was at the outset of the year that we would grow about 1. 9 over the course of the. I think thats probably what well end up being right around 2 in return for gdp. Our forecast for next year is only modestly better, perhaps 2. 5 . So still we believe that the economy has a ways to go. And, in fact, if you recall, some of my comments last you, i talk to you about it, 10 year timeframe which started in, the end of 2006. So we have gone 2007, 2008, 2009, 2010, 11, 12, 13 now. Thats seven years in. That would apply 14, 15, 16 into we get back to normal. As you will see what i talk about housing, that aligns with our expectation of the path of increase in housing starts, which is the largest contribution that housing makes Economic Growth. So the economy we think is not near recession, but neither do we believe it is as robust as some others believe. Mind you, people come to me and say why you so pessimistic . Well, actually im not pessimistic. Unrealistic but in the long run for our country, im an optimist. My job is to forecast what i think will happen, not what i want to happen. That would be an entirely different presentation to one which they would almost certainly have a little heartburn over. A part of the fact that we are not expecting robust growth comes back to sort of the social side of economics, which is what you people do . And as you can see on this chart on the far right there has been some improvement over, certainly from the depths of the downturn, but still not robust. Youll see where the personal consumption expenditures running Something Like one, 1. 5 . The average of that measure from 19802007 was 3. 4 . Consumer spending is still significantly lower than what would support i three, 3. 5 real growth rate. Youll see some more things somewhat weve been learning that just give us pause and put us in the lower quartile in terms of our expectations of Economic Growth. Likewise, business reflected the fact that consumption is going to be picking up, then it would be unwise to expand capital investment, your ability to produce and higher labor. And, of course, thats been one of the challenges, one of the reasons that our central bank has been in the position that they have been with regard to Monetary Policy is the slow growth in employment. And certainly businesses at both capital and labor, the degree to which theyve been adding capital has been slow. Replacement of obsolete capital but not much expansion. Consequently theyre also not expanding employment at a pace that would indicate faster Economic Growth. This starts to get a little confusing, but, or i guess maybe not confusing but takes a moment to absorb what it says. As you know, one of the thrusts of productivity improvement within u. S. Economy has been the development of and importation of technological change. What this chart says is that the pace of increase in technology has slowed. Doesnt mean that businesses are not investing in it. Just the pace at which they are investing in it has slowed. And as you also know, the real prize that is price adjusted for quality and inflation has been falling of technology tools, but the pace at which it is falling has also been slowing. So you could infer from that that we may be moving toward the exhaustion of the benefits from additional technologic investment. I would argue thats not true. There may be some slowing from a very heady days, but it is probably related heady pace, but it is probably related businesses are waiting for Economic Growth degrade the opportunity for them to increase their investment in technology. I was listening to the former chief Information Officer of aol time warner is also an adjunct professor at georgetown and sits on the boards of several venture funds in silicon valley, and and he suggested that there are four firms in the world who are leading technologic change, and all for our u. S. Domicile firms. They are google, lincoln, facebook, and whose the force one fourth when . Amazon, which i thought was really interesting. But his view is that it is still the leadership of the world and those are all u. S. , some firms. While there are some warning signs in this particular chart, i think personally that it avoids the resurgence of Economic Growth for we say pick up and a resumption of the very positive trendline. As you know we saw significant allges from a fiscal perspective this chart basically shows the period 19502008 that we ran a deficit in terms of, the deficit to gdp ratio of about 1. 8 were outlays exceeded receipts. The 200912 period, that rose to 8. 7 of gdp. And the omb forecast 2018 is that it will fall to 3. 5 but that still double the pace from 19502008. Thats going to be discussed, an aspect of that will be discussed over the next month. In fact, maybe the next two weeks, which relates to the debt ceiling. As you will see in our surveys of consumers in just a moment, the consumers do not like that discussion. To my point about consumers not yet being robust and consumption not being up, of course one of the things that happened prior to the crisis with savings essentially went to zero for a couple of quarters. This chart kind of averages over that time to read it, but you can see the savings rate has come back up that its not yet near the longterm trend. And if consumers are attempting to increase savings, that means that theyre reducing consumption, especially if Income Growth is flat. And Income Growth has been very flat. Thats one of the problems of this expansion. So heres what consumers are saying about housing. On the left hand side is the expected home price change. So housing has become a tailwind. When we said it was on a firm footing, thats been borne out. But the last couple of months, they have wavered. Their Price Expectations for whats going to happen in the next 12 months, as you can see, in the last month dropped back a little bit. It had been on a steady increase. They have recognized house prices started moving up, which is important for them since the meeting income household still, the biggest share of wealth they have is the equity in their homes. So this matters a lot to them. On the right inside we ask this question, is it a good time to sell a house . Thats the green line on the bottom. So you can see that was taking up 1 per month. It started actually, this chart is go back to it, at january 2012. You can see in november when we made our nose but it was up over 20 . You can see a continued moving forward out until may of this year, and now for the last couple of months its flattened off. So consumers have been getting more optimistic, but this sort of flattened off as they wait the debt ceiling debate, the question of Interest Rates have risen, theres a question of additional geopolitical risks in the middle east. So consumers have sort of paused. Now, on this chart, in this survey we asked them first, is the economy on the right track or the wrong track . Two things. The rise in the wrong track back in july and august of 2011 was the last time we ha

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