Episodes

Ending America's Dropout Crisis Part 2: A Matter of Leadership

2012-02-01T15:49:08Z

A look at what can be done at the middle school level to keep students in school through high school and beyond. We will profile middle school leaders, teachers, students and programs that have turned troubled middle schools into models of success.

]]> Ending America's Dropout Crisis Part 2: A Matter of Leadership
Ideas in Action with Jim Glassman

JIM GLASSMAN:

WELCOME TO IDEAS IN ACTION, A TELEVISION SERIES ABOUT IDEAS AND THEIR CONSEQUENCES. I'M JIM GLASSMAN.

THIS WEEK - THE SECOND EPISODE OF OUR 2 PART EXAMINATION OF THE HIGH SCHOOL DROPOUT CRISIS IN AMERICA AS PART OF A PUBLIC MEDIA INITIATIVE CALLED AMERICAN GRADUATE - LET'S MAKE IT HAPPEN. THIS IS DESIGNED TO HELP LOCAL COMMUNITIES FACE ADDRESS AMERICA'S DROPOUT CRISIS.

IN PART ONE, WE EXPLORED HOW HELPING KIDS IN MIDDLE SCHOOL CAN PUT THEM ON THE PATH TO HIGH SCHOOL GRADUATION. NOW WE WILL LOOK AT WAYS EFFECTIVE LEADERSHIP BY PRINCIPALS AND ADMINISTRATORS CAN HELP BOOST STUDENT ACHIEVEMENT AND HIGH SCHOOL GRADUATION RATES.

THE TOPIC THIS WEEK: A MATTER OF LEADERSHIP. HOW PRINCIPALS CAN MAKE A DIFFERENCE. THIS IS IDEAS IN ACTION.

NO MATTER WHAT GRADE OR AGE - SCHOOL LEADERSHIP MATTERS. A SKILLED PRINCIPAL CAN REDUCE THE DROPOUT RATE OF A SCHOOL THAT IS TROUBLED IN OTHER AREAS, WHILE POOR LEADERSHIP - EVEN IN A SCHOOL FILLED WITH TALENTED TEACHERS - CAN CONDEMN STUDENTS TO MEDIOCRITY.

DEWEY HENSLEY:

Having strong leaderships in-- inside our schools, it's crucial. These leaders make the weather in the building. They help to change belief systems. They help to make is so that each child in the building counts. Their ability to step up and say what's important, identify the goals along with-- their faculty and staff, to create a collective vision, that moves kids and schools forward is crucial.

JIM GLASSMAN:

WE BEGIN IN LAS VEGAS, NEVADA WHERE ONE PRINCIPAL HAS GAINED NATIONAL RECOGNITION FOR GUIDING HER SCHOOL TO EXCELLENCE.

IT'S 6:30AM. THE START OF ANOTHER SCHOOL DAY AT ROBERT O. GIBSON MIDDLE SCHOOL. PRINCIPAL LINDA ARCHAMBUALT IS ALREADY AT HER DESK.

DR. LINDA ARCHAMBAULT: I love this school. And I've had people say, "You're crazy for wanting to be in an old building in an economically disadvantaged area of town."

I stay in middle school because I know that if I'm successful in helping them make better choices, that their four years of high school are going to be fantastic and that's my goal.

CAPRICIA PIERCE:

We have a great principal. She got the number one principal of the nation this year. And she loves us and she helps us with everything.

JIM GLASSMAN:

IN 2011, SHE WAS NAMED PRINCIPAL OF THE YEAR BY THE NATIONAL ASSOCIATION OF SECONDARY SCHOOL PRINCIPALS. SHE STEERED THE SCHOOL TO A 98% ATTENDANCE RATE AND INTRODUCED SOUGHT-AFTER MAGNET PROGRAMS IN LEADERSHIP AND FOREIGN LANGUAGES. ALT: THIS WAS A BIG TRANSFORMATION.

PRINCIPAL ARCHAMBAULT ARRIVED AT GIBSON MIDDLE AS AN ASSISTANT PRINCIPAL IN 2004. LIKE MANY SCHOOLS IN URBAN ENVIRONMENTS, GIBSON STRUGGLED WITH A LONG LIST OF DEBILITATING PROBLEMS. MOST TROUBLING WAS THE VIOLENCE.

DR. LINDA ARCHAMBAULT:

I did believe that at some point time, either the principal or I would probably-- lose our life.

CAPRICIA PIERCE:

my sisters were tellin' me, like, there was fires in b-- in the bathrooms from kids startin' them and a lot of fights-- in the lunch lines. 03:02:15:00 And people would get arrested.

PABLO NAVARRO:

Students were generally rude, apathetic, just a lot of screaming and yelling everything and loud voices

JIM GLASSMAN:

BUT VIOLENCE IN THE SCHOOL WAS ONLY PART OF THE PROBLEM.

DR. LINDA ARCHAMBAULT:

They deal with a lot of issues-- you know, the abuse at home, the neglect, the-- not existent parent because they're working three jobs.

Three families living in one home, two bedroom. They deal with so many different things. It gets to you after a while.

JIM GLASSMAN:

PRINCIPAL ARCHAMBAULT REALIZED THAT STUDENT'S BEHAVIOR INSIDE THE SCHOOL AND THE IMPACT OF THEIR LIVES OUTSIDE THE SCHOOL WEREN'T THE ONLY HINDRANCES TO LEARNING. THE SCHOOL BUILDING ITSELF ... OLD AND DILAPIDATED... ALSO PRESENTED A CHALLENGE.

DR. LINDA ARCHAMBAULT:

I get frustrated because people say it shouldn't matter whether or not the kids are proud of the building. That is a bunch of malarkey. It does matter. And when I first got here in 2004, the kids would joke and say that the G for Gibson meant "ghetto." And they called it a ghetto school. It broke my heart. We had open, exposed wiring. 06:20:00:00 We had holes in ceilings where you could see the sky, and it wasn't a skylight. How can you send the message that education is important if you don't deal with the facility and create a school that they're proud of?

JIM GLASSMAN:

THE FINAL CHALLENGE WAS DEALING WITH STUDENTS AND PARENTS WHO OFTEN SPOKE LITTLE OR NO ENGLISH.

Jane Patterson:

We don't really-- have strong strategies to work with that particular population. And when they don't develop the-- the literacy skills required to succeed in-- in high school, they're chances of-- of moving on to higher education really become, you know, much-- much more narrow.

DR. LINDA ARCHAMBAULT:

80 percent of my student population is Hispanic. And it's a second language to most of the students.

JIM GLASSMAN:

ALL OF THESE CHALLENGES LED TO WHAT SEEMED LIKE AN INSURMOUNTABLE ACHIEVEMENT GAP.

TEST SCORES WERE LOW - WITH ONLY 27-PERCENT OF THE STUDENTS DEMONSTRATING PROFICIENCY IN MATH AND LANGUAGE ARTS.

AS SCHOOL LEADER, PRINCIPLE ARCHAMBAULT KNEW THAT SHE'D HAVE TO ADDRESS EACH AND EVERY ONE OF THESE ISSUES.

DR. LINDA ARCHAMBAULT:

When I became the principal in 2006, I knew that we had to make change. And it had to occur fairly quickly for the behaviors to get under control.

JIM GLASSMAN:

SO SHE STARTED WITH THE BASICS.

DR. LINDA ARCHAMBAULT:

We implemented some programs, and those programs included character education-- a-- serious unit on respect. We began teaching students skills that we thought that they should know, and found that they did not have, such as-- being polite, holding a door, please and thank you, excuse me. And once we started teaching the social skills, we started seeing change.

JIM GLASSMAN:

GIBSON MIDDLE SCHOOLS BAND DIRECTOR PABLO NAVARRO HAS BEEN WITH THE SCHOOL FOR 15 YEARS.

PABLO NAVARRO:

Our principal, Linda Archambault has-- been instrumental in trying to change that climate here. And it-- and it's worked.

If you walk down the hallways, you'll hear a lot of students saying "good morning, good afternoon, how are you?" They want to strike up a conversation. Very polite, they'll open the doors for you. That's something we didn't see 15 years ago.

KAMILIA MEYERHOFF:

Dr. Archambault is the protector of this school. This-- this is her baby and that's in a good way. She is very protective of the-- the students, very caring, And she's protective of the building, too.

JIM GLASSMAN:

PRINCIPAL ARCHAMBAULT NEXT TURNED TO THE BUILDING ITSELF.

SHE SOLICITED HELP OF THE VERY PEOPLE WHO WOULD BENEFIT MOST FROM A SCHOOL MAKE-OVER...THE STUDENTS.

ZACHARIAH RAHAMAN:

We also did the beautification and it was-- we really liked it. It looks better than just grass.

We're all really proud of it 'cause we all knew inside that we all worked at it and we had did this.

JIM GLASSMAN:

EVEN PRINCIPAL ARCHAMBAULT ROLLED UP HER SLEEVES.

KAMILIA MEYERHOFF:

Comparing her to other administrators that I've had, she puts more of her heart into this building.

PABLO NAVARRO:

How many times have we heard, "Lead by example. Lead by example." And we believe it and we-- we think it's true, but we won't lead by example. We have to mop up the floor. We have to du-- we have to sweep our own rooms or paint a wall. And those were the things that really reached me, because I-- I realized, "If my boss can do it, then I can do it, too." And that was very encouraging.

JIM GLASSMAN:

BUT THERE ARE SOME THINGS BEYOND A SCHOOL LEADER'S CONTROL ...LIKE THE ISSUES THAT STUDENTS DEAL WITH AWAY FROM SCHOOL. MANY OF GIBSON'S STUDENTS ARE CONSIDERED POOR. 80-PERCENT QUALIFY FOR FREE OR REDUCED-PRICED LUNCH. PRINCIPAL ARCHAMBAULT AND HER STAFF HAD TO FIRST MAKE SURE HER STUDENTS WERE READY TO LEARN.

DR. LINDA ARCHAMBAULT:

We have students who aren't showering because they don't have hot water. We offer-- a shower here at school. We wash clothes for students when they need it. We go out and buy clothes for students when they need it.

We have students who come to school that are sleeping in cars. So they can't do their homework, 'cause they don't have a light to work from.

We offered an opportunity period in the morning where the teachers come in, and there's a half an hour where they're in their classrooms. Students who have tried to do their homework at night and aren't successful can go in before school and get individual help. And that's made a difference as well. JANE PATTERSON:

research tells us-- the two major factors are what happens in the classroom, and what happens at home. What parents can do is really become partners with their teachers in the education of their children.

JIM GLASSMAN:

ENGAGING PARENTS IN A WAY THEY UNDERSTAND ALSO HELPS STUDENT PERFORMANCE. MANY SCHOOLS AROUND THE COUNTRY OFFER LANGUAGE SUPPORT FOR THEIR STUDENT POPULATION, BUT HOW MANY SCHOOLS OFFER IT TO PARENTS AS WELL?

DR. LINDA ARCHAMBAULT:

One of the biggest steps that we've taken in engaging our parents is to provide almost every communication in Spanish and in English. I have 12 faculty that are bilingual in addition to the office staff. And that in itself has-- encouraged parents to feel more comfortable coming in.

we even offer tutoring for students where the parents can come with them. And the parents take us up on it. They feel that if they learn that math or the English or the reading that it'll be able to transfer to the other children coming up. 06:03:24:00 And I'm surprised at the number of parents who show up for that.

JIM GLASSMAN:

ADDRESSING BEHAVIOR, THE BUILDING, HOME LIFE AND PARENTAL INVOLVEMENT HAD A POSITIVE EFFECT ON THE STUDENTS.

DR. LINDA ARCHAMBAULT:

We started seeing them transform from kids that were in survival mode to students. And from that point, we started working about academics. We knew if we didn't get the culture and climate under control that the academics would never occur in a classroom. And we're at a point now where the academics are the focus for the students here at school.

JIM GLASSMAN:

AT GIBSON, ACADEMIC ACHIEVEMENT HAS INCREASED MORE THAN 100% OVER THE PAST FIVE YEARS. TEST SCORES HAVE GONE UP FROM A 27-PERCENT PROFICIENCY RATE TO 60%.

KAMILIA MEYERHOFF:

The change in the culture as affected the students and the student performance-- they have more confidence. They feel-- they feel more secure here. They're getting that positive reinforcement that they need inside the classroom and outside the classroom.

I am proud to go to Gibson because knowin' the way Gibson started out and it wasn't that-- very good of a school and no one wanted to go here because of all the bad things people were hearing about it. And now you're hearing our principal is a great principal, got principal of the year. And Gibson is, like, one of the best schools of the nation now. Yes, I'm very proud to go here.

DR. LINDA ARCHAMBAULT:

I think the role of the middle school is to prepare the students for high school and that it's critical for their success in high school. If they don't go to high school with the basic skills that they need, and if they don't go with--to high school with the right attitude and the right work ethic, they're not going to be successful.

We do what we can to make sure that we're meeting their needs so that when they do go to Western or to any other high school in the city that not only are they prepared, but they shine as Gibson students.

JIM GLASSMAN:

HOW DO TRANSFORMATIONAL SCHOOL LEADERS GET THE RESOURCES AND TRAINING TO HELP TURN THEIR SCHOOLS AROUND? SOMETIMES IT STARTS WITH ASKING FOR HELP.

ONE PRINCIPAL AT A RURAL APPALACHIAN HIGH SCHOOL HAS FOUND A WAY TO IMPROVE TEST SCORES AND INCREASE GRADUATION RATES THROUGH AN INNOVATIVE LEADERSHIP MENTORING PROGRAM OFFERED BY THE STATE OF KENTUCKY.

A HIGH SCHOOL PRINCIPAL'S JOB IS NEVERY EASY.

PRINCIPAL KEVIN GAY:

The gamut goes from being the-- a nurse to a janitor and sometimes to-- to a counselor or whatever. But-- generally it's-- it's an exciting day.

JIM GLASSMAN:

AND PRINCIPAL KEVIN GAY HAS LOTS TO DO TO KEEP LESLIE COUNTY HIGH SCHOOL IN HYDEN, KENTUCKY ON TRACK TO CONTINUE ITS SUCCESSFUL TURNAROUND.

PRINCIPAL KEVIN GAY:

I feel like my job as principal of the school is to support our-- teachers in teaching and learning and that my top priority is that our whole school is about student learning.

By constantly learning and looking at where we're at and where we need to go.

LAUREN LITTLE:

Mr. Gay is very active within the student population. He's always out walking around at lunch. You know, checking on everybody. He'll talk to you. He's very nice. He's a good guy, he's a great person and-- he's here for the right reasons.

JIM GLASSMAN:

LIKE MANY RURAL SCHOOLS AROUND THE NATION, LESLIE COUNTY HIGH FACES AGE OLD PROBLEMS.

DEWEY HENSLE:

Often, in-- in rural communities, you have high levels of poverty where there's been-- generational poverty over a period of time there's almost a status quo in some Appalachian counties, for example, where the same families stay at the same social strata over generations. That makes change sometimes very difficult. It also creates a culture or a mindset in the community that has to be changed.

PRINCIPAL KEVIN GAY:

When I first arrived at Lesser county high school we were-- identified as a persistently low-achieving school. We were identified as a bottom 10 school.

Only 15% of our students were scoring proficient or distinguished in mathematics that year and about-- 40% in language arts and reading.

JIM GLASSMAN:

EVEN WITH ALL ITS PROBLEMS, GRADUATION RATES WERE ABOVE THE 2008 NATIONAL AVERAGE AT 78%. BUT IT WASN'T GOOD ENOUGH FOR PRINCIPAL GAY.

PRINCIPAL KEVIN GAY:

I'm originally from this area and so I knew the teaching staff, I knew the students were capable of much more.

JIM GLASSMAN:

PRINCIPAL GAY SOUGHT AID FROM AN INNOVATIVE STATE PROGRAM TO HELP HIS EXISTING TEACHERS REALIZE THEIR POTENTIAL. THE KENTUCKY DEPARTMENT OF EDUCATION ASSIGNED HIM AN EDUCATIONAL RECOVERY TEAM.

DEWEY HENSLEY

We scour the state and find people who become educational recovery specialists. Those specialists are highly skilled. They go into the school, and they work in math, in literacy, and a third person who's a leadership person that works-- to mentor and support and help the principal.

That unprecedented amount of support to go into a single school is very valuable.

They work really hard to ensure that when they leave in three years-- two or three years, that as they leave, they leave behind strong teachers, a different attitude about the school, and measurable success

Susan Brock:

I have seen dramatic change in the time that I have been here.

JIM GLASSMAN:

SUSAN BROCK WAS BROUGHT IN TO WORK DIRECTLY WITH PRINCIPAL GAY AND THE ADMINISTRATIVE STAFF.

SUSAN BROCK:

We actually began by something that most businesses do which is looking at a vision and mission statement. You know, without a vision the people perish and that's kind of what we've dealt with here. Is that we do have to have a school mission and vision.

DEWEY HENSLEY

In persistently low achieving schools, really in all schools, but-- it's magnified in persistently low achieving schools, is the idea of culture. A leader and the people inside that building, they create the culture.

JIM GLASSMAN:

PART OF THAT CULTURE IS MAKING SURE THAT STUDENTS FEEL INCLUDED AND VALUED IN THEIR OWN EDUCATION.

SUSAN BROCK:

We had to change the mindset that we were not making change or trying to increase student achievement because of test scores. That test scores are just a result of students actually learning and becoming college and career ready and going on to whatever their post-secondary-- ambition is.

TROY NAPIER:

When I come in as a freshman-- every-- it was a really different. Not much work. Not much homework. The teachers didn't really teach you that much. And as the years went on you could tell that there's a big change because you had more homework and teachers worked harder. The administration worked harder. Everybody was just all in one together for a certain purpose.

When I see somebody doing that it makes me want to work hard myself.

DEWEY HENSLEY

If we're able to take those kids from the fringe and make them feel that they belong, make them feel that the school is theirs to a degree and that they're valued and significant in the school, then what we do is we give them that sense of belonging.

Our ability to create that sense of belonging is a first step toward dealing with disenfranchised students who become our dropouts.

JIM GLASSMAN:

WITH A VISION AND CULTURE OF HIGH EXPECTATIONS IN PLACE, PRINCIPAL GAY AND THE EDUCATIONAL RECOVERY STAFF BEGAN TO INTRODUCE NEW PROCEDURES AND PROTOCOLS.

PRINCIPAL KEVIN GAY:

Initially they helped develop processes and systems. And early on in the turnaround process we had so many processes that needed attention that it was really-- important for them to be here to help gain that critical mass that we needed for school turnaround.

JIM GLASSMAN:

THE NEW SYSTEMS DEAL WITH ALL ASPECTS OF SCHOOL LIFE - INCLUDING DISCIPLINE, SCHEDULING, COMMUNICATIONS AND PROGRESS REVIEWS.

SUSAN BROCK:

We work from a plan, a school improvement plan, that's very tailored to what we do here. We refer to it as a 30/60/90 day plan because we monitor very closely every 30 days. We don't work in the dark. We use the data and we make decisions based on the data. Individuals student data and school data.

CYNTHIA COLLETT:

We've changed our communication flow. Instead of it being teachers are not really sure what's going on, we know first hand what's going on. We're always in touch with what's going on with the administration.

SCOTT MELTON:

The administration supports the teachers now a lot. It's not a one-way path. We can talk to them, tell them, make suggestions, and they do their best to-- to try to help us with that.

JIM GLASSMAN:

THE EDUCATIONAL RECOVERY TEAM ALSO INTRODUCED PROFESSIONAL DEVELOPMENT FOR INSTRUCTORS

SUSAN BROCK:

ERS stands for educational recovery staff specialist. There are ERSs are in math and language arts

SCOTT MELTON:

Our-- educational recovery specialists, she's in our classrooms just about every day. We have meetings with her at least once a week.

SUSAN BROCK

Working with teachers here and building the capacity to identify individual student needs and work with those has made the most difference.

SCOTT MELTON:

We test children throughout the year, and we find the gaps-- in their education, what things that may have missed or forgotten. We try to fill in those gaps and catch them up to where they're supposed to be. And I think that's one of the reasons we've done so well in the last couple of years.

LAUREN LITTLE:

We've got a great staff here at Leslie County High School. They always, you know, want to help you and if you need extra help they'll-- you know, stay with you after class or help you with problems that you may have.

KEVIN GAY:

We've talked about how the conversations have evolved from management-type issues into 99% of all our conversations are about student learning. If you go talk about to teachers it's about student information, student data that they have, and what we can do to improve. And I think that's a true indicator of a successful school.

JIM GLASSMAN:

SINCE THE PROGRAM WAS INTRODUCED IN 2009, LESLIE COUNTY HIGH SCHOOL HAS ATTAINED BOTH A HIGHER GRADUATION RATE AND BETTER STUDENT ACHIEVEMENT.

PRINCIPAL KEVIN GAY:

The school's performance is wonderful. Our mathematics percent proficient and distinguished is at 53%-- Our-- our reading scores, proficient and distinguished, are at 83%. So it's been a huge increase over the last two years.

JIM GLASSMAN:

WHICH RANKS THEM 27TH OUT OF 250 HIGH SCHOOLS IN KENTUCKY.

PRINCIPAL KEVIN GAY:

What makes me most proud about the school is our students and their effort and how proud they are of their accomplishments that they've made over the past two years.

We've talked to them and talked to them about giving their best effort. And that's all we can ask of them. And they've done that.

LAUREN LITTLE:

After high school I'm probably going to go college. I haven't decided where yet, but-- probably major in biology. Go pre-med and then go to med school.

SCOTT MELTON:

I want them to understand that just because they're from eastern Kentucky doesn't mean that they can't score well on a test, that they can't go to college and be whatever they want to be. That's the truth.

JIM GLASSMAN:

AS WE'VE SEEN, TRANSFORMATIVE SCHOOL LEADERS SET A CULTURE OF HIGH EXPECTATIONS FOR STUDENTS, TEACHERS AND EVEN THEMSELVES. THIS ATTITUDE OF ACHIEVEMENT CAN GO A LONG WAY TO BOOSTING AMERICAN GRADUATION RATES.

THIS CONCLUDES OUR 2-PART LOOK AT THE NATIONAL DROPOUT CRISIS THROUGH THE AMERICAN GRADUATE - LET'S MAKE IT HAPPEN INITIATIVE.

FOR IDEAS IN ACTION, I'M JIM GLASSMAN.

THANKS FOR WATCHING.

Ending America's Dropout Crisis Part 1: Middle School Intervention That Works

2012-01-26T19:28:26Z

]]> Ending America's Dropout Crisis Part 1: Middle School Intervention That Works

JIM GLASSMAN:

WELCOME TO IDEAS IN ACTION, A TELEVISION SERIES ABOUT IDEAS AND THEIR CONSEQUENCES. I'M JIM GLASSMAN.

THIS WEEK - WE BEGIN A TWO-PART EXAMINATION OF THE HIGH SCHOOL DROPOUT CRISIS IN AMERICA. IT'S PART OF THE CORPORATION FOR PUBLIC BROADCASTING'S PROGRAMMING INITIATIVE: AMERICAN GRADUATE - LET'S MAKE IT HAPPEN, DESIGNED TO HELP LOCAL COMMUNITIES ADDRESS THE NATION'S DROPOUT CRISIS.

EVERY YEAR, 1.2 MILLION AMERICAN HIGH SCHOOL STUDENTS DO NOT GRADUATE ON SCHEDULE, AND MORE THAN ONE IN FOUR FAIL TO EARN A DIPLOMA. IN TODAY'S GLOBAL ECONOMY, IT IS IMPERATIVE THAT AMERICA IMPROVES THE RATE OF HIGH SCHOOL GRADUATION SO THAT STUDENTS EMERGE CAREER AND COLLEGE READY.

WE'LL TAKE A LOOK AT TWO ELEMENTS KEY TO SUCCESSFUL EDUCATIONAL TURNAROUND: TARGETED MIDDLE SCHOOL INTERVENTION AND EFFECTIVE SCHOOL LEADERSHIP. WE'LL TALK TO EXPERTS AND VISIT SCHOOLS THAT ARE TAKING CONCRETE STEPS TO INCREASE HIGH SCHOOL GRADUATION RATES.

THE TOPIC THIS WEEK: MIDDLE SCHOOL INTERVENTION THAT WORKS. THIS IS IDEAS IN ACTION.

THEY'RE CALLED "DROP OUT FACTORIES" - AMERICAN HIGH SCHOOLS WHERE FEWER THAN 60% OF STUDENTS MAKE IT TO GRADUATION DAY. TODAY, ABOUT ONE OUT OF EVERY TEN HIGH SCHOOLS FIT THE DESCRIPTION. THEY ARE CLUSTERED IN LARGE CITIES AND POOR RURAL AREAS ALIKE. AND FOR THE MORE THAN TWO MILLION STUDENTS ATTENDING THESE DROP OUT FACTORIES, THE OUTLOOK IS GRIM.

ROBERT BALFANZ:

Currently, the nation has a graduation rate of right about 75 percent. Which means that there's about a million kids a year that are not getting their diplomas on time. There's four million in the Class of 2010. Three million got diplomas in June. If you're in your 20s, don't have a high school degree, don't have a work history, are you ever going to work? Probably not. But every year, we're putting a million kids towards that future.

JIM GLASSMAN:

FOR MINORITY STUDENTS, THE PROBLEM IS EVEN MORE ACUTE, WITH A NATIONAL GRADUATION RATE OF ONLY 50 PERCENT FOR AFRICAN AMERICAN AND HISPANIC STUDENTS.

ROBERT BALFANZ:

Really the intersection is between poverty and dropping out. But because poverty rates are higher among minorities, we then get higher minority dropout rates.

LINDAN HILL:

Just because a kid is poor, or their parents are poor, doesn't mean that they don't have a lot of ability, that they don't have a lot of potential, because they do. Poverty, economic-- inequality, other kinds of inequalities mitigate against those kids having opportunities. It's not the ability that they lack. It's the opportunity.

JIM GLASSMAN:

RESEARCH SHOWS THAT MAKING SURE STUDENTS GET THOSE OPPORTUNITIES DURING MIDDLE SCHOOL IS CRITICAL TO INCREASING GRADUATION RATES. BY HIGH SCHOOL, IT IS DIFFICULT TO TURN MOST FAILING OR STRUGGLING STUDENTS AROUND.

BOB WISE:

The best news is that I think this country has finally woken up to the dropout crisis. And so a lot of attention is given to early warning indicators, particularly in middle school immediately capturing when a student is beginning to, one, miss a lot more class, number two fail a class, or number three, have disciplinary problems.

JIM GLASSMAN:

WE START BY LOOKING AT ONE MIDDLE SCHOOL IN DALLAS, TEXAS THAT IS BOOSTING ACADEMIC ACHIEVEMENT BY USING STUDENT ENGAGEMENT BOTH INSIDE AND OUTSIDE OF THE CLASSROOM.

THIS IS THE THOMAS C. MARSH MIDDLE SCHOOL AWARD-WINNING ROTC DRILL TEAM.

IT IS ONE OF THE SCHOOL'S HALLMARK PROGRAMS - DESIGNED TO INSTILL DISCIPLINE AND HIGH EXPECTATIONS IN STUDENTS FROM THE SURROUNDING DISADVANTAGED AND LARGELY MINORITY COMMUNITY.

CARLOTTA THOMAS:

We give all students that enter into this building a chance regardless of their background, their income level or their ethnicity. They have the opportunity to be the very best. And we insure our teachers with the skills and materials and to do so.

One of the reasons why we're one of the best schools in Dallas is due to our test scores, from last year. In writing we were 92% passing, reading we were 90%, math 90%, science 81%.

JIM GLASSMAN:

BUT SUCH ACADEMIC SUCCESS DIDN'T HAPPEN OVERNIGHT.

DAVID BATES:

In 1999, it wasn't the best of place to work. Lots of gang activity. Lots of bullying, fighting, you know. Our scores were low. We were I guess-- you know, everything you would think of a big, large urban school district, public school kids. I guess that's what, you know, if you wanted to sum it up.

JIM GLASSMAN:

CORPORAL DAVID BATES WAS HIRED IN 1999 SPECIFICALLY TO ESTABLISH AN ROTC PROGRAM AS PART OF AN OVERALL PLAN TO BOOST STUDENT PERFORMANCE. GETTING STUDENTS ENGAGED IN SCHOOL IS A BIG PART OF THAT EFFORT.

DAVID BATES:

We started with nothing. And then we started fund-raisin'. We started getting uniforms. We started getting, you know, materials. I started writing my own curriculum.

Four or five years later, we had all kinds of gear, and we started winning competitions. That's when we got a little bit of-- people-- "What's going on over there?" A typical school day okay always starts off with you know, we call to attention and we tell them to take their seats. They all sit down the same way. Procedures are huge, the way we pass out folders, you know, the way I go over to calendar every single day, the way we take notes, the way we sit, the way we stand, the way we walk. Once I get that regimen in, it becomes real easy.

I teach-- first aid-- land navigation, time management, organizational skills, history. I do what's called effective Army writing, and basically its just good writing skills. (LAUGH) I-- I-- I call it that, and the kids think it's, (LAUGH), you know, something different. But-- but really it's g-- just good writing.

CARLOTTA THOMAS:

Kids who are involved tend to have better grades and go on to graduate from college. So we do encourage for them to do something besides just coming to school.

ABRAHAM TEKLE:

I joined ROTC because I wanted to have the right to say that I was part of some of the trophies that are up there.

DAVID BATES:

When the kids perform for me, they perform at a high level and they don't want to let me down, so when I just put little things on the table like, "We do better. Your scores need to be better. You better do this, you better do that," they don't want to let me down. It's been okay not to pay their bills. It's been okay, you know, not to get a referral. It's been okay. You know, at home, that's what it's been, it's just been okay. Well, that average, okay stuff is not good enough here.

JIM GLASSMAN:

COACH BATES SETS HIGH EXPECTATIONS, EXPECTATIONS THAT MIRROR THOSE OF THE SCHOOL AT LARGE.

CARLOTTA THOMAS:

We expect for students to have A's or B's on report cards. We expect them for them to go to tutoring if they need help. We expect for them to read. We expect for them to do science fair projects. We expect for them to be dressed appropriately for school and to have great behavior. So anything that we want them to do we expect for them to do at their very best.

NATALIE FRANCO:

The reason I joined ROTC is because I liked, I like what the program does. It changes people life. What changed my life was-- from being out there in the street, like, just being bad, stuff like that. And once I came in here I learned discipline, how to treat people, how to respect people, how to respect my elders-- parents, why they're here for us, why they do so much for us. And we are going to do something for them when we grow up.

JIM GLASSMAN:

FOR SOME STUDENTS, MEETING THE EXPECTATIONS OF THE ROTC PROGRAM CAN BE QUITE A TRANSITION.

ABRAHAM TEKLE:

It's really up to them to see if they want to change because if you want to be in ROTC, you have to change. Like, you can't just be slacking off. You can't get in trouble in school. That'll leave a bad reputation on your school.

STEPHANIE ESCOBAR:

When I put my uniform on, it's an amazing feeling. I am proud of myself. And it makes it makes you feel like you're actually doing something for your community. And I think that's really important.

It's like the most exciting thing. You're out there and everyone sees you. And they don't just see you as this person. They see you as a cadet at Marsh Middle School.

DAVID BATES:

The discipline-- is not what a lot of people think discipline is. Like, you know, the pushups and this, that and the other. It's the self-discipline, the discipline to do what is right when no one is looking. You know, that integrity starts to come into play with some of these kids, like they know that they got to do well or, you know, they'll hear it.

Bridgett Robinson:

That spirit of community and a spirit of giving and leadership-- has kind of trickled down from the ROTC down into our core classes and into an overall campus environment.

JIM GLASSMAN:

ALL THE TEACHERS AT MARSH MIDDLE USE JOB ASSIGNMENTS TO TEACH STUDENTS RESPONSIBILITY AND TO GET THEM INVESTED IN THEIR OWN EDUCATION.

Bridgett Robinson:

One way to make them engaged and feeling important is to give them a job or a task to do. And so if we are doing a collaborative activity in a group, you might make one the actual spokesperson; you might make another one the actual person that is collecting the supplies afterward and sort of cleaning up the area. And you might make one-- the actual writer, the person that's actually writing the data down.

DAVID BATES:

The kids all have jobs. When you give a kid a job, he takes it seriously. But here, just passing out folders, not really a great job, but it's their job. They take it seriously.

JIM GLASSMAN:

IN THE ROTC PROGRAM JOBS RANGE FROM MENIAL TO MANAGEMENT.

NATALIE FRANCO:

My position here in JROTC, I'm commander officer. I lead morning. I lead every single day through all these students that come in here. They look up to me. And they would like to be there one day.

STEPHANIE ESCOBAR:

Especially being a CO...I learned that I could be a leader, no matter what it is, no matter what occasion it is. I learned how to be committed to something. And if you stay committed to something, you know you can achieve anything you want.

JIM GLASSMAN:

WHEN STUDENTS ARE ENGAGED AND WELL-BEHAVED, IT IS EASIER FOR TEACHERS TO DO THEIR JOBS.

BRIDGETT ROBINSON:

If you're able to teach, then you're able to get results. If you're able to relate to the kids and there's less distractions with other outside of the classroom items-- then, you're able to get the results that you need.

JIM GLASSMAN:

IT'S BEEN 13 YEARS SINCE COACH BATES STARTED THE ROTC PROGRAM AT MARSH MIDDLE. HE'S GONE FROM 78 TO 317 STUDENTS - ABOUT A THIRD OF THE STUDENT BODY NOW PARTICIPATE IN THE PROGRAM. AND WHILE HIS DRILL TEAM HAS WON NUMEROUS NATIONAL CHAMPIONSHIPS, HE IS MOST PROUD OF HIS STUDENTS' HIGH SCHOOL GRADUATION RATE OF 97%. BUT HE'S NOT DONE YET.

DAVID BATES:

Everybody's high school graduation, high school graduation- well, I'm at the point now where I want to take it another step. The high school diploma, it's not-- it's not as good as it used to be. My hopes, and goals and dreams for the kids - 100% graduate from college.

CARLOTTA THOMAS:

We do talk about college a lot at our campus. Our campus has become a branding campus for college. If you walk around-- classrooms in this school you will see college bulletin boards, college projects. The students can wear college t-shirts, we have a college week and we take them on college field trips. We understand you're going to go to high school. So we just decided to take it a step further - to make sure that you're going to be a college graduate.

LAUREN SHAW:

That's our way of showing them, "This is our culture. This is what we're-- we do at this school: We talk about going to college. So everything that we do, it's about going to college." When they know the end goal, they understand it. They know the reasoning behind why we do things the way we do them.

ROBERT VACQUEZ:

ROTC, helped me prepare to go to high school. Because-- as-- when I came into this program, I didn't know, you know, a lot of leadership skills. So when I walked in, right away I knew I was going to be a leader.

STEPHANIE ESCOBAR:

It really helped because it helped me to be disciplined and organized. And it just helps so much with my grades. I had A's all year, never C's. It was just because of the ROTC program.

CARLOTTA THOMAS:

The kids love Coach Bates. They respect him. They do not think he's too firm. They understand that he has a goal for them so they want to live up to that goal and they do not want to disappoint him. They truly love Coach Bates.

DAVID BATES:

I like to think my students are the best in the world, and that's-- I know 100% of the time, they are the best in the world when they're with me. Sometimes (LAUGH) when they're not with me, they're not the best in (LAUGH) the world. But that's what we're-- that's what we work on every day.

LAUREN SHAW:

The kids are special here at Marsh Middle School because they understand that, in spite of some of their circumstances, that it they will achieve. They understand that no matter what "I can make it. I will go to college."

JIM GLASSMAN:

NEXT... WE'LL VISIT A MIDDLE SCHOOL IN INDIANAPOLIS, INDIANNA, THAT IS USING INDIVIDUAL LEARNING DATA TO IDENTIFY STUDENTS WHO ARE STRUGGLING IN CLASS. THOSE STUDENTS THEN GET THE HELP THEY NEED TO EVENTUALLY GRADUATE HIGH SCHOOL AND PREPARE FOR A SUCCESSFUL FUTURE. A NUMBER OF INGREDIENTS IS NEEDED TO INSURE STRONG MIDDLE SCHOOL ACADEMIC SUCCESS.

THE STAFF AT HARSHMAN MAGNET MIDDLE SCHOOL IN INDIANAPOLIS, INDIANA HAS FOUND A WINNING COMBINATION TO HELP EVERY STUDENT SUCCEED REGARDLESS OF HIS OR HER BACKGROUND.

ROBERT GUFFIN:

We have approximately 410 students in the school, of which 87 percent are free-and-reduced lunch. We have approximately 60 percent African-American, 30 percent Hispanic, ten percent white.

LINDAN HILL:

this school is a story of remarkable turnaround. And the principal and the faculty and the staff that the principal has gathered here has really, really embodied the whole sense of leading change, of establishing a sense of urgency, establishing a vision.

JIM GLASSMAN:

BEFORE PRINCIPAL GUFFIN ARRIVED IN 2009 MANY STAFF MEMBERS ASSUMED THAT THE MAJORITY POOR STUDENT BODY COULDN'T OR WOULDN'T LEARN. THE STUDENTS BELIEVED IT TOO.

ROBERT GUFFIN:

Students were out in the hallways on a regular basis, not attentive in class. Heads were down. Some students wanted to go to sleep. There were fights in the building on a regular basis. We decided that that had to change.

JIM GLASSMAN:

THOSE CHANGES RESULTED IN SIGNIFICANT ACADEMIC IMPROVEMENT FOR HARSHMAN'S STUDENTS. IN PRINCIPAL GUFFIN'S FIRST YEAR, LANGUAGE AND MATH SCORES ON THE INDIANA STATE TEST IMPROVED BY 9%. IN HIS SECOND YEAR, THEY IMPROVED BY AN ADDITIONAL 28%.

IT WAS THE GREATEST IMPROVEMENT IN TEST SCORES BY ANY MIDDLE SCHOOL IN THE ENTIRE STATE.

SO HOW DID THE STUDENTS AND STAFF MAKE SUCH GREAT STRIDES IN JUST TWO YEARS?

ONE KEY FACTOR WAS COLLETING DATA ON EACH AND EVERY STUDENT TO DETERMINE WHERE HELP WAS NEEDED.

WHITNEY NEWTON IS IN CHARGE OF GATHERING, ANALYZING AND DISSEMINATING THE DATA.

WHITNEY NEWTON:

The way that we look at students is each student is a holistic person. And we want information about them that will help us meet their needs across the board, everything from what they need in math to what they need at home and everything in between. So when we're collecting and analyzing data, we want lots of different pieces about each student.

ROBERT GUFFIN:

we are constantly-- looking at how our students perform today and-- and how we can take that information as a teacher and 10:51:58:00 How can I take the information--as a teacher and use that to inform my instruction? What did they do? What do they know? Did they meet the objective that we planned for our classroom?

WHITNEY NEWTON:

So it's really looking at the goal for the end of the year which is broken down into the goal at the end of each unit, which is broken down into the goal at the end of each day. Alright. What are we going to do to get there?

JIM GLASSMAN:

THE GOAL AT THE END OF THE SCHOOL YEAR IS TO PASS AN EXAM THAT MEASURES A STUDENT'S PROGRESS ON BASIC ACADEMIC SUBJECTS: IT'S CALLED "THE INDIANA STATEWIDE TESTING FOR EDUCATIONAL PROGRESS PLUS" - OTHERWISE KNOW AS ISTEP.

ROBERT GUFFIN:

We'll take that ISTEP exam, look at where our deficiencies in our students were. And-- and we will use that to plan an overall plan for each nine weeks or each semester or the entire year.

We look at where students are strong, where students are weak. And how can we shore those areas up?

JIM GLASSMAN:

IN ADDITION TO UNIT EXAMS AND REPORT CARDS EVERY 9-WEEKS, THE STAFF AT HARSHMAN USES 6-QUESTION MINI-TESTS CALLED "SCRIMMAGES" TO BENCHMARK STUDENT PROGRESS.

WHITNEY NEWTON:

So we're looking at, every three weeks, "Did they get the standards that were in the pacing guide from the previous three weeks? And how-- how are they doing with that?" As the coaches, we roll that data out to the teachers and give them a chance each month to look at that data as a team-- analyze it, put it together, separate it into different formats, whether it's by standard or by-- sub-group.

JIM GLASSMAN:

TEACHERS COLLECT DATA ON A DAILY BASIS USING WHAT HAS COME TO BE KNOWN AS AN "EXIT TICKET."

ALEASE MONGER:

An exit ticket is basically, like, going over, like, basically what we learned in that class at that time. And we do it at the end of the class, like, before the bell rings.

JAKE BURSKEY:

It doesn't always have to be an official thing. But I always end a class with a wrap-up activity. it can be just asking questions, going into individual groups and asking individual kids-- and asking them in a way that they've got to think about what we've learned on a higher level.

JIM GLASSMAN:

COLLECTING ALL OF THIS DATA IS ONE THING BUT ORGANIZING IT IN A USEFUL WAY IS QUITE ANOTHER.

WHITNEY NEWTON:

Because we have so much data that we're collecting and we're really trying to organize it for teachers, a lot of them are using data, but it's not very effective for them from their perspective because they have it in a packet here, in a file here, and it's on this computer program and here on this website. And so what we tried to do was bring it all together onto one database-- very simple, just a two-column spreadsheet online that all the teachers can access at any time.

JIM GLASSMAN:

FOR EXAMPLE, IF TEACHERS FIND THAT 40-PERCENT OF THE STUDENTS ARE STRUGGLING WITH A TOPIC, THEY WILL CONTINUE TO EMPHASIZE IT.

JAKE BURSKEY:

Part of my learning as a teacher is to use assessment as a tool to drive my instruction. So I may set a unit to last two weeks. But if they're not getting it, I've got to continue to incorporate those while staying on pace with the curriculum.

JIM GLASSMAN:

IF ONLY ONE OR TWO ARE HAVING DIFFICULTY, THOSE STUDENTS CAN GET PERSONALIZED HELP FROM ONE OF THE INSTRUCTIONAL SPECIALISTS.

MEE HEE KIM:

We pull out these students during their elective period, and work with them one on one, or a small group setting to master these standards in a really individualized, instructional kind of experience that they can't get within a normal classroom

JIM GLASSMAN:

THE EDUCATIONAL SPECIALISTS ALSO USE A STRATEGY CALLED FRONT LOADING IN MANY OF THEIR ONE-ON-ONE TEACHING SESSIONS.

MEE HEE KIM:

We kind of pre-teach them what they're going to be learning that day, so they're exposed to the vocabulary. They're exposed to the skill a little bit.

ROBERT GUFFIN:

It allows them to be-- the person in the classroom who has their hand up first. It allows them to be the person in the classroom who people look to for the answers. The confidence that they gain and the pride that develops becomes something that is immeasurable and allows students to grow and begin to know, "I can do this."

DANIEL ESTRADA:

After I worked with Mr. Spencer, it was good because I could understand how the problem worked out. And it was cool.

JIM GLASSMAN:

PRINCIPAL GUFFIN AND HIS STAFF FEEL THAT SHARING THE DATA WITH THE STUDENTS THEMSELVES IS A KEY TO ACADEMIC SUCCESS.

WHITNEY NEWTON:

The teachers in their classes, so math and language arts, all took their ISTEP scores, handed them out to students, and had them fill out a reflection individually so that they could look at, "What was my score? What do I want my goal to be? Why was that my score? Why do I want this to be my goal?" and just really allowed each student to see, "Where am I-- in comparison to where I'm supposed to be this year.

JACOB SPRINGER:

Teachers here a strict, but also want you to have fun, be safe, to do what you got do to get the job done.

WHITNEY NEWTON:

So-- it's really exciting, though, to hear kids say, "I didn't pass ISTEP last year but I'm going to pass it this year." It's really powerful to hear a student take that ownership and advocate for themselves and say, "I want to pass ISTEP this year so I am coming to your tutoring this week."

We're teaching to our students, where they are, where they're coming in, and where we want them to be, to be-- successful and move on to high school and college and jobs that allow them to be happy.

ROBERT GUFFIN:

I've never known a student that has come to school and said, the first day of school, "this year, I'm going get in trouble." Every student that comes to this school wants to succeed. And every year, they start out with, "I'm going to be my best that I can be." And how we respond to them makes a huge difference in how they behave in school.

JACOB SPRINGER:

If you get good grades that means you'll get far in life. And you'll have a house, good wife, you'll-- you get good grades, you get to be anything you want to be.

JIM GLASSMAN:

MARSH MIDDLE IN DALLAS AND HARSHMAN MIDDLE IN INDIANAPOLIS ARE JUST TWO SCHOOLS MAKING THE KIND OF POSITIVE CHANGE THAT IS HAPPENING ALL OVER THE COUNTRY.

BUT THERE'S STILL MORE TO BE DONE. JOIN US NEXT TIME WHEN WE TAKE A LOOK AT ANOTHER STRATEGY TO CURB AMERICA'S HIGH SCHOOL DROP OUT CRISIS -TRANSFORMATIVE SCHOOL LEADERSHIP THAT WORKS.

THAT'S IT FOR THIS WEEK'S IDEAS IN ACTION. I'M JIM GLASSMAN, THANKS FOR WATCHING.

High Frequency Trading and the Future of Finance

2012-01-19T15:44:28Z

When people think of the stock market, they think of Wall Street. But the world of finance is changing, and high-powered computers and high frequency trading methods are quickly taking on a larger role. Is this safe, and who wins and who loses?

]]> IDEAS IN ACTION with Jim Glassman
High Frequency Trading and the Future of Finance

JIM GLASSMAN:
Welcome to Idea in Action, a television series about ideas and their consequences. I'm Jim Glassman. This week, it's called "high frequency trading." And it is changing the way Wall Street works. Computers, using complicated algorithms, make trades in milliseconds, moving markets, and gaining and losing millions in the blink of an eye. This turbo-charged investing has caught the attention of financial regulators. But defenders say the real winner is the small investor, benefits from added liquidity, and reduced trading costs. Joining me to discuss the benefits and risks of high frequency trading are Ted Kaufman, professor of law at Duke Law School and former U.S. Senator from Delaware. Cameron Smith, president of Quantlab Financial, a high frequency trading firm. And Adam Sussman, director of research at the TABB Group, financial research company. Topic this week, high frequency trading on Wall Street. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never-ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
Welcome all. Yeah, Cam-- Cameron, before we get too deeply into high frequency trading, can you just explain how it works? I mean, I've heard that the-- the average amount of time that-- that a company like yours holds onto a stock is, like, you know, three tenths of a second or something.

CAMERON SMITH:
No, I don't-- I don't think it's quite that fast.

JIM GLASSMAN:
Well, just-- just tell us how it works.

CAMERON SMITH:
All right, well-- maybe in-- an example would be the best way to-- to talk about it. So take-- take a stock like-- United Airlines. What-- what we do is take in all the data regarding United Airlines. You look at the stock, you know, buys and sells, right? Then maybe also you would also look at-- related securities, so other airlines. And what you're trying to do is-- like, Benjamin Graham or Warren Buffet, they would look at the value of a stock, you know, in 10, 12 months or whatever, right? Based on book value, something like that.

What we're doing is we're trying to determine fair value also, but not fair value, you know, in 12 months, but fair value at 9:42 and 11 seconds, and then at 12 seconds. So-- 'cause this is a continuous market. You have to value the stock at every moment in the trading day.

So again, you would look-- so taking United Airlines. You'd look at related sec-- related securities, maybe you're looking at the price of oil, because oil impacts-- airline stocks, potentially. Maybe you're looking at affects. You're looking at whatever indicators are going to help you. And you-- and you don't-- these indicators are-- you're looking at the market itself. The market's telling you what it should be priced. And you're making-- you're making your bet as to what--

JIM GLASSMAN:
The way you say "you" you mean the computer?

(OVERTALK)

CAMERON SMITH:
The-- the-- well, the-- the algorithm. Yes, it's programmed by people, but--

JIM GLASSMAN:
That-- for example, if the oil price goes way-- you know, moves up, a minute ago, and you figure, "Well, that's-- that's going to be bad for an airline, but it's not really quite reflected in the price of the airline," your-- your computer is saying, "Sell"? Is that r-- is that--

(OVERTALK)

CAMERON SMITH:
It could-- it could be. It might not be as tangential, but-- but if you-- it might just be more buyers and sellers in-- in United or-- or-- or maybe other stocks. Southwest Airlines just moved and-- and we know that from past experiences those are correlated. So you might want to--

JIM GLASSMAN:
Okay, well, let's say you--

CAMERON SMITH:
--Buy or sell--

JIM GLASSMAN:
--Buy, but then something happens a second later or two seconds later, and then you sell. I mean, the-- high frequency trading is trading that is high frequency.

CAMERON SMITH:
No, I--

JIM GLASSMAN:
I mean, you sell pretty quickly after you buy, right?

CAMERON SMITH:
The holding periods can vary. I mean-- if you were able to buy and sell within microseconds or milliseconds, what-- which is what some people say, that's actually an arbitrage strategy. I can only speak for our firm. We buy with-- you know, we have to-- if you just bought-- on the offer, you got-- you got to wait till the market moves before you can make-- any-- any profit on that, right? So you need to wait-- you know, could be many seconds, could be minutes, it could even be hours, depending on how active the stock is.

JIM GLASSMAN:
The point about high frequency trading, though, is that it's very fast, as the name implies?

TED KAUFMAN:
Yeah.

JIM GLASSMAN:
And you're concerned about that?

TED KAUFMAN:
No, I'm not concerned that it's fast. I-- I'm concerned there's just been a great deal of change. Clearly, the-- the basic buying and sale of stocks has remained the same. Cameron's right about that. But we've gone to this thing now, where the vast majority of-- of what we're doing is controlled - over 60% is controlled by high frequency traders. And frankly, we really don't know what's happening with the high frequency traders.

We don't have the information like we used to have before. You had a ticker tape go on the old day. You had ticker tape. Everybody would see what the price was. You could find out who the dealers were. And so my concern is that when you don't have transparency. And I mean, transparency being the ability of-- of-- of an organization to find out what's going on in-- in-- in the markets.

Then you don't have transparency. Then it's awful hard-- to be sure that you have fairness. And so my approach is not that there's anything intrinsically wrong with high frequency trading. My point is that we've had a lot of change. There's a lot of money involved. We have-- don't have a lot of transparency, in terms of regulators being able to figure out what's going on. And therefore, in the past, when that's happened, we've had some very bad-- bad things happen.

We don't have all the information. What we need is what I've called for and a n-- bunch of people have called for and the Securities Exchange Commission's called for is a consolidated audit trail. Now basically you've got to have a situation where the regulators can see what's going on. They know what's going on. And they can regulate it.

JIM GLASSMAN:
And-- and h-- Adam, how important is that, to-- to-- for the regulators to find out what's going on? And maybe-- in kind of very much an ex post facto way.

ADAM SUSSMAN:
Right. I think that although the U.S. markets have probably more transparency than any other equity market structure around the globe that there is room for improvement. I mean, I think all three of us would agree that it's not a perfect market structure. Particularly as you look across different sized companies and how they trade. You know, in terms of the consodi-- consolidated audit trail, I think most people agree that-- you know, that some form of increased information in the hands of regulators is a good idea. What's being debated is more, you know, how much should it cost? And which is-- you know, depends on how frequently the information has to be reported.

JIM GLASSMAN:
But is-- is it even possible, except for a few months down the road, to find out what happened? In other words-- in other words-- has high frequency trading kind of prevented us from knowing today what this audit trail would look like?

ADAM SUSSMAN:
No, I don't think that there's anything inherently-- inherent about high frequency trading or even our market structure itself-- you know, that would prevent the regulators from being able to, you know, piece together a better understanding of-- of the markets. Everything's electronic. Electronic-- you know, electronic-- markets are inherently easier to piece together than markets where there would be no record-- you know, there'd be no file. We have an easier time going about this than most other markets.

JIM GLASSMAN:
So there's this-- this-- this mystery or lack of-- lack of transparency that you talk about, Ted. But what-- what are you worried about, exactly?

TED KAUFMAN:
Well, I'm worried about-- if you look back over our history and you find-- activities, financial activities that-- have a lot of money and a lot of change and no regulation, bad things happen. Look at derivatives. I mean, derivatives, basically, we had a lot of money in derivatives, a lot of change in derivatives. When from practically nothing to trillions of dollars. The Congress came in and-- and-- and passed with-- signed by the president, by Clinton, the-- the act to say that government cannot regulate derivatives.

And then you look at what happened. I mean, it was just an unmitigated disaster. Remember the junk bond thing? And Mike Milken, who was a big junk bond trader, he said, "Look, Ted, don't be worried about junk bonds, because-- no one's ever lost a dollar in junk bonds." Until everybody started losing millions of dollars.

It was the same thing with the savings and loan crisis. So I think as-- if you look at it from-- as a policymaker, you say, "Okay, wherever I've got a lot of change and a lot of money. I've got to be trans-- transparency. And I've got to regulate. Now we can argue about regulation in general. But in regulation specifically, in this case, I think there has to be some better idea of what's actually happening, because nobody knows. I mean-- Cameron says it. Adam says it. We don't really know what's happening. There's all kinds of allegations. But regardless of the allegations, what is-- we don't know what's actually happening.

JIM GLASSMAN:
Okay, so-- but what-- so, Adam, I mean, what-- what would your worries be about what's happening? Like, what-- I guess front running? I mean, someone who's trying to push up the price of a stock and then-- and then sell it? Is-- is that a problem?

ADAM SUSSMAN:
I think the problem is really in-- in small cap names, which is really, if you think about, you know, the economy and you think about jobs and you think about where-- you know, where growth is going to come from for the U.S., we need to do a better job of supporting our small cap names. And I think that's where today's market structure, where it really is geared towards electronic trading, and-- and kind of-- edged out-- the floor traders. I think that's-- we-- we need to, you know, create more opportunities for small cap stocks.

JIM GLASSMAN:
So what can happen to these small cap stocks? Are you saying that--

ADAM SUSSMAN:
Well, what happens is that--

JIM GLASSMAN:
--That the price can drop a lot or--

ADAM SUSSMAN:
Yeah, because there's not as much liquidity in those names. They tend-- you know, intraday volatility tends to be exacerbated in those names.

TED KAUFMAN:
There's another problem, yeah. There's another problem on small cap stocks. And that is there isn't much interest in them anymore. Essentially, most of this is about a hundred stocks, 95% of the stocks aren't being covered. So there's-- a wonderful article out by David Wilde, who used to be an executive with NASDAQ, when he talks about the pro-- this is a real problem for IPOs. That we're not having as many IPOs as we should. And we should be having IPOs, because everyone is moving their money and their interest towards the high frequency trading in the top 100 stocks.

But I think the real problem here is not-- you know, we can-- people can talk about front running and all these different things. And by the way, if you go overseas to England and to France and now Canada, they're doing in-depth studies on all these issues. But my concern is nobody knows. No one can tell-- unless someone comes forward from-- from a firm and says, "Yep, we do front running. Yep, we do this." But there's no way that anyone knows what-- what's happening there.

JIM GLASSMAN:
Whereas in the old traditional trading, you could see the paper trail, you could--

TED KAUFMAN:
Yeah, there were problems with specialists. I'm not-- I'm not saying there weren't problems with specialist. But I think--

JIM GLASSMAN:
Cameron thinks you couldn't before.

CAMERON SMITH:
Yeah, I-- I think, actually, it's-- it's exactly the opposite of-- of maybe the conventional wisdom in that because you had a floor-based environment, where people could look at each other. You'd know who was walking in with paper. "Oh, there's the Fidelity floor broker." Completely unregulable. Now we have a perfect audit trail. You-- you see everything.

And plus, unlike in the past, everyone sees everything at the same time. Just 'cause you-- you don't-- can't see the floor broker from Fidelity walking in the crowd anymore. There's no crowd. It's all automated. We're all on a level playing field with respect to information.

JIM GLASSMAN:
Adam, when Americans think of the stock market, they probably think of-- the New York Stock Exchange, traders on the floor, but only about 40% of the trading volume in America takes place on Wall Street. Where does the rest of the action take place?

ADAM SUSSMAN:
You know, over the last number of years, there's been-- financial regulations that have come in that have allowed competition-- among the exchanges. And part of that competition is off-exchange trading venues. Sometimes referred to as "alternative trading systems" or "dark pools." And that's really allowed-- you know, differentiated-- execution venues to come in and-- and offer a different type of service to-- to the trading markets. And that's-- that's kind of where that other-- that other-- volume is taking place.

JIM GLASSMAN:
So-- Cameron-- you know, almost 90 million Americans have money in the stock market. Should they be worried about all these-- these-- these other places, these dark pools, these strange places where trading is going on?

CAMERON SMITH:
Yeah, that's right. I think-- I think there is a real issue there that needs to be considered further. We've had a real dramatic change in the market structure over the last ten years. If you look back just into early 2000s-- for instance, the New York Stock Exchange had about 80% market share.

So we had very concentrating-- concentrated trading on-- on New York. And-- and to a lesser extent, but still similar, on NASDAQ. And the-- with the-- advent of reg-- regulation N.M.S. and-- and proliferation of dark pools and the like, actually no one venue has more than around 25% now. We've got about 10 or 11 exchanges, and honestly, I think you're going to have a lot more as time goes on. And in part, I think it's due to regulation. And I think there's something we need to do about-- about that, probably, going forward.

JIM GLASSMAN:
So just-- just to be clear, what-- what's regulation N.M.S.?

CAMERON SMITH:
Well, regulation N.M.S.-- among its many impacts was a rule tried-- that was attempting to insure that customers get the best price. But also part of it-- it had the effect of causing markets to go electronic. Which I think is generally a very good thing. But part-- also part of it is there's-- there's some concepts where you have to always route to the best price, which-- gets a little complex, but it-- it causes there to be a proliferation in markets, because of-- of-- of this obligation to route to the best price and because of-- inability to-- charge different prices to different customers. So you have-- again, it gets kind of complex, but you've had the proliferation of markets-- they were gone from one or two markets now to-- to-- if you start counting dark pools, you can get up into 40 or so.

TED KAUFMAN:
And to make it more difficult, as Cameron said earlier, there's this whole dark pool. I mean, we got to-- it isn't just high frequency trading, it's high frequency trading in an environment, where we have, you know, 40-- over 40 dark pools-- 14--

JIM GLASSMAN:
What is a dark pool?

TED KAUFMAN:
Well, a dark pool-- a dark pool is-- is-- is a way that you can trade where you don't have to trade on exchanges. The easiest way I can put it. The simplest way for folks--

CAMERON SMITH:
Yeah, it's called a "dark pool", because it doesn't disseminate. Because of regulatory reasons, it's bids and offers. So you don't really know what's in it. You just send your order in there and you say-- "Only execute me if I get, you know, a certain price," and it will. But I-- I-- I'd like to go back, actually, to this whole-- issue of-- fraud and-- and-- and the like. Put this in context. As Adam-- 'cause Adam said something earlier that I think-- you know, it gets lost in this conversation, 'cause we're rightly diving into the details, and we-- when we certainly should.

But by every measure-- you know, 'cause-- let's say we go to the doctor, right? We get our cholesterol checked. We get our HDL and get all these things checked. We have certain measures of health, right? We have very similar things in markets. We-- we-- we know about spreads and costs for-- we say a mythical institution who has to trade 500,000 shares. How much does that cost him? And we compare these costs over time. And by every measure, the markets have never been healthier. So--

JIM GLASSMAN:
Right, but Ted is talking about something else, which is-- could a bolt from the blue-- a cataclysmic event that could occur even if all these other metrics look pretty good.

CAMERON SMITH:
Of course, but I wanted to make sure we kept the context. But I'm happy to talk about the flash crash, if that's what--

JIM GLASSMAN:
Well, actually, let-- let-- let's talk about the flash crash. And the S.E.C. did determine that the flash crash-- was not-- caused by high frequency trading.

TED KAUFMAN:
Yeah, no, I think that they--

JIM GLASSMAN:
Isn't that correct?

TED KAUFMAN:
--Came out, but there's a lot of people that don't believe that was right. The main message I got out of the flash crash studies. It took six months to get it. Because I'm not, like, demonizing high frequency trading. What I'm basically saying is it's got to be regulated, folks. And if we don't know what's going on in this thing, then we can have all these-- appearances. And the real-- the way I got started on this, Jim, was my concern about the-- the-- the-- the amount of credibility of our-- our financial markets. I mean, Kellogg just came out with a report that said only 23% of the people trust our financial markets.

JIM GLASSMAN:
Kellogg Business School?

TED KAUFMAN:
Kellogg Business School. And, you know, that-- that to me is-- two things made this country great. One was democracy and the other was our financial markets.

JIM GLASSMAN:
Perhaps some of these machine-made algorithms, if you get into a bad situation, could-- the-- the flash crash, which was a thousand point drop in a few minutes, I mean, that-- that-- that could happen in-- at-- in multiples.

CAMERON SMITH:
Yeah, but the-- I think the lesson of the flash crash was the danger of when you have an automated market, which doesn't have a human there to stop it. And actually, the U.S. equity market is the only equity-- I mean, we trade globally-- in every asset class pretty much. And it's the only market I can think of that does not have some kind of circuit breaker-- some kind of bumper, in a sense.

So if it starts to go down, something kicks in at the exchange level. It was the only market-- in fact, on the day of the flash crash itself, this was made completely obvious when the-- both the C.M.E., the futures market, was heading down, the equities market was heading down, and then a mere five second pause and the C.M.E. marked the bottom, a five second pause.

JIM GLASSMAN:
C.M.E.?

CAMERON SMITH:
The Chicago Mercantile Exchange-- the main futures market. And that rebounded it. That was the bottom of it. There was no issue. We might not even be talking about the flash crash if there was a similar sort of safety pause in the equity markets. But there wasn't. Again, it was the only market that didn't have one. The S.E.C. has quickly moved in and implemented what they call circuit breakers.

So I think that's going to be a big help. And I think that would alleviate-- you can get all the benefits, 'cause I think-- 99% of the time, there's no question that automated trading's more efficient. It's going to-- it provide-- better prices for everybody. If you're worried about this 1%, where you're going to have a big move, then-- then-- then I think that's where you can put in these bumpers and the like that-- that replicate what a specialist would have done. 'Cause what would a specialist do if the market was really moving? He'd call a time out, pause, order imbalance, where should I reopen this market? He'd just-- so--And we can replicate that.

JIM GLASSMAN:
We do have those-- those time outs, right, built into the system?

TED KAUFMAN:
Yeah, but-- but-- but my point is there aren't any more specialists controlling it. There aren't any market makers. There's nobody to do this. This isn't just a problem with the computers, it's a problem of the-- as we talked to start out the show, talking about dark pools, the market structures, the total market structure problem. And that's what I've been trying to get the S.E.C. to do is there's been incredible change in the number of dark pools we have. There's been-- everything used to be controlled in the markets. There was-- we had market makers.

We made all these changes. And then high frequency trading is just one of the elements that's really had dramatic change. E-- even if you look at each one of these in their own place, you have to look at what the interaction of them are. And I-- and I'm-- I think the S.E.C. has not been-- for a number of reasons, has-- has not-- has not been as forthcoming as they could. And while--

JIM GLASSMAN:
So the-- so the S.E.C.-- so this is really-- a failure on the part of the S.E.C.?

TED KAUFMAN:
No, the-- the-- the S.E.C., for instance-- Mary Schapiro talked about consolidated audit trail.

JIM GLASSMAN:
She's the head of the S.E.C.

TED KAUFMAN:
Yeah, what, two years ago? She said she-- we should implement-- a consolidated audit trail. Here we are and we still haven't, you know, put it in place. We keep talking about it. And there are problems, as Adam said, about financing and the rest of it. But meanwhile, we let two years go by where we still don't know what's going on in-- in-- in the market. And when I talk to some of the leaders in-- in the exchanges-- in-- in the-- regulatory agency, they say it's going to be three years minimum to get the consolidated audit trail in place.

JIM GLASSMAN:
What would you like to see-- on the regulatory side to-- to obviate this problem that we've got?

TED KAUFMAN:
I'd like to see anyway we can get to transparency. I believe that when you have markets-- and I agree the-- the liquidity is at-- most of the time is-- because of high frequency is extremely high. But even liquidity, what's more important is transparency and fairness, because you have to have that regulated. Because that gets back to the whole idea of how do we keep maintaining American financial markets, as credible markets, is people have to believe it's fair.

And there's-- as I said, there's loads of studies going on, around the world right now-- looking into high frequency trading, in detail. I mean, incredible studies are going to be coming out here in the next six months or so. And I just don't want to see us in a situation where our markets are not as credible as any other financial markets in the world. That is the key to-- one of the keys to our success.

CAMERON SMITH:
The senator has-- has talked about the need for a consolidated audit trail, which I wholeheartedly agree with, large reporting system. That's all good. I want the regulators to have all the information and w-- that they need, but again, I think the market's never been more transparent. And you were asking before about what are we concerned about? What kind of problems, front running and all that. Totally less likely now, because what's gone on is you've got all these-- what we call high frequency traders, unfortunately, from-- but there's no barriers to entry in this business. There's a lot of people in it. So if somebody in-- any kind of active stock is putting in quotes or otherwise up to something-- I can guarantee you there's, you know, 25 other firms who are going to make sure that that doesn't--

(OVERTALK)

JIM GLASSMAN:
But it is dominated by a few firms, isn't that right?

CAMERON SMITH:
There's plenty of-- no, there's plenty of competition and plenty of firms getting into it or--

JIM GLASSMAN:
I just--

CAMERON SMITH:
--Competing.

JIM GLASSMAN:
I did want to bring up one other issue that people complain about-- as far as high frequency trading is concerned. And that is-- that firms are paying to have their computer servers as close to the trading facilities as possible-- because-- that little millisecond if it's in California or something to get to the New York Stock Exchange can count. Is that-- is that at all disturbing? Is that, like-- kind of an extra edge--

TED KAUFMAN:
Yeah, I think-- I think--

JIM GLASSMAN:
--That people have?

TED KAUFMAN:
Yeah, no, I think-- I think, you know, when you read the reports on it, they always say, you know, "Look, this is-- you know, this is-- this is just a way for us to get better data and the rest of it." But you've got to have the-- the high-speed computer. You've got to have the algorithm. If you're mom and pop, you're not in a business of-- of-- of being able to compete with this.

So collocation causes me a problem, in terms of what we have to do-- again, back to my basic rule. Is-- does it make it fair? Do people feel-- and does it add credibility? And collocation-- we had flash orders-- which-- which I think we pretty well straightened out. It just gives the impression that somebody's look-- you know, you're playing poker and one person's looking at the cards, like, a nanosecond before the other person is. And while I'm on it, the other thing that concerns me is that, you know, 90% of the trades are cancelled. So what is going on with that? I mean, what--

JIM GLASSMAN:
What does that mean?

CAMERON SMITH:
I was hoping to answer some of the other things. But-- on that--

JIM GLASSMAN:
Well, you can answer-- anything you want.

(OVERTALK)

JIM GLASSMAN:
We're running out of time, but-- very quickly.

CAMERON SMITH:
So typically-- there-- there's certain firms that-- what they call post orders. "I want to buy." "I want to sell." Right? Like you'd post an order in-- post something in a classified ad, let's say. But they change their mind all the time about where they want the bid to be, where they want their ask to be. And there's a lot of stocks. Let's say the futures moves. They decide, "Oh, I'm going to change my bid. I'm going to change my offer."

They change it a lot. They can't control when they get executed, but they can control what prices they're quoting are. So they change their-- senator's right, they're-- you know, I'm sure there's several firms that-- out of every hundred orders they put in, 90 of them they cancel and change before they interact with some-- before somebody comes and takes them.

JIM GLASSMAN:
And you're okay with collocation?

CAMERON SMITH:
Collocation, I think, is-- bespeaks of how competitive the market is. Why am-- why are we trying to shave microseconds or milliseconds? Because we're trying so hard to compete with another firm doing the same thing. We're not competing with the individual investor. The individual investor is the big beneficiary in this. We're doing completely different things.

JIM GLASSMAN:
And why is the-- why is the-- small investor the big beneficiary?

CAMERON SMITH:
Well, we-- first of all, we see it in the empirical evidence-- execution cost for retail investors have never been lower. So it's pretty much indisputable. And-- and the reason-- we're doing-- they shouldn't be concerned about the fairness aspect is because, again, we're doing different things. We're trying to capture millisecond, second, minute-- errors in pricing. Whereas most retail investors, including me when I just trade-- when I put an order in, I just think, you know, some stock's going to go up over six months or a year and I want to be in that sector, right? I just send the order in.

I'm not thinking, "Wow, it's 9:42 and 11 seconds, I want to buy on the bid and resell it on the offer." I'm not in that business. If I wanted to get in that business, I could. You can find firms that'll pay for your collocation on that. But-- I just want to own the stock for the next 12 months. And all I want to know is when I put that order in that there's a whole bunch of people in there fighting furiously to interact with me to give me the best price. And that's what's going on.

JIM GLASSMAN:
So-- and this is-- a good way to get in the last word, Adam.

ADAM SUSSMAN:
Sure.

JIM GLASSMAN:
Where does this leave the average investor, everything that's happening now?

ADAM SUSSMAN:
Sure.

JIM GLASSMAN:
Is this something to be concerned about? Ted talks about the lack of confidence in the markets. Cameron talks about the increased liquidity, the-- the lower cost to the average investor, I guess, the tightening of the spreads. Is--

(OVERTALK)

JIM GLASSMAN:
Where is the average investor in all that?

ADAM SUSSMAN:
Honestly, I think for the-- for the average investor-- and-- and just like Ted has his-- has his favorite topic on transparency, mine would be about, you know, making sure that the IPO market and that the small cap stocks are-- you know, that there's a different market for them or that we try to focus on how we can improve the market for those stocks. 'Cause honestly, if you're a retail investor and you want to own-- you know, you want to own a large swath of the market, you should just go buy a E.T.F. right?

JIM GLASSMAN:
Exchange traded fund.

ADAM SUSSMAN:
An exchange traded fund.

JIM GLASSMAN:
An IPO is initial public offer.

ADAM SUSSMAN:
Yeah, exactly. Sorry, so-- so I think that for the retail investor, you know, the concern is, you know, are the-- are today's entrepreneurs comfortable with, you know, the market structure that we have, comfortable with, you know, the regulatory aspects of-- of having a public company so that-- you know, that it actually encourages our best companies, our fastest-growing companies to come to market.

And on terms of buying-- you know, buying an airline stock or buying Google, I mean, yeah, it's cheap. You can do it. You're going to get a good price. No problem. I mean, the fairness aspects that-- that Ted were-- that Ted was referring to, actually, I think more apply to the competition within the high frequency trading firms than for the retail investor. It's-- you know, is there-- is there transparency into, you know, how-- how different high frequency trading firms-- compete with one another and, you know, any arrangements that they might have? I think for the retail investor, it's-- it's-- again, it gets back to the fundamentals of the economy and-- and the-- and, you know, IPOs.

JIM GLASSMAN:
But not if some cataclysm occurs, the retail investor, as Ted said, is going to be--

ADAM SUSSMAN:
Yeah, but I don't think that's got--

JIM GLASSMAN:
--Pretty upset about all this.

ADAM SUSSMAN:
That's got nothing to do with high frequency trading or dark pools. That has to do with, you know, the mismanagement of our economy as a whole.

JIM GLASSMAN:
Thank you, Adam. Thank you, Cameron. And thank you, Ted. And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to IdeasInActionTV.com or download a podcast from the iTunes store. Ideas in Action, because ideas have consequences.

ANNOUNCER:
For more information, visit us at IdeasInActionTV.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never-ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Rich State, Poor State: How Eliminating the Income Tax Helps Grow States' Economies

2012-01-11T19:15:52Z

With many states in the U.S. fighting for their fiscal health, there is a small but growing movement to ditch the state income tax for an increased sales tax. Would this policy stimulate growth, and whom would it truly benefit?

]]> IDEAS IN ACTION with Jim Glassman State Income Tax Program

JIM GLASSMAN:
Welcome to Ideas in Action, a television series about ideas and their consequences. I'm Jim Glassman. This week, do you live in one of the 41 states with a state income tax? Would you trade that income tax for a higher sales tax? There's a lively movement afoot in several states to do just that. Supporters say it would help revive the economy, but critics say it would raise prices for everyone, with most of the burden falling on the poor. Joining me to discuss this topic are Carl Bearden, executive director of United for Missouri, a group advocating for the repeal of the personal income tax in that state. Jonathan Williams, of the American Legislative Exchange Council and co-author of Rich States, Poor States, an annual comparison of economic competitiveness among the states. And Jon Shure, director of state fiscal strategies on the Center on Budget and Policy priorities. The topic this week: should states ditch the income tax in favor of a sales tax?

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never-ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com.

JIM GLASSMAN:
Today, only nine states have no income tax. But in places like Missouri and Oklahoma, there's a movement to expand that club. Supporters say states with no income taxes show stronger growth overall than states with high income taxes. But critics argue that eliminating the income tax increases the reliance on sales and property taxes. And that lifts the tax burden toward the poor, who spend a greater proportion of their income on necessities. Who wins and who loses, by ditching the state income tax? Welcome all of you to Ideas in Action. Jonathan, why is a statewide sales tax better than an income tax?

JONATHAN WILLIAMS:
Well, you know, I think legislators across the country are looking at state income taxes as a major inhibiting factor to economic growth, whether you look at revenue growth, whether you look at income growth, GDP growth at the state level or population growth, the nine states without personal income taxes across the country have vastly outperformed their high tax counterparts. And this is not only true in this past decade, but it's true over data over the last 50 years. Half century's worth of data, the no income tax states always come out on top. And as legislators look for ways to create jobs, make their states more competitive for business development, this is a big strategy that they're considering right now.

JIM GLASSMAN:
We're going to go over some of those numbers a little bit later in the show. Carl, Missouri. Missouri gets-- 68 percent of its revenues from state income taxes. And now you, among others, want to trade that in for a higher sales tax. But wouldn't the sales tax have to be really high in order to make up for all the revenue that's lost?

CARL BEARDEN:
No, not really. We-- taxing less than three percent increase in our sales tax from what we have now.

JIM GLASSMAN:
What-- what do you have now, by the way?

CARL BEARDEN:
We have-- 4.225 percent state sales tax. And then the locals all have varying rates on theirs. So we're talking about the state sales tax rate would go from 4.225 to seven percent, a slight increase again, under three percent. We would broaden our base. We're currently taxing about 25 percent of our GDP, our state GDP. And we could be taxing as much as 45 percent under this proposal. We would have exemptions in there for necessities of life, such as rent, childcare, health care, prescriptions, public transportations. All those basic needs that people-- buy every day.

JIM GLASSMAN:
So right now, the sales tax only applies to 25 percent of the state's gross domestic product.

CARL BEARDEN:
Correct.

JIM GLASSMAN:
So as you say, not food, I guess not rent, that kind of thing.

CARL BEARDEN:
Right. Food has a very small sales tax on it now. We continue to have a smaller sales tax. It would not be seven percent. So-- so the rest of the things, the rent, those sorts of things will not be taxed. They're not taxed now. They won't be taxed in the future. And that would help eliminate some of the regressivity concerns.

JIM GLASSMAN:
So what's wrong with that? I mean, why-- why would eliminating the income tax or replacing it with a sales tax with the same amount of revenue. That's the idea here. Why would that have bad consequence?

JON SHURE:
Well, first of all, we have to see if the same amount of revenue. There's an open question about that. But it doesn't just change what taxes are paid. It changes how they're paid. Right now, low and middle-income people spend a higher percentage of their income every year on buying things. Their taxes would go up under this. The wealthiest people, who get the biggest break from an income tax, they would get the biggest tax cut. So overall, state's ability to create jobs and build a strong economy would be hurt by a lack of resources. And the burden would fall most on low and middle-income people.

JIM GLASSMAN:
Yeah, how-- how do you-- how do you take into account the fact that-- that low-income people spent almost everything that they have on consumption?

CARL BEARDEN:
Well, the data's pretty clear. Again, if you eliminate the necessities that we don't tax and you get down to the basics, nothing used, for example, in this proposal would be taxed. So if you buy a used car, there's no tax. If you buy used clothing, there's no tax. So you eliminate a lot of those-- those sorts of areas.

But here's what we have. We know that people at $20,000 income spend quite a bit of their-- their-- income on those necessity of life. But we also know that the people making $200,000 spend a whole lot more than those at $20,000. And they-- they will be paying a large share of this revenue.

JIM GLASSMAN:
But they don't pay ten times more.

JON SHURE:
No, they don't. It's-- it-- the numbers don't work--

JIM GLASSMAN:
Not to make your argument for you--

JON SHURE:
The numbers don't-- no, the numbers don't work in that sense. It would seriously redistribute how-- how people pay taxes. But I'm also not convinced that it would make up the money that is-- that is lost. So the question is really states investing in what creates jobs. They won't be able to do it.

JIM GLASSMAN:
Well, we're-- we're actually assuming that it does. And I don't know whether these-- I think there has been some research on this that-- yeah.

CARL BEARDEN:
So-- so we know that-- that in our current base, just without expanding the base. If we increased the-- sales tax from 4.225 to seven percent, we're going to raise an additional $1.7 billion, out of the 4.4 billion we need to raise. We're broadening the sales tax base by $50 billion. That's the GDP expansion. 50 billion times seven percent. That's three and a half billion dollars. Three and a half plus 1.7, if I recall. It's been a long time since I've been in school, but 3.5 plus 1.7's 5.2 in excess of the 4.4 we're trying to replace.

JIM GLASSMAN:
Okay, so let's-- let's just-- let me ask you a basic question here, 'cause we don't want to get too much into the weeds of-- of too many percentages. But if you tax consumption, doesn't that hurt the economy? I mean, we keep hearing how we've got a consumer-driven economy. And when you tax something, you get less of it. So why-- why would we want to tax consumption? That would hurt the economy, right?

JONATHAN WILLIAMS:
Well, I mean, all taxes matter to growth, obviously. Just some matter more than others. If you look at, for instance, taxes on capital, some of the most mobile factors out there is capital is more mobile today, going all throughout the world. Even if you look at OECD, not really a conservative think tank, they said taxes on--

JIM GLASSMAN:
OECD stands for?

JONATHAN WILLIAMS:
Organizational Economic Cooperation Development, which is the major--

JIM GLASSMAN:
For the developed countries.

JONATHAN WILLIAMS:
In-- in developed-- economic countries said that taxes on capital, corporate income taxes, other taxes on capital-- are the most damaging to growth. And this comes from OECD, very non-- biased, non-partisan source.

JIM GLASSMAN:
In-- hold-- let me just stop. Is-- isn't that right though, Jon? I mean, you hear this. I think you hear this from economists of all stripes that the last thing you want to tax is investment, because investment is what creates job. If you have to tax something, you should tax consumption--

JON SHURE:
Well, states-- state-- well, there's a reason why most states have both a sales tax and an income tax, because that balance makes sense. In tough economic times, the sales tax might be-- perform stronger. In good economic times, the income tax brings in revenues that you can reserve for the future. That's why no state has gotten rid of an income tax in over 20 years, 'cause that balance makes sense. So if you don't-- if you-- if you throw away one of your most important tools for investing in jobs and economic growth and only rely on the other tool, you've lost the balance that makes so much sense and that works so well.

JIM GLASSMAN:
Let's explore this-- this issue of taxing consumption. I mean really, if you tax consumption, even a little bit more, you're going to get less of it, right?

CARL BEARDEN:
Well, it's interesting, because we-- we've taken over 100 grassroots people, just everyday people out of their communities to Tennessee-- our next-door neighbor who has no income tax, no individual income tax, and compare that. We let them shop $100 at a store at-- in Missouri and $100 buying the same things in Tennessee. And they found that that difference was very, very minimal, that on that $100, they may have paid two cents to $3-- two cents to $3 more. And so what we find is that that is not a large enough increase to drive consumption. If you-- if you-- went to 10 percent or above, I think then you might have that consideration.

JIM GLASSMAN:
But I hear people-- drive across the state line between Maryland and Delaware, where there's no-- there's no sales tax in Delaware.

CARL BEARDEN:
Right. So-- so the data actually shows that-- that you'll do most of your shopping where you live. And so with the-- with the exception of once in a while, major, big-ticket items, you're going to do most of your shopping where you live. We have that same situation in Missouri. Kansas Line and the Missouri line. You cross a street and you're in one state.

Kansas has a much higher tax on food, for example, than Missouri does. And yet we don't see all the grocery stores on the Missouri line. They're-- they're on the same side in Kansas. And so there is a flexibility. And what we're talking about is a small enough increase not to impact consumer credit. You know, as a former budget chairman in-- in the state of Missouri, I would-- I would gladly have traded a more stable revenue source over time as a sales tax than I would an income tax that goes way up and then goes way down, because it makes our life easier and the cuts in-- in government spending aren't quite as severe.

JIM GLASSMAN:
That is true though. Sales taxes are-- are more-- a more stable source of income.

JON SHURE:
In bad economic times. In good economic times, you need the-- the-- the revenue that you get from-- from an income tax. That's why the balance is good. But I want to go back to something. You know, what's radical about this is that if a state does this, they will have to have the highest sales tax they've ever had in their history. And they'll have to tax more things than they've ever taxed before. I've seen proposals to tax babysitting and prescription drugs.

So you know, it's-- it's kind of a radical experiment just to get rid of a tax that actually performs very well and is part of a balance. And you can compare Missouri and Tennessee. The average person in Missouri makes $2000 a year more than in Tennessee. So obviously Tennessee is not being hurt by having this-- this income tax.

JIM GLASSMAN:
Actually-- you talk about an experiment. This is a good time to take a look at some of these numbers that Jonathan was talking about from the study that looked at the nine states that don't have an income tax versus the-- the 41 states that do. As far as gross domestic product within the state, over 10 years from '98 to 2008, the growth in the nine states without an income tax was 86 percent. The nine states with the highest income tax, 60 percent growth in GDP. Population growth, nine states with zero, 16 percent, nine states with the highest, six percent. Non-farm payroll. So this is a good employment figure. 18 percent growth in the states with no tax, eight percent in the state with tax. So Jon, I mean, obviously, it's not a perfect experiment, although the variety within these states that don't have a state income tax is pretty-- pretty high.

JON SHURE:
Well--

JIM GLASSMAN:
You got-- you got states like North Dakota and-- and-- you know, Nevada. And you've got other-- you got large states like-- Texas and Florida. So isn't this significant, these results--

JON SHURE:
It's-- it's pretty far from a perfect experiment. I-- I got to be honest with you. If the whole thing is based on these numbers, we should just go home, because these numbers--

JIM GLASSMAN:
We're not going to go home.

JON SHURE:
Okay, well these numbers are like saying, you know, "The rooster crowed this morning and the sun came up. So the rooster made the sun come up." They ignore all kinds of other factors. The climate, the natural resources, the jobs, the housing prices. And you can-- you know, you can cherry-pick wherever you want. There's no state with a worse financial crisis than Nevada today. They have no income tax. Last year in Florida, for the first time since World War II, more people left the state than came. They have no income tax. If income tax-- if not having an income tax were magic, we'd see a whole different picture.

JIM GLASSMAN:
Jonathan?

JONATHAN WILLIAMS:
Well, actually, I mean, the Florida numbers have picked back up. Florida's actually gaining population again. You take a look at this nine states versus the nine states with the highest tax rates, 10 years worth of data. You have a very good cross-section of states here. This-- these relationships of higher growth with the states that avoid income taxes are not just true in this ten-year window. They're true if you-- they're true if you look at a whole half-century worth of data, which, by the way, we've seen states come in and out of that group of the no-income tax states.

JIM GLASSMAN:
Actually-- wouldn't a better experiment be a state that got rid of its state income tax or a state that significantly lowered its state income tax? Do we have any of those?

JONATHAN WILLIAMS:
Oh sure, I mean, you take a look at Alaska eliminated their state income tax. You've seen, you know, some pretty positive growth in Alaska. But you know, the other thing we do is take a look over the last 50 years at the 11 states that have instituted an income tax over that period. And we take a look at their growth prior to the income tax imposition and we take a look at their growth today. And without exception across those states, you see their relative growth-- to the United States economy shrink, after the imposition of an income tax.

JIM GLASSMAN:
And what-- what are some of those states?

JONATHAN WILLIAMS:
Well, you take a look at my home state of Michigan for instance. You take a look at Illinois. You take a look at Pennsylvania. You look at-- take a look at Ohio, Rhode Island. Many of those states today are really shells of what they are-- what they used to be. Of course, not all of that's-- related to the personal income tax--

JIM GLASSMAN:
Although-- although--

JONATHAN WILLIAMS:
--But certainly it's a direct incentive.

JIM GLASSMAN:
Although you named a bunch of states in the-- the rust belt, so-called rust belt, that are having a hard time-- economically. Do you think it's because of the institution of the income--

CARL BEARDEN:
Well, I think you can look at Illinois specifically. And the Bureau of Labor Statistics show, since they implemented their newest tax-- income tax increase, they've lost 18 jobs an hour as-- from January through August. They've lost a total of 106,000 jobs during that period of time.

You know, Missouri's GDP is 48th in the nation for the last 10, 12 years. We're 43rd over the last 50 years. We can do better. Only Michigan, his home state and Ohio are behind us. And they're trying to move up. And I-- I believe that-- you know, we don't compare ourselves to Texas. We don't compare ourselves to Nevada or Florida, although the sun shines just as bright in Florida today as it did 30 years ago. And they've-- they've grown.

We compare ourselves to Tennessee, which I think is an apple-to-apple comparison. The reason that people in Missouri make a higher per capita income is because we have a higher educated work force. We've been at it longer than Tennessee. They-- they got started in the 1930s, when TVA came. Up until that time, they were-- they were very--

JIM GLASSMAN:
Tennessee Valley Authority.

CARL BEARDEN:
Exactly, exactly. So-- so they-- but they've caught up very quickly. And about 13, 14 years ago, they surpassed Missouri on population growth. They surpassed us in GDP growth. And they-- they get to keep nine Congressional seats during the last census. We lost a Congressional seat, even though we grew.

JIM GLASSMAN:
What about that? I mean, there-- there-- now those are two states. They're contiguous, although Tennessee's contiguous with lots of states. They're fairly similar states. And Tennessee's been growing a lot. Missouri has not.

JON SHURE:
Well, to-- to think that because one state is growing and one state is not growing as much. And to say it's all because one state has an income tax and it does-- it's just oversimplifying and cherry-picking-- it makes no-- it makes no sense.

JIM GLASSMAN:
Well, there's no doubt that-- that the economics is not-- the economics is not---- economics is not biology. On the other hand, you know, you got to make a judgment based on something.

JON SHURE:
Well, you've got to make a judgment based on everything. And that's the problem. This analysis just picks one thing and makes a judgment based on that.

JIM GLASSMAN:
Okay, so what's the ju--

JON SHURE:
If Missouri has a much more skilled, highly qualified work force, there's a reason for that. It's because they've made the investments over the years to have those things, and that takes the revenues that you'd lose if you got rid of the income tax.

JIM GLASSMAN:
What-- what's the argument from an economic point of view for keeping the current system of state income taxes?

JON SHURE:
The best argument for keeping it is that you need balance. That to have both kinds of taxes protects you in different kinds of economic situations. Again, that's why states do it. That's why most states have always kept it that way.

JIM GLASSMAN:
As-- as head of the budget committee, wouldn't-- wouldn't you want to share in the revenues from let's say Capital Gains? The stock market goes way up. Rich people, as well as others, cash in their stocks. Big capital gains. You get-- you-- you get the profits.

CARL BEARDEN:
So that reliance causes a lot of problems, 'cause when that money comes in. I mean, it's nice of Jon to say that we'd put that stuff away. Most states don't put it away. They spend it. And that's what happened to Missouri. You know, the building tools we have-- income tax is kind of like asbestos. You know, it used to be a great thing. It used to insulate us and do all these sorts of things.

But it's a bad thing. You know, we know asbestos causes all sorts of damage, whereas the-- the sales tax, it does better at-- others. The downturn's much better. And it doesn't go down in the good times. It provides you a steady increase. It rises as-- it rises some, not as much as the income tax, but then you don't spend as much either. And so you have a more manageable, service-friendly provider than you do with an income tax.

JIM GLASSMAN:
But just to take your-- analogy with asbestos, you know, states have gotten rid of the use of asbestos. So why haven't states woken up to the fact that income taxes are toxic and vote them out and go to the sales tax?

CARL BEARDEN:
Great question, because if you look-- Tennessee has eight states border it. Missouri has eight states bordering us. All the states that border us, with the exception of Tennessee, 'cause we're already there, are looking at some sort of tax reform. I know we-- we already talked about Illinois. Their tax reform is going in the wrong direction by raising taxes, driving jobs out.

But every other state around us is looking about eliminating or reducing their income tax. So they are looking at that. Kansas has a big proposal out to eliminate theirs. Oklahoma's trying to speed theirs up. Kentucky, who has the lowest sales tax of any of the-- the states that border us is also looking at this type of program. So it is something that is very lively. And it's something that-- that I understand why Jon is upset with-- with some of these things, because a lot of people are looking at that. And it's a battle-- I think it's a great discussion to have.

JIM GLASSMAN:
Why would he be upset? He-- he-- he wants America to grow.

CARL BEARDEN:
He does.

JON SHURE:
I-- I want every state to grow. I think if-- if Carl believed what he's saying, he probably would have moved to Tennessee a long time ago. There's no income tax there. No, I think states-- states have to do what's right. You know, the-- the people that we elect in states are the stewards of the economic future of the state. They need to look at what got them where they are today.

What attracts businesses and people is investment in education and transportation and everything else. You get rid of the income tax. And you'll be sorry. You'll be sorry that the state no longer has the capacity to grow and, as I said before, it's now created a state where the lower your income, middle-class people have now had a huge tax increase. The wealthiest people have gotten the big tax cut.

JIM GLASSMAN:
So your main argument is that states need-- a consistent flow of income.

JON SHURE:
State needs stability and balance.

JIM GLASSMAN:
And you don't buy the argument that eliminating a tax on income would help a state to grow.

JON SHURE:
The argument, frankly, is not based on any real connections.

JONATHAN WILLIAMS:
There's plenty of economic-- academic research that suggests otherwise and that it does produce growth. And they isolate out the variables. We do a simple correlation relationship over 50 years, over nine states-- without income taxes that pro-- that shows very strong correlation. You look at correlation on the other hand--

JIM GLASSMAN:
And correlation is--

(OVERTALK)

JONATHAN WILLIAMS:
It's not cause and effect. But certainly over a 50-year period, that relationship--

(OVERTALK)

JIM GLASSMAN:
--Cause and effect in any kind of--

JON SHURE:
Ask-- ask the people in Nevada. The state's a basket case and they have no income tax.

JIM GLASSMAN:
Yeah, what about that?

JONATHAN WILLIAMS:
Well, if states want to follow that approach of just raising income taxes-- Texas is more than happy to take your jobs, gaining four Congressional--

(OVERTALK)

JON SHURE:
Well, you know, nobody said just raise income tax--

JONATHAN WILLIAMS:
--Over the last ten years.

JON SHURE:
We said we need a balance, because that's what works best over time. Texas is laying off 100,000 teachers.

JIM GLASSMAN:
But the fact is that over a long period of time, Texas has really been thriving. And it is-- is the most significant, along with Florida, of the no income tax states. And if you talk to people in Texas, and I live half the time in Texas, they will tell you that one of the reasons that they moved their businesses to Texas from California is the tax situation. There are others. There are other reasons as well, regulatory issues-- tort reform. But the tax situation is-- is really one of the main reasons.

JON SHURE:
And oil helps too. It brings in a lot of revenue. And I can tell you. I can find plenty of people in Texas who'll say, "You know, if Texas had the courage to also have an income tax, they could invest in education and everything else. And they would not just have as many jobs as they'd have. They'd actually have good jobs."

JIM GLASSMAN:
Carl?

CARL BEARDEN:
I think that, you know, if you do look at Texas, and excellent point again. We don't compare ourselves, Texas. Oil doesn't make up nearly as much of our budget as people want to-- want to-- pretend that it does. But here's-- here's the case. When DCI does market analysis of why-- companies move, they say, "What's the first thing you do?" Well, we-- we create a shortlist. Well, how do you get on the shortlist? They do this before they even contact the state economic development. You get on a shortlist because of business climate and tax policy. So Texas is ranked number one in-- in highest-- business-friendly climate since 1999.

And when you ask those people exactly what you're talking about, why you chose Texas, 44 percent of them tell you that it was because of their tax policy. 31 percent say it was because of their business climate. It does make a difference. And-- and we may not-- you know, I'm in Missouri. Actually, there was a Bearden in Tennessee. And-- and I do have a lot of family history in-- in Tennessee.

I'm in Missouri, 'cause I have two great grandkids that live there. Their-- their mom and dad are professionals, who can, in today's technology, can do those jobs from anywhere. I want my grandkids to have a place and a reason to stay in Missouri, because I want their parents to stay there. And if their parents stay, they're likely to stay.

JIM GLASSMAN:
Jonathan, I know your organization is concerned about states. But is there an-- a federal application to what you've learned in your research? In other words, should we go to a consumption tax or something-- a partial consumption tax, 9-9-9 or (LAUGH)-- or, you know, the kinds of flat taxes that people have talked about that are actually consumption taxes?

JONATHAN WILLIAMS:
Well, I mean, you take a look at the most mobile factors out there today, like we talked about. And taxing capital at the lowest level possible is a good pro-growth-- stimulus, whether you look at it international level, federal level, state level. Now today, of course, our corporate-- federal corporate tax rate of 35 percent, second highest in the world-- our companies are struggling to compete against their foreign-- competitors.

We have to do some big things at the national level to get things under control, whether that means-- a flatter tax system-- or lower rates overall on capital. That's something we have to look at. At the state level, we certainly see that application. At the international level, you see that application.

Look at the-- the OECD countries, as I mentioned earlier. Take a look at the Eastern European countries and what they've been able to accomplish, first as their high tax counterparts in Western Europe and the flow of capital that's going from western to Eastern Europe. And now with the eve of their-- their talk of tax harmonization to say, "You must have a limited or a minimum tax rate to be part of the EU system," because they see this tax competition in action, capital moving to the low tax areas.

JIM GLASSMAN:
Okay, let's-- I just want to go around the table and ask-- what you think the future of eliminating state income taxes is. Carl.

CARL BEARDEN:
I-- I think that it's pretty high. I think most states who have income taxes now. Most of the people working in those states have never worked under an environment where there wasn't a state income tax. So there's an educational proponent, which is what we try to do in Missouri. The more people learn about this, and we've talked to thousands of people across the state. The more people learn about it, they understand it, the more they like it, because it puts them in the driver's seat. They get to choose what tax they're paying, how much they're paying, whether they buy used, new or what have you. They get to make that decision. And it's not an automatic deduction from their check.

JIM GLASSMAN:
And are you going to have a vote in Missouri about whether to go from income taxes to sales taxes?

CARL BEARDEN:
We're working on right now, trying to-- have that on the ballot in 2012.

JIM GLASSMAN:
It has to be on the ballot. So why-- why doesn't the-- just quickly. Why doesn't the legislature just go ahead and approve it?

CARL BEARDEN:
Well, letting the super committee come to an agreement. You know, there's all sorts of disagreement poli-- politicians, elected officials. And speaking as a reformed one or whatever-- you know, it's very difficult for them to make these sorts of decisions. And so the people will sign an issue petition process in the state of Missouri. They will decide whether or not it goes on the ballot.

JIM GLASSMAN:
Okay. Jonathan, what do you think the future of eliminating state incomes taxes it?

JONATHAN WILLIAMS:
Well, I'm quite bullish on the future of-- elimination of state income taxes across the country, because legislators look to success stories like Texas and wonder, you know, how we might be able to emulate it. I know Jon said earlier, they rely a lot on oil and gas. Only three percent of their budget comes from severance tax revenue, which is much lower than many of the other states out there today. They have--

JIM GLASSMAN:
Severance is energy tax.

JONATHAN WILLIAMS:
Extraction on oil and gas, absolutely. And so you look at the states that are doing well today. People want to know, "How can we create jobs?" Being from Michigan-- where a state where we've been desperate to do everything we can to create jobs-- we had really a lost decade over the last 10 years of-- lost job creation. There are no opportunities for-- people when they graduated.

We-- by the way, we have great research institutions. We spend a lot on K12 education. But if the jobs aren't there, people are going to go to other states where the jobs are. And as people look to emulate that job creation engine of Texas and other states, they're going to be looking at an income tax pretty seriously.

JIM GLASSMAN:
Jon, future?

JON SHURE:
Like-- like the decline of the income taxes because of the auto-- auto industry. I think people in the show-me state and other states have a lot of common sense. And when they see the consequences of this, they're going to pay 10, 11 percent sales tax. They're going to have to pay sales tax on things they never paid tax on before. They lose the advantage of, you know, you lose your job. You don't have to pay income tax. So I think in the end, common sense will prevail. Balance will prevail. And states will stay on the course that's been tried and true over time.

JIM GLASSMAN:
Thank you, Jon. Thank you, Carl. And thank you, Jonathan. And that's it for this week's Ideas in Action. I'm Jim Glassman. Thanks for watching.

ANNOUNCER:
Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs, just go to ideasinactiontv.com or download a podcast from the iTunes Store. Ideas in Action, because ideas have consequences. For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never-ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Drive: Guess What Motivates Us? (Hint: It's Not Money)

2012-01-05T15:50:10Z

Think money is the ultimate motivator? Not so, says Daniel Pink, author of "Drive: The Surprising Truth About What Motivates Us." Pink asserts that while money is vital, it plays a small role in what pushes us to strive, succeed and enjoy life.

]]> JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. Think money is the ultimate motivator? Well think again says Daniel Pink, author of Drive: The Surprising Truth About What Motivates Us. In his book Pink contends that while money is important it plays a relatively small role in what pushes us to strive, succeed, and enjoy life. Pink's book Drive is being translated into 31 languages and continues to show up on the New York Time's Bestseller List. The topic this week: the surprising truth about what really drives us. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

[DAN PINK'S REMARKS TO THE RSA - VIDEO COURTESY OF THE RSA]
We are purpose maximisers not only profit maximisers. I think the science shows that we care about mastery very, very deeply and the science shows that we want to be self-directed. And I think that the big takeaway here is that if we start treating people like people and not assuming that they're simply horses-- you know slower, smaller, better smelling horses-- if we get past this kind of ideology of carrots and sticks and look at the science I think we can actually build organizations and work lives that make us better off but I also think they have the promise to make our world just a little bit better.

JIM GLASSMAN:
Dan thanks for joining us on Ideas in Action. Dan what are the historical phases of motivation that have brought us where we are today?

DANIEL PINK:
Well human beings are a mix of motivations. We have a biological drive, all of us do. We eat when we're hungry, we drink when we're thirsty, we have sex to satisfy our carnal urges. That's part of what it is to be human but obviously not all that it is. We have a reward and punishment drive-- we respond very well to rewards and punishments in our environment. And for a long time-- early on in our history, I mean 50,000 years ago, it was really that first drive, that biological drive, that was at the center of society. I was trying to race faster than you so the saber tooth tiger would get you rather than me. I was trying to basically to survive. It was all about those biological impulses. Well as we got more complex and I had to do trade with other people, I had to work with clans and tribes that weren't my own, that reward and punishment drive ended up being a very powerful social lubricant. It basically created an operating system that allowed us to do all kinds of trade and commerce. I mean it's an incredible achievement these carrots and sticks. I mean it's an incredible human achievement. We all tend to think that the Industrial revolution was fueled by steam or coal but it was fueled in equal measure by carrots and sticks. Well now here we are in the 21st century and if you look at the social science-- if you look at 50 years of research in motivation it says that those kind of carrot and stick motivators are great for 19th century work, good for 20th century work, but don't work very well for 21st century work-- the complicated, complex, creative kinds of things that most people in the white collar and even blue collar workforce are doing today.

JIM GLASSMAN:
So when you say carrots and sticks-- the carrots-- the medium for carrots is generally money, right?

DANIEL PINK:
Yeah. Generally money deployed in a certain way. It's what I call an 'if then' reward. If you do this then you get that.

JIM GLASSMAN:
So you say in your book Drive you write: "The best use of money is to take the issue of money off the table.," And how would that work?

DANIEL PINK:
Ok well that's true for the creative and conceptual kinds of work, for routine things-- stuffing envelopes, pay people per envelope; turning the same screw the same way on an assembly line, doing that routine algorithmic stuff 'if then' motivators work well. They get people to focus, eliminate distractions. The trouble is we have 50 years of science that says that they don't work so well for the complicated, complex, and creative sorts of tasks. So the best use of money as you say is to pay people enough so they're focused on the work rather than on the money. People do better when you raise the-- we have this misguided notion we think if we raise the salience of money that'll get people to perform better. But the way people perform better-- again this is not a philosophy this is what you know 50 years of --

JIM GLASSMAN:
--There's research on this right--

DANIEL PINK:
Social science tell us is that the way that people perform better at work is when you raise the salience of the work. And the way to do that is to reduce the salience of money. And so what it would mean it would mean paying people very healthy salaries and then offering as a measure of fairness some kind of maybe profit sharing but something-- some other kind of incentive but not keyed especially to individual short-term performance. That can be devastating.

JIM GLASSMAN:
You talk about how there's technology ventures for example where people are participating in creative activities not for money. What are some of those?

DANIEL PINK:
There is a great example of the entire open source movement. The open source movement, which is--

JIM GLASSMAN:
Linux--

DANIEL PINK:
Linux, Apache, Wikipedia, a whole array of things, which would have seemed to many people-- and I studied economics-- theoretically impossible. Let's get a bunch of volunteers who do complicated work for no money and give away their product. That can't work, but it does because people have these other kinds of motivations and even in the for profit technology sector there are a whole array of really, really interesting new practices that challenge the traditional notions of management. And these new practices arise not because they're nicer but because they're more effective.

JIM GLASSMAN:
What are some of those practices?

DANIEL PINK:
Oh I mean one of my favorite is an Australian company called Attlasian does something called FedEx days where once a quarter on a Thursday afternoon they say to their developers go work on anything you want as long as it's not part of your regular job. Do it the way you want, do it with whomever you want, pure autonomy, the only requirement is that you have to show what you've created to the rest of the company on Friday afternoon in this fun wacky kind of meeting. They call them FedEx days because you have to deliver something over night. It turns out this one day of intense autonomy new ideas for products, new features for existing products, improvements to internal processes-- and these FedEx days are spreading like crazy to companies all over the place.

JIM GLASSMAN:
And Google does something similar right?

DANIEL PINK:
Google does 20% time where people can spend 20% of their time working on whatever they want. And again there's something that's sort of a little bit-- you know in basketball terms is a little bit of a head fake here because 20% time, FedEx days, it seems you know summer of love, follow your bliss, groovy, and it's so strategic and it's so hard headed. Cause Google is not signing away the intellectual property rights--

JIM GLASSMAN:
Right.

DANIEL PINK:
--To what's created on 20% time--

JIM GLASSMAN:
It's one of the best things-- best products Google has were created in this time--

DANIEL PINK:
Google News-- you used to be-- you were in the newspaper business at one point, Google News has reshaped the newspaper business. Google News-- not an official project, a 20% project. G-Mail not an official project a 20% project and if you talk to people at Google they'll that you can take any innovation there and it traces back to someone's 20% project.

JIM GLASSMAN:
And another example you used in the book is the results only work environment, ROWE, explain that.

DANIEL PINK:
The ROWE. What it is-- work arrangement where people don't have schedules. They don't have to be in the office at a certain time, they don't have to be in the office at any time, they just have to get their work done. How they do it, when they do it, is up to them. And it started off as a-- most famously as a small project inside of the corporate headquarters of Best Buy, the big American retailer, and now 90% of the corporate headquarters is on this results only work environment. You see it with places like Netflix, classic kind of disruptive company, right? I mean this is a very successful company. Successful not in basically achieving greater and greater economies of scale but basically reshaping an entire industry. Netflix: their vacation policy, they don't have one. People take as much vacation as they want whenever they want it. There's a challenge to the orthodoxy out there about what really motivates people and what it says is that we have this folklore-- there's a belief-- really in folklore that human beings are easy and simple. That if you simply reward the behavior you want and punish the behavior you don't want you're going to get the results that you expect and that just empirically isn't true and so you have these companies out there that are challenging these orthodoxies and minting what I think are going to be the sorts of management practices that most companies are going to adopt. I've started doing this inside of companies is say how many people here-- give me an estimate how many people in your company do you think are good citizens, contributors, work hard, trustworthy? And usually the answer, depending on the company, is-- I've never gotten an answer lower than 85%. Ok? It's usually in the 90s. And so what we have is we have a set of workplace policies-- let's say it's 90% fit that bill-- all of our workplace policies are designed for the 10%. All of our workplace policies are designed to close off the low road to the 10% and they end up shackling the 90%.

JIM GLASSMAN:
You made one of the best or most popular videos on YouTube-- I don't know if you actually made it but it was a speech that you gave at the Royal Society in London that was then animated-- last time I looked it had 6 million views. Tell us about that.

DANIEL PINK:
I did a talk in this place called the RSA and they ended up taking 9 minutes of the remarks and accompanying it with this incredible white board drawing done by a guy named Andrew Park in the UK.

[REMARKS ON VIDEO]: It turns out there are three factors that the science shows lead to better performance-- not to mention personal satisfaction: autonomy, mastery, and purpose.

It's a really great way to put ideas in action that is there's some motion, some animation, and it helps sort of give some of these ideas life.

JIM GLASSMAN:
But clearly people are connecting with the content of what you were saying as well as with the animation.

DANIEL PINK:
I hope so. [Laughs] I mean believe me plenty more--

JIM GLASSMAN:
No in other words this kind of resonates with people I think.

DANIEL PINK:
I think it does because I think all of us have that suspicion. I mean all of us-- if you say to people tell me about the best boss you ever had. They don't say here's the best boss I ever had she was amazing; she was unbelievably controlling, she told me what to do and how to do it all the time, she was completely controlling and I was utterly compliant, that was the best job I ever had.

JIM GLASSMAN:
But what about the part where the best boss may be the one who said you know if you do this I'm going to give you a big bonus?

DANIEL PINK:
You don't hear that very often. What you hear-- ask people about their best bosses you hear answers of-- it's interesting-- you hear high standards and autonomy. You hear-- they held high standards for me but they let me get there on my own.

JIM GLASSMAN:
And in fact you say in your book that this carrots and sticks approach can lead to cheating and even addiction. What do you mean by that?

DANIEL PINK:
Well I mean the mechanism for waving a carrot in front of somebody you know is similar neurologically to the sorts of-- the reward-- the pathways that we have for drugs and other kinds of things that are less benign. And that's the point these rewards get our attention ok so if you offer me $500 to climb onto this desk I'm there. Ok? I'll do it. I'm going to focus on it, do it. You get my attention. That's a very good frame of mind for simple things but for the complicated things that most people are doing, for seeing the long-term, it just doesn't work very well. If there's very high stakes rewards for short-term accomplishments you're going to get some cheating there's no question about it. I mean we've seen that.

JIM GLASSMAN:
You talk about simple tasks but also very short term. That's the orientation. You've said that in fact the financial crisis of 2008 may have been the result of this kind of carrots and sticks thinking and very short-term thinking.

DANIEL PINK:
Well I mean I think that there is a short term problem-- to some extent in American business where many executives-- not because they're bad people but because they're rational say I'm looking at that 90 days. I want to hit my earnings. I want to-- or exceed my earnings by 1 cent. That's my time horizon, and if I do that it triggers a huge bonus. I think that's a big part of what happened in the financial crisis. You also had people basically passing the potato around so I write a mor-- I'm a mortgage broker and I give somebody a mortgage for a house that they can't afford then I go off and sell it off to someone else and they chop it up and package in the security that somebody else buys. The thing is is that again looking at the science these 'if then' motivators they're powerful in the short term. Let's take sales-- it's the 20th of the month and you got to hit your sales numbers by the end of the month. Offer people a huge honking bonus for closing deals by the 30th of the month. You'll hit your numbers. You might burn your best customers in the process, you might have people pulling in orders from later in the year, but it'll work. It has a great-- it does do things in the short term.

JIM GLASSMAN:
Other than money you write that genuine motivation's composed of three things so let's talk about each one of them. The first is autonomy.

DANIEL PINK:
Yes. Autonomy's our desire to be self-directed, to direct our own lives. It doesn't necessarily mean kind of wild and wooly cowboy independence but it means having some volition over what we do, how we do it, who we do it with, even when we do it. I mean Facebook is a good example. Facebook hires engineers, very talented engineers, they bring them into a boot camp-- Facebook boot camp they're doing-- fixing bugs and what not. Then let's take-- there's a great engineer she goes around and she interviews with various product teams and various technology teams at Facebook and then at the end of those three or four weeks she decides which team she wants to work for. That is the company hires a talent but the talent picks the team. Because if you have a say over who's on your team you're more likely to engage.

JIM GLASSMAN:
So it's ownership, buy in, that kind of thing--

DANIEL PINK:
It's all of those kinds of things but it's self-direction. All of us want to be in charge of our lives. We don't want to be controlled. Human nature is not to be controlled and our nature is to be autonomous and self directed. If you fashion policies particularly within the inside of a company that go with the grain of human nature rather than against it I think you do better.

JIM GLASSMAN:
Ok so the second element in motivation-- this motivation 3.0-- is mastery. So you write, 'the desire to get better and better matters.' Now does this work for the majority of people or only for high achievers?

DANIEL PINK:
Oh it works for everybody. I mean this-- if you think about human behavior people do all these things that biologists and economists can't explain. Playing a musical instrument on a weekend; biologists: 'Why are you doing that?' Economists: 'Why are you doing that?' It's not satisfying a biological urge; you're not making any money, why do people do that irrational act? 'Cause they like it, 'cause it's interesting, 'cause they get better at it. And this is-- there's some interesting research out of-- from an incredible researcher named Teresa Amabile, fairly new research, that shows that the single biggest motivator at work-- she did this fascinating in depth study where she would randomly page people during the day or you know text them during the day and say how motivated are you right now and what she found is that the single biggest motivator at work was making progress. The days that people were making progress were the days they felt motivated, engaged, loyal to the company.

JIM GLASSMAN:
So is the lesson there that the businesses should offer ways for people to get better at what they do-- you know education?

DANIEL PINK:
Put people in positions where they make progress. A lot of times people don't see the progress they're making, help people see the progress they're making, celebrate the progress. The trouble is inside of companies is that the only way you know you're making progress is if you get feedback on what you're doing, and the workplace is one of the most feedback deprived places on the planet. Generation Y, the younger folks are always going around annoying boomers saying how am I doing, what'd you think of that, was that any good-- and boomers have misinterpreted that as some kind of deep seeded emotional neediness. When in fact what it is is that they live in a world of incredible rich robust feedback where you press a button something happens you do a Google search you get the answer, you play a game you get a score, then they come into this feedback desert called the workplace where we give people feedback once a year in a kabuki style formal performance review. I mean it's crazy.

JIM GLASSMAN:
So what would you advise for a business as far as feedback in concerned about mastery?

DANIEL PINK:
They're all kinds of great thing that companies are doing. One is a do it yourself performance review. So at the beginning of the month you can set out your goals-- your learning goals and your performance goals at the end of the month give yourself an evaluation. High performing teams do that almost organically, they meet, they set out goals, they meet again, they give each other feedback. Some companies are doing something really, really interesting that is kind of a peer-to-peer-- using peer-to-peer feedback even with external rewards although no contingent ones. So there's a couple of companies that will do things like say you and I are coworkers, you help me out of a jam, I see you do something amazing for a customer, boom I can give you a $50 bonus on the spot. Now it's non-contingent so I'm not saying if you do something great for me I'll give you a bonus.

JIM GLASSMAN:
Right.

DANIEL PINK:
It's non-contingent, it's immediate so you don't have to wait 9 months to get the feedback on it, it's $50 so it's not distorting anybody's behavior, and when it comes from peers it's often seen as very, very authentic. There's even some software out-- a lot of new software being developed to sort of quicken the feedback metabolism inside of companies.

JIM GLASSMAN:
Ok number three you write, 'Humans by their nature seek purpose; to make a contribution and to be a part of a cause greater and more enduring than themselves.'

DANIEL PINK:
I think there's purpose with a small 'p' and purpose with a capital 'P' and both are powerful motivators. For instance people want to know how what they do contributes to the larger whole. So they want to know that if they're going to work that it's going to have some kind of effect on what's going on, that it doesn't disappear into the ether. And when people feel like they've done something that actually is going to last, that something that's going to make a difference in somebody's life-- and I don't mean something you know grandiose like you know solving world hunger or anything like that-- giving somebody a great product or service, having a restaurant that people love, doing something that you know-- have a product that someone buys as a gift and gives to someone else and has a meaningful experience. That is actually really motivating and there's some other just fascinating research out there that shows that even-- bringing the sense of purpose to the surface can have a huge effect on people's productivity and performance.

JIM GLASSMAN:
So are people willing to take let's say a lower salary if they-- if they're satisfied in these other ways?

DANIEL PINK:
Not necessarily, because here's the thing this goes back to your question about money-- money is really important-but it's just not important in the way that we think. So these are not replaceable, fungible goods, it's not like I'll give you a 10% drop in pay and a 15% increase in mastery. Uh uh. It's more of a threshold thing. So you got to pay people enough and people evaluate enough based on-- this is very, very clear in the research on human resources-- people evaluate fairness internally and externally. So if you and I are doing the same kind of work in the same kind of company and you're getting paid a lot more than me and I find out boom my motivation goes down. If you and I are working at one kind of company doing a certain kind of work- a similarly situated company is paying its folks for our jobs a lot more; totally demotivating. So money is a very important threshold motivator. If you miss it it's game over.

JIM GLASSMAN:
Does this theory work for those who are not Westerners? Is there anything cultural about it?

DANIEL PINK:
It's interesting-- some of the psychologists-- mostly psychologists not really economists have looked at this and what they find particularly with autonomy is that autonomy is pretty universal. It might express itself differently above the surface. So someone in Japan might say well-- I choose-- my self direction says I want my family to do well and my family to prosper rather than an American might say I want to be on the cover of Rolling Stone, and they both come from autonomist urges they might express themselves a little differently on the surface. 'Cause I don't think you know deep down there's a huge amount of difference in our nature. I mean, we're human beings.

JIM GLASSMAN:
When you talk to business people about this idea-- the ideas that you developed in Drive-- what are their reactions?

DANIEL PINK:
It's interesting. I've gotten much less pushback on a central claim than I ever would have imagined. Partly because if you marshal the science and marshal this evidence it's pretty overwhelming. It's not even a close call in the social science. So then you get two reactions; number one is I agree with you what do it do? And I think that there are a lot of people in business who generally want to be good. Good in the sense of treating people well but good in the sense of affective at the same time and they're realizing there's some amount of synergy between the two. The other thing that you get though is I agree with you I think you're right; I'll do it next quarter I got to hit my numbers.

JIM GLASSMAN:
[Laughs] Are there big companies in the United States-- you talk about I think it's Attlasian in Australia-- but are there big companies that are adopting this kind of approach?

DANIEL PINK:
Look I mean Google's a big company, Facebook is becoming a big company, Netflix is a big company, what you see-- Cisco has started doing FedEx days so that's a huge company as well. It's harder to do in a very large kind of company, it's harder to do in a publicly held company because of the short term pressures, it's harder to do in a highly regulated industry because there's less autonomy. So you see the first movers in places like really in places like software and places where the founder was still around. Having some amount of founder DNA still around-- so you look at a place-- you look at an established tech company like Qualcomm in San Diego and they do a lot of these kinds of things but Irwin Jacobs who started the company 30 years ago he's still walking around the hallways.

JIM GLASSMAN:
In the tools kit section of your book you give some concrete steps that readers can take in order to put motivation 3.0 into effect. Can you just tell us what your top advice for individuals?

DANIEL PINK:
For individuals?

JIM GLASSMAN:
For individuals.

DANIEL PINK:
I think it's a few things. Number one I would tell them to think about-- I mean as mushy as it sounds to think about their purpose. It's like why are you here, what's the point? And a lot of times--

JIM GLASSMAN:
Kind of one sentence.

DANIEL PINK:
Yeah. Like there's an interesting exercise in there where can you define your-- what's your life about in a sentence? I think that--

JIM GLASSMAN:
What's an example of that?

DANIEL PINK:
Oh 'I live my best life so that I can teach others to do the same.' That was Oprah Winfrey's sentence when she did this exercise. Alright so-- so having a sense of purpose-- a lot of times we talk about how; here's how you do it, here's how you do it, I got to get better at it, but we're not talking about why, what's the point? Why am I here? So that's a good one. I think having a good sense of how much autonomy you really have particularly at work and so you can do a sort of self assessment where you say how much autonomy over time do I have, how much autonomy over team do I have, how much autonomy over task do I have? I think that's kind of things. There are all kinds of things that parents can do with their kids--

JIM GLASSMAN:
Yeah what's gotten the biggest response for parents-kids advice?

DANIEL PINK:
Ok-I get a piece of email on this everyday. 'Dear Dan, now I know why paying my kids an allowance to do chores isn't working.' Alright? So this idea out there that chores are good and allowances are good but it's one of those things where if you combine the two it's not good. And so if you combine-- which seems so sensible, my kids are going to do-- I'm going to pay them an allowance in exchange for doing chores but that's not why you do chores at your house. You do chores at your house because you're part of a family, family members help each other, you have an obligation to each other. Allowances are good too; helps kids manage money, understand the importance of money, but when you start paying them to do chores you're saying hey taking out the garbage after dinner only a chump would do that for free, helping your mom empty the dishwasher that's like working at Mickey D's, nobody would ever do that for free. And so what parents find out is that it actually works because kids love-- we all love money but they metabolize it pretty quickly and suddenly you're paying $10 a week to get the dishwasher emptied and you know you got three kids-- my kids would start a union you know and they'd want $12 to empty the dishwasher.

JIM GLASSMAN:
Did you learn anything about yourself by writing this book?

DANIEL PINK:
I think so. I think so. I didn't really understand myself the importance of-- I think I understood autonomy pretty well and I think purpose is important too and other kinds of research and writing reporting that has come out a lot. It was the mastery that really surprised me but it made visceral sense. So if I'm working on something and I crack a problem in writing or I come up with wow that was actually a good paragraph for once, it's great. I mean you're up, you feel good about what you're doing, and at some level all of us think well not everybody-- that must be my own weird thing-and a lot of us I think don't extrapolate enough from our own experience.

JIM GLASSMAN:
That's a good place to end. Thank you Dan Pink.

DANIEL PINK:
Thanks for having me.

JIM GLASSMAN:
And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Assassins of the Turquoise Palace: Author Interview with Roya Hakakian

2011-12-28T21:28:28Z

A book interview with Iranian-American author Roya Hakakian. In her new book, "Assassins of the Turquoise Palace," an audacious1992 Iranian led political assassination is examined and helps to shed light on the Iran of today.

]]> IDEAS IN ACTION with Jim Glassman

Assassins of the Turquoise Palace: Author Interview with Roya Hakakian

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. This week a discussion with Roya Hakakian, Iranian American journalist, poet, and author. In her new book, Assassins of the Turquoise Palace, Hakakian vividly depicts the murders of four Iranian dissidents in a Berlin restaurant in 1992. With a revelation that Iranian backed assassins recently targeted the Saudi ambassador in Washington and whispers that Iranian agents might be seeking bases in Latin America what can the 1992 murders tell us about Iranian activities today? The topic this week: a discussion of the book, Assassins of the Turquoise Palace and how it relates to the Iran of today. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
Roya welcome.

ROYA HAKAKIAN:
Thank you for having me.

JIM GLASSMAN:
You were a young person in 1979 during the revolution that overthrew the Shah and you were in favor of that revolution. What dynamics led you to the position that you had that you believed that things would really improve?

ROYA HAKAKIAN:
The dynamics of being an adolescent you know and liking action, liking seeing lots and lots of people in the streets chanting and it was a very exciting time for Iran. So I can't say that my initial attraction to what was going on was very cerebral. It was mostly visceral. It was a wonderful time to be in Iran. And I think during my adolescent years I developed a very strong sense that we as a new generation should hope for a future of democracy and freedom in Iran.

JIM GLASSMAN:
But do you think that was a mistake? In other words if the Shah hadn't been-- sort of imagine Shah is not overthrown, I mean would Iran be a better place today?

ROYA HAKAKIAN:
You know it's one of those tough questions because you can never hope to change the course of history because it always feels that we're moving forward.

JIM GLASSMAN:
But do you feel you kind of made a mistake in supporting this revolution?

ROYA HAKAKIAN:
What I regret is the degree to which we were Manichean about the Pahlavi regime.

JIM GLASSMAN:
Just like good and evil, one side or the other.

ROYA HAKAKIAN:
Yeah. I think there were lots and lots of shades of gray that had we been a lot less radical there were other possibilities that would have led to a better future.

JIM GLASSMAN:
You left Iran in 1985. What were the conditions that made your family choose to leave?

ROYA HAKAKIAN:
In the early 1980s it was unofficially impossible for Jews to leave Iran. It was not a law that was passed but if you were a Jewish person and you applied to get your passport you were almost certain not to have your passport renewed. So it was a very long and convoluted ordeal until we received our passports and my mother and I left and my father joined us about four years later.

JIM GLASSMAN:
As you said you come from Iranian Jewish ancestry and you write that before the revolution Iran's cities certainly were pluralistic and that you were free to practice your faith.

ROYA HAKAKIAN:
Yes I think the 60s and the 70s mark one of the brightest golden moments of ethnic plurality and multiplicity within the Iranian society. I think that the Pahlavis had brilliantly understood the value of dismantling ethnic religious ghettos whether intellectually or physically.

JIM GLASSMAN:
Pahlavis are the ruling family, the Shah.

ROYA HAKAKIAN:
Exactly. And so I think it was a fantastic time for all minorities concerned inside Iran.

JIM GLASSMAN:
So a lot of these people left. A lot of Jews left, a lot of intellectuals left, a lot of others left, and what is that Diaspora like to today? Is it cohesive? Do they seem to have the same views? Are you very much in touch?

ROYA HAKAKIAN:
It's a-- I think it's a Diaspora that's evolving. It's a Diaspora that like many others that were new and fledgling and I think 30 years in the life of a Diaspora is probably still very young. It's trying to define itself. I think the newer generation of Iranians, the second generation of Iranians who were born and raised in the west, have an entirely different view of what went on and I think part of what we all need to come to terms with whether the Diaspora or the movement inside Iran, is a definition or our own version of what occurred in Iran in '79 and since then--

JIM GLASSMAN:
I'm sorry so what's the difference when you say-- young people have a different version-- is it kind of a more benign version? Or-- because they didn't suffer under the regime or--?

ROYA HAKAKIAN:
I think the jury's still out. I think the ones-- there are two sorts of reactions that you see among the Iranian Americans who weren't-- don't share the experiences that their parents had under the regime. Some think that their parents really exaggerated about the degree to which they suffered and some really share the parents' sense of the past.

JIM GLASSMAN:
Let's talk about your book. Your book begins in 1992 with an Iranian inspired assassination. So what led you to investigate and write about this incident so many years later?

ROYA HAKAKIAN:
Really-- a very good storyteller who landed in my kitchen and told me the story of this night after night who was one of the survivors of that assassination. And initially it started very benignly in that I was the host in the house and I was trying to strike up a conversation with a guest. What I assumed would be just a story of an assassination turned out to be a much longer, more fabulous tale of a fantastic trial, an investigation, and a lot of small heroes who come together to bring about one of the most triumphant moments of the past 30 years of Iranian-European relations.

JIM GLASSMAN:
Roya could you just kind of set the scene for us? Explain really what happened in this restaurant and who some of the key characters were.

ROYA HAKAKIAN:
On September 17th, 1992, four members of the Iranian Kurdish opposition who had come to Berlin, Germany, on the invitation for the Social Democratic Party of Germany for an annual conference were having dinner with a few other Iranians at a restaurant called Mykonos when two gunmen walked in and shot everybody at the table and four died instantly. And what ensued thereafter was a thorough investigation and a trial that lasted almost four years, leading to a judgment in 1997 that forced all the EU member nations to withdraw their ambassadors from Iran for a period of almost five months and led to the loss of relations between Europe and Iran.

JIM GLASSMAN:
Roya you write that the Iranian government tried to influence the trial. Did they succeed in any way?

ROYA HAKAKIAN:
They tried very hard and no they didn't succeed because the verdict-- the judgment that issued from this trial is the worst blow that has been delivered to the regime since 1979.

JIM GLASSMAN:
The highest levels of the Iranian government were found culpable.

ROYA HAKAKIAN:
Exactly.

JIM GLASSMAN:
And so what does that mean?

ROYA HAKAKIAN:
Well the judgment named the supreme leader in Iran, Ayatollah Ali Khamenei, who's still in charge as the supreme leader, the sitting president at the time who was Rafsanjani, the foreign minister who was Vilaeti and you know the chief of the revolutionary guards and the minister of information as the five people who made the original decisions about the list of 500. And ironically these are all the people who in some capacity or another are still in power in Iran.

JIM GLASSMAN:
Can you just explain the 500 enemies of Islam death list and how it works its way into the story?

ROYA HAKAKIAN:
When the assassination occurs the office of the chief federal prosecutor in Germany assigns an investigator, one of his prosecutors, to investigate the case and his impression-- his name is Bruno Jost, he was a senior prosecutor at the time, his initial hypothesis is that this is the work of a rival Kurdish group, the PKK namely, and there has been some kind of rivalry between two Kurdish factions which has led to this attack.

JIM GLASSMAN:
And the Kurds are?

ROYA HAKAKIAN:
One of the largest ethnic minorities inside Iran which share a land with the Kurds of Iraq or at least historically did and Syria and Turkey.

JIM GLASSMAN:
And the people who were assassinated in this incident you talk about were Kurds correct?

ROYA HAKAKIAN:
Three of them were Kurds and one of them was a non Kurdish Iranian who had been their friend and their guide in Germany while they were there. So the initial impression of the investigator slash prosecutor was that this had nothing to do with Iran, contrary to what the exile community was alleging, but it was the work of some sort of internal factional rivalry. And little by little Bruno Jost, our hero slash prosecutor, discovers that this in fact is not a lone operation, that it fits within a-- multiples of other crimes that have occurred since 1980 beginning with an attack in the suburbs of Washington here against a former Iranian minister, and then there are dots that he could connect from Washington to Rome to Vienna to Geneva to a series of other capitals. And then as a result of this he discovers that there has been a list of 500 Iranians; artists, writers, satirists, intellectuals, or opposition leaders, against whom the Ayatollah Khamenei had issued a fatwa to do away with them.

JIM GLASSMAN:
And these are enemies of Islam who are both inside and outside Iran?

ROYA HAKAKIAN:
This is a list of those who live outside of Iran's borders.

JIM GLASSMAN:
And so as you said earlier the top levels of the Iran regime were noted in the judgment and you said this was the biggest setback the Iranian regime has ever suffered since 1979.

ROYA HAKAKIAN:
That's true.

JIM GLASSMAN:
Does that go all the way through the present day by the way?

ROYA HAKAKIAN:
It does absolutely.

JIM GLASSMAN:
So the sanctions and all that, nothing close to what happened here.

ROYA HAKAKIAN:
Absolutely. That's my view. And I think if you look at the way the regime has treated this incident you will come to the same conclusion. Because you know the takeover of the American embassy in Iran in November of 1979 is among the major historical events that regime continues to celebrate. The fatwa against Salman Rushdie-- a lot of other historical events the regime has somehow spun into its own advantage or at least has tried to do so. This is the one incident that has been completely buried. It has not existed within the media or any-- there is no references to it. It's been just the kind of thing that they try to do away with and forget as much as they could as fast as they could.

JIM GLASSMAN:
And this withdrawal of diplomatic relations that also had a profound effect to the punishment itself to the regime.

ROYA HAKAKIAN:
Yes. I think the reason for that is probably because if you have no relations with the United States you can somehow say that the Americans are bad. You can blame it on the history and you know the coup d'état of 1953. But if you don't have relations with Finland and Denmark and Switzerland and Austria then it becomes-- the greater the number grows then the harder it is to justify. And I think it became really hard to justify to the ordinary Iranians why all these embassies were closed and why they couldn't get visas to go visit relatives.

JIM GLASSMAN:
And so if the response today to Iran building a what some would call a nuclear weapon were for embassies around the world or countries around the world that withdrawal diplomatic relations you think that would have an effect?

ROYA HAKAKIAN:
Absolutely. If this case is a guide and I think it should be, it's why I wrote about it, I think the cutting of ties between Europe and Iran will be hugely effective in that it will create a great deal of unrest within the public. Look this period in the history of Iran marks a moment at which the largest number of Iranians live in Diaspora. There have never been such a huge number of Iranians living abroad. There is something between 3 to 5 million Iranians primarily here and in Europe and I think if you shut down all those embassies and you basically make it impossible for the families to visit, to go back and forth, you create an impressive effect inside.

JIM GLASSMAN:
The group that was involved in planning these killings was called 'The Committee for Special Operations,' do you know if this committee still exists and what it might be up to?

ROYA HAKAKIAN:
I don't know whether the committee still exists but I know that at the time that the trial was going on there were several witnesses who had been with high ranking members within various organizations inside Iran; ministry, one from the ministry of information, one was the former president of Iran, Bani Saj, who testified to the fact that every decision that is made for an assassination or for such an operation whether inside Iran or abroad is made with the approval from the highest ranking members of the Iranian leadership, the supreme leader, among them.

JIM GLASSMAN:
Let's talk about what's happening today because the timing of your book was just exquisite-- and by the way your book was just recently named one of the most-- 100 most notable books of the year by the New York Times. So congratulations.

ROYA HAKAKIAN:
Thank you.

JIM GLASSMAN:
Many people were shocked to learn that Iranian people forces were behind an effort to have the Saudi ambassador to the United States assassinated in Washington in a restaurant apparently. But you've written that the Iranians targeted the ambassador-- Saudi ambassador of Sweden in 1990. So this is nothing new. On the other hand since 1997 when this judgment was made in the German court there have been no attempted assassinations and you know people had said that the regime was chided-- understood there's some bad consequences. So what do you make of what's going on here in the United States with this plot to assassinate the Saudi ambassador?

ROYA HAKAKIAN:
Well for one thing I think-- I look forward to the trial. I look forward to learning what really happened. What was the motivation? And just watching for once how it is that we as Americans make an accusation of espionage or terrorism against someone and go about trying the person that we've accused because this will be a very important moment for Iranians also to see you know here is Iran that constantly comes up with these accusations whether against hikers or Iranians living inside Iran you know that-- they're conducting espionage. So I think this would be a very, very refreshing change for us to just show how it is that we conduct a trial here in this country and what justice in action really includes.

JIM GLASSMAN:
So does that tell us anything about where Iran is right now in history? For example, could this attempted assassination be related to the green movement-- the green revolution which began in 2009, it was tweeted around the world and seemed to have some momentum and now seems to be a little more quiescent. Is there a relationship there?

ROYA HAKAKIAN:
I think that 2009 was an important moment in that up until then there was a sense of belief that the regime was legitimate, that the supreme leader was a benign leader, and that if the public took to the polls and chose the candidate that they really wanted as president that the votes will take care of what needed to be done. And I think once the votes were not honored, once the guards attacked, arrested, the demonstrators and you know the brutality by which they went around you know arresting activists showed itself then that was a very big moment for the public to realize that the regime is not legitimate, that the supreme leader isn't really the nation's father that wants the good of all in his heart and that it further-- not only revealed the face of those in leadership but also it separated the nation from those who are supposed to be in the position of leadership and I think further polarized both the regime and the public.

JIM GLASSMAN:
Some in Washington have reported that Iran's Quds force-- what is the Quds force by the way?

ROYA HAKAKIAN:
It's an elite unit within the revolutionary guards that do much of the extra judicial territorial operations that the revolutionary guards carry out.

JIM GLASSMAN:
So the Quds force is developing a presence in Latin America, especially Venezuela, how credible do you find this-- these reports? And should we be concerned about it?

ROYA HAKAKIAN:
Well we should be concerned about the Quds force and in my view for reasons that have to do with the history of the Quds force operations. They have been involved in many of the assassinations that Iran carried out against the list of 500 throughout Europe. I mean in those years in the 80s when these operations were occurring the international community basically turned a blind eye to these assassinations and unfortunately it is until now when there are non Iranians, you know high profile non Iranians that are being involved that we have finally come to pay attention to them but they had been implicated and involved in numerous operations against Iranian dissidents.

JIM GLASSMAN:
Apart from sanctions-- president Bush and president Obama generally had at least in public a wait and see attitude toward Iran. Do you believe that more action should be taken against the current regime?

ROYA HAKAKIAN:
I think there are ways possibly of filling in the gaps that existed when in 2009 the public took to the streets. And one of those gaps was in the area of communications. The movement was at the mercy of the regime for reaching to its members. They took down Twitter when they wanted to, they took down the Internet when they wanted to, they took down the cell phone towers when they wanted to. And you know they're also trying very hard to make it impossible for news broadcasts in Persian to reach Iran, whether it's the Voice of America, or BBC, or other broadcasts. And I think for starters filling in the gaps that the 2009 movement experienced would be a major step in strengthening the hands of the potential hopefully near future next movement.

JIM GLASSMAN:
So where's the real power in Iran? It's with the supreme leader? It's not with the president?

ROYA HAKAKIAN:
I think it's with the supreme leader and revolutionary guards. I think the revolutionary guards are the people who are really running Iran economically and politically. We here in the United States look at what needs to happen in Iran as the Iranians versus the regime but it's really a question of how does a believing nation separate itself from those who are defining themselves as the representatives of God in charge. That's a very hard thing to do. This is no longer a question of Iranians versus Khamenei but it's a question of how do you as a believing Muslim say no to your clerical leadership and say you go back to the mosque, we still honor you, but we want to have a government that is completely free of religious influence.

JIM GLASSMAN:
And you think that that-- those forces are occurring in Iran in the same way that they've occurred in Libya, Tunisia, Egypt maybe not so visible, but that's the movement of history?

ROYA HAKAKIAN:
I think that's the movement of history and I think Iran is a pivotal place in what happens next because I think Iran is where it all began in 1979 where this fantasy of let's bring our clerical leadership to power and see what happens really took shape. And I think it is where it will be buried as well. But I think it will all depend on how well the Iranians do it and most importantly how they figure out the process and the separation should occur.

JIM GLASSMAN:
Thank you Roya Hakakian and thanks for writing a really a fascinating and very, very timely book.

ROYA HAKAKIAN:
Thank you.

JIM GLASSMAN:
And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

The New Battle Field: Life After War for America's New Veterans

2011-12-21T17:58:53Z

As the wars in Afghanistan and Iraq wind down, a new generation of veterans is returning home. While some may suffer from visible scars, many more carry psychological wounds that that are harder to recognize. How can Americans help today's new generation of veterans adapt to life back home?

]]> IDEAS IN ACTION with Jim Glassman

The New Battle Field; Life After War for America's New Veterans

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. This week: after ten years in Afghanistan and with combat operations over in Iraq a new class of veterans will need to adapt to life back home. They're returning to a weak job market and a Veterans Administration that critics say isn't up to the task of helping them. Joining me to discuss this topic are; Colonel David Sutherland, special assistant to the chairman of the joint chiefs of staff; Paula Domenici, head of training programs at the Center for Deployment Psychology at the Uniform Services University of Health Sciences; and Rajiv Srinivasan, spokesperson for Iraq and Afghanistan Veterans of America. The topic this week: the new battlefield, life after war for America's new veterans. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
Since 2001, 2.3 million Americans have joined the U.S. military with many serving in Iraq or Afghanistan. As those conflicts wind down America's newest veterans are returning home. While some struggle with visible scars, others suffer from invisible, psychological wounds. How is today's generation of vets adapting to civilian life and what can Americans do to help? Colonel Sutherland 2.3 million Americans have fought in the most recent wars in Afghanistan and Iraq. What is unique about this new generation of veterans?

COL. DAVID SUTHERLAND:
Well I think that first off this generation of veterans are wired to serve. They just need a little help during transition and reintegration and they'll thrive. They've proven their fortitude, they've proven their capabilities time and time again on the battlefield and I've seen valor on the battlefield. The series of noble acts over a period of time under harsh conditions. And I've seen valor when they come home. They're the same series of noble acts over a period of time under harsh conditions. And sometimes it takes more than valor. It takes communities, and leaders in the communities, recognizing their potential for greatness. This generation of veterans, just like previous generations of veterans, have served with distinction. They're brave, they're disciplined, individually and collectively, and they're kind, and we see it over and over again. It's when they come home that those challenges-- the recognition and the assistance at the local level is so important.

JIM GLASSMAN:
Captain nearly 99% of Americans are not involved in military life and is this disconnect hamper veterans in transition, sort of-- maybe a lack of understanding?

CAPT. RAJIV SRINIVASAN:
You know the easy answer is yes. To say that because fewer people are serving then that's why military folks are having a harder time to transition. But I believe the right answer is no. The issue here isn't to get more people to serve. I don't think that would really help or hurt the situation. To me the issue is that we do not look at Veterans Affairs and the utilitarian argument for why it's important. Right now when you hear an argument for Veterans Affairs or an argument for veterans charities it's usually an argument that says oh of compassion, feel sorry for these vets, take care of them because they served their country. What we need to start doing is changing the argument. We need to realize that Veterans Affairs are important to this country for two reasons in my opinion; one it's an economic issue, we spend hundreds of thousands of dollars training these young men and women we need to make sure we maximize that utility when they come back home. To me the most important argument though is it's a national security issue, because every homeless veteran, every jobless veteran, every veteran without healthcare, is a walking billboard for our young leaders in high school today for them not to join the military. And quite frankly it's far stronger and louder when a young high school student sees a homeless or jobless veteran to realize that they could probably find welfare and a higher standard of living in another profession and our best and brightest won't join the service and our frontlines will be weaker for it.

JIM GLASSMAN:
Paula there's a recent Pew poll that says that reported rates of posttraumatic stress disorder are much higher than in previous wars. How have we progressed in helping veterans deal with this and other psychological conditions?

PAULA DOMENICI:
Well first of all I would actually disagree with that to some extent. We know the rates of PTSD range from about 14% to 30% depending on when you're looking at when they're surveyed; if they're in theater, when they come home, are they in veteran status, and those rates are not dramatically higher than other-- if you look at other wars. But irrespective of that I mean it's very important for us to address PTSD and where I work at the Center for Deployment Psychology what we are doing is disseminating evidence based treatments for conditions like PTSD that can actually get our soldiers and veterans better. Where they don't--

JIM GLASSMAN:
And what does that mean?

PAULA DOMENICI:
That they can stay in the mission. They can stay in the fight. They may not have to leave the service, that they don't need to be disabled, that they can be functional.

JIM GLASSMAN:
And Colonel Sutherland you don't really consider PTSD an illness right?

COL. DAVID SUTHERLAND:
I don't and in fact I won't use disorder associated with it. It's a sense of disconnection for me, my interpretation, I'm not a PhD or a doctor, my PhD's in soldiering. The understanding of that epidemic of disconnection when we come home and we don't feel like we fit in. Those sacred moments on the battlefield turn into secrets where we can't talk about these issues but-- the doctor's right. I mean the previous generation of veterans because of their challenges when they came home, especially our Vietnam veterans, we can now talk about our challenges and we can address them directly because we can talk about them. But understand-we're not victims, we're veterans. And we don't need a handout we need a hand up and it's not pity we're looking for but recognition of the potential. And when organizations do that-- RAND just recently released a study about the belongingness, the remedy to help deal with the effects of posttraumatic stress is a sense of belongingness, a sense of community, and how important that is to be able to talk about and feel like you fit in.

JIM GLASSMAN:
Yes.

PAULA DOMENICI:
If I could just add the other thing we're doing is training military providers to use evidence based practices in theater, in Iraq, in Afghanistan, for individuals on the field who have posttraumatic stress symptoms. So to intervene early and maybe pull them off the frontline but they're still downrange with their unit to some extent and so we're treating it earlier and sooner and not medivac-ing some of these folks home which we know often isn't good for their mental health.

COL. DAVID SUTHERLAND:
I think Raj will support me on this; we get asked three questions when we come home. Our friends will ask us what did we do over there. Our families will ask how do you feel about what you did. And we have to ask ourselves what did we accomplish. And discussing those and having the awareness on the battlefield we can do that because we have a built in peer-to-peer support network. It's when we come home and we lose that support network and that's why mentorship programs, peer-to-peer programs, at that local level, and family resilience. Our fam-- we can't discuss the service members without discussing the families.

JIM GLASSMAN:
So this community approach is that something, Captain, that DOD should be supporting or the Veterans Affairs Department, or is that for individual organizations and families? I mean, how do we get to this ideal that Colonel Sutherland is talking about?

CAPT. RAJIV SRINIVASAN:
Well I think he hit it right on the head it's about the community. It's about community organizations and---

JIM GLASSMAN:
So at the local level you're talking about?

CAPT. RAJIV SRINIVASAN:
Absolutely. To me in my opinion the issue isn't the availability of such programs. To me the supply side of this equation is actually not terrible in this country. To me it's the demand side that's really hurting and what I mean by that is when you come back as an Afghanistan or Iraq war vet we're soldiers, we're programmed to be self reliant, to take on any task on our own shoulders, and when it comes to the idea of asking for help I think a lot of us are more and more reluctant to seek out help. I think the demand for those programs on the soldiers' side is what-- is the missing side of this equation. I think it's going to take a lot of work to tell these soldiers that it's ok to go out and ask for help.

JIM GLASSMAN:
And you're saying it's ok to go out and help so it's not simply availability of information it is in some sense sort of psychological?

CAPT. RAJIV SRINIVASAN:
Absolutely and you know I'd add something that in my work with Veterans Affairs the most effective path to reaching the veteran isn't through veteran targeted marketing by any means it's actually reaching the veteran's mother, the veteran's father, the veteran's girlfriend, the veteran's sister; the family of influencers around the veteran that can really shape his or her decision making. I'm a great example of that. When I came back from Afghanistan I definitely needed to see a counselor. I had some posttraumatic stress issues that were definitely affecting my life but it wasn't until my mother and my girlfriend intervened that I went and actually took that first step into the counseling room.

JIM GLASSMAN:
And when you say affecting your life, if you don't mind, in what way?

CAPT. RAJIV SRINIVASAN:
I mean it starts out from anything from bad dreams that don't let you sleep at night, and abuse of food, I gained a lot of bad weight, neglecting, not to a point of huge noticeability, but neglecting my professional life and my personal health, where I just didn't feel good about myself.

COL. DAVID SUTHERLAND:
Not wanting to go into crowds.

CAPT. RAJIV SRINIVASAN:
Not wanting to go into crowds.

COL. DAVID SUTHERLAND:
Being hyper vigilant, re-experiencing the events over and over again.

CAPT. RAJIV SRINIVASAN:
And my temper. That was the one thing that really got out of control and how I-- when I really stood back and said I need to get help is when I saw how flaring my temper was when I came back.

COL. DAVID SUTHERLAND:
What you get from the community level to go back to what Raj is saying is you get information and options. There is a desire to want to help, there-- across the nation. I've now been to 300 communities in the past year and there is a desire to want to help. The American people know what we are but they don't know us and therefore-- and when I saw what we are we're a military, we're at war, we're fighting. Each one of us is unique and individuals. Although I can talk through his symptoms and he can talk through mine we still have different ways of dealing with that and what we find at the community level is flexibility, innovation, and a horizontal network as opposed to a vertical network that's policy driven. Having that flexibility comes from the local levels.

JIM GLASSMAN:
This is a very important point so how, Paula, do we-- is there a way to kind of de-stigmatize the asking for help?

PAULA DOMENICI:
I think it has to be a top down and bottom up approach within the military. The culture is shifting and you know has shifted a great deal but there still remains a lot of stigma. So I think both from leadership as well as the average battle buddy everybody along the continuum needs to know the importance of one's wellbeing and mental health to the resilient soldier-- that that's going to actually help the mission.

JIM GLASSMAN:
But the resilient soldier-- but in many cases these are returning soldiers, they may not be soldiers anymore. So does that mean that the kind of intervention has to come in at the time they're on the battlefield? Just you know remember if you have problems when you get back--

PAULA DOMENICI:
I think it needs to start throughout the deployment cycle, you know pre-deployment, during deployment, after deployment. It's not a message that can only be there when someone steps off the plane after having served in a war zone.

JIM GLASSMAN:
Rajiv.

CAPT. RAJIV SRINIVASAN:
I'd like to talk-- I'd like to take your step one point further Paula is that I don't think transition begins during deployment, doesn't begin after deployment, transition for the solder begins when he signs on the dotted line in my opinion. Just to give you a glimpse during the pre-deployment timeline for a soldier moves very fast. You spend a vast-- especially for a combat-armed soldier you're spending weeks if not a month in the field and spending a lot of time away from your family. When the few days that you have back on post in Garrison on your main day to day life of post you're trying to get in do your job and get home because you know you're going to be away from them for a year. And then of course during deployment it's 365 days, 24 hours a day you're on call. And then when you come back it's the same thing, you know you want to be with your family. And all these tasks like making us go to PowerPoint briefings or these mandatory one to two hour counseling sessions they seem like distractions. The way you have to fix that is the minute the soldier, sailor, airman, marine, the minute they sign on the dotted line we have to think what's the next step for this person. To me it's a holistic approach that is not associated at all with the deployment but is associated with the flag that he or she wears on his shoulder.

COL. DAVID SUTHERLAND:
It's a specific leadership at the local level, what Paula's talking about, what Raj is talking about, it's leadership. And it's our responsibility when they're in to say there is no stigma. You've got an army captain who served in Afghanistan and an army colonel who has served multiple tours in different locations saying I've got post traumatic stress and what's important is your quality of life long term and that quality of life comes from looking for options that best suit you to deal with this vileness that you've just experienced.

PAULA DOMENICI:
And if I could just add an important part of our training is to get to all sorts of individuals that will interface with a service member or veteran whether it's a primary care doc who might be their first entryway into talking about sleep problems or a minister or a priest, chaplains also may be a good segway. In addition using things like telemedicine. So I think we need to be creative and know there's a lot of different access points and that all of those individuals if they can be trained up to look for and help service members with problems that they then may be able to refer them on.

JIM GLASSMAN:
You know Paula the VA estimates that 18 veterans commit suicide everyday and that number may well be underreported. Can something be done specifically to address that problem?

PAULA DOMENICI:
Well I actually think a lot of good things are underway regarding suicide in the military from the DOD side specifically. Most of-- all the branches have prevention efforts that are very good. There's a large multiyear study underway that's looking at risk and protective factors for Army specifically. The VA has a hotline and suicide coordinators. Suicide is a very complicated condition. There's many variables that are at play. We can't say that it's only linked to deployment. It's hard to predict suicide. So I think education and awareness about the signs and symptoms again among everybody that will interface with the veteran or service member is really important.

JIM GLASSMAN:
I'm wondering-- Colonel Sutherland used the term vileness and I'm just wondering whether you Colonel or Captain-- is there something about Afghanistan and Iraq that's different-- COL. DAVID SUTHERLAND:
Yeah I think that first off war is vile no matter where.

JIM GLASSMAN:
Right.

COL. DAVID SUTHERLAND:
It is the most vile thing you can think of with the exception of why we fight. Holding a five-year-old girl in my arms who'd been shot in the face because her father was trying to enforce a rule of law and not Sharia law is why we fight. Going into a torture house and in one corner are arms and another corner are legs, another corner torsos, and another corner heads of seventy different men, women, and children, that were brutalized because they would not succumb to Zarqawi's view of the world is why we fight. But that affects you and you come home and it's the same effect in Vietnam, the same effect in Korea, and WWII. I met a gentleman yesterday who fought in the Battle of the Bulge that says he still wrestles with his demons and we can talk about this now and that's part of the goodness. But when you're used to accomplishing the mission on the battlefield and you come home and you can't get a job that power of humiliation will overwhelm you. Or it's difficult to stay in a classroom because you've got two tours in Iraq and one in Afghanistan and the kid sitting next to you is 18 years old and just out of high school and giggles every time the door slams and you jump and he's got-- he's texting and doesn't have the same level of discipline-- that feeling of fitting in. So what we find are veteran resource centers at universities that make a difference and connect the veterans to one another. Or in the workplace a veterans network or a mentorship program and sponsorship program geared towards the veterans. That makes a huge difference--

JIM GLASSMAN:
That brings up a good point, which is about unemployment. I mean I don't think there's any doubt those of us who know military people who have fought in these two wars that the level of talent is tremendously high-- dedication, talent, ability-- and yet the Bureau of Labor Statistics in October showed that veterans between the ages of 18 and 24 have an unemployment rate of 22%. Do you think that the bill that was just passed by congress helping veterans through tax credits to employers-- will that help? Are there other things that could help?

CAPT. RAJIV SRINIVASAN:
I do think it'll help. I think it'll help for several reasons; one there's nothing more fulfilling than leading soldiers in combat and so when you transition back and you're in a 9 to 5 job your tendency is to slack off. Your tend-- you're not 100% in because your heart and your mind are somewhere else. What I believe that tax credit does to the employer is that it serves as a credit to say hey thank you for taking a risk on this person that's coming back. Thank you for taking a risk on him. We understand that there may have been other people who are more qualified, had prior experience, but you're taking a risk on a veteran. We understand the sacrifice that you're making and we hope that you'll keep him onboard because we want to make it financially beneficial to you to make sure you're taking care of our veterans. I believe it's a good thing and I do think it will help.

JIM GLASSMAN:
Is there a problem Colonel Sutherland in the talents, the skills, the jobs that are-- that people use when they're in the military not being readily transferable?

COL. DAVID SUTHERLAND:
No I think they are transferable. When you understand risk and how to mitigate it and you understand showing up for work on time and not minding working on weekends or holidays-- but more importantly you understand the decision-making, the leadership making a positive difference on a daily basis. And then the other aspect is what they bring in decision-making and what they bring in talent and fortitude is phenomenal because I don't see hiring a veteran as a risk-- as a risky proposition. What I see as they want to be part of a winning organization and they want to take it to the next level. The challenge is that we've got organizations out there saying we want to hire veterans, we can't find them. And part of it is they're coming to us, to government, to find them. They're in your local community.

JIM GLASSMAN:
So if somebody's watching this program and says you know I'm convinced I really want to hire veterans there's not one place that such a person would go right?

COL. DAVID SUTHERLAND:
Exactly. They're migrating to the trades. They want to continue to do what they did but we've made it difficult because of licensing and credentialing requirements at the state level. Where somebody that's been a medic on the battlefield comes back and has to go through EMT training from day one with a kid just out of-- an 18 year old. And so we have to recognize their skills at the civil level-- civil society-- and adjust to them as opposed to the service member and veteran coming back and adjusting to civil society.

PAULA DOMENICI:
And I think we need to educate employers that-- about not having stereotypes about our veterans that they all have PTSD, they're all going to go over the edge and be aggressive, etc. It's just not true. The majority of our service members and veterans are resilient and you know they have reintegration challenges but they don't have PTSD. So we need to break those stereotypes through education, through training groups like the one where I work. And we need to get--

JIM GLASSMAN:
And you see-- and that's a real problem that's not just something-- that's not just conjecture--

PAULA DOMENICI:
I mean you've got organizations that want to hire, you're describing, and they don't know quite how to connect but I think you have a group of corporations and organizations that do think it's a risk and are concerned they're going to have the one person who goes over the edge and does something and their place is going to hold liability. And so we need to give them education and let them know that these men and women have great skill sets and values that's going to truly benefit their organization. We just need to help them understand how they're transferable.

COL. DAVID SUTHERLAND:
We had an individual in Phoenix the other day that just his workspace was not conducive for his issues. Every time he was in a cubicle, every time someone walked behind him, he flinched, he jumped. Not that it was disruptive to anyone else but it affected his productivity. The leadership of that company engaged with him, looked at his workspace, they put up a rearview mirror, his productivity went off the chart.

JIM GLASSMAN:
Great story. And let's just conclude, I want to ask all of you-- polls show that Americans very much support this newest generation of veterans and-- but they often don't know what they should do to show their appreciation. What can Americans do just to show military people who are returning from Afghanistan and Iraq that they really appreciate their service to the United States. Rajiv.

CAPT. RAJIV SRINIVASAN:
I think the baseline answer is to get involved. It's one thing to reach out your hand and thank me for your service but I want to know what you're doing to really thank the guys that are coming behind me. I want to see people at the YMCA. I want to see people in their church reaching out to those in their community who they know are vets. The hard part about the community effort is that if you take the total number of Iraq and Afghanistan war vets and divide them amongst the 3,000 plus counties in the country you're talking maybe a handful per country. They're few and far between and so that means when you find one in your community you really invest in them. You show them that you're thankful, you keep your eye out for them as if they were your neighbor, your friend, and see what you can do with your own dollar, with your own time, to make that veteran's transition the easiest it can be.

PAULA DOMENICI:
And I want to just add to that. I think a big issue is the moral injuries that service members sustain which goes to the fact that they're incredibly compassionate and they have to make these split second decisions about incredibly hard things about you know the baby that's going to die or running over somebody and so they come home with these moral and ethical challenges that just eat up their soul. I mean that's what I hear about in my clinical sessions and that's hard work and we need to be thankful for what you're describing.

JIM GLASSMAN:
And what about this appreciation question? What can people do to show appreciation?

PAULA DOMENICI:
I mean I think what you're saying obviously is really important. Joining up in any type of volunteer group. I think probably one of the most important things also is if you interact with a veteran to listen, to listen to their story, and if they don't want to talk that's fine too but to be there and just listen.

JIM GLASSMAN:
Colonel?

COL. DAVID SUTHERLAND:
I would say recognizing that there are just some things that government can't do. That independent organizations working together and leaders in communities coming together, solution focused as opposed to problem focused, and what I mean by that is there are cities where we've got up to 1500 unemployed veterans in one city from Iraq and Afghanistan and so these black holes for transition and reintegration services can only be solved by that conduit coming together focusing the good will. Mentorship programs keep them in school, being a mentor for a returning service member. University of Arizona-- every veteran at the University of Arizona that wants one has a mentor from the Tucson community. Look at linking your employment efforts to those groups but recognizing that trades are people too. The trades-- the truck drivers, the pipe fitters, the crane operators, they all participate in this as well and so providing internships while they go to school enables these service members and that's where you find them.

JIM GLASSMAN:
Thank you Colonel Sutherland, thank you Captain, and thank you Paula.

PAULA DOMENICI:
Thank you for having us.

JIM GLASSMAN:
And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Stories from the Arab Spring: Will Democracy Take Hold?

2011-12-13T18:37:57Z

As Tunisia and Egypt begin transitioning away from dictatorships and towards democracy, two Middle East experts assess the progress that has been made, as well as the hurdles that remain for both North African countries.

]]> IDEAS IN ACTION with Jim Glassman

Stories from the Arab Spring: Will Democracy Take Hold?

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. In the spring of 2011 Tunisia and Egypt erupted in protest for freedom and democracy. The success of these movements brought hope to dissidents who had fought through years of repression. Now Tunisia has held peaceful and democratic elections but the future of the democracy movement in Egypt is in question. Joining me to discuss the future of democracy in the Middle East are; Josh Muravchik, fellow at the George W. Bush Institute and author of The Next Founders: Voices of Democracy in the Middle East; and Michele Dunne, Executive Director of the Rafik Hariri Center for the Middle East at the Atlantic Council. The topic this week: the outlook for freedom after the Arab Spring. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
Last spring the Middle East and North Africa erupted in demonstrations and protests for democracy and freedom. The movements that seemed to come to life with a sudden spark had actually been nurtured for years by a courageous group of dissidents, some of whom endured beatings, torture, and prison. The George W. Bush Institute has created The Freedom Collection, a series of videotaped interviews with dissidents from around the world. We recently interviewed several of these activists in Egypt and Tunis to record their stories for history and to learn what they believe will happen next. Welcome. Michele, let's just start with Tunisia. How did the elections there go?

MICHELE DUNNE:
The elections that Tunisia held on October 23rd went very well. These were Tunisia's first free elections and they were for a 100 member constituent assembly that will probably be in office only a year, will undertake the writing of a new constitution, and will also appoint a cabinet, that actually has happened now, and rule the country during this interim period. And the elections went very well. They got high marks for the cleanness and the fairness of the elections and probably the best testament to the elections were that the losers conceded gracefully and said well ok this was fair and also I think most of the losers said they wanted to help those who had won the elections. It wasn't really a surprise that the Islamist movement Ennahda won the largest share of the constituent assembly, 41% of the seats.

JIM GLASSMAN:

And Josh you were in Tunisia recently so why were they as trouble free, these elections, as Michele said?

JOSHUA MURAVCHIK:
Well I think there was a broad national consensus that they wanted to move forward to democracy and they were well organized. Tunisia was-- has in a sense been a kind of anomaly in that all of the Arab world upon independence was ruled by dictators but-- including Tunisia-- but the previous dictator Bourguiba was relatively more mild, or more liberal, than most of the other Arab dictators, and then his successor Ben Ali actually tightened the dictatorship very severely and made it more of a police state than many of the other regional countries. And yet Tunisia is also more western in many ways; all the children learn French as well as Arabic in school, it's a more middle class country, and there was a kind of anomaly between the degree of repression in Tunisia and the degree of development of society. And so when they finally had the moment in which they overthrew this dictator I think there was a very well shared and well understood idea among Tunisians about wanting to have a democracy and what that would mean.

JIM GLASSMAN:
And Michele though there is concern in some corners about the size of the vote that the Islamists got-- Islamist party-- 40% of the vote, really the dominant party, what's your sense about that?

MICHELE DUNNE:
Ennahda, the mainstream Islamist movement in Tunisia, had a lot of credibility with Tunisians because it was very much repressed under Ben Ali, basically forced to go into exile, and they came back and just got off to a very fast start in Tunisia in only a few months you know after having been really not able to be active in the country at all for years, came back in and captured all these shares. But they have made an effort so far to be clear that they're not going to try to overturn the secular nature of the state, that they understand that Tunisia is a fairly liberal place compared to other Arab countries, and that they're going to work with other factions. And they have already now formed a coalition government with two other secular factions.

JIM GLASSMAN:
And Josh you were in Tunisia, what's your view?

JOSHUA MURAVCHIK:
We don't really know what these Islamists want and I'm not sure that they know. Certainly I think they're not all of one mind, but I spoke to a variety of liberals who are secularists and I found them split down the middle. About half of the liberals I spoke to said Ennahda we're not afraid of them, they're not so extreme, and if they try to really impose anything on us that's undemocratic we'll be back out in the streets tomorrow and Ennahda will be easier to overthrow than Ben Ali was--

JIM GLASSMAN:
Or could they dissolve this coalition that Michele was talking about?

JOSHUA MURAVCHIK:
Well that depends on two parties and that may depend more on the ambitions of individual politicians than it depends on popular sentiment. But the other half of the group of liberals and secularists that I spoke to were actually quite worried.

JIM GLASSMAN:
You know Josh you talked earlier about the kind of democratic or liberal background of many of the people in Tunisia but there was a tremendous amount of repression and I just wanted to run a clip from an interview with Sihem Bensedrine, a Tunisian activists whom you interviewed recently in Tunisia as part of the Bush Institute's Freedom Collection. So let's just run a clip of that right now.

SIHEM BENSEDRINE:
They used a lot of tools of repression against me and my family. They stole my car and the car of my husband. Of course they also used a lot of physical harassment. Each time I do a declaration or statement or an outlet on human rights violation immediately they send the Bandi--

JOSHUA MURAVCHIK:
Thugs.

SIHEM:
How do you say it?

JOSHUA MURAVCHIK:
Thugs.

SIHEM:
Thugs. And they beat me in the street.

JIM GLASSMAN:
Was this common? This kind of repression?

JOSHUA MURAVCHIK:
It was common. This was a very, very harsh and strict regime. In a sense as I was saying earlier, it's a little hard to understand why because Tunisia was a relatively developed country and not such a difficult country to rule in the sense that it has no ethnic divisions to speak of and the economic situation was advanced of its neighbors, but a lot of people were treated very-- tortured or some killed, many, many imprisoned, and also there was a sense of pervasive spying by the regime so that people were constantly looking over their shoulders and afraid they were being watched.

JIM GLASSMAN:
But Michele what would you caution Tunisians to do in order to keep moving forward in the early days of their democracy?

MICHELE DUNNE:
Actually Tunisians I think have been very, very vigilant since they overturned Ben Ali and we saw Tunisia go through several months of instability in which different interim governments were overturned and eventually they moved into a process of sort of very large round tables, several very large commissions, that were formed and that bargained over a series of months to then negotiate out this transition. So one thing I think will be very important will be to keep that spirit of inclusiveness going forward as they write a new constitution and to guard against a kind of a tyranny of the majority-- well now there isn't really a majority as we said, there's an Islamist plurality-- but a pretty strong plurality in the constituent assembly and they've joined with a couple of basically leftist factions to form this government. So liberals are a little bit on the outside I think right now but still at the moment there's a good spirit of let's cooperate and I think this is a critical thing. In all of these countries that are in transition be it Tunisia, Egypt, Libya, Islamists are an important part of the political fabric and Islamists and secularists are going to have to cooperate and are going to have to work out rules of the road so that they can have ongoing democratic processes, people can win elections, lose elections, but that the rights of everyone in the society are protected.

JIM GLASSMAN:
And actually this is something that you have written about Josh; the notion that democracy needs more than just voting and there can be kind of tyranny in democracy and that people need to have established rights and these rules of the road that Michele talks about, which I think brings us to Egypt. Is that part of the potential source of the unrest in Egypt? Why is Egypt kind of in so much more turmoil than Tunisia?

JOSHUA MURAVCHIK:
Well Egypt I think the transition to democracy is in less favorable circumstances than Tunisia. One is it's a poorer country, second in Egypt we have this very important division that is you have a large minority-- ethnic, religious minority, the Copts, the Christians make up presumably 10% of Egyptians-- there's debate, the Copts will tell you they're actually more than 10%-- but they're at least 10% of the Egyptians. They're not Muslims, they're Christians, and they have-- they're in a sense the original Egyptians before the Muslim conquest of Egypt, those who did not convert. And they've always been second-class citizens but there's a question now of whether they're going to suffer sharper persecutions either by authorities in the government or by fellow citizens, Muslims who are prejudice against them. So that's a very raw sore point in Egypt. And thirdly there's a kind of inflammation in Egyptian politics that I sense, which I think has to do with a sense on the part of Egyptians of the historic greatness of their country, that is it is probably the most ancient civilization in the world. It's also historically the dominant and leading country in the region and it hasn't been that. It's been a very unhappy sort of stagnant country and it gives a kind of-- there's a kind of bitter sense of disappointment among Egyptians that I think you often hear in the way of conspiracy theories and things like that.

JIM GLASSMAN:
And also because Egypt is-- has kind of a less developed even below the surface democratic institutions a party like the Muslim Brotherhood has a lot more clout there.

MICHELE DUNNE:
Yeah the Muslim Brotherhood was founded in Egypt in 1928 so it's got a very, very long history in Egypt-- it's got a long history of political activism, it's got a long history of social and community activism. Look I think that what's going wrong the Egyptian transition, while I agree with everything that Josh said about look it's a much larger, poorer, less educated country, than Tunisia, and it's got some of these divisions within society that Tunisia doesn't suffer from quite as much but what's-- I think the bigger problem right now is that Egyptian demonstrators basically handed over control of the country to the military. What they did instead of having a full revolution was to provoke a military coup. The military removed Mubarak and promised to lead the country into a democratic transition. What we're seeing now is that the military is willing to hold parliamentary elections and to hand over legislative authority but they've shown that first of all they want to hold on to executive authority for a good long time. They have tried to postpone presidential elections as long as they can, postpone them specifically while a new constitution is written. The military has shown clearly it wants to remain in control while a new constitution is written because it wants its role enshrined in a new constitution. It wants the military to remain separate and in a sense above the new elected civilian authorities--

JIM GLASSMAN:
And is part of that a money question? Because the Egyptian military controls a lot of the economy, they don't want to see that valuable assets that they own taken away--

MICHELE DUNNE:
It's partly a money question but it's more than that. All Egyptians with whom I had spoken had agreed to set the money question aside, that the economic perquisites of the Egyptian military were not going to be challenged in the foreseeable future because everyone realized that would be explosive. But what the military has been trying to do during the transition is not just hold on to what it had during the Mubarak era but actually to increase it's power to make de-joure the sort of powers it had de facto under Mubarak and actually write them into the new constitution. And what we're seeing now is a renewal of protests and so forth in Egypt specifically asking the military to step aside and allow not only parliamentary but a presidential election so that it must then fully withdraw and turn over to civilian authorities. You know in Tunisia the military did that. The military in Tunisia was never as powerful as the Egyptian military but they stepped back very quickly and the whole transition was carried out by civilians. In Egypt so far the military has refused to do that and it's-- frankly it's messing up everything, it's making a terrible mess of the transition.

JIM GLASSMAN:
But is this partly for stability? I mean is there a way to put a kind of a better face on this?

MICHELE DUNNE:
Well that's the argument of the military is that we are the guardians of the nation and we will see you through this transition, however if one looks objectively-- let's set aside the political process, let's just look at how the military has been running the country in Egypt since February of 2011 when they ousted Mubarak, frankly it's a disaster. They have failed to carry out police reforms so there's a pervasive sense of crime and insecurity. They have failed miserably in addressing the rising sectarian tensions that Josh was referring to, Salafi baiting of Christians and violence against Christians. There have been 100 people killed in Egypt in terrible sectarian incidents. The military has completely failed to get on top of that and even itself has played a role I think in increasing sectarian tensions. The economy--

JIM GLASSMAN:
And the economy, yeah--

MICHELE DUNNE:
The economy is a terrible mess--

JIM GLASSMAN:
Right and they wouldn't even accept any money from the IMF.

MICHELE DUNNE:
They're being forced to change their minds now. They initially refused loans from the IMF back in June but now they're having to go back to the IMF and ask for those loans.

JIM GLASSMAN:
The revolution was very much you know lauded around the world for being peaceful and many of these peaceful protests as we know were made possible by bloggers and young people who use Facebook and twitter and mobile phones to organize. I just want to run a clip from your interview Josh with Mahmoud Salem and before we do that could you tell us a little bit more about him?

JOSHUA MURAVCHIK:
Well he's a very interesting young man, very irreverent, iconoclastic, very clever and witty. He started blogging in sort of what was the first wave of Egyptian and Arab bloggers around 2004, 2005, and he blogged under the name 'Sandmonkey', that was his moniker, and the reason he did it was not only for his own security but even more so his mother was a part of the establishment. She was a member of the peoples' assembly from the ruling party and as he explained to me he didn't want his irreverency to be chalked up against her. So he blogged under the pseudonym.

MAHMOUD SALEM:
In 2004, 2005, when the Egyptian blogosphere started, it started with about 30 blogs, and they were all secular blogs basically. People used to refer to it as 'the old guard', it included me, it included Ahmed Elbaga, it included a bunch of people like that. And at the time the idea was you're having debates, you have people on the far left, on the far secular right, and you know Christians and Muslims and they're finding the only place they can actually discuss issues of the country at the moment. And it's really funny because when you compare the atmosphere in 2004 and how far we have pushed things until now, stuff that used to be such taboos back then are now non-issues now. So-- but yeah no it was-- I wouldn't call it a movement. We used to joke about that because we're very different, we're not all friends, and it's not a monolithic entity, it's a bunch of walking egos who have large audiences online. But in order to deal with the media, which always needed a movement, we called it the 30th of February Movement and very few of them got the joke. So-- because there is no 30th of February.

JIM GLASSMAN:
Are bloggers and Facebook activists I mean are they still influential in Egypt?

JOSHUA MURAVCHIK:
Well I think they are but what's happened since the revolution is that there is now a free-- more or less free media in Egypt so you have lots of new television stations, new newspapers, and the thing about the bloggers was that they were in a society where there was not free media. They were sort of the cutting edge. They were a way around the control by the state of news sources and they are no longer that. So they've--

JIM GLASSMAN:
You mean because there's much more. Although I hear, Michele you were recently in Egypt, that another of the failures of the military is that they have really put a damper on a lot of free speech.

MICHELE DUNNE:
Yeah they're-- in Egypt right now you have a free media and it's true that a lot of the bloggers and Facebookers have moved into television, press, this kind of thing, because they were getting a bigger audience than they used to. But there's still a state media that exists side by side and that state media is really very, very troubled. There have been sort of mini revolutions inside some of the state media but then we also see the state media being manipulated by the military. For example there were some-- a very ugly sectarian clash in Cairo in early October in which there was a Christian march to protest the burning of a church in another part of Egypt and the state media actually called on people to go out into the streets and defend the soldiers from the Christian marchers who they said were attacking the soldiers, which they weren't, and this ended up in just a terrible sectarian clash in which more than 25 people were killed. And the Egyptian military has been exerting I would say selective repression against the media.

JIM GLASSMAN:
I'd like to ask both of you just to wrap up-- What do you see for Egypt in the future? Let's say over the next year. Josh.

JOSHUA MURAVCHIK:
I see a lot of turmoil in Egypt and if I were betting I would say 50-50 chance that Egypt will have a successful transition to a democratic system and a 50-50 chance it won't, that the process will break down in much greater internal violence or in some new kinds of undemocratic development.

JIM GLASSMAN:
Is that different from the way you would have felt let's say in March of 2011?

JOSHUA MURAVCHIK:
I'm a little less optimistic than I was. It was clear I think always that this was an uncertain path that Egypt was on, a very hopeful one, but with no guaranteed happy ending. I think that was clear all along but yes in the early months after the fall of Mubarak it was great sense of unity of Muslims and Christians, demonstrators in Tahrir Square, and the like. It seemed I would say better than even chance at that time if I had handicapped it that the outcome was going to be successful. I wouldn't say that the chances are better than even now.

JIM GLASSMAN:
Michele, what's your view of the future?

MICHELE DUNNE:
I'm optimistic that Egypt will become a democracy but more in the ten year timeframe than the one year timeframe. I mean one year is just frankly for any country undergoing a transition from authoritarianism to democracy, it's not going to happen in a year. Even if you-- now Egypt might well hold its first free elections and so forth and start down the road but I think there are some very rough days ahead. You know what Egypt did back in February of 2011 was kind of a half revolution. They removed Mubarak but not the military. So they didn't remove the power behind the throne. Now what we're seeing is Egyptians I think starting to perhaps carry out the other half of this revolution and it's very unclear where that will lead. But I think that over the longer term Egypt will make a transition. It won't be quick and easy. There may be many sort of diversions along the way but I certainly agree with Josh that Egypt is a whale in the region. The other country that's going to be enormously important is Syria. If both Egypt and Syria overthrow authoritarianism and are making their way, however slowly, toward real democracy it will have enormous impact. It will definitely show where the entire region is going.

JIM GLASSMAN:
Thank you Michele Dunne.

MICHELE DUNNE:
You're welcome, thanks for having me.

JIM GLASSMAN:
And thank you Josh Muravchik.

JOSHUA MURAVCHIK:
Nice to be with you.

JIM GLASSMAN:
And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

How to Save America's Middle-Class

2011-12-07T21:44:46Z

For many years, it has been portrayed in the media that America's middle class is dying. But if you look where people are going economically, the true picture might surprise you. What is the real state of America's middle class and what can Americans do to stay ahead?

]]> IDEAS IN ACTION with Jim Glassman

How to Save America's Middle-Class

JIM GLASSMAN:
Welcome to Ideas In Action, a television series about ideas and their consequences. I'm Jim Glassman. This week: Has America's middle class vanished? There's a lot of talk about the rich getting richer and the poor getting poorer in America. But is that really true? Joining me to discuss this topic are Don Peck, features editor of The Atlantic and author of Pinched: How the Great Recession has narrowed our future and what we can do about it. And Stephen Rose, research producer at the Georgetown University Center on Education and the Workforce, and author of Rebound: Why America will emerge stronger from the financial crisis. The topic this week: the forces changing the American middle class. This is Ideas In Action.

ANNOUNCER:
Funding for Ideas In Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never-ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
Is the American middle class under siege? Well, that seems to be the accepted story line in the media. Numbers show that the middle class has gotten smaller during the recession. But would you be surprised to find out that a healthy chunk of Americans moved into the upper middle class over the past ten years? To be sure, reports also find that those who have lost their jobs or whose incomes have remained stagnant are facing some dire consequences. What is the true state of the American middle class? Don, you write this in your book: "The richest 1% of households earn as much each year as the bottom 60% put together. They possess as much wealth as-- the-- the assets that they own-- as the bottom 90%." Now, first of all, why is this a problem?

DON PECK:
Well, I mean, if-- if incomes are growing robustly, you know, throughout society, it's-- it's-- it's much less of a problem, I think. I-- I-- I do think, though, that, you know, on its face, extreme in-- income inequality is-- is unhealthy for society. One thing that I-- I note in-- in-- in my book, Pinched, is when I talk to successful entrepreneurs and financiers today, they can get work anywhere in the world, sell their products anywhere in the world. They circulate quite widely among international cities, you know, from San Francisco in New York to Tokyo, London, Shanghai. One person-- at the Aspen Ideas Festival a few years ago, you know, said, "If I relocate work-- from the U.S. to China, and as a result of that-- you know, two Chinese-- move up from poverty into the middle class and one American falls out of the middle class, well, maybe that's not such a bad trade." And-- and-- and in fact, that's kind of a morally laudable, you know, way to look at humanity. But it's cold comfort to the middle class in America today. And I think that what we're seeing with the evolution of the economy and with extreme income inequality is a cultural separation there as well, between the top 1% and the rest of society. The interests of the top 1% of society and the rest of the society simply aren't as aligned as they used to be.

JIM GLASSMAN:
So you think that the top 1% should be more inward facing and forget about what's going on in the rest of the world?

DON PECK:
I-- I-- I'm not making a "should" statement. I-- I-- I-- but I am saying that that difference, that-- that divergence in interests, as well as the evolution of the meritocracy, in which people who succeed today-- you know, they really do attribute their success entire-- entirely to their own efforts. And as a result, I think they feel less obligation to the communities of their birth and to society as a whole. I think those are significant cultural changes.

JIM GLASSMAN:
That is a pretty-- shocking statistic. Richest 1% earn as much as bottom 60% put together.

STEPHEN ROSE:
There's a lot of people that have talked about American decline, and it's a big story. And people flock to it whenever it exists. The wealth data are skewed because everyone under 40 has zero wealth. So in the life cycle effect-- I was a grad-- poor graduate student. And now, 30 years later, I'm worth a lot of money. You know, wealth-- you know, looking at wealth and not adjusting for the life cycle effect will really skew your data in inequality. And in the income inequality, there's many different ways. In my mind, it doesn't pass the smell test at all. 70% of Americans have HDTVs. 65% of Americans, when surveyed, said compared to your standard of living today, how does it compare relative to your parents at the same lifestyle? This comes from a general social survey. We've been asking this question every two years for the last 40 years. It's remarkably consistent. Even in 2008, 63% of people said they lived better than their parents.

DON PECK:
The last-- again, I-- I really think if you look at the last 30 years-- while-- while it's important to make certain distinctions between women and men, between people with a high school diploma and-- and other Americans, you know, with-- with-- with significant exceptions, you know-- things have gotten better for the middle class. You know, they've gotten quite a bit better. The last ten years have really not been good years for the U.S. Median wages have stagnated. Job growth generally-- has been very low compared to other historical periods. You know, the employment to population ratio today is-- is quite low-- compared to the last couple of decades. So-- so something seems to be going on today-- as a result of technological progress, as a result of globalization, and as a result of culture. And-- and that does make me really worry about people in the middle of society. Steve has talked about the segregation of-- of people into kind of thirds. And-- and I-- I do think that, you know, we-- we need to be cognizant of-- of the high school only population as well. I-- I-- I think that-- when you combine high school dropouts-- with-- people with a high school diploma, but no more, you're-- you're near 40% of the population, aren't you?

STEPHEN ROSE:
No.

DON PECK:
No?

STEPHEN ROSE:
It's gone down. It's about 35 now.

DON PECK:
35? Okay. But I mean, this is-- this is a significant portion of the population in and of itself. I don't want any viewer to think that I'm saying the middle class is gone, that there are no people that are prospering in the U.S.-- or that the fate of America is-- is necessarily in decline. But I think there are some real and worrying signals out there, particularly within the last decade, and certainly since this recession began. You know, middle skilled jobs, according to the economist David Autor -- were hit especially hard-- and this recession, much harder than high skill or low skill jobs. That's something that has been a pattern for-- for a decade or more. And-- and so-- so I think-- you know, we-- we-- we can't-- the past is an extremely important thing to look at-- but I-- you know, I think we need to look at what's happening recently, what's happening now, and-- and-- and ask what's going to happen in the future.

JIM GLASSMAN:
Don, in the September Atlantic Magazine, you wrote a cover story about the vanishing middle class in America. And I want to quote from it: "The Great Recession has accelerated the hollowing out of the American middle class and it has illuminated the widening divide between most of America and the super rich. Both developments herald grave consequences." What were the main indices that you discovered during your reporting that supported this thesis?

DON PECK:
I think actually one of the most important is a cultural index. You know, if you-- if you look at the family habits of-- Americans, the-- the middle class, moderately educated Americans who finished high school, but didn't get a four year college degree, those habits were very similar to the college-educated population in the 1970s-- in terms of rates of marriage, rates of divorce-- and-- and probably most important, rates of single parenthood. But today-- moderately educated Americans in their family habits-- resemble closely high school dropouts, characterized by-- high rates of divorce and-- and very high rates of single parenthood. So in 2008, for instance-- among college graduates, 6% of children born to college graduates-- were born-- to single parents. Among high school dropouts, that was 54%. And among that middle group, it was 44%.

So-- so things have really changed in terms of family patterns for the middle class over 30 years. And I think the problem is that parents who don't marry tend not to stay together. And that unsettles the lives of children, who tend not to do as well in school or in life thereafter. So what we're seeing in part is a cultural separation, one that has continued and accelerated in this recession, and one that makes me worried, frankly-- in the long run, not-- not-- not this year, not next year, but in the long run, about-- about mobility in America.

JIM GLASSMAN:
But here are you defining middle class? You just-- you just gave a definition, at least a difference be one group and another group. One group didn't finish college, and another group did finish college. But what about income?

DON PECK:
Well, yeah. I mean-- I mean, there-- there are many ways you can-- you can define, you know, the middle class. There's no-- there's no single, clear definition for the middle class in the U.S. Over 90% of Americans-- identify themselves as middle class. You know, I think-- I think one way to think about the middle class-- we like to have a broad middle class in America. So perhaps the middle of society, the 25th up to the 75th percentile, is-- is a decent way to--

JIM GLASSMAN:
So-- just-- just to be clear, are you saying that the 30% of Americans who have graduated from college, they're-- they're not middle class?

DON PECK:
Well, they-- they consider themselves middle class. But I think-- I think realistically-- they're-- they're really not. You can say they're-- they're upper middle class. But I mean, if you-- if you just look at income distributions, certainly, I think you would say the top 30%, top 20, 30% of society shouldn't really be called middle class. It's-- it's either upper middle class or-- or lower upper class.

JIM GLASSMAN:
So-- so, Steve, has Don gotten this right? He-- he talks about a widening divide between-- most of America and the super rich, and this declining middle class, cultural problems. Is that right?

STEPHEN ROSE:
Well, Don's look at education. And I think he's made a serious mistake in the following way: You can think of society now as kind of a third, a third, a third. The third of a four year, a graduate degree, the third has high school-- high school or less, most, a high school degree. And then, there's a broad middle in the third. Those that have two year degrees, those that have certificates, those who have two or three years of colleges, but no degree. Don is basically putting that middle third with the bottom third. And I would argue that their situation is much more similar and much more middle class than-- than the bottom third.

JIM GLASSMAN:
But he's also saying it's changing. You know, it may have been true 20 years ago that it was more associated with the-- with the upper third. Now it is more associated with the lower third. Is that-- that what you're saying, or not? But--

DON PECK:
Cer-- certainly as to family matters, yes, yes.

JIM GLASSMAN:
Part of your article, of course, is about-- is about this-- this widening gap in incomes as well.

DON PECK:
Yeah, yeah. And I-- I think-- I think that cultural change, first of all, you know, needs to be linked in part to changing economics. And-- and particularly, the changing economics of men. This cultural change is not purely the product of economics. But-- but it is, I think, partially one. It's-- it's-- it's a product of declining wages for lower skilled men-- the exodus of men from the workforce, all of which tends to-- make marriage less common for-- for-- lower skill and-- and middle skill Americans. Now, Steve's done some very good analysis-- that I think correctly shows that, you know, when you-- when you look over the past 30 years, you know, what-- we don't see a picture of-- deep distress for-- for middle America. We see-- you know, some-- some income-- increases. The last ten years, you know, if you-- if you-- if you simply look at median incomes-- have not been as good. Median incomes-- were flat. You know, over the last ten years, they've fallen. But I-- I think what's really important as well is to distinguish between men and women. You know, women have done really well in the economy. There's-- there's still some discrimination. They still don't make as much as men on average. But they've done-- they've done well over the past 30 years. Men have not. And-- and again, that feeds into-- what I'm-- one of the things that I'm really, really worried about is that when men are economically insecure, when men aren't in the workforce-- women don't marry them. But they do have children with them. So-- so again, that's-- that's kind of how I see the interaction of-- of these two factors.

JIM GLASSMAN:
And-- and you're saying that that's bad for the children?

DON PECK:
Yes.

JIM GLASSMAN:
And is it also bad for the-- for the men?

DON PECK:
It's-- yes, it's-- it's bad for the men as well.

(OVERTALK)

JIM GLASSMAN:
'Cause women are a-- George Gilder wrote a book about this 30 years ago, that women are kind of a civilizing influence for men. I guess we could debate that. There are many men that are civilizing influences on women as well. But--

DON PECK:
Well, no. There's-- there's good evidence that shows that when men are married-- they work harder, they work longer. Their income path improves-- in part because they're working more. But their wage path also improves. So-- and-- and they're happier and healthier. So-- so-- so, yes. The-- the-- the-- this situation is-- is bad for men. And you know, I-- I think that when you look at the transition of the economy from an industrial economy to a post-industrial economy, what you see is that, you know, many men are doing fine. But-- but a meaningful minority of men have simply not adjusted well. You know, from-- from 1980 up until now, you know, men really haven't been completing four-year colleges at a much higher rate.

JIM GLASSMAN:
And-- and they haven't adjusted well because-- because traditionally, they made-- many men made their livings off the-- the-- the sweat of their brow, or off the-- the strength of their back, and they're not able to move to this new kind of economy?

DON PECK:
Many have-- have not been able to. And why is kind of a puzzle. But, you know, you-- you think-- you can think of two basic responses, as-- as outdoor work and factory work declines. You know, one is you get more education-- and take advantage of the many opportunities for people with more education in this economy. The other is you move into the service sector. You know, men-- at least if you look at-- at-- at four year college graduation rates, you know, really haven't gotten more education. And certainly not-- not to the extent that women have. And-- and they've had trouble moving into at least some of the-- the-- the fast-growing service industries, like health care and-- and-- and education, that women have really loaded into. So-- so, yeah. I mean, why haven't men taken the signals of a declining industrial economy more to heart? I think that's a puzzle. Perhaps they will in the future. But by and large, they haven't today.

JIM GLASSMAN:
Now, you-- Steve, in your book, you acknowledge the number of-- the number of people who reside in the middle class has declined. But you argue that the membership in the well off category has jumped quite a bit, by 14% between 1979 and 2007. So can you explain that?

STEPHEN ROSE:
Sure. I mean, as Don said, there's no real definition of the middle class. On some levels, you can define things as a relative term, between the 25th and 50-- 75th percentile. That means the middle class will always be 50%, so it can't change, by definition.

JIM GLASSMAN:
Right, right.

STEPHEN ROSE:
So that's called relative comparisons. And then, I tried to do an absolute comparison.

JIM GLASSMAN:
So what's your conclusion? I mean, is-- is it that the-- the-- the middle class didn't gain as much? But is that because people move from the middle class to the upper class?

STEPHEN ROSE:
No. My conclusion is, is that-- society grew by a lot. And the middle class got a sizable share of that. They could have gotten more. They didn't. The inequality was there, that the people in the top 25%, the top quintile, got more than their fair share. But there's two ways to look at it. They got more than their fair share, and there was none left over for the middle. And they got more than their fair share. And the middle class partook a lot in the income increase over these decades.

JIM GLASSMAN:
Okay. You're saying-- Don, that it is-- you're disturbed by what's happening now and what it appears will happen in the future. You're looking at data that go back 30 years.

STEPHEN ROSE:
Well, people say different thing-- things. And it's -- so there are different debates that are going on. Basically, what happened is in the '90s, you had a tremendous amount of growth. And we reached the highest employment levels that we had in the history of the country. And-- the people at the bottom did very well. In many ways, they kind of overshot where they had been before. And as the economy didn't recover that well in the 2000s, people went sideways, number one. Number two, another issue that's hard to get in the numbers is health care expenditures have just exploded. So health care expenditures, from an economist's point of view, benefit people, but they don't show up in many different datasets as part of your income, such that a study now that showed that instead of wages stagnating, they would have been up 5% in the 2000s if you incorporated increased in benefits. But let me talk to the general point. And the general point is, what does the future hold? And obviously, we don't know what that is. There's always reasons to be concerned. In America, as opposed to other, let's say, advanced countries, and Japan and Europe, has had a larger underclass.

JIM GLASSMAN:
Right.

STEPHEN ROSE:
You know, going it on their own, and that means fail on their own. That's point one. Point two: This recession has been remarkably different than other recessions. Its depth, its continuity-- this recession is not just an American recession, as we see today in what's happening in Europe, as they totter on the edge of recession and maybe go backwards. So it's not simply what happened to America. Can the future be different? Obviously, it can. But if we look at the past, there have been many different times where people have written America off. And America just has unique advantages relevant to the other advanced countries. We have the biggest market. English is the national-- is the international language. We have a developed financial and judicial system. We have the best colleges. These are not gonna go away. If anything, there's a brain drain to America.

JIM GLASSMAN:
You-- you mentioned as one of our comparative advantages, education. And I guess you're probably talking about higher education.

STEPHEN ROSE:
Yes, I was.

JIM GLASSMAN:
I think that there is certainly concern about this knowledge gap in the United States. Only 30% of Americans-- kind of a shocking statistic to a lot of people-- have graduated from college. And that's a number that's not going up, right?

DON PECK:
Well, it's going up. But it's going up slowly.

JIM GLASSMAN:
It's going up very-- very, very slowly.

DON PECK:
Yeah.

JIM GLASSMAN:
How important is that-- that four year degree today? Would we be less concerned about it? Is it-- is it really the-- the technological knowledge that people can gain right out high school, or maybe they should gain it in high school? I mean, how are we gonna solve this problem?

DON PECK:
I think, you know, a college-- a four year college degree remains a very good investment. And-- and you know, anyone considering going to school should-- should-- should be encouraged to-- to do so. I think we should-- encourage-- you know, much better K through 12 education, so that more people can go to and complete college. And yes, I think we also need to build-- more opportunities for-- for people who don't go to and complete a four-year degree. I mean, we need to continue to invest in our-- in our community colleges. You know, I-- I-- I think we-- we-- we really should try to build-- more pathways into the workforce-- for people who don't go to college at all, or at least not initially. You know, because we're so focused on four year college, I think often people who finish high school and aren't going on to college struggle the career paths through manufacturing that used to exist, don't exist. I'm personally encouraged by-- the proliferation of career academies in-- in U.S. high schools, which are schools which-- within schools that allow-- students to combine classroom learning with-- with technical skill, and very significantly, apprenticeships-- you know, which allow them to see, you know, real jobs and-- and what it takes to get there. You know, even if they don't go on to get a four year degree.

JIM GLASSMAN:
But are we getting to the point in America where in order to stay in the middle class, or certainly to join the upper middle class, that you need not just a college degree, but a graduate degree--

STEPHEN ROSE:
Okay--

JIM GLASSMAN:
--because of global competition among--

STEPHEN ROSE:
At the center, a couple of months ago, myself and the center director, Tony Carnivale, published a thing called The Undereducated American. So we certainly think, as Don said, that more post-secondary education is needed. And there'll be slightly more people getting a BA. You should understand that 30%-- for our labor force as a whole, there's only two countries in the world that have more than 30%. So, I mean, it sounds like a small number if you hang out only with college grads. In a world historic sense, that's a very high number, especially since so many people have two year degrees and certificates. So in the future, what I would change sort of thing, it's not you need a BA to get in the upper middle class. You need some post-secondary. I should note that what you major in matters a lot. So people with two year degrees, 28% of people with two year degrees earn more than the BA median. That is, there's a lot of variation.

JIM GLASSMAN:
Because what? They're in computer sciences or engineering--

STEPHEN ROSE:
They're in computer science. They're in engineering. They're in--

JIM GLASSMAN:
So it's not necessarily how long? It's-- it's-- it's the subject you choose to specialize in?

STEPHEN ROSE:
The subject you choose. And also, there's just individual variation. Some people didn't get that four-year degree, but still have that self-motivation. And one of the biggest jobs of two year college graduates who are making a lot of money, is that they're just managers at small businesses. They're worked their way up. They've built their businesses, or they've been rewarded. So I don't believe-- I think it is wrong to say that all you need is a four-year degree.

JIM GLASSMAN:
What-- what's your advice to young Americans? I think-- I think some of what-- Steve said had some implicit advice-- who want to stay in the middle class or move into the upper middle class?

DON PECK:
Yeah. Work hard-- stay in school. Get more education. And-- and-- and really-- you know, focus a lot of people today in school are going into business majors-- social science majors-- thinking that there's really kind of gold at the end of the rainbow from those majors. You know, the-- the-- the skills that are really in demand today involve, you know, math, science, engineering. I wish more Americans would-- would pursue those paths. But you know, I-- I-- I think for-- for people who do work hard, who do pursue their educations and continue them, and particularly for people who-- focus on those kind of harder majors-- you know, things-- things are going to be just fine.

JIM GLASSMAN:
We're seeing these Occupy Wall Street-- protests. And you know, there may be many reasons why people are-- are-- are down there on Wall Street and-- and elsewhere. But certainly, the stated reason is that all the gains are flying to Wall Street. There is this division in society. Do you think this is reflecting-- a broader-- feeling in the nation?

DON PECK:
I think there's a lot of discontent in the nation-- certainly. And I-- yeah, I think people are-- are angry at Wall Street. I-- I don't think that means that-- that, you know, millions of people are-- are about to take to the streets. I think-- I think the thing that's special about Wall Street, in a sense, is that, you know, most Americans really have very little problem with people who've done well as a result of say, entrepreneurial efforts. You know, where-- where it's clearly the product of their hard work, their-- their personal genius, say.

JIM GLASSMAN:
Steve Jobs?

DON PECK:
Steve Jobs. You know, to some extent, what's happened on Wall Street-- seems a little bit different than that. I mean, Wall Street seems, in some sense, like a partially rigged game, you know, where-- the U.S., you know, provides an implicit guarantee against failure. And-- and people on Wall Street-- itself, you know, take 100% of the gains when they do not fail. And I-- I think that's really-- the source of much American frustration with-- with Wall Street in particular today. And I think that's partially justified.

STEPHEN ROSE:
Wall Street's an easy target. And they cer-- it's certainly odd that they are able to get so much of the pie. They have served a function. But as-- you know, I agree with Don. They-- they certainly rigged the game such that they're getting a lot of the g-- gains when they win, and some of the gains even when they lose. They do take a hit. And a lot of rich people lost money, 'cause they had a lot of their-- the finance industry has contracted by 10%. So that's-- 800,000 people losing their jobs. The-- a lot of people had money in their own companies, like Lehman Brothers. And they-- they took big hits. So it's not like they took no hits. But it's-- you know, it goes back to an old debate of productive and unproductive labor. Somehow or other, the middle people seem to be the ones. Even though that companies-- have ways to save a lot of money with this extra finances, even though people use it to buy their houses, even though people use it-- take loans to send their kids to college, there's something a little perverse that they can take a little cut off the top. And-- so it-- it's a mixed bag. And they-- they are the piñatas of-- today's world, when people think that the rich are doing too well. And they've earned it a bit.

JIM GLASSMAN:
Thank you, Steve, for your "opiñata" . And-- and thank you, Don.

DON PECK:
Thank you, Jim.

JIM GLASSMAN:
And that's it for this week's Ideas In Action. I'm Jim Glassman. Thanks for watching.

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For more information, visit us at IdeasInActionTV.com. Funding for Ideas In Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never-ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Counterstrike: The Untold Story of America's Secret Campaign Against Al Qaeda

2011-12-02T16:56:51Z

Ten years after 9/11, are we safer? Counterstrike, a new book by two veteran New York Times correspondents, examines how government agencies have learned to cooperate and share information to fight terrorism around the world.

]]> IDEAS IN ACTION with Jim Glassman

Counterstrike: The Untold Story of America's Secret Campaign Against Al-Qaeda

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. This week: ten years after 9/11 are we safer? Counterstrike a new book by two veteran New York Times correspondents examines the transformation of numerous government agencies as they've evolved to fight terrorism around the world. Joining me to discuss this topic are Eric Schmitt, a terrorism correspondent for the New York Times and co-author of Counterstrike; and Thom Shanker, a Pentagon correspondent for the New York Times and co-author of the book. The topic this week: how the United States government has adapted to fight Al-Qaeda and how well it's working. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
A new book illustrates how ten years after 9/11 experts at the Pentagon, State Department, and numerous other law enforcement agencies have come to use one of the cornerstone tenets of the Cold War, deterrence theory, as a way of approaching a very different kind of battle; the war on terror. At its most basic level, deterrence theory says that if you hit us we will hit you back so hard it's not even worth attacking us in the first place. Now, this approach is being used to deter terrorist attacks in the U.S. and overseas. Thank you for joining us gentlemen.

THOM SHANKER:
Great to be here, thank you.

JIM GLASSMAN:
Thom in the beginning of your book you write that terrorism and counterterrorism are the new Darwinism. What does that mean?

THOM SHANKER:
Well, what Eric and I learned in reporting this book-- really almost over the ten years since the 9/11 attacks was that there's a very learning adversary out there. It's not the kind of enemy who has a battle plan and sticks with it. So almost every action that this government took, whether the military, law enforcement, or the intelligence community might have an effect over a couple of days but Al-Qaeda and the affiliates would very rapidly see what was done, learn from it, and change what they did requiring the U.S. and its allies to also change their actions.

JIM GLASSMAN:
So it's sort of constant evolution on both sides.

THOM SHANKER:
That's exactly right and America had been lucky and good, but that's not good enough everyday because the adversary only has to be lucky and good once every ten years to really change the history of our nation.

JIM GLASSMAN:
And the beginning of this evolutionary process-- I'm going to quote from your book, the early days after 9/11 you say that, "our government agencies were like a drunken octopus trying to solve a rubix cube." Was it really that bad?

ERIC SCHMITT:
It was that bad Jim. There was a handful of people in the government who had any idea really what Al-Qaeda was and as we went through and did interviews we talked to senior people in the government who really had no idea what Al-Qaeda was much less how terrorist networks operate. And so I think that guided the initial response perhaps understandably the instinctive response to try and kill and capture your way out of-- to victory. Going after Al-Qaeda as if it was a traditional enemy when actually Al-Qaeda is a cellular network, you have to treat it as such, and the United States government really hadn't put-- had its arms around that concept up till then.

JIM GLASSMAN:
And it was Bob Gates who said something like 'we cannot kill or capture our way to victory' But it took a while to figure that out?

ERIC SCHMITT:
It did and it goes back even further than that I mean it was really Don Rumsfeld surprisingly enough who two years after 9/11 really starts to be thinking about the idea and in a famous memo that he pens to some of his top civilian and military aids says are we basically creating more militants than we're taking off the battlefield with this type of war that we're fighting? By then it was in Iraq of course-- as this insurgency is rising in Iraq and that leads to a whole new kind of thinking than the Pentagon and some of the other federal agencies.

JIM GLASSMAN:
In your book you make reference to the new deterrence and in Cold War doctrine there's this notion of mutually assured destruction that being kind of the classic notion of deterrence but this is a different kind of deterrence. Can you just explain what you mean by the new deterrence? THOM SHANKER:
Sure, the challenges are that during the Cold War as you mentioned Jim the Soviet Union had valuable targets that we could identify, whether they're missile silos the Kremlin itself, the dachas where the leadership kept their ballerina girlfriends that sort of thing. It's a little harder with a stateless terrorist. At the same time if the Soviets launched an attack you could follow the missile contrail, know for sure where it came from. Not so with a letter bomb, a package bomb, an IED. But as the early years after 9/11 showed, as Eric said that you can't capture or kill your way to victory, people began asking well can we move this to the left? Can we even deter their actions by figuring out what values terrorists hold dear and if we can hold them at risk in a similar way that we held the Soviet missile silos at risk then we can alter their behavior. And what the analysts found is even though the terrorists don't hold territory and don't launch missiles there are things that they hold very valuable; their reputation, the fact that they're viewed as successful, and there are also people in the terrorist network who really don't want to give up their lives for Jihad; the financiers, the gunrunners, the people who rent the safe houses. They're in it for the money and you can actual make them give up terrorism by threatening them directly.

JIM GLASSMAN:
And so could you just elaborate a little bit on this Eric because I think this is such an important point-- how did we, how did our government go about producing this kind of deterrence. I mean it wasn't as though Al-Qaeda stopped suicide bombing-- people were-- people have continued to kill themselves and sort of throw everything into the fight against the west.

ERIC SCHMITT:
Right, this gets back to what we were talking about earlier Jim this idea of thinking of terrorism as a network and that within this network as Thom said there are various components of that that support the suicide bomber, the ultimate terrorist leader such as Osama bin Laden, and if you can target those elements that support the most fervent terrorists; these gunrunners, these logisticians, take them off the battlefield, it's going to make it much more difficult for these terrorists to operate. So for instance in our book we talk about an effort that the military undertook in Afghanistan where they identified some of the financing networks that are there they're called hawalas, these ancient money exchanging operations that are family run. And the military basically shut down about half a dozen of these hawalas as an example to the others and basically said look you have a wonderful way of-- a wonderful lifestyle here, you have a nice home, nice family, you want to keep this, right? Ok. You can continue to do business with this community you're just not going to do business with these militants, the Taliban in other words. And the message gets across-- again these people have self-interest that the military identified and focused on. You take away that ability for the terrorist to conduct their finances it makes it that much more difficult to carry out their operations.

JIM GLASSMAN:
What do you think is the biggest change that you've seen since 9/11 in the way that the United States has met the terrorist threat both here and abroad?

THOM SHANKER:
I would say the biggest change here at home is the collapsing of the walls that divided the military, the intelligence community, the State Department, and others. Before 9/11, the spies didn't trust the soldiers, the soldiers thought the State Department had no role in these sorts of overseas missions, and I think they've all learned through the leadership of some senior officers across the government that only by sharing information and working together in a whole of government manner can you beat this new adversary. And I know that sounds kind of like American Government 101 but it's actually true that's one of the good news stories that the taxpayers can look at in this Darwinian change across our government over the past decade.

JIM GLASSMAN:
Ok and as you point out that change came into play in the killing of Bin Laden himself.

THOM SHANKER:
You know as we argue in the book the raid that killed Bin Laden and all the massing of intelligence that led to him simply couldn't have been done before. In fact in our valedictory interview with Bob Gates, himself a former director of Central Intelligence who was defense secretary at that time, he told us it could not have been done at any other point in this government because the government had to learn and grow and not only take lessons learned but take those lessons to heart and the raid that killed Bin Laden simply could not have been done before.

JIM GLASSMAN:
So that's internal at least internal to the U.S. government. What about fighting terrorism abroad?

ERIC SCHMITT:
Well this is another one of the big changes that took place after 9/11 of course was the ability for the United States to reach out and work with allied intelligence services and security services. You saw the FBI sending many more agents overseas and working with our counterparts in foreign countries. You had the New York Police Department again sending officers overseas as well. So there was this understanding that again to fight this network you needed to have a whole of government. Not just within your own government but within the global counterterrorism network. Now that's not to say this all works perfectly of course. You look at the tensions right now that exists between the CIA and the Pakistan spy agency the ISI; they go up and down. Or the cooperation in Yemen for instance with counterterrorism. But the lesson learned here is that you can't just hold on to all your valuable secrets yourselves because these terrorists they move across boundaries and you need to share intelligence if you're going to cooperate and go in after them.

JIM GLASSMAN:
So Thom what is the evidence that this strategy that you describe is working? I mean certainly yeah we got Bin Laden, took a long time but we got Bin Laden, but-- and we haven't had any attacks in the United States-- but are there other-- is there other evidence that this is really working?

THOM SHANKER:
Sure sort of at two levels, Jim. At the strategic level I think it's rather remarkable that there hasn't been a mass casualty attack in ten years. So something is working right. That being said although we think it's a good news book everybody watching today should understand that everybody's convinced there will be another attack. What we hope these strategies and actions have done is push off the day of that attack, and perhaps lessen the severity. But everybody needs to know another attack is coming. But that's how you can see its success that it's been that long and that these major terrorist groups are mostly not focusing on mass casualty attacks. While Al-Qaeda still wants a weapon of mass destruction, a weapon of mass effect, Al-Qaeda central and its affiliates have since been focused on smaller attacks; bringing down individual airliners, sending printer cartridges with bombs, packing explosives into underwear. As tragic as any of these would be it's of a different category than bringing down the twin towers.

JIM GLASSMAN:
It took a while for the Bush administration, the administration which I served, to get this strategy right-- to get it to be really effective. And that's not a criticism necessarily just takes a while. Has the Obama administration adopted the learnings of the Bush administration? What's your feeling?

ERIC SCHMITT:
I think they have and I think I would just correct one thing you said-- this is a strategy that's moving in the right direction I think and as we've seen in Darwinism it's by no means a perfect solution because the threat is changing. What the Obama administration did was took a lot of the tools and policies that the Bush administration had left them and advanced them. I mean you had a stronger policy coming out against the enhanced interrogation techniques for instance. You had president Obama actually step up the drone attacks in Pakistan as a means of going after some of the most dangerous militants that we're fighting there both Al-Qaeda and other reasons. But in many respects it was very much a continuity that we had here between the two administrations. One big change of course was president Obama himself and the image that he could project to the world that this was a very different kind of American leader, appealing to many of those in many of the kind of countries that Al-Qaeda was trying to recruit from. In fact the Al-Qaeda leaders just before Obama was sworn in were coming up on the net. Zawahiri and others criticizing him saying he's nothing but another Bush, he's just an African American Bush perhaps, trying to undercut his credibility right away because they saw the kind of threat that he posed to their narrative overall.

JIM GLASSMAN:
Your book covers numerous ways that we've been able to combat terrorism-- I just want to touch on some of them and if we could just talk about them. One is drones-- predator drones. The Obama administration has been using drones a lot. How have they changed the game?

THOM SHANKER:
Right. In two very specific ways; the first is that what a surprise when Obama came in he actually fired off more missiles from predator drones in his first year as president than president Bush had in his entire tenure. So clearly he accelerated the predators in a strike capacity but what is much less known Jim in its own way more important is use of these unmanned surveillance vehicles to bring an unblinking persistent eye over terrorist terrain even in Pakistan, a foreign sovereign country, or in Yemen, and what this has allowed the U.S. government to do, the intelligence, military, and law enforcement, is to establish patterns of life around suspected terrorist safe havens. When you can put a drone in the sky over a village or a safe house or a compound, in a terribly remote area, and watch it 24 hours a day, seven days a week, for weeks at a time, you can get a very clear idea of who's coming, and who's going, and from that you can build a case for either attack or raid or further surveillance, and this is one of the important technological changes that led directly to Bin Laden's compound.

JIM GLASSMAN:
Right. Right. Cyber and electronic eavesdropping. That has grown enormously. How important has that been?

ERIC SCHMITT:
It's been huge Jim; it's one of the major changes and shifts over the last decade of course. Again as we described before, cyberspace is where the terrorist safe haven-- ultimate safe haven really is. It's where they do a lot of their recruiting, it's where they do raising money, they even in some of the virtual gaming they have-- games teenagers may be playing-- they intersperse code words for the same words that are being used in the game. So to get into that environment has been crucial for the United States and its allies. And as we talk about in this book there are a number of ways where the United States has done this successfully; essentially infiltrating some of these websites that-- areas that the militants use as well as hacking into terrorist cell leaders' phone networks and posing-- these are individuals-- posing as terrorists themselves to sew confusion and dissent among the ranks. So the people who are coming into these chat rooms or whatever they don't know who's real and who's not which is again a way of disrupting this network that relies on the trust.

JIM GLASSMAN:
Soft power, the war of ideas, how effective has the U.S. been in changing the kind of virulent anti western feelings. There's certainly still a lot of it going around.

THOM SHANKER:
Sure. I think if you were to be a school teacher and grade all the efforts that the government has embarked upon since 9/11, I would say the counter messaging, counter narrative, probably gets the lowest grade. That being said it's probably the hardest to do because you can't measure it, it's an art not a science, it's very imprecise. The problem Jim, as you know so well from all of your years of work in this area, the U.S. only gets one chance to tell its story first. And what happens so often the adversaries because they don't have to be factual, they don't have to be truthful, they're out on the network first, they're on the web first, they're posting to all of their Internet sites first, with lies or at least amplification of American actions that they view as improper for the Muslim world. And the U.S. has for far too long been in a responding mode, a defensive mode. As one of our best sources said to us-- when the U.S. counter messaging has to create a narrative to tell the world that people who behead innocents and blow up civilians is wrong-- we've already lost. We shouldn't have to be responding to that. You know I think that the strategy the U.S. is moving toward is one of being much more on the offense, pointing out the errors of terrorists. There are now statistics from the UN, non-governmental organizations, not the U.S. government-- that show that 85% of those killed by terrorist organizations since 9/11 were innocent Muslims. That is a very resonant statistic that the terrorists don't want out but needs to be trumpeted in more effective ways.

JIM GLASSMAN:
Thom one of the fascinating stories that you and Eric tell in the book is about Sinjar about this cash of information, records, files, that were found in Sinjar, Iraq. What role did they play in this counter terrorist story?

THOM SHANKER:
Right. It's one of the case studies that we approach almost like a business school model of what right looks like because that raid and how the intelligence was exploited really shows the whole of government at work. So let me start out and then Eric can jump in and finish the story here. Sinjar was a dusty village in Western Iraq near the Syrian border and the predators overhead and other surveillance had established that it was a major ratline or smuggling route for young men from across the Middle East who were coming to Iraq to make Jihad. Some were going to be just fighters and some were going to be suicide bombers. So the Joint Special Operations Command, JSOC, which does the most high end commando raids, they're the outfit that got Bin Laden in May, sent a team in and they killed the boss of the smuggling ring and all the people there. One guy even tried to blow up a suicide vest to destroy all the hard drives but they did gather a lot of computer information. So much that it became known as the Al-Qaeda Rolodex. And as one of our sources told us it's a sad parallel but Al-Qaeda is as anal about record keeping as the Nazis. So what they gathered were the hometowns of where all these Jihadists had come from across the Middle East, what Imam, or religious leader, or high school counselor had inspired them to come. Now this was just a treasure trove of data. It was almost like you know the archaeology of a terrorist network. And the officer in charge of JSOC at the time, Stanley McChrystal, decided this was too valuable to keep in the classified world and since his teams had found it he owned the classification. He ordered it, first time in American history, unilaterally declassified, and he gave it to analysts who crunched the numbers, came up with case studies, and personality profiles of where all these people had come from and then he made a very good decision to give it all to a friend at the State Department who was one of his predecessors at JSOC. Take it from here.

ERIC SCHMITT:
That's right a guy named General Dell Dailey who had been one of the JSOC commanders before but-- at that time was the top counterterrorism official at the State Department. So here's Dailey, he's got all these files and he makes the decision-- the government sends him out on a trip, several trips, through the Middle East and he goes from government to government basically saying I have got evidence of individuals who've left your country, who've gone on to commit attacks within Iraq against American soldiers and these guys-- that may not be a problem for you but if these guys come back they're very much going to be a problem because all the things they learned in Iraq if they survive are going to be a problem for you. So he goes country by country through the region presenting evidence to intelligence chiefs, to military counterparts, and basically saying these are the suicide bombers and he gets phenomenal cooperation-- he's essentially both wearing his State Department diplomat's hat but also many of these who knew him as a general that carried added credibility and to the point where that had such an effect on drying up or lessening the flow of suicide bombers coming into Iraq that General David Petraeus said it was one of the-- you know most important things that was done in order to shut off that type of threat to American forces there.

JIM GLASSMAN: And even though these documents were declassified and I know you wrote about them in the New York Times but really they didn't get very much exposure at the time and one of the things I think is terrific about your book is you put these stories all together and it is a-- really a driving narrative about some things that were done that seem to have had an effect. One place where it's hard to see the effect is Pakistan and Pakistan remains a tremendous concern. There's kind of this delicate balancing act and yet terror cells are still operating in Pakistan. Is there nothing that we can do by way of deterrence to combat the terrorism coming out of Pakistan?

THOM SHANKER:
I mean Pakistan is probably the greatest national security problem facing our nation today. It's a nuclear power in a very dangerous part of the world, but if you look at it from Pakistan's perspective they see India as their mortal enemy to one side and they don't believe the U.S. is going to stay in Afghanistan on the other and so they need to sustain their interests. So both to combat India and to sustain influence in Pakistan the ISI and perhaps other elements of government have been supporting terror and insurgent groups to further their state aims. And as our sources like to tell us it's almost as if you have trained snakes that you tell only to bite the neighbor's kids. Well sooner or later they will and they already have been biting your kids at home. But only Pakistan Jim can come to the conclusion that this is not a valuable tool of state power and crack down on their own insurgent networks.

JIM GLASSMAN:
Yeah I have to say that we spend a lot of time trying to convince the Pakistanis that they faced a threat but you're right it's only the Pakistanis that can come to that conclusion. We might help them a little bit but ultimately they have to understand that the threat exists but it is very frustrating I think for Americans in general not just for the government. Eric, why did it take so long to find Bin Laden?

ERIC SCHMITT:
I think it took-- in part because again you look at this network and what he had accomplished there and he was able to move himself away from the area where most American analysts thought he was, that is in the tribal areas, and pretty much put himself in a place where nobody thought he could possibly be; in the shadow of one of Pakistan's premier military academies in a major city Abbottabad, just a few hours drive from Islamabad itself. But some of the security measures that he took, he obviously didn't have any Internet or cell phones within his compound, anything to detect. In fact he was so careful about the individuals coming into his compound, the few people that were allowed, that not only were they not allowed to bring cell phones but they had to take the SIM cards out of the cell phones from a few miles away so that anybody who might be tracking them coming and going it made it that much more difficult. So he limited his contact from the outside world really to a handful of people and ultimately it was these couriers who were coming in and out that ultimately led us-- along with some of the surveillance that Thom talked about-- pulling everything together that led to that. And even then-- even then the intelligence-- the best intelligence from months of studying this compound was only 50/50 at best when they told president Obama whether or not they thought he was there. That's-- they really weren't sure if Bin Laden was going to be there when that raid took place.

JIM GLASSMAN:
So this wasn't simply a case of him being sort of protected by the Pakistanis, it was really good tradecraft I guess you would call it.

ERIC SCHMITT:
Well this is of course the great unanswered question; how in the world could the Pakistani security services, be it the ISI, the spy agency, the military, not know he was there for so many years. Now there's yet to be any smoking gun that point to any individual, or any specific part of the agency that says they helped harbor him there but clearly the suspicions are, and American officials are on the record saying, they believe he received some kind of help within Pakistan. That seems to be obvious. Just how high up in some of these government agencies remains a mystery or a question at least today.

JIM GLASSMAN:
That's a good place to leave it. Thank you Thom Shanker

THOM SHANKER:
Jim thanks for having us.

JIM GLASSMAN:
And thank you Eric Schmitt.

ERIC SCHMITT:
Thanks Jim.

JIM GLASSMAN:
And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Vladimir Putin and the Future of Russia

2011-11-22T20:46:47Z

Vladimir Putin's recent announcement that he intends to become Russia's President yet again indicates he rules Russian politics with an iron fist. Could he lead the country back behind a new Iron Curtain?

]]> IDEAS IN ACTION with Jim Glassman

Vladimir Putin and the Future of Russia

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. This week: is Russia moving backwards? Vladimir Putin's recent announcement that he intends to become Russia's president yet again indicates that he rules Russian politics with an iron fist but does that mean that he will take the country back behind the iron curtain? Joining me to discuss this topic are; Matthew Rojansky, Deputy Director of the Russian and Eurasia Program at the Carnegie Endowment for International Peace; David Satter, Senior Fellow at the Hudson Institute; and Clifford Gaddy, Senior Fellow at the Brookings Institution. The topic this week: Putinism and the future of Russia. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
It's been 20 years since the end of the Cold War but what's old is new again in Russia. Vladimir Putin has announced that he will take over the presidency again. The corruption by the ruling class during Soviet times has become corruption by the new ruling oligarchy. The Obama administration is pursuing a reset, or normalization, of relations with Russia. Can Russia get back on track to developing its democracy? Cliff, could U.S. policy makers have predicted that Putin would once again seek the presidency?

CLIFFORD GADDY:
Oh absolutely that's been the discussion for the past four years; what role would Putin play, would he come back again? I think people have gone back and forth about whether he would let Medvedev serve out two terms and to some extent I think this is a surprise. Although by the time he made the announcement a couple of weeks ago I think the consensus was that Putin was not going to let Medvedev continue he was going to assume the presidency himself again.

JIM GLASSMAN:
So Matthew in your view is this a positive or a negative?

MATTHEW ROJANSKY:
Well it's neither exactly positive nor exactly negative. You have to remember Putin has been present all along. This isn't exactly a return of Putin from some limbo or some disappearance that he pulled for the last four years. He's been in the driver's seat. He's has the title of Prime Minister but he's been exercising many of the powers frankly that you expect the president to exercise and he'll go on exercising those powers. And so that says to me above all continuity; continuity for the U.S. Russia reset, cooperation on Afghanistan, nuclear cooperation, and all the things we've been doing all along. I expect those basically to continue.

JIM GLASSMAN:
And what about this reset? Are you sanguine about it? You think it's working? And is it really by the way a reset?

MATTHEW ROJANSKY:
Well I think it was a reset very much in Russian eyes. You know it was an American term but it was something that caught on with the Russians because they were the ones who felt that we needed to come through with some kind of air clearing. They thought of it in some ways as an apology. Things were getting very bad you know 2006, 7, 8, the Russia Georgia war, and I think this did enable a kind of new breath of fresh air for the relationship. I don't think that goes away. I think what changes is now you have a much more wary impression from the U.S. congress towards Vladimir Putin coming back as president. I think you're going to see a reaction from the United States. It is political season going into 2012 and I think the personal rapport that Medvedev and Obama had obviously isn't going to be repeated with Putin.

JIM GLASSMAN:
So even though you think this is a matter of continuity, it's not that big of change that-- at least politically to the United States the reaction may be that it is a change and not a change for the better.

MATTHEW ROJANSKY:
That's right. The essence of the business if you will stays the same between the U.S. and Russia but a lot of the outward trappings are going to look different.

JIM GLASSMAN:
David what's your view about the reset?

DAVID SATTER:
I thought from the very beginning that there was no need for any reset. The United States had not done anything wrong in its relations with Russia--

JIM GLASSMAN:
But we actually didn't invade Georgia did we?

DAVID SATTER:
No. Not only that the United States is a rule by law country and it's not appropriate for a country that's ruled by law to reset its relations with a country that's lawless on the basis of the lawless country's definition of what's appropriate. Many of the things that the Russians do they do out of their own self interest not as a favor to the United States but they would very much like us all to interpret what they do in their own interest as a favor for which we should be grateful. And in return for which we should exercise a measure of self-censorship about the real state of Russian society. That's the essence of the reset. The acceptance by the Obama administration of those terms of reference.

JIM GLASSMAN:
Actually let me just go back to Matt because you mentioned a few things where the Russians are cooperating such as Afghanistan and there may be others, certainly not Syria, I don't think Iran, but are those simply matters-- things that Russians are doing their own self interest they would have done anyway but they're kind of pretending as David says to be nice to us?

MATTHEW ROJANSKY:
I think the key is there were a lot of things that were in Russia's self interest and in U.S. interests for the past four or five years that simply weren't happening because there was so much bad blood. There had been a lot of just negative rhetoric flying back and forth and once that was cleared away it was relatively easier to move forward on things like the nuclear treaty and cooperation on Afghanistan that basically both sides wanted. That doesn't mean though that we have some kind of fundamentally new cooperative relationship. I don't think we'll undo what we've achieved at this point but I don't see the United States and Russia kind of building big new accomplishments.

JIM GLASSMAN:
The Russians have been engaging in a lot of really bad behavior by any kind of normal moral standard and are we kind of encouraging that or at least not discouraging it? Or should it even be a matter of interest to us in our foreign policy?

CLIFFORD GADDY:
It should be a matter of interest but it has to be balanced with other interests. I don't think-- I mean I have a lot of criticisms of the current administration and in many respects including aspects of the relationship with Russia but I think it's unfair to say that we've swept all of this under the table, that we've turned a blind eye to crimes and so forth. It's a matter of balancing interest and that's what the reset was all about it. It was I think as Matthew kindly suggested it's a bit of pretence. It's a face saving measure for both sides. Locked in a confrontational sort of a situation you know both sides as Matthew said had important issues they'd like to deal with and by calling this a reset you say ok let's just temporarily pretend that these issues that we were in confrontation about maybe we can put them aside and let's get down to real issues. But that doesn't mean that either side thought that this was drawing a blank slate, that we're not going to remember grudges and protest and complaints on either side, and they continue to come up.

JIM GLASSMAN:
But the Russians, Matt, continue to be somewhat provocative. I mean Europe is having its own issues. Putin proposed this Eurasian Union to counter the EU. I mean how likely is that to come about and is that the reestablishment of kind of an iron curtain for the rest of Europe?

MATTHEW ROJANSKY:
It in a sense may be Putin making his own bed, right? This is a guy who's laying out a vision that is fundamentally not that appealing to a lot of post Soviet states in the neighborhood. It's not even that appealing to many Russians. But you know with respect to this conversation we've been having you can't forget what came before the last five years as well. From a Russian perspective the United States has not only not been neutral towards Russia but has meddled in ways that have been harmful. Since 1991 and the fall of the Soviet Union we were in Russia mucking around trying to transform their economy in ways that the Russian people perceive as having hurt them very badly.

JIM GLASSMAN:
And what about that? What is the view of the Russian people? And the implication of what you were saying earlier is you know gee the Russian people would really like our moral support on issues on democracy.

DAVID SATTER:
The unfortunate reality is that the democratic consciousness of Russia is at such a low level at the present time and the exhaustion as a result of the economic hardships of the 1990s is such that most of Russian people are indifferent to these moral issues. But that's not a reason why the United States should tailor its positions to that mentality. There's a lot of confusion here--

JIM GLASSMAN:
Can I just interrupt? Are they indifferent to the corruption?

DAVID SATTER:
The corruption that they see around them they understand and they're not indifferent to that. Unfortunately a system has evolved in Russia through which millions of people participate in the corruption and they take it for granted. One of the ways in which the present regime tries really to delude the population is by convincing them that the corruption that exists in Russia is actually typical of the rest of the world as well.

JIM GLASSMAN:
Is that convincing?

DAVID SATTER:
Up to a point. First of all because people want to believe it and second of all because they feel helpless.

JIM GLASSMAN:
These two are shaking their heads.

MATTHEW ROJANSKY:
Russians go to the west all the time now. That's one of the basic freedoms that Russians have today that really the government doesn't interfere with in any meaningful way is freedom of travel. An increasing number of Muscovites and St. Petersburgers and folks at least in major cities have got the resources to do it and they vacation all the time in the west. So they know what it's like over here. They don't like the fact that Russia doesn't compare and they hate the corruption. But remember Russia's been living with it for hundreds of years. So they're also realistic. If they feel they have a choice between sliding back into the chaos of the 1990s when they were living in poverty and their parents and grandparents were selling family heirlooms on the streets and people couldn't feed themselves and they weren't getting paid and accepting the constraints that Putin puts on things and a sort of day to day grind of corruption; given that choice if that's the only choice it's clear which way they'd go. I think that's the problem.

JIM GLASSMAN:
The internal moral issue in Russia is just the killing of journalists. I mean it's incredible. There's no country in the world where there's-- has been this many as far as I know killings of journalists who are simply trying to do their job.

CLIFFORD GADDY:
Yeah. Well that's--

JIM GLASSMAN:
Does that bother people and if it bothers people is it more bothering the young or the old or nobody?

CLIFFORD GADDY:
--Clearly bothers some people and probably a lot of people but as for the generational issue I think you know to some extent I think that's exaggerated. There used to be a common refrain among people in the west when they would observe that things in Russia-- Matthew was referring to the 1990s when we the U.S. was so heavily involved in trying to reshape politics and economics in the country and when things would not go the way we wanted we always would fall back on this refrain that well when the new generation comes up it'll be different. These are the old people that grew up under the Soviet system. I think that was a misperception and I think a lot of us who know Russians and know Russia would-- have noticed how the young people aren't growing up in a vacuum they're growing up in an environment that's shaped by the experiences of their parents and their grandparents. Young Russians very sensitive to issues about World War II, which we always associated with the older Russians, that they remembered the war. And that means that there are a lot of-- you know if you sort of strip away a veneer that many younger Russians might have because they're watching the internet, they're watching-- they're on the internet, they're traveling abroad as Matthew said, you find that a lot of times they behave and think remarkably like their parents and grandparents did.

JIM GLASSMAN:
Do you agree with that?

DAVID SATTER:
Well yes I mean the problem is that the older generation grew up under communism, the younger generation grew up under gangsterism and the problem is that both experiences had the effect of breaking down individual moral responsibility. And in this respect I don't see an improvement in the younger generation in Russia. This is a very sad thing. In fact as crazy as it may seem that communist system at least in its later stages-- it was deluded, it destroyed people's freedom, it limited their possibilities, but it had elements of unselfishness about it that were encouraged. And those elements of unselfishness and sort of mutual assistance under the impact of the kind of criminal takeover of the country in the 90s and under Putin it became worse, was destroyed. So what you have is a population in which the sense of personal conscience has been severely undermined and even those communist habits of kind of mutual assistance no longer exist.

JIM GLASSMAN:
So we're yearning for some aspects of the communist--

DAVID SATTER:
--Not seriously--

JIM GLASSMAN:
Matthew--

MATTHEW ROJANSKY:
I just can't accept-- maybe speaking as a spokesperson of my generation, I have many Russian friends who have come up since 1991-- I just can't accept this amount of pessimism. People talk about a lost generation I don't think that's right either. You have to remember that Russians have got a lot more outlets today than they ever had during the communist era, frankly even more than in the 1990s and you do see freedom of expression coming through online. You see a lot more innovation and entrepreneurship, something else you didn't see during the soviet era. And I think there will be a tipping point. I think there will be a time when my generation has enough wealth, enough stake, enough to lose, and I think that they will be willing to act out against the corruption, against the oppression that they see around them, and protect those things.

JIM GLASSMAN:
Should Putin take note of the Arab Spring?

MATTHEW ROJANSKY:
Yes he's taking note of it and it's not only the Arab Spring. I think he's looking at the turmoil on the streets of Greece and in the periphery of the Euro Zone, and he sees a budget crisis, he sees the writing on the wall in his own country. He knows that oil and gas revenues are going to plateau. At the same time he's got the same baby boom generation that we have in the west is retiring and they're going to need social services and they're going to need medical care, and he's not going to be able to keep up with it. And when he can't, when Russians aren't getting the day to day and the stability that they expect, I think that's when you hit a tipping point.

JIM GLASSMAN:
And what about social media?

MATTHEW ROJANSKY:
Social media will always play a kind of a triggering role, a catalytic role.

JIM GLASSMAN:
But are the Russians making the same kinds of attempts that he Chinese have in trying to control social media?

MATTHEW ROJANSKY:
I think the Russians are very realistic in this sense. They try to fight it on its own grounds. In other words they try to make the United Russia Party as social media savvy as any other political movement and to some extent it is. But they know that they can't control the Internet.

JIM GLASSMAN:
Cliff, Russia's now the world's largest producer of oil. As Matt says you know prices could plateau and all these oil revenues could certainly level off but you have said that the Russian economy in fact has become too dependent on oil. What do you mean by that?

CLIFFORD GADDY:
It's basically become addicted to oil but this began already during the Soviet period in the sense that an addict requires not just the same amount of a substance, of drugs or-- to satisfy the cravings but continually more. And the way that worked in the Soviet Union was the oil and gas rents made it possible to develop a whole structure of the economy locating factories in places-- cities and places that no free market economy with freedom of movement and freedom of choice and private property would have done. But you end up with huge cities not just of 20 or 30 thousand people but sometimes of a half a million, even a million or more--

JIM GLASSMAN:
What are examples of these cities?

CLIFFORD GADDY:
These cities that are scattered in a chain basically all across the Urals in western Siberia. What would have happened if there had been not a command state run economy, a planned economy, but a free economy, and yet you inherit that from the Soviet period and you have to-- to maintain political and social stability you have to support these cities, these factories, and during the global economic-- global financial crisis this is where the money was devoted to preserving jobs in these large factories. And so Russia's actually been incredibly stable, it has a low, a relatively low unemployment rate compared to western Europe or Eastern Europe. Down the road it has a major problem to face because as we were just mentioning these oil prices are not likely to continue to soar, though nobody has a clue what's going to happen to oil prices in the future. If they were to plateau that would probably be a relatively positive outcome. They may even go down and at that point there are some really critical choices that have to be made. We've had eight-- Russia had eight years before 2008 of a real boom, windfalls, everybody could be happy. Everybody could be satisfied. I think the next decade, the next eight to ten years, it's going to be a completely different story. And at some point not maybe tomorrow, not next year necessarily, but at some point in these coming years they're going to have to face some real tradeoffs, some real crunches.

DAVID SATTER:
Oil is fundamental to the Russian economy, it's fundamental to the budget, it's fundamental to Russian exports. Oil is unreliable in the long run. Severe drop in the price of oil will create an immediate fiscal crisis in Russia.

JIM GLASSMAN:
So Matthew what should the U.S. be doing? I mean an unstable Russia-- I guess in one sense we-- some people might be happy if Putin gets into trouble, but an unstable Russia probably is not very good for the United States. So is there something that we could be doing to promote the kind of stability that would counter these predictions?

MATTHEW ROJANSKY:
I think the answer is very straightforward and that is that Russia can no longer withdraw behind some kind of wall. You know you referred to it as a new iron curtain; you can call it Eurasianism rather than a Euro Atlanticism. I think Russia's got to be part of the system. As Cliff pointed out it inevitably is economically and so politically it's got to be part of that system. It's got to be playing by the rules. You know as David was talking about that does mean holding them accountable to international standards that they've signed up to, democratic standards, human rights. But if Russia is part of a global system and the United States leads that system today, for better or for worse, it's on us to keep Russia as part of this system and as a player. I think if we do that then we have an opportunity to see things move stably even if that means big change at least it's going to happen in a gradual and a non cataclysmic way.

JIM GLASSMAN:
So what does that mean specifically? Does that mean bringing Russia into other organizations?

MATTHEW ROJANSKY:
WTO.

JIM GLASSMAN:
Ok WTO.

MATTHEW ROJANSKY:
It means WTO to start with.

JIM GLASSMAN:
World Trade Organization. Or what about kind of putting more pressure on Russia to behave in a way that would be considered responsible by the community of nations such as taking an important role in pushing back against Syria?

MATTHEW ROJANSKY:
Yeah absolutely. I think pressure is appropriate most of the time. I think the challenge with it is; is it going to work? And so you have to make sure that when you put pressure on Russia you're focusing on an argument that they understand, that's focused on your own interests so they get why you want that thing to happen. Not just telling them well we thing democracy is good in the abstract so be more democratic. That doesn't make sense to them. Say we want rule of law because it protects our citizens and our companies when they trade with you. That's a message that makes sense. And hold them to their commitments; you signed up to this deal, we signed up to this deal, you want us to observe our end, you observe your end.

JIM GLASSMAN:
Cliff.

CLIFFORD GADDY:
I think the reality is we have very little in the way of levers against Russia right now. And you're absolutely right that it would be best for Russia, for Russia's development, for the whole world's development, if Russia were integrated into both the economic and the political global structure. But I think the reality is that the Russians are quite willing to risk not being-- at least Putin is quite willing to not join it. Now to pull back from this I think the Eurasian Union idea is part of that. He's been very critical of the idea of joining WTO. He's sort of said past weekend we can kind of take it or leave it. And people don't believe that but I think you should. I think you should believe--

JIM GLASSMAN:
And that's part of this kind of oil-- partly because oil's centricity doesn't really make any difference? You now all we do is sell oil.

CLIFFORD GADDY:
Partly that and partly the sense that frustration with what the west, what the United States in particular, can do for Russia. That doesn't mean he has an answer. He's gone to-- he's in China right now. Putin is.

JIM GLASSMAN:
This seems to bring us back to what we were talking about in the beginning about the reset. It seems like if you're doing a reset at the very least you should be creating the environment in which Russia would entertain becoming this responsible member of society.

MATTHEW ROJANSKY:
But remember Russia's preferences and Russia's attitudes here both on the part of the people and the leadership still matter and I agree with Cliff that we don't have a lot of direct levers that we can apply but remember things have changed very dramatically. Yes you still have a kind of Soviet mentality on the part of some people, you have a kind of Russian exclusivism, Russian exceptionalism, but combined with that at the very same time you have a CEO mentality in Putin's own mind as well as certainly a lot of the oligarchs and the folks who control the government.

JIM GLASSMAN:
What do you mean by CEO mentality?

MATTHEW ROJANSKY:
Business mentality, bottom line they look at the profit and loss and they say does it profit us to be a part of this system, to trade with these guys over in Europe and the United States and China and when they want to do that it's because it profits Russia and I think that's going to be the case for WTO.

JIM GLASSMAN:
Let me finish up by going to David first about what's going on in Russia that you might consider good, or that Americans might consider good, and bad?

DAVID SATTER:
Good part is that there are many brilliant people in Russia. There is political debate in the country. It's immeasurably freer than it was under the Soviet Union. Bad part is the country's heading for a systemic crisis. The forces moving in that direction appear to be so fundamental it's hard to see how a country can avoid it. Under those circumstances there isn't a lot that the United States can do to change the internal dynamics in Russia. The only thing the United States can do is abandon the pretence, call things by their proper names, speak honestly and truthfully not only to the government to the Russian people. If the Russian people don't appreciate it now under conditions of a future crisis they will appreciate it because nothing is worse than the idea, than the conviction, that their government is a bunch of crooks and the west is totally complicit. That is not something that in the long run is going to be helpful especially under conditions in which the country's heading for a very foreseeable crisis. We just don't know when.

JIM GLASSMAN:
Matthew same question.

MATTHEW ROJANSKY:
Best thing that's happening in Russia and the United States is more Russians in America and in Europe and more Americans and Europeans in Russia than at any time in history. And the bad thing is corruption. Corruption is costing Russia more today than it has any time including in the Soviet period.

JIM GLASSMAN:
So it's worse today than it was in the Soviet period?

MATTHEW ROJANSKY:
It's worse today and it's getting worse.

JIM GLASSMAN:
Cliff.

CLIFFORD GADDY:
The best thing that has happened, it's not necessarily still happening to a great extent, is that Russia has-- Russia and Russians have regained a sense of dignity, self respect, and a sense that the rest of the world looks at them with some degree of respect. And that's important for their own self-esteem. The bad thing is that I think that is not continuing right now and there's a huge degree of cynicism. There was hope maybe several years ago. The hope has declined, has diminished, and cynicism has grown, which I think contributes to the idea that nobody is going to help me. We have to help ourselves so every man, every woman, for themselves. These are all-- it's a type of mentality that's not conducive to positive development in the future and this last announcement by Putin that he is simply going to come back, that all the decisions are made at the top, that there's no prospects for rejuvenation of the leadership, all of these things contribute to the idea of what's the point? You know, what's the point? A lot of Russians think about, not necessarily act on it, but think about just leaving the country.

JIM GLASSMAN:
Thank you Cliff, thank you David, and thank you Matthew. And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Pakistan and America: An Alliance at the Breaking Point?

2011-11-17T17:11:02Z

After the attacks of September 11th, America turned to Pakistan as an ally in the war on terrorism. But after ten years of fighting in Afghanistan, it appears that Pakistan is working to undermine U.S. interests in the region. What does this mean for the future of Pakistani/American relations?

]]> IDEAS IN ACTION with JIM GLASSMAN

Pakistan and America: An Alliance at the Breaking Point?

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. This week: has America's relationship with Pakistan reached the breaking point? For the last ten years the United States has fostered an alliance with Pakistan to fight terrorism and bring stability to Afghanistan. But the relationship between America and Pakistan is badly frayed. How should we view Pakistan now? Joining me to discuss this topic are; Ambassador Teresita Schaffer, senior fellow at the Brookings Institution and former Deputy Assistant Secretary of State for South Asia; Shuja Nawaz, director of the South Asia Center at the Atlantic council and author of the book Crossed Swords: Pakistan, its Army, and the Wars Within; and Reza Jan, research analyst and Pakistan Team Lead for the Critical Threats Project at the American Enterprise Institute. The topic this week: America and Pakistan, a frayed alliance. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
After the attacks of September 11th, Pakistan was forced to make a serious decision. They were either with America or against us in the new war on terror. Ten years have passed since Pakistan sided with America but with American drone strikes on Pakistani soil, angering the Pakistani population, the discovery that Osama bin Laden had been living in Pakistan for years, and claims that Pakistani intelligence has supported terror attacks against the United States forces in Afghanistan, it's clear the relationship is anything but a simple alliance. How should America deal with Pakistan in the future? Shuja you recently authored an article in News Week that described the alliance between the United States and Pakistan as a train wreck. Are things all that bad?

SHUJA NAWAZ:
Yes, I think it's been a train wreck in the making because from the get go the reasons for Pakistan joining the alliance were quite different from the ones that America thought it was getting. It was president Musharraf at that time basically preserving himself in part and saving himself from being declared a pariah in the international community who signed up on the U.S. side. But at heart Pakistani interest remain regional and were not consonant with the U.S. interest and then when admiral Mullen threw in a grenade-- a parting grenade into this relationship when he testified before the senate Armed Services Committee, it really brought out the fraud relationship.

JIM GLASSMAN:
And that grenade was to say that Pakistan-- or Pakistani security forces had a hand in attacks on Americans?

SHUJA NAWAZ:
He was very explicit. He called the Haqqani network, which has been killing U.S. troops in Afghanistan as a veritable arm of the Inter-Services Intelligence of Pakistan.

JIM GLASSMAN:
So should he have just kept quiet about that? Kept the Pakistanis happy?

SHUJA NAWAZ:
Not really but he had been saying something similar even as early as 2009. The question is why wasn't there a much more frank discussion and an open discussion behind closed doors between him and his Pakistani interlocutors. And if that discussion was a one-way conversation then why was this not brought out earlier rather than for his swan-song before the senate?

JIM GLASSMAN:
Madam Ambassador what are the stakes for America in having a good relationship with Pakistan?

AMBASSADOR TERESITA SCHAFFER:
You know, I think I want to pose that question differently. What is America's stake in Pakistan? And it's primarily two things; first now because of our engagement in Afghanistan the administration like its predecessor is convinced that there can't be a satisfactory outcome in Afghanistan unless the United States and Pakistan are working in some kind of harmony. But second and even more importantly the United States has an enormous stake in the political and economic health and governability of Pakistan because if Pakistan sees a continuation of the weakening of the state, which has been going on now for a couple of decades, you have potentially horrible consequences for Pakistan, for the region, and for the world. This isn't the first time the United States and Pakistan have been allied. It's actually been third: in the 1950s, in the 1980s, and now. A lot of Pakistanis have been waiting for the time when as they would tell the story the United States would once again find Pakistan no longer useful and walk out the door. Americans tell that history differently but where I completely agree with Shuja is that underneath the supposed strategic agreement that led to these alliance there are significant differences in our strategic goals. And that is certainly the case now and that is the fundamental problem that we're dealing with.

JIM GLASSMAN:
Reza could you set the stage for us a little bit-- I mean Pakistan has several different militant groups operating within its own country including the Haqqani network that we heard about earlier, the Pakistani Taliban-- I mean how do they-- just in setting the stage-- how do they affect Pakistan's government and their relationship with the united states?

REZA JAN:
Well, there are several groups as you mentioned. The ones that Americans know best are the Taliban, the Haqqani network, because those are the ones they have to deal with on a daily basis in Afghanistan. Those are the ones that they're fighting-- you mentioned the Pakistani Taliban that's really the main insurgent organization that's operative, that's active inside of Pakistan. You then have several other groups, Punjabi Taliban groups, some of whom were fostered by the state in the 1990s and before to act as proxies in its war against India over Kashmir. That of-- some of you know-- several of whom have now broken off entirely and act independently and so it's easy to get confused given how many groups they are and how many different agendas there are on the table but what we've seen over the years is an increasing amount of coordination and cooperation between these separate groups. In the end they might all come from a different place but they run along similar ideologies. A lot of them have similar end goals as far as the Pakistani state is concerned, as far as the Americans in Afghanistan are concerned, and we've seen an increased amount of cooperation, co-location, training, sharing of resources, and so while it's important to understand the differences between the many groups on the ground, I think it's also dangerous to overlook the similarities and the collective danger posed by these individual groups, not just from their militant activities but from the fact that a lot of them are you know have active social wings in the country and are beginning-- or are involved in a slow radicalization of society as a whole.

JIM GLASSMAN:
But do they-- I mean not to generalize-- but do they operate within Pakistan with the consent or at least a wink from the Pakistani government? Or at least elements of the Pakistani government?

REZA JAN:
And that's where you start to see the split because there are some that definitely get overlooked by the Pakistanis. You have the Haqqani network operating out of North Waziristan, you have the Quetta Shura Taliban, Mullah Omar's movement, which is based in Quetta, and those definitely get overlooked by the Pakistanis. There's not action taken against them, there's even accusations of support given to them. But then there are groups like the Tehrik-i-Taliban Pakistan whose main agenda is to overthrow the state and they-- the Pakistani state tries to fight them and take them on very-- there's a stark difference over there they try very hard to fight these groups. So there are some groups where there seems to be the wink and the nod and there are other groups where they're heavily involved in fighting them and part of the problem for the Pakistanis is that they don't see these groups on a base level are cooperating. So they're with one hand sheltering part of the movement, on the other hand fighting another part and both those parts are mutually allied against them in the long run.

JIM GLASSMAN:
And how much of a problem is that for the United States that you've got these groups operating with certain amount of impunity some of them within Pakistan even with the encouragement of some of the elements of the Pakistani--

AMBASSADOR TERESITA SCHAFFER:
This is in a nutshell the big problem that the United States faces at two levels; first of all it's a problem for the United States forces in Afghanistan whose principal military adversaries have a sanctuary where they can't be reached. But secondly in kind of determining where the United States and Pakistan really are in their strategic relationship. You have a country, Pakistan, which in its actions against the Pakistani Taliban are both defending themselves and going after forces that the United States finds very dangerous, but at the same time it is in at least de facto affiliation with some of the groups that are behind the threat to U.S. and coalition forces in Afghanistan. And we've never really quite been able to sort that out and when American officials publicly complain about it, and Admiral Mullen's testimony was not the first time that's happened, this causes great embarrassment and anger in Pakistan in particular with the Pakistani military.

JIM GLASSMAN:
We now have several references to Admiral Mullens' hand grenade-- do you think that was in any way a signal of a change as far as American policy toward Pakistan is concerned? Or was that kind of like a parting shot? Or a continuation of a policy?

SHUJA NAWAZ:
I think it was more of a parting shot and a reflection of his frustration at a relationship at which he worked very hard to develop particularly his personal relationship with the head of the Pakistan military, the Army Chief General Kayani. Ever since his statement we've noticed that the White House and other parts of the administration have been trying to walk back the hard line that he took. Now this may be just for cosmetic purposes but it causes confusion in the message that the U.S. is sending.

JIM GLASSMAN:
You commented over the last year that almost all of the Pakistani experts at the State Department have departed within the last year. Do you think there's a certain weakness in expertise in the United States government on Pakistan?

AMBASSADOR TERESITA SCHAFFER:
I would like to comment on that. I think this is a very serious problem. I was in the Foreign Service for 30 years. I served in Pakistan. I served for three years in Pakistan, which has usually been the standard tour. Nowadays because of the security problems our diplomats generally serve in one year increments and they serve under very tight security restrictions, for good reasons that we all understand, but the net result is that the people who serve in Pakistan who ought to be the repository of deep understanding of the society and a good feel for who makes things tick emerge after a year with a great rolodex, and lots of telephone friends, but relatively few personal relationships, and without having really had the time to get deeply into things. So I think this really is a problem.

SHUJA NAWAZ:
I would pick up on that and the reason why I wrote that piece was that it almost appeared that nobody was in charge of Pakistan and the U.S. government in a central position and you had all these key nodes where policies were being made on Pakistan, White House, the Office of the Defense Representative in Pakistan, the State Department, and the DOD, and suddenly because summer is the time when moves are made to new jobs suddenly most of the people working on Pakistan disappeared in a coincidence that was not on anyone's radar.

JIM GLASSMAN:
And Reza let me bring you into this-- this is a good point to do so because there certainly is this feeling that we've either got a train wreck or something's not working and the American people I think it's safe to say are kind of frustrated. So how effective would it be for the United States to actually take some action against Pakistan or kind of warn Pakistan, 'Hey we're not going to tolerate this.' For example cutting military or civilian aid to Pakistan.

REZA JAN:
The-- it's interesting you mention the desire to cut aid to Pakistan I feel-- it seems to be part of a larger groundswell of emotion inside U.S. public opinion and U.S. policy circles to declare Pakistan an enemy, to cut off relations, to cut off aid, and you almost want to reach out and say 'hang on a second.' The United States cares about Pakistan for its own sake not just in terms of its-- you know the war in Afghanistan or its relations with Afghanistan. In the end it's a country of 180 million people with 100 nuclear weapons. It's desperately poor. It's home to a large faction of the most violent sections of Al Qaeda--

JIM GLASSMAN:
But right but are there any carrots or sticks that we can use to affect government policy within Pakistan with which a lot of people are certainly frustrated? So one might be at least a threat to cut off military or civilian aid.

REZA JAN:
Well there's always-- the United States has experimented with several options in the past, ramping up diplomatic pressure, trying to restrict the flow of aid-- I mean recently they-- there was the hold they put on the $800 million dollars of military aid and there was a recent vote in the senate to-- in one of the senate committees to put a pause on the delivery of a billion dollars of aid tying it to conditions to military action- Pakistani military action on the Haqqanis or Al Qaeda. And these are all tools one can experiment with. They've had varying degrees of success because in the end you have to try and find the right mixture that changes the Pakistanis basic calculus.

JIM GLASSMAN:
Ok here's another idea that I've heard floated, I'll ask Shuja, and that is the United States should turn more toward India. And you know the Pakistanis are very concerned, some would say kind of too concerned, almost paranoid about India and if we were to assist India more militarily for example that that might get the Pakistanis attention. What about that?

SHUJA NAWAZ:
I think the U.S. should pay more attention to India but for a very different reason in my view and that is to use its new strategic relationship with India to help try and normalize the relationship between India and Pakistan. The two countries have already started talking. I think the U.S. can play a role behind the scenes. The Indians have tended in the past to be very allergic to a third party intervention and will continue to be that way but if the U.S. plays a quiet role I think it can try and bring these countries together which also helps resolve their differences in Afghanistan in the long run and opens up their borders to transit trade with central Asia. That's quite critical. The U.S. also has a new relationship with China. The Chinese have already expressed an interest in working with the U.S. to stabilize Afghanistan and that region. I was in China a month ago and the whole conference was brought by the Chinese to discuss how they and the United States could work together in this region. So there is already a groundswell of support for a regional approach much better than cutting off ties or trying to punish Pakistan with cutting off aid, which is in terms of Pakistan's own needs and other resources, not an enormous amount in absolute terms. It's much better to engage and remain engaged and bring others into the picture.

JIM GLASSMAN:
You wrote a book about the-- partly about the Pakistani military which is a very important institution maybe the most stable, most important institution in the country-- do the U.S. and the Pakistani military-- now I'm just talking about the military-- do they share the same vision for the region, the future of the region?

SHUJA NAWAZ:
I don't know if they share the same vision for the future of the region but they certainly share the same aims in the short run and they have a very good relationship and that quite often runs counter to the politician to politician links between the two countries. It almost seems as the military to military relationship as the pentagon would put it overshadows the country relations. I would also--

JIM GLASSMAN:
So is that something to build on?

SHUJA NAWAZ:
It is something to build on but I think the critical relationship if you want one with Pakistan for the long run really has to be the civilian relationship. And the U.S. must change this habit of leading with the military. But to go back to your question about what exactly what specific action that Ambassador Schaffer was referring to; on the Haqqani network rather than publicly challenging Pakistan to do something or else I would go to the Pakistanis behind the closed door and say what's the best that you can do to prevent the Haqqanis from using North Waziristan as a sanctuary? Come up with a solution and we'll work with you on it. Once you've identified that the idea is to reduce the sanctuary then I think you can certainly find a way of achieving it. And the Pakistanis have various options and let them develop and execute those options rather than being publicly forced into a position where they have to do it or else. What the Mullen statement in congress did was it actually united all the disparate elements inside Pakistan against what? Against the United States.

JIM GLASSMAN:
Let's just talk about the future or at least try to figure out what's going to happen in the future. Ambassador Schaffer what do you think's going to happen over the next let's say year or two as far as U.S. Pakistani relations are concerned?

AMBASSADOR TERESITA SCHAFFER:
I think we're going to go through a very difficult patch because there is deep anger on both sides and the other side doesn't quite understand why. In Pakistan I think it's largely driven by the military, although anti Americanism is much broader than that, but it's this sense of national humiliation and this sense that the United States doesn't adequately respect Pakistan's sensitivities and vulnerabilities. In the United States it is really the fallout from the Osama bin Laden presence in Abbottabad and I think it's going to take us a while to get past that. In the meantime I think you're likely to see a continuing rather unsettled state in Pakistan. You have domestic political opponents that are having at it. You have a fluctuating curve of political violence and I think you're probably going to see Pakistan continuing to, as one of Pakistani friends put it, 'play the victimization card in its dealings with the United States.' And the United States is likely to respond-- if all you have is a hammer everything looks like a nail-- by manipulating aid and that will be accentuated by our fiscal difficulties.

JIM GLASSMAN:
Reza.

REZA JAN:
I would tend to agree I think-- frankly I think a lot of the changes that need to be made need to be made on the Pakistani side within the Pakistani leadership. There needs to be a certain amount of public support for the changes that are going to need to be made because they're going to be fairly drastic and to use a dirty political word courageous changes but part of the problem is it's going to be difficult to change public opinion because policymaking, especially within the Pakistani military where it's really done, it's so opaque. The average person doesn't really have an insight into how or why certain policies are pursued. Now I mean--

JIM GLASSMAN:
And by changes you're talking about kind of a more serious confrontation with these militant forces within the country.

REZA JAN:
Absolutely. I think the moment is coming and it needs to come sooner rather than later when there's the light bulb moment inside the Pakistani military--

JIM GLASSMAN:
So why hasn't it come already if the 20 or 30 or more thousand people have been killed?

REZA JAN:
They see larger interests and larger stakes at play. I think for the Pakistani military there's a fair amount of calcified thinking and part of that comes with the fact that it's an institution that's slow to change, it's an institution that's built up a strategy and is trying to see it through, a lot of it is tied to who currently is at the top in the Pakistani military and that comes down to the fact that from a lot of angles their strategy towards Afghanistan, their strategy towards the United States, is working--

AMBASSADOR TERESITA SCHAFFER:
And there's one other thing we haven't mentioned at all but I think it's important to Pakistan's perspective on Afghanistan, which is that historically Pakistan has had bad relations with Afghanistan and Afghanistan has had good relations with India. There's a very strong tendency to see Afghanistan as the other half of an Indian pincer movement, which must at all costs be resisted.

JIM GLASSMAN:
Shuja I want you to project the future but I also want to ask you a quick question about Abbottabad, which Ambassador Schaffer mentioned. Do you think that Pakistani officials were in anyway cooperative with the hiding of Osama bin Laden?

SHUJA NAWAZ:
We haven't seen or heard the full evidence on that particularly from the U.S. side--

JIM GLASSMAN:
I know. We just want your opinion.

SHUJA NAWAZ:
--I think that at the upper levels it would be quite difficult for this to have been put in place for so long without the information leaking out. But to look at the future it's going to be what we at the International Monetary Fund, where I was for 30 years, called a J- curve where things deteriorate and then you start putting in place the conditions that will make them improve. I think the U.S. and Pakistan are at that inflection point where they have to very seriously look at this relationships and see that you really want to look beyond Afghanistan because if you look at purely Afghanistan then this codependency is going to flounder and at some point the relationship will breakdown. It's not going to help the U.S. or the region.

JIM GLASSMAN:
So the relationship is much more important than Afghanistan?

SHUJA NAWAZ:
I think so.

AMBASSADOR TERESITA SCHAFFER:
Pakistan is--

JIM GLASSMAN:
So you think we're at the bottom of the inflection point?

SHUJA NAWAZ:
I think we're going down towards the bottom of the J-curve.

JIM GLASSMAN:
I'm sorry Ambassador?

AMBASSADOR TERESITA SCHAFFER:
I was going to say Pakistan is more important than Afghanistan. That's the key.

REZA JAN:
And to follow on the idea that the relationship with the United States is more important than Pakistan I think it's even more important for the Pakistanis to realize that quickly is because the idea that they frequently hide behind that they're being underwritten by the Chinese or that they can turn to China when the moment suits them in lieu of the United States I think is a vastly fading illusion and it's one they're going to have a rude awakening to if they haven't already.

JIM GLASSMAN:
Thank you Reza, thank you Shuja, and thank you Ambassador Schaffer. And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

How to Solve a Problem Like Illegal Immigration

2011-11-09T19:13:22Z

With states shaping their own immigration laws and courts taking up the issue, experts from across the spectrum discuss what is currently lacking and what is needed in shaping true immigration reform.

]]> IDEAS IN ACTION with Jim Glassman

How Do You Solve A Problem Like Illegal Immigration?

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. Illegal immigration has become a hot button issue in America affecting education, employment, healthcare and human services and as congress and the White House debate, states are making their own policies. What should be done about illegal immigration? Joining me to discuss this topic are; Doris Meissner, senior fellow at the Migration Policy Institute and former commissioner of the INS; Mark Krikorian, executive director of the Center for Immigration Studies; and Ali Noorani, executive director of the National Immigration Forum. The topic this week: how do you solve a problem like illegal immigration? This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
There are more than 11 million illegal immigrants in America today. Some Americans are alarmed by what they see as an influx of people who have broken the law to come to America, taking jobs that could go to American citizens. In this tough economic climate that's an easy idea to sell, however undocumented workers make up only 5% of the workforce and they perform a lot of menial tasks that Americans may not want to do. But efforts to stem the tide of illegal immigration are working. In fact the number of people crossing the border illegally has plummeted over the past two years. How serious is the illegal immigrant problem? And what can be done to fix it? Doris why are people so upset about illegal immigration? I mean illegal immigrants make up 3.7% of the U.S. population, 5% of the workforce, what's the big problem?

DORIS MEISSNER:
Well people are upset for a lot of reasons. They're upset because the country is changing through immigration and part of that change is being brought about by people who are coming here illegally. More of it's being brought about by people who are coming legally. We are a country of laws, we are also a nation of immigrants, and so the tension between our heritage and the fact that we've always changed over time through immigration is in conflict with the idea of people coming outside of the laws. But in addition to that people don't really understand our laws. Our laws don't provide a way for people to come to this country for work purposes in nearly the numbers that the economy was demanding until very recently. Overall immigration picture is one that is positive for the country at a macro level but at a micro level the costs of immigration are borne disproportionately, both legal and illegal immigration, at the local level, through schools and other kinds of services and our policy doesn't allow for that to be compensated right now.

JIM GLASSMAN:
And actually I wanted to ask Mark about that. What is the impact of undocumented workers on the U.S. economy?

MARK KRIKORIAN:
There'd be two sides to it; one is the illegality of the worker can have an effect and the other is just a huge number of low skilled workers, a kind of supply shock to the labor market. And the illegality of illegal workers actually has much less economic impact than people think. What really matters, their consequence, their effects to the economy is the fact that there's a huge proportion of the low skilled workforce that comes through immigration, mostly illegal because illegal immigrants are less skilled, but some of it legal and that then has a number of effects. First it slows down wage growth for American workers in these same occupations, and there's a lot of them. It also interestingly because they're low skilled workers in a 21st century knowledge based economy it limits their own upward mobility and their children's upward mobility, whereas in the past similar workers were coming to a very different economy. And thirdly it distorts the industries that these low skilled workers are concentrated in, slowing the process of technological advancement and labor saving technologies in areas like agriculture. There's nothing that can't be mechanized say that's in the hand harvesting of fresh fruits and vegetables. This supply shock of cheap labor creates takes away the incentives for farmers to implement the mechanization-- use the technologies that exist or invest in the development of new ones.

ALI NOORANI:
It's an interesting contradiction here because while we're on one hand saying well immigrants are doing the jobs of picking peaches, picking strawberries, picking apples, those are jobs that Americans will do, but then in the same sentence we're saying well actually those are jobs that machines will do. If congress was to act and actually put forward a reasonable immigration solution we'd be able to make taxpayers out of everybody, the worker as well as the employer.

JIM GLASSMAN:
Good point and let's get to that. Why is it that congress has been unable to come up with a solution to the problem that America is a nation of immigrants and yet we've got 11 million undocumented immigrants here breaking the law. Why can't something get done?

MARK KRIKORIAN:
Well the standard package that advocates call comprehensive immigration reform has three pieces to it; the three parts of this so called comprehensive reform is one legalizing the illegal immigrants who are here, amnesty in English, huge increases in future legal immigration, whether guest workers or whatever it is, but increased immigration, and then promises to enforce the law in the future so we don't end up with more illegal immigrants. The core political problem really is that the enforcement promises nobody believes because that's what the 1986 Amnesty Law was based on. Amnesty now, tie up the lose ends of bad law in the past, in exchange for promises to enforce the law, promises were not kept--

JIM GLASSMAN:
What about that? I mean-- was that a false promise in 1986? It seems to have been. So can those lose ends be tied up now?

DORIS MEISSNER:
Well it was a sincere promise in 1986 but the follow up didn't follow up on the promise but that's now 20, 30 years ago and I think that the political problem that Mark refers to is actually a deeper issue than the inflammatory issue of immigration itself, which has always been an inflammatory issue. In the first place we have done enormous buildups in enforcement in this country at least in the last 10 years, probably in the last 15 years. So the idea that we're not equipped to follow up on the enforcement promise of immigration laws is I think no longer valid. But the deeper political problem here is that immigration is one of those issues that requires bipartisanship. It requires a strong center. There is no immigration reform, statutory change, since the middle of the last century that has passed without a strong cross party agreement and that is simply missing from our politics today.

JIM GLASSMAN:
In fact it seems that there is a lot of demagoguery on this issue.

DORIS MEISSNER:
Yeah the problem solving is going to require people in both parties to come to a bipartisan agreement and it's not in the cards right now--

JIM GLASSMAN:
It's not in the cards. Do you think it's not in the cards in an election year?

ALI NOORANI:
An election year makes it more difficult undoubtedly but you also see in communities across the country whether they're Hispanic or even independent that there is a growing demand for a solution to this problem. And poll after poll for years has said people want a path to legal status, they want strong enforcement of the law, and they want a rational immigration system--

JIM GLASSMAN:
Well we're seeing states take matters into their own hands. What do you think of that?

ALI NOORANI:
Well you see Alabama and Georgia on one end of the spectrum who are literally undermining their very own economy. Then you see California doing things proactively for immigrants. But then you also see a place like Utah, the most conservative state in the country who is saying you know what, we can't just have an enforcement only perspective, we have to actually have an immigration system, even if it's just limited to Utah that serves Utah's economy.

JIM GLASSMAN:
So what is Utah doing specifically?

ALI NOORANI:
Utah has done two things; one is they have said they want to enforce immigration laws at a local level, then they have asked the federal government for a waiver so that they can institute in essence their own worker program. So based on the labor market and the economic needs of Utah they would like to be able to say ok workers can come into Utah based on our needs as a state and our economy. That's a practical solution that brought together Republicans and Democrats in the state of Utah that we need to see replicated in congress--

JIM GLASSMAN:
Come in legally--

DORIS MEISSNER:
--But the interesting thing about Utah is that there is no such thing as this waiver that they have asked for and there is now way to actually do at the state level what it is that they're asking for so what you're really seeing in Utah is the pressure that local officials, local elected, and state elected officials are under to respond to this issue of immigration on the ground, the distortions that it's causing the current system in the absence of the federal government doing the job that the federal government is supposed to do.

JIM GLASSMAN:
And even at the federal level there's a certain ad hoc ism recently the Department of Homeland Security announced that it was going to consider certain deportation cases on a case by case basis-- is the Obama administration making policy by itself by doing this rather than following the law?

MARK KRIKORIAN:
I would say yes. What--the thing you're talking about this reassessment of deportation cases is kind of the final part of a policy that has been pretty clearly articulated by the administration over the past couple of years the goal of which is that no illegal immigrant who hasn't also killed somebody or been a child molester or drug dealer something like that would be acted on by the government. In other words that illegal-- being illegal itself will not result in any consequences. So this recent announcement what they did was they said that the 300,000 people already in the deportation pipeline from before will all be reexamined one by one and those that they deem not to be somehow dangerous or threats will be released, given work authorization, essentially legalized or at least quasi legalized. The administration has essentially announced that immigration law is kind of a secondary offense, like not wearing your seatbelt. You're not going to get pulled over for it but they'll use it against you if you're doing something else bad and that undermines the very premise of enforcing immigration laws.

JIM GLASSMAN:
And isn't that kind of the major issue? We see this in the states you know-- is being an illegal immigrant really being treated as a crime? There are 11 million illegal immigrants. And should it be?

ALI NOORANI:
For us to forcibly deport 11 million people from our country would be a social and economic nightmare. I think we can all agree to that. So what the Obama administration has said is that we have a limited amount of valuable law enforcement resources let's focus those on, as Mark said, the worst of the worst. That's smart law enforcement. And let's make sure that the folks who are here and who are in violation of immigration law that they are put into a process where they are vetted, they haven't committed these types of crimes and let's make sure that we are using our valuable law enforcement resources the right way. Because at the end of the day a mass deportation is not going to serve our country's interest.

DORIS MEISSNER:
I think that describing this policy as going beyond what the executive branch has the prerogative to do it is in incorrect. The executive branch does have the prerogative to determine how it's going to establish its enforcement priorities and pursue them in that way. And it has said and has now made even more explicit that it is going to focus on serious criminal activity.

JIM GLASSMAN:
And you think that's a good policy?

DORIS MEISSNER:
I do think it's a good policy.

JIM GLASSMAN:
Can I ask you about another policy? 8% of the children born in America are born to at least one illegal immigrant parent and then that child then gets automatic U.S. citizenship. I mean isn't this a problem?

DORIS MEISSNER:
This is not a problem. This is one of the critical aspects of the United States that makes it distinct in the world in many ways. But fundamentally people born on U.S soil are U.S. citizens. It means a lot of things but among the things that it means in the current setting is that we will not build in structurally an underclass into our society going forward into the future.

JIM GLASSMAN:
Should an illegal immigrant be able to get the same rights and the same tuition as a legal American at a university in Texas for example?

MARK KRIKORIAN:
Certainly not. I-- actually I think the issue of in state tuition is kind of missing the point. The question is really should illegal immigrants even be permitted to enroll at state universities because there's a fixed number of slots, every seat at a university taken by an illegal immigrant is one that a legal immigrant or U.S. citizen doesn't get but--

JIM GLASSMAN:
But then you have the problem that Doris just expressed I think very eloquently, which is where do you leave these people like on the side of the road? Say you know well we're not going to give you an education fend for yourself--

MARK KRIKORIAN:
But the point-- what that means though is that the real issue is legalization or not, not in state tuition, that's almost a distraction because let's say-- California for instance permits in state tuition for illegal immigrants and now just passed a bill permitting taxpayer subsidized financial aid as well. Well ok those students spend four years in a university and then what? They can't get a job it's illegal. They're illegal immigrants. So the issue-- the in state tuition thing--

JIM GLASSMAN:
This struck me the other day when I heard about the California policy.

MARK KRIKORIAN:
It's almost a distraction.

JIM GLASSMAN:
So what do they do? Do they leave? Do they go into the black market?

DORIS MEISSNER:
These are all workarounds. These are workarounds because-- the idea of states trying to tackle this issue because of exactly what you said. They're at least trying to allow people to move forward because let's remember who most of these illegal immigrants are, they're kids who came here when their parents brought them as youngsters, they can't go anywhere because our system doesn't provide for any proper management of this whole not only group of people but way forward in terms of immigration overall.

JIM GLASSMAN:
Yes Ali.

ALI NOORANI:
There's two things here one is that these students are high performing academic students. They've already competed for that seat and they have earned that seat. So they're not displacing anybody. A university looks at somebody based on their grades and their test scores. So that's number one. Number two and Doris touched on this earlier is that these are all state-by-state solutions. This comes back to the fact that congress has not come around the table in a bipartisan way to fix the problem.

JIM GLASSMAN:
Right. Let's hone in on that because that's a very important issue to us at the Bush Institute as we look at ways to increase economic growth and there are a lot of people who are saying let's get rid of this family connect-- extended family connection type of immigration which I think is unique to the United States or is certainly quite unusual and instead make our decisions about whether immigrants come to the United States based on their level of education or even how much money they've got. In other words let's try to boost the quality of immigration-- what do you think of that?

MARK KRIKORIAN:
Well I mean there's a germ of a point there but you need to understand--

JIM GLASSMAN:
Only a germ.

MARK KRIKORIAN:
Only a germ I'm afraid because-- look we took in about 1.1 million legal immigrants last year, that's how many green cards we gave out. Now most of those people were already here and they engineered some kind of permanent status-- but 1.1 million people, 400,000 of them about were the spouses or minor children of U.S. citizens. That's the kind of irreducible minimum of family immigration. You're not going to get rid of that. It's the other--

JIM GLASSMAN:
Right.

MARK KRIKORIAN:
It's the adult siblings, the adult children, that kind of thing-- and that's not insignificant to get rid of that. But the point is you start with 400,000 people who are relatives who are not-- it's not going to be eliminated--

JIM GLASSMAN:
Right but what about the other 600,000?

MARK KRIKORIAN:
But--

JIM GLASSMAN:
What if you said you had to pay 50,000 dollars to become an American citizen or to immigrate to the United States? Or that you have to have a college degree? Or that you have to have an advanced degree?

MARK KRIKORIAN:
The question here is what kind of skills are special in a modern economy that actually have those kind of effects--

JIM GLASSMAN:
Well there are a lot of people in Silicon Valley and I mean I talk to people almost everyday who say we can't find those skills in the United States we need to import them--

MARK KRIKORIAN:
--Look the head of-- the vice president of Texas Instruments just testified last week that at the bachelor's degree level they have no interest in importing people. They couldn't care less. It's people with advanced degrees and overwhelming majority of foreign students who get PhDs in the United States stay already. It seems to me this is a phony issue because the top, the best and the brightest, already are able to stay.

JIM GLASSMAN:
Ali.

ALI NOORANI:
It's not a phony issue. The fact is if you graduate with a PhD in computer engineering you don't have a guarantee to a green card. You don't have a guarantee to be able to stay here. More and more we're seeing that companies are unable to sponsor those individuals and those individuals after we train them return to their countries and start businesses there. So in effect we are exporting highly trained workers to then take the jobs that we need as a country.

JIM GLASSMAN:
Do you think a part of the concern about people who want to reduce the number of immigrants is really related to the fact that so many of our immigrants are Hispanic?

ALI NOORANI:
This is a time-honored tradition in our country right? In the early 1900s it was if you were Irish or Italian. Now if it's you're Hispanic. I think as a country we've always met that challenge of understanding who are new neighbors are and welcoming them to our nation. So I think this tension that we feel as a country we can struggle through that. We'll figure that out.

JIM GLASSMAN:
The fact that it's historic-- it's been going on-- it was Italians and the Jews and you know everybody didn't like a specific class of immigrants-- and the fact that it's been going on for a long time doesn't mean that it's not somewhat pernicious.

ALI NOORANI:
I have confidence in us as a country that we're going to meet that challenge. So is it an issue of race? Is it an issue of class these days? Yes, but it has always been. So I think we need our leadership to help us meet that challenge.

JIM GLASSMAN:
Do you think there are too many Hispanics coming into the United States?

MARK KRIKORIAN:
The question is two-fold. Ali is right in that there's always a certain discomfort and always has been when newcomers show up. There's no question about that. What we face today though is different in kind from anything that's every happened before because this is the first immigration wave ever where the majority of immigrants are from a single ethnic group. I looked at the 1910 census when I was writing my book. The variation in the languages and ethnicities was stupefying. There was no group that was even close to being majority. Today like 55, 60% of our immigrants are of a single ethnic group. That really does create a very different dynamic that we have the least diverse immigration flow in American history.

JIM GLASSMAN:
And that-- least diverse even during the period let's say when lots of Italians were coming in the early part of the century--

MARK KRIKORIAN:
They weren't anywhere close-- anywhere close to the share of immigration--

JIM GLASSMAN:
What was the percentage? 10%? 20%?

MARK KRIKORIAN:
It was something like 20 or something, 25%, and even then only for a brief time. The Germans earlier only for a brief time.

JIM GLASSMAN:
Do you think that a border fence can really work? I mean Rick Perry for one, governor of Texas, doesn't think that it will. An extensive border fence.

DORIS MEISSNER:
Well I mean what's going on on the border now today and what's going on with the change since the recession in 2008 is really dramatic. Fencing is part of effective border control but it needs to be used selectively and it is not the answer across the entire border to solving the problem of illegal immigration. In the first place a lot of our illegal immigration actually comes from people that never have crossed the southwest border. Somewhere between probably 35 and 40% of the resident illegal population are people who came here with visas and overstayed their visas. So even if you reduce dramatically the number of people that come across the U.S.-Mexican border, which in fact is the case today, you have not solved the problem of illegal immigration through border enforcement. In Mexico there is a shift going on now which may really be a game changer in terms of the traditional push pull into the United States. They've just completed their census and the numbers are pretty stunning; a combination of dramatically reduced fertility, better job growth, and better economic growth in Mexico than in many other countries during this time, higher education levels, so that people have a reason to be staying there. So we actually may be turning a corner where some of the pressure is off in terms of the flow of illegal immigration which I hope allows for the political moment to arise where we actually rectify this system.

JIM GLASSMAN:
So Ali ultimately we've talked about a problem that's very difficult to solve. What-- do you think that there is a chance to solve this problem or to have a rational immigration policy by let's say 2013?

ALI NOORANI: Well I think we have to keep pushing towards that. I think we'll-- it'll be interesting the way that the presidential primary debates continue to unfold and how immigration continues to be in essence a marginalizing factor for the Republican Party. But at some point when we get to the general election both candidates are going to have to present to the country, not just to Hispanics but to the country, a rational plan to fix our immigration system.

DORIS MEISSNER:
The other thing that could be very important here is the Supreme Court. It's entirely possible that these state laws, which are now with court decisions in different circuits in fundamental disagreement, may be taken up by the Supreme Court. If the Supreme Court decides that states cannot legislate in this area it creates a different political climate--

JIM GLASSMAN:
I just want to ask all of you what you think a reasonable immigration policy would look like very, very briefly.

MARK KRIKORIAN:
The way I see it is the enforcement part is going to come first. It has to come first. It's not going to be part of a deal. Enforcement is not negotiable. After a time the illegal population will shrink through enforcement. Not all of them will leave but it can be shrunk. We modeled and estimated that we could probably cut it in half in five years with real consistent across the board enforcement. No machine guns and stuff just regular enforcement. At that point, then a deal I think is possible and the deal then would be legalization for some of the remaining illegal immigrants in exchange for permanent reductions in legal immigration. That's the deal that we're going to see five or seven or ten years down the road. Not this comprehensive immigration reform that holds out the promise of enforcement but just a promise.

JIM GLASSMAN:
Doris.

DORIS MEISSNER:
I'm pessimistic politically about immigration reform but I do believe that from a policy standpoint you must do what we think of as comprehensive reform. You cannot ultimately enforce your way out of this problem. The problem is one that requires a more integrated solution because if nothing else and particularly going into the fiscal climate that we're going into we can't afford more enforcement. We're doing an enormous amount of enforcement at this point but of a law that is not rational. You need an employer enforcement piece that holds employer accountable on a mandatory basis to checking their workforce. We don't have that now. You must have an amnesty piece and you must have a possibility of future flows of workers for labor market reasons that is more balanced with the family immigration.

JIM GLASSMAN:
Ok. Ali.

ALI NOORANI:
We have two options in front of us. One option is we can bank on deepening recession and spending tens of billions of dollars on enforcement. That's what Mark just laid out. In essence make sure that people want to leave because the economy's terrible and we're spending a billion dollars-- tens of billions of dollars a year on enforcing immigration law. That option does not serve our needs as a country. That is clear. The second option is to make taxpayers out of people who are here illegally, require them to pay their taxes, get legal status, pass a criminal background check, and then get in line for citizenships. That's one leg of that stool. The second leg is to have an immigration system that meets the needs of our workforce and our economy so that job creators are coming into the country and creating jobs and they're welcomed here. And then third is actually being able to have an immigration enforcement system that can operate effectively and efficiently so we're not spending tens of billions of dollars to forcibly remove five million people. That's crazy. We're actually spending the right amount of resources on making sure the ones who are here to hurt us and cause harm are removed. That's smart immigration policy.

JIM GLASSMAN:
Thank you Ali, thank you Mark, and thank you Doris. And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Malaria: Fighting the Number One Killer in Africa

2011-11-02T19:28:41Z

A program highlighting the scourge of malaria in Africa and developing countries worldwide with a discussion about how concerned organizations, such as the Bush Institute, can work with other groups to expand treatment and prevention of this deadly disease.

]]> IDEAS IN ACTION with Jim Glassman

Malaria: Fighting Africa's Number One Killer

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. This week: taking a bite out of malaria. Many people around the world accept malaria as a fact of life. In fact malaria is preventable and curable. At a recent global health conference hosted by the George W. Bush Institute, I had the chance to sit down with three people who are leading the charge in the fight against malaria. They are; Ambassador Mark Dybul, inaugural fellow in global health at the George W. Bush Institute; Bishop Sunday Onuoha president of Vision Africa; and Dr. Steven Phillips, medical director of Global Issues and Projects at the Exxon Mobile corporation. The topic this week: fighting malaria, Africa's number one killer. This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
According to the World Health Organization, each year malaria wreaks havoc in over 108 countries- across five continents- but nowhere has malaria taken a bigger toll than in Africa where malaria is the number one cause of death for refugees and children. In fact one African child dies every 45 seconds due to malaria. In terms of the sick the disease affects children's school attendance and their parents' ability to work. In Africa alone malaria is responsible for a loss of over 12 billion dollars a year in productivity. The good news is that malaria can be prevented and, if caught early enough, treated. With the right attention and intervention it can even be eradicated. Thank you gentleman for joining us on Ideas in Action. Mark, if malaria is preventable and treatable why does it seem to be such a continuing problem?

AMBASSADOR MARK DYBUL, M.D.:
Well it really comes down to political commitment and money. I mean that's the end of it. Some of your viewers-- some of your older viewers may actually remember having malaria in the United States particularly in the South not too long ago. But we stepped up our game and did what was necessary. Right now we've seen in the last five years, after the President's Malaria Initiative, the Global Fund, that we can actually make significant progress but we need more resources, more commitment; political commitment both globally but most importantly in country-- from across the sectors, private sector, faith community, but importantly governments, and that's really all it takes today. That's it. In a nutshell that's it; political commitment and resources.

JIM GLASSMAN:
We're going to talk about that in a little more depth. Steven, you work for Exxon Mobil's Global Issues and Projects division. Why would an oil company be interested in malaria?

STEVEN PHILLIPS, M.D.:
Well part of the answer is with Mark's intro, which is the recipe for success in malaria is collaboration among sectors. And let me start at the end in terms of Exxon Mobile's involvement; over the last ten years Exxon Mobile has invested over 100 million dollars in malaria initiatives. One part advocacy for more money and more attention globally to malaria, one part in research and development for new drugs and vaccines, and one part on the ground disease control projects in countries such as Angola and Nigeria where we have major operations. And we've invested this for two reasons; one is the scope of the opportunity. As Mark noted this is a huge problem with a huge human toll, in Africa especially. W.H.O says something like 200 or 300 million cases of malaria occur every year, something like 800 thousand deaths. We look at that as an oil company as an opportunity to do something significant about. And the second piece of the equation is we want to be part of the solution. So how do we become part of the solution? It's by spending that 100 million dollars through the harnessing of public-private partnerships with faith based organizations such as Bishop Sunday's, with NGOs, with development agencies, with African governments, with international public health agencies.

JIM GLASSMAN:
In a more self interested way you have a large workforce that you don't want to get-- to have malaria. And you've also-- you know you have customers as well.

STEVEN PHILLIPS, M.D.:
It all starts with the workforce. I like to think of our malaria engagement as a set of concentric circles. It all begins with the employee and malaria is a toll that we know firsthand at the workplace level. We've been in Africa for over 100 years. 85 to 90% of our employees are local African nationals. So we know that they suffer absenteeism, the ravages of malaria. And then outside of the concentric circle of the employee we have families, we have children that need to go to school and be educated, we have spouses that till the soil, that bring products to market. And then beyond the families we have communities, countries, and then the entire region of Africa. And we look at malaria as a regional problem-- frankly just because of the biology of the disease. Malaria is not something we can take care of within our fence line. So it's logical for us to extend our very, very comprehensive malaria control programs outside the fence line into the communities and into the country scale at large.

JIM GLASSMAN:
And Bishop Sunday, Mark made reference to the faith based sector and you've been doing a lot of work in Nigeria training faith leaders to educate communities about malaria, how does that work?

BISHOP SUNDAY ONUOHA:
It works because we live in a society where an average African, an average Nigerian, believes in his pastor, believes in his Imam-- highly religious community. When you come to that kind of society they tend to believe in their pastor and their Imams more than they believe in their doctors. When you come to such a society where there is such a belief system, they trust the pastors-- it is then our moral responsibility to take advantage of such opportunity. To communicate to our audience, to communicate to our congregation; need to prevent and need to avoid. In Nigeria alone you have over 300 thousand people die every year because of malaria and when such is happening your staff cannot go to work when they are sick. When their children are sick they cannot go to work. When their husbands are paralyzed because of malaria, wives cannot go to work. The vulnerable group-- the pregnant women, women, and children-- when those people are affected, the pastor is affected. So it is our moral obligation as people of faith to respond.

JIM GLASSMAN:
And you mentioned Imams as well. One of the things I think is interesting about your work is that Christians and Muslims-- and Nigeria is both a Christian and a Muslim country-- are working together is that correct?

BISHOP SUNDAY ONUOHA:
Yes, we work with both Christians and Muslims are working together for this particular effort, this malaria effort. And I can tell you this is the largest Muslim-Christian effort in the world is happening in Nigeria. The media will show where things are not going right but media hardly picks up those things that are going correctly. Right now in Nigeria we see Imams, we see pastors coming together strategically planning how to touch and reach out to the congregation in order to address the menace of malaria.

AMBASSADOR MARK DYBUL, M.D.:
You know just to go along with what the Bishop said because one of the important things-- he spoke from a pastoral perspective. From a public health perspective you actually can't succeed in global health unless you engage the faith community. World Health Organization estimates 30 to 70% of healthcare is provided by faith organizations in sub-Saharan Africa. It's a pretty wide range. There's no question if you travel around you can go to village after village and-- after village you won't see any vestige of a government or public health clinic but you'll find a church and they're caring for their people. And they are providing the community support that's necessary. You know if you get a bed net, which prevents malaria, but you don't sleep under it it doesn't do you a whole lot of good. And for a long time people were sticking them under their bed because they were in a nice pretty wrapper or using them to fish or even wrapping their dead with them. You need someone in the community who they trust to go in and say this is how you use your bed net. Same for HIV. So if you don't engage the faith community in global health you will not succeed in global health and it's really that simple. If you don't meet people where they are you can't succeed.

JIM GLASSMAN:
Steven, there have been some references to bed nets here-- what are the ways that malaria is combated?

STEVEN PHILLIPS, M.D.:
Key tools for prevention are bed nets and insecticides and they're both highly, highly effective. They are both relatively inexpensive but they take management systems to effectively deploy. So you asked Mark previously why an intervention that has effective tools such as bed nets, insecticides, and on the treatment side rapid diagnoses-- there's a very simple pregnancy type test that can give an answer of whether or not you have malaria within 20 minutes or so-- and then you have very effective drugs that are not overly expensive. Management systems need to take these multi sectoral approaches, whether faith based, whether government run, or whether private sector in country, and make sure that human resources are organized in a way that the finances, the products flow to the end user, to the vulnerable women and young children that need them.

JIM GLASSMAN:
And the medicines you are referring to are those to prevent malaria or are they after you've gotten it?

STEVEN PHILLIPS, M.D.:
Those of us in the north typically think of anti-malarials as preventative because when we get our visas for African countries along comes the Malarone or the Doxycycline. In Africa if you survive to the age of five you typically have partial immunity to the disease and you no longer are at a considerable risk of dying but you do get sick over and over again and the episodes of sickness in an African child or an African adult are then treated as opposed to prevented. And treatment requires typically a longer course and higher doses but is uniformly effective in causing a cure if it's instituted early enough.

JIM GLASSMAN:
Mark one of the organizations that you work with is Malaria No More and Malaria No More is aiming to rid Africa of malaria by 2015, I think it is. Is that a realistic goal?

AMBASSADOR MARK DYBUL, M.D.:
It actually is a realistic goal and you know Malaria No More was created around the White House Summit. President Bush convened a White House Summit on malaria. He had already initiated the President's Emergency Plan for Aids Relief; largest international health initiative in history for a single disease and then turned his sights to malaria. And around the White House Summit where Steven was, the sultan actually came, as well as the archbishop at the time came to see how the private sector-public sector could work together to fight malaria. Malaria No More was created. That is not a Malaria No More goal. That is a global goal and it's actually a goal that is shared by the African heads of state importantly. So Malaria No More works to support all of the institutions to bring them together in a collaborative way to highlight the success of malaria and the battle of malaria. When Malaria No More started about 20% of the U.S. population recognized malaria as an issue, it's now about 60%. Now that's not Malaria No More alone. A lot of people have been involved in that. But our aim is to support others to succeed. We don't actually do a lot of interventions. That's for them to do. What we do is highlight advocate for resources because as I've said political commitment, money, is where we need to go. Building on what president Bush did, what the Obama administration is working on, and then supporting them to achieve their objectives.

JIM GLASSMAN:
But there's still 800 thousand people dying is that right?

AMBASSADOR MARK DYBUL, M.D.:
There's still 800 thousand people dying but it's reduced. It's all kids. As Steven said 90% of the death is children, which is just a tragedy and it's usually from meningitis that they get. It's really a-- you see-- we used to see rooms and rooms full of beautifully sleeping angelic little kids, and they looked like they were sleeping but they're actually dying because they have meningitis. Because of the interventions supported by president Bush, the World Bank, the Global Fund to Fight Aids, Tuberculosis and Malaria-- and I say supporting because in the end it was the people on the ground who did the work, all we did was support their national strategies-- those wards are now empty. It's really rather remarkable. Those wards during malaria season are empty where the interventions have succeeded. The tragedy to some degree is kids with fever because of malaria are assumed to have malaria when they come in with a fever during malaria season. Well because of the success of malaria we're finding about half the time they actually don't. So they're treated for malaria because that's what's available and then they go home and die from pneumonia. So with this rapid diagnostic test, with the advance in science, a community healthcare worker can, like a pregnancy test, now determine if someone has malaria or not and give them an antibiotic. So we could actually not only tackle malaria, not only achieve that goal, we could actually have a new goal of zero childhood death from fever because it's really malaria and pneumonia. And groups like Bishop Sunday's are beautifully positioned to begin to make that push so we advance not just from malaria death but childhood death associated with fever.

STEVEN PHILLIPS, M.D.:
It should be recognized that we're sitting here today on a momentous day in the history of malaria where the Roll Back Malaria community in Geneva, which is a consortium of 500 hundred or so public sector, private sector, and non profit organizations. Today they announced the launch of a report that summarizes ten years of progress and impact on malaria. That report says that malaria is down 38% over the course of the last ten years, that three countries have eliminated malaria in the last ten years, and that coverage of the critical intervention of bed nets has reached approximately 80%, all over the last ten years, and that funding has increased 30-fold from about 50 million dollars to 1.5 billion dollars by 2010. The pieces are falling into place. I think the critical part that many people don't appreciate are-- including policy makers is that malaria has a biology where if you stop pushing on the balloon it's going to pop back out. It's going to resurge and it's going to bounce back with a vengeance perhaps worse than it was to begin with. So I think it's certainly in the global community's interest to keep our foot on the gas pedal to make sure we have the political will going forward.

JIM GLASSMAN:
And we're talking about successes-- Bishop Sunday can you-- like on the ground successes that you've seen in Nigeria.

BISHOP SUNDAY ONUOHA:
What I have seen in the past few years is the level of collaboration that is taking place within the context of malaria. I don't think-- apart from HIV/AIDS-- I have not seen it in another sector various institutions and groups coming together to work together over a particular need and issue. Faith community coming together, Muslims and Christians coming together, government and faith institutions coming together. Right now in Nigeria there is that emphasis on primary healthcare to get to the grass root, making sure that the health institutions at the grass root level is taking care of and addressed, and a new minister that understands how to address primary healthcare appointed, working with the faith institutions, working with the community leaders. Another thing that is happening here is that we can see in our world how issues could be addressed when we come together--

JIM GLASSMAN:
Are you seeing specific results? I mean do you notice in your times going back and forth between Dallas and Nigeria?

BISHOP SUNDAY ONUOHA:
Yeah we're seeing quite some results. Success stories, we have the data that we have gladly shared with our friends, the number of people-- the reduction in terms of death and the usage of net where people listen to the faith leaders, where people collaborate with one another that the usage of net has grown high.

JIM GLASSMAN:
Steven referred to countries where malaria has been-- has disappeared, what are the success stories?

AMBASSADOR MARK DYBUL, M.D.:
Well Steven's point of it coming back is very important-- I'll tell a story I've always found somewhat amusing-- when the Minister of Health of Zanzibar was told that president Bush launched the President's Malaria Initiative and resources would come to Tanzania and Zanzibar to eliminate malaria the minister said, 'Great we've done that three times before we know how to do it.' So the success is actually not complicated. We know how to do it. It's a geographic coverage that spans borders; mosquitoes don't stick within a border that is drawn on a map, they fly all over the place. So you need geographic coverage, three major interventions for prevention and treatment to knock it down and when you knock it down you actually start having a ripple effect. So we see villages that have had bed nets provided and the next village over even though they don't have any bed nets see reduction in malaria and that's because the bed nets have an insecticide in it so the mosquitoes are dying. So we're seeing more than 50% reductions in death in large number of countries in sub-Saharan Africa where the Global Fund-- the President's Emergency Plan-- others have supported national leaders to take this on. Key point if the national leaders aren't there it's not going to work. And as Steven said we're on a trajectory now where we can look towards malaria being eradicated from the planet. That's a difficult word and it gets very controversial but probably within 50 years but on a steady pace. But if-- as Steven said if we pull back all that success goes away just like in Zanzibar.

JIM GLASSMAN:
Is there a problem, Steven, with resistance to insecticides? Is that one of the reasons you need to keep pushing?

STEVEN PHILLIPS, M.D.:
Right. There are technical problems, financial problems, political will issues. Technically there is the prospect of resistance both to the drug, the number one first line drug, which is based on a Chinese botanical product, and there's also issues around resistance to the insecticide; to old insecticides such as DDT used for indoor spraying and now to two or three newer classes and generations of insecticide. The Darwinian aspects of the mosquito and the parasite are such that they are incredibly adaptive creatures that have been present since prehistory and so when they're massively exposed to either effective drugs or to effective insecticides it's just a matter of time before resistance rears its ugly head and it's already happened in Southeast Asia, in the Cambodia, Thailand area-- that's to the drug-- and to the insecticide there's fairly prevalent partial resistance to the key ingredient in bed nets.

JIM GLASSMAN:
So what do you do? You have to keep finding a new drug? Or new insecticide?

STEVEN PHILLIPS, M.D.:
Well what you do is based on-- it's basically innovation and to incentivize innovation and several foundations such as the Gates Foundation have planted these public development projects-- product development projects, where academic centers are incentivized to join with big pharmaceutical companies and combine the best of both worlds. Pharmaceutical companies are really good at product development, academics are a crucible of great new ideas and now they've been partnered through a variety of innovative mechanisms to come up with new drugs and new insecticides. And the pipeline as I understand it is as rich now as it has been in a long, long time. So there are new products that will be coming out.

JIM GLASSMAN:
And this holistic approach have you seen this in Nigeria? Do you think this is a good idea?

BISHOP SUNDAY ONUOHA:
Good idea. Great idea because every society survives when there is a sense of ownership by a community. The community must accept responsibility. When there is international aid or international support going to any group they must have a sense of responsibility that they also have something to contribute to it. In any place where there is no sense of ownership program dies off. What is going on here especially in the malaria and HIV/AIDS as we have seen it is that the communities are accepting responsibility. Faith communities accepting responsibility. We're prepared if someone, that Imam, can preach on malaria based on the Koran by Islamic scholars. Then prepared is someone that a pastor can preach based on the bible, by bible scholars, and we put them together in the same booklet. So when an Imam is preaching he's someone from the Koran, he toss(?) his eyes to make reference to what the bible says. When the pastor is preaching from the pulpit he talk to the other place to see what Imam is preaching. The point also is that in the same community both Imam and Christians belong to the same community. And when they all come together changes happen.

JIM GLASSMAN:
And you can do this whatever the government is doing.

BISHOP SUNDAY ONUOHA:
Whatever the government it doesn't matter.

JIM GLASSMAN:
Just on the medical side Steven are there any promising vaccines?

STEVEN PHILLIPS, M.D.:
Well I'm not a vaccine expert but let me say that the world is waiting right now with great anticipation for the first effective vaccine to come out of the pipeline. And they say a collaboration between the drug company GSK and MVI, which is a non-profit sponsored by the Gates Foundation, they are currently in phase 3 clinical trial. Phase 3 is the last part of a very complicated regulatory framework to bring a vaccine to commercial use. If phase 3 is successful then in about three years, something like 2014 or 15, there will be a partially effective vaccine-- partially meaning about 50% effective against serious malaria in the age range of young children, one to five years old.

AMBASSADOR MARK DYBUL, M.D.:
And it's also important to note that in the history of global health almost all epidemics succeed-- almost all vaccines succeed because you've already had a trajectory down in infection rates and the vaccine is really cleaning up what remains, sometimes a lot, sometimes a little, but we're on that trajectory. So the faster we push down the trajectory with the interventions we have today the more effective a vaccine will be.

JIM GLASSMAN:
Just to clarify bed nets-- bed nets work right? I mean are bed nets the main reason that this trajectory is heading down?

AMBASSADOR MARK DYBUL, M.D.:
It depends on the country but in general the bed nets have been one of the leading edge of the intervention. Ten Dollars Saves a Life-- it was something Malaria No More came up with-- Ray Chambers and Peter Chernin when they co founded Malaria No More-- and that includes the distribution cost. That includes those implementation costs so ten dollars saves a life. So a school of kids all around the United States have been raising money and it's a nice approach but it's more complex than that.

JIM GLASSMAN:
I just have a last question for all of you very, very briefly, one sentence would be good; what's the next step as far as you're concerned in the fight against malaria?

BISHOP SUNDAY ONUOHA:
The next step is for all the component parts; government, private sector, NGOs, come together we must never stop. If we stop from where we are we'll get back 20 years behind. We should push on. This is the time to push.

JIM GLASSMAN:
And Mark?

AMBASSADOR MARK DYBUL, M.D.:
Political commitment, resources, to get us to the finish line and use malaria as the leading -- as a leading edge to combat childhood death from fever.

JIM GLASSMAN:
Steven.

STEVEN PHILLIPS, M.D.:
From a private sector perspective nothing speaks like results. Today's report from Rollback Malaria that shows significant advances in the last ten years is likely to generate renewed finance, renewed political commitment, and I think even better results in the future.

JIM GLASSMAN:
Thank you Steven, thank you Mark, and thank you Bishop Sunday.

BISHOP SUNDAY ONUOHA:
Thank you.

JIM GLASSMAN:
And that's it for this week's Ideas in Action. We'll see you next time. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.

Automation Nation: Will Robots Take Our Jobs?

2011-10-26T17:36:33Z

A debate on the future of the American economy and the role of intelligent computers and robots. Will rapid technological innovations aid American workers, or will it render large numbers of American workers obsolete?

]]> IDEAS IN ACTION with Jim Glassman

Automation Nation: Will Robots Take Our Jobs?

JIM GLASSMAN:
Welcome to Ideas in Action a television series about ideas and their consequences. I'm Jim Glassman. This week: it's not cowboys versus aliens it's humans versus robots. With over 9% of Americans looking for work the job market has never been more competitive, but these days competition is increasingly coming from another source; highly intelligent robots. Can the American worker go toe-to-toe, or wheel-to-wheel, with a robot? What does the increasing use of artificial intelligence and robots mean for your job and the future of the American economy? Joining me to discuss this topic are; Robin Hanson, associate professor of economics at George Mason University and research associate at Oxford University's Future of Humanity Institute; and Martin Ford, founder of a Silicon Valley based software development firm, Querybot Systems, and author of the book, The Lights in the Tunnel: Automation, Accelerating Technology and the Economy of the Future. The topic this week: humans and robots; complement or competition? This is Ideas in Action.

ANNOUNCER:
Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investors Business Daily helps investors find these new leaders as they emerge. More information is available at Investors.com.

JIM GLASSMAN:
Martin, you know that since the recession began nearly four years ago spending on human beings by companies has gone up 2%. That's all. Of course unemployment has increased. While spending on software, hardware, and technology's gone up 26%. Are we already seeing automation having a major impact on employment?

MARTIN FORD:
I believe we are and it's not something that's just happening instantly right now it's been going on for some time. Over the past couple of decades at least what we've seen is that the wages for average workers have basically been stagnant in spite of the fact that we've seen significant increases in productivity. And basically all the fruits of innovation and of productivity are really going to business owners and to management at this point and very little to labor and I think automation has a lot to do with that. Economists that have looked at it have found that currently the job market is polarized and what that means is that the mid range jobs which have traditionally been jobs that have been really solid middle class jobs and they tend to be routine jobs that require some education and training but not an extreme amount, and these jobs have basically disappeared. They've been vaporized and what we're left with now is a polarized market with lots of low-end jobs, low skilled jobs with low wages and also high-end jobs that really require lots of education. But going forward I think what we're going to see is that automation is going to take on more and more so it's going to start to impact especially the higher end jobs because its capability is constantly expanding. You know we're seeing an acceleration in technology and in the capability.

JIM GLASSMAN:
I want to get to the historical comparisons but I'd like to ask Robin first of all I mean aren't there benefits to automation?

ROBIN HANSON:
Absolutely. We are rich today in large part because we developed fast capable machines that over the last few centuries have displaced many workers and allowed other workers to go on to more interesting creative jobs.

JIM GLASSMAN:
Didn't people talk about this you know in the 19th century that we're all going to get unemployed as a result of new machines or-- agriculture is a good example isn't it? Tractors, combines, and yet we're richer than we ever have been.

ROBIN HANSON:
The concern that machines will replace humans has been a concern for many centuries. It's been something people have envisioned for a very long time and so far it hasn't been that much of a problem. It doesn't mean it always will be mild but so far it's been a good thing.

JIM GLASSMAN:
So what makes this change different from let's say the automation of farming where we produce a lot more food, with a lot fewer people?

MARTIN FORD:
Well first of all Robin is correct, I mean there's no doubt that advancing technology is really what has made us wealthy and historically that's been true. The difference between what's happening now and what happened with agriculture is that with agriculture we were talking about a primarily mechanical technology that was specific to the agricultural sector. And there's no doubt it eliminated millions of jobs. It was in the short term very disruptive but those workers eventually found opportunities in other relatively labor intensive sectors. They found jobs especially in manufacturing and later in services and also the other thing that happened is that as food production automated, consumers had more money to spend and they spent it on other things in manufacturing, in services and that did drive employment. But the key is that at that time technology was at a point where those sectors were labor intensive. They had to hire a lot of workers. What we have today is quite different. We have this new field of information technology and it is ubiquitous, it will be applied everywhere. There aren't going to be any sectors appear in the future, I don't think, that will get a pass on information technology. It's going to get applied right away to any new industries that pop up--

JIM GLASSMAN:
But Martin just during the last presidential term, during George Bush's presidential term, you know we had unemployment around 4%, 4.5%. I mean-- that's almost full employment. Here we've had a recession, unemployment's up to 9%, but really is this just all of a sudden happened in the last few years?

MARTIN FORD:
I don't believe it's all of a sudden at all but what I do believe is that we had a housing bubble of course and I think that masked this to a very significant extent. It did that in two ways; number one is that consumers took on a lot of debt and remember as I said before wages were stagnant during this time. Unemployment was low but wages weren't increasing and so people went out and continued to spend a lot but they did that on the basis of debt-- credit cards and home equity loans rather than on the basis of income and that spending helped to drive the economy; the other thing is the housing bubble itself created an enormous number of jobs because building residential homes is very labor intensive. It creates a lot of jobs for construction workers and it also creates peripheral jobs; loan agents and people like that.

JIM GLASSMAN:
So you think that was kind of an anomaly. Robin I just wanted to ask you if this is imminent, this change-- we're going through it right now. Is there something the governments should do now to take this into account?

ROBIN HANSON:
Well let's talk about how much of a change we're having. So I think it's important and I hope we agree that there's a lot of short-term fluctuations going on in the economy that have little to do with increasing automation. Just a lot of other things going on and it's a mistake to get too hyped up about this particular driver because it's a slow long-term driver. It's not something that suddenly makes the economy go up or down. So I think we agree on that. So the issue is to look at long-term trends, long-term issues, and see where that's going over the long run. So if the government's going to do anything about it it needs to be focusing on the long run.

JIM GLASSMAN:
But what about this argument that Martin makes that sounds-- pretty good one to me is that we live in this era in which jobs, where you make money basically off the sweat of your brow or the strength of your back, those jobs are disappearing--

ROBIN HANSON:
That's been true for a long time.

JIM GLASSMAN:
--And even at a higher level you're running into competition with robots and automation. So how are we going to compete?--

ROBIN HANSON:
It's been true for a long time that almost all the value for most work is from your head. Most of the value for most jobs is the fact that we have smart brains and we are clever about how to do the jobs, yet automation hasn't equally taken on all jobs. There are some kind of jobs that are just a lot harder to automate and those jobs are where people will go when the easy to automate jobs are being taken over.

JIM GLASSMAN:
And what are those jobs that are harder to automate?

ROBIN HANSON:
Well, if you are a software expert you probably have a better sense for which jobs are harder to automate. It's easier to talk about what's easy to automate actually. It's easier to automate routine jobs, structured jobs, jobs for which you don't need to know that much. That's what people are doing all the time. Software professionals like Martin here are looking out into the world and trying to see where they can write software that will displace jobs.

JIM GLASSMAN:
Martin thinks and I'll let him speak for himself in his book he's really talking about a lot of jobs that are going to be automated correct?

MARTIN FORD:
Right and I think it's important to understand the point that I think most jobs in the economy are to some extent routine and fairly narrow. I mean people get paid to do fairly specific things. I mean, you may be a very well rounded human being and there may be a lot of things that you can do that are well beyond the capability of any machine but typically that's not what you get paid for. You get paid to go to work and you tend to face the same types of challenges again and again within some relatively narrowly defined range and as these technologies get better they're going to be able to take on more and more of that. One of the really potentially disruptive things I think is going to be machine learning, which is a technology where software looks at what's been done in the past in terms of how a job was performed and then basically figures out how to do it in the future. Basically it writes its own program based on looking at that data. So as that continues things that now appear to us to be non-routine will begin to look routine--

JIM GLASSMAN:
So give me an example of that. I mean I know maybe one example will be Watson the IMB computer on Jeopardy figured out how to beat the game but in more practical terms. MARTIN FORD:
In more practical terms for instance Google's got a translation tool that you can use to translate a web page and you can get a readable translation of-- basically in any language almost instantly and that was constructed entirely with machine learning. I mean they didn't go out and hire a bunch of people who are fluent in all those different languages and then program that application. They-- the machine did that by analyzing documents. So machine learning is a kind of-- really it's a tool where a computer learns to program itself.

JIM GLASSMAN:
Ok so actually-- let's probe that for a little while. So you've got a machine that's learned how to translate. That puts translators out of business but there may be some advantages-- economic advantages to that Robin. I mean is that good or bad?

ROBIN HANSON:
First off these automated translations are a first good cut, but they're not a full translation. If you want something professionally translated, reliably translated, if you want like 99% of the words right, you need to hire a human today. So they're impressive technologies, they're impressive improvements but it's really too easy to think that because they've done something really impressive that suddenly they're almost to where you are. Most of us do jobs and we feel routinized, we feel like we're robots because it seems so easy but that's because we have such fast capacity. If you actually try to write a program that copies what most people do you suddenly realize just how flexible they are. Most of these programs that do one specific thing they can't do something very different. You take Watson and you give it a different game show and suddenly it can't do anything. It was designed to do that one game show--

JIM GLASSMAN:
--But Martin-- well that may be true today but is that going to be true in the future?

MARTIN FORD:
Well-- I think they'll be a lot more flexibility in the future but again the point is that in their jobs most people don't play two game shows they play one game show. I mean they specialized in one type of work. They do one basic thing. And actually if you look at a technology like Watson, playing Jeopardy is extraordinarily broad. I mean you get questions from basically anywhere. If you take Watson and repurpose that technology to the real world whether it's answering questions about medicine or providing customer support for a company or product support. I mean it's a much narrower range. It actually is in many ways much, much easier than building a machine to play Jeopardy.

JIM GLASSMAN:
Would you feel more comfortable getting a consultation from let's say a cardiologist-- a human cardiologist or a machine cardiologist?

MARTIN FORD:
Well I'm not at this point ready to cut doctors out of the loop. That's not the point. I think doctors are probably relatively safe except for some specialties perhaps like radiology where it is really routine. Things like analyzing you know visual images, those may be much more susceptible to automation. But they're a lot of other jobs in the economy particularly in areas like customer service, customer support--

ROBIN HANSON:
I don't think we need to speculate about this. We've seen many, many decades of steady progress in automation. We've seen what the rate looks like. We've seen that it's slow, methodical; it takes time to slowly chip away at the kinds of jobs humans do and get machines to do that. We're not on any sort of sudden threshold where suddenly a vast flood's coming over the gates. We are slowly chipping away and we'll continue to slowly chip away--

MARTIN FORD:
But surely you agree that the technology's accelerating right? I mean you're looking at an exponential in terms of the hardware, the software's moving somewhat slower--

ROBIN HANSON:
Economically it's not accelerating. I agree that chips are accelerating every two years they get twice as fast but that doesn't have twice the economic impact. In terms of the ability to use computers to do useful things that's slowly chipping away at a relatively linear, modest rate.

JIM GLASSMAN:
But don't you-- Robin-- don't you think that there is some effect of automation on the current unemployment situation? Or you think that's a completely separate issue--

ROBIN HANSON:
It's minor. It's not enough to be worth focusing on. If you're going to deal with unemployment today you should be looking elsewhere.

JIM GLASSMAN:
And you think, Martin, that there is something very different about this kind of automation, artificial intelligence, learning machines, than what we saw let's say on the farm or even in the factory up till now.

MARTIN FORD:
Definitely much different than what happened in agriculture. You know we've got a really a revolutionary technology that's unprecedented. It's not different from what's been happening over the last 20 years it's just more pronounced you know--

ROBIN HASON:
What about the last 50 years--

JIM GLASSMAN:
Why is-- explain why it's unprecedented. I'm not sure that our viewers really understand let's say what artificial intelligence is. What does that mean?

MARTIN FORD:
Well it means that machines are increasingly taking on cognitive tasks. I mean they can solve intellectual problems. They can think in some sense, they can make decisions, they can solve problems. Now when you say the words artificial intelligence people tend to get caught up in what you see on movies, science fiction type things and that's what we'd call true or artificial general intelligence where you have a true thinking machine. That's something that is still in the realm of science fiction. It's decades away. That's not what I'm talking about. What I'm talking about is artificial intelligence that is specialized. It's you know--

JIM GLASSMAN:
So give me an i-- give me an example of a job that artificial intelligence could supplant.

MARTIN FORD:
Well there's an article in the New York Times not long ago about eDiscovery Software, which is software that looks at legal documents and determines which ones are relevant to a court case. Now historically that would have been done by paralegals and lawyers who would have been working with cardboard boxes full of paper documents. Now you have a software application, which can go through electronic documents and figure out which ones are important for the court case and that's directly resulting in the loss of jobs.

ROBIN HANSON:
Let's talk about the timescale of unprecedented. Computers are unprecedented but they've been around for well over a half-century. Within in the last half-century we've seen what computers do. We've seen how they slowly chip away at jobs and we'll continue to see chipping away at jobs over the next half century. But there's no sudden thing that's happened in the last 10 years to make a change over what we've seen from computers. We see computers.

JIM GLASSMAN:
But isn't it possible, Robin, that computers can get so smart that all but a very small number of workers can actually provide any significant valued added compared to the machines?

ROBIN HANSON:
Yes that's possible and in fact I think yes that will happen but not soon. Not in the next 10 or 20 or even 30 years.

JIM GLASSMAN:
What about the idea that machines themselves will make people smarter so that there will be more people in the-- kind of the very smart part of the spectrum and they can be doing jobs that machines can't do? In other words machines will help people stay ahead of machines.

MARTIN FORD:
Well that's absolutely true for a certain segment of the population. People who are very well educated, have the skills, have the motivation--

JIM GLASSMAN:
But can't machines help other people in the population become smarter? Or are people sort of inherently smart or not?

MARTIN FORD:
You know again it's this contrast between doing work that's relatively routine and work that's genuinely creative. You know a computer-- what we've seen historically and this is part of where I think I disagree with Robin is that since the beginning of the computer revolution computers have been tools that have extended the capability of people doing routine work. But now we're getting to a point where computers are going to do that routine work. They're going to simply automate it all and if in fact it's true that most of the work out there is on some level routine, then we're going to see an impact.

JIM GLASSMAN:
Robin I think there's one thing that you won't deny which is that over the last 20 or 30 years the income earning potential of somebody who is well educated, let's say who has a college degree, has increased vastly in comparison to someone who's not well educated.

ROBIN HANSON:
I agree.

JIM GLASSMAN:
So with-- do you think that's a result at all of this kind of automation that Martin's talking about?

ROBIN HANSON:
Not mostly. First off if you look worldwide we see returns to skills across the ladder. I think there's particular things happening in the United States over the last few decades and they're interesting and important but don't confuse those with these broad trends of computers and automation. There's this fundamental important long term trend that's important to realize something big will happen within the next century or so. I completely agree with Martin that something really big and out of trend will happen eventually and we should be thinking about it and preparing it but that's not what we're seeing in the last couple of decades in the United States.

JIM GLASSMAN:
So that's not because for example you know 30 years ago you drive into a gas station and you know 2 or 3 guys jump out and pump the gas and wipe off the windshield and now you can just go to a gas station-- I did it the other night-- there's nobody in the gas station but me. So those people lost their jobs and let's say they can't be retrained for something at a higher level, that increases the gap.

ROBIN HANSON:
Absolutely but that sort of displacement of jobs has been going on for a very long time and will continue to go on for a very long time. So that's not really the effect. I think the right way to think about this is in terms of whether labor-- humans and machines complement each other or substitute for each other. This is the old economics debate. So way back hundreds of years ago economists were afraid that machines would substitute for people and in fact afraid that human wages would fall drastically with the very first machines. But that's not what happened because during that time it seems like humans and machines complemented each other. The more valuable machines got the more valuable humans got too. I think the right way to understand this is that tasks complement each other but individuals can substitute on a task. So when machines were doing one set of tasks and we were doing another set of tasks then when they got better at their tasks that made us more valuable at doing our task right.

JIM GLASSMAN:
Ok. What-- just very frankly-- what makes your argument different from the Luddite argument of the 19th century, which Robin was just expressing there?

MARTIN FORD:
Again I think our-- we've got technology now which takes on cognitive or intellectual problems I mean a lot of what Robin is talking about is mechanical type technologies that extended capability in a manipulative way, not in intellectual ways. And if most people are doing routine work and if computers get to the point where they can take on the majority of routine tasks then it's going to displace people in the sense that well there might conceivable be a job out there that's routine-- or non-routine and creative in some way it's going to beyond the capability of that person to do it.

JIM GLASSMAN:
So we may be focusing a little bit too much on jobs. I realize everybody talks about jobs but really isn't the aim of economic policy or the aim of an economy to produce prosperity, opportunity, to give people a good life and yet we always heard machines are your friend. You know like a robot could do stuff for you that you wouldn't-- that you don't want to waste your time doing. So why isn't this overall a boon to society?

MARTIN FORD:
Well I think in terms of the technology and what it can offer to us it is. It is. I mean I'm definitely not against technology at all.

JIM GLASSMAN:
I mean people work fewer hours than they used to work and yet they have a better life mostly.

MARTIN FORD:
Well some do. People in low wage occupations work fewer hours but then they work three jobs just to get by. I mean we have to understand that this is impacting different groups in different ways. You know going forward I believe we're going to run into a problem when technology can do most of what people are capable of doing-- most of what the average people are capable of doing.

ROBIN HANSON:
And why is that a problem?

MARTIN FORD:
Well because those people under our system they're not going to have an income. I mean you can't survive in our economy without a job. Not in the United States. We don't have the kind of social welfare safety net--

ROBIN HANSON:
This is where I disagree. I think that when machines are really powerful and they can do lots of things you only need to own a few machines to be able to own a lot and survive and be prosperous and wealthy. So once machines are so good that people can't compete with them we will have a vastly prosperous world where there's all these very productive machines and owning some of those machines will be enough. So we need to make a smooth transition so that people start to buy capital so that they can own those machines and be productive and wealthy.

JIM GLASSMAN:
So you as a college professor could own a machine that could churn out your lectures or write books for you that otherwise would take you a long time to do?

ROBIN HANSON:
I might but I might just own stock in companies that does-- do that. Or I might own real estate; I might own other sorts of intellectual property. There's just many other things that are valuable in this new economy. In a world where machines are productive there's lots to own that's useful.

JIM GLASSMAN:
But don't you agree with what Martin is saying that in such a society there will be more-- we may be already seeing this-- more people will be left out. I mean do you think there's a kind of moral dimension here? That as we become more automated the rich will get richer or people will have the opportunity to get richer and a lot of people will be left out?

ROBIN HANSON:
We're still in an era where wealth is increasing. The world is on a tear in terms of increasing wealth. Worldwide people have been getting dramatically richer. This has been the best decade ever in terms of decreasing poverty. Worldwide people are getting richer. Now eventually this will happen but it will happen with enough foresight that people can use their income to buy stock, to buy real estate, to buy these other things they will need to survive in this new world.

JIM GLASSMAN:
This is a good point I mean you know between 2000 and 2010 was the single biggest period of economic growth in global history. I'm saying global history a lot of it is because of China and India but they're partaking in the same kind of automation that you're talking about. What's the big problem basically?

MARTIN FORD:
The problem is the extreme inequality that we're seeing. I mean it's inequality in income and also in wealth--

ROBIN HANSON:
But inequality is reducing worldwide. That's the point. The rich aren't getting as rich as the poor are getting richer--

MARTIN FORD:
Well in developed countries though inequality is certainly increasing.

JIM GLASSMAN:
So you do think there's a difference between this phenomenon is more pronounced obviously in developed countries than in developing countries?

MARTIN FORD:
Currently but it will certainly impact in developing countries and especially in China as well eventually because they're-- Foxconn the manufacturing in China recently introduced-- or they announced that they're going to introduce huge numbers of robots in spite of the fact that wages there are very low. So even China will be impacted by this eventually.

JIM GLASSMAN:
So actually that's a really good example. So Foxconn, which employs 1.2 million people and had gotten into some kind of you know it was really a scandal about the number of people that were committing suicide. They're saying well we don't have to worry about these people committing suicide we're going to higher a bunch of robots who probably won't commit suicide-- and Foxconn is a Taiwanese company right that does a lot of business in China as well-- has factories in China as well. So is that the wave of the future in developing countries?

MARTIN FORD:
I think so I mean there's no doubt that if you look at China manufacturing is going to automate in China. I mean manufacturing in the United States is already largely automated and it's going to follow the same path in China that's inevitable.

JIM GLASSMAN:
So are there government policies that you think ought to be implemented now to take care of what you see as growing inequality as a result of automation?

MARTIN FORD:
I think we need more progressive taxation and we need to build a better safety net. I think that the dialogue that's going on right now politically is all about austerity. It's about cutting the safety net. You know you've got states that are actually cutting back on unemployment. We're talking about cutting entitlements for the middle class. I think that's all disastrous looking forward in terms of what's happening.

JIM GLASSMAN:
So you think there needs to be more of a safety net.

MARTIN FORD:
There needs to be more of a safety net and there's no choice but to fund that through more progressive taxation on the wealthiest people who are really benefiting from this trend and they're benefiting in large measure because they're in the right place at the right time. They're here at this moment and this technology is making them very wealthy, we need to incorporate that into our tax policy.

JIM GLASSMAN:
That's a good place to leave it. Thank you Martin and thank you Robin. And that's it for this week's Ideas in Action. I'm Jim Glassman, thanks for watching. Keep in mind that you can watch Ideas in Action whenever and wherever you want. To watch highlights or complete programs just go to ideasinactiontv.com or download a podcast from the iTunes store. Ideas in Action because ideas have consequences.

ANNOUNCER:
For more information visit us at ideasinactiontv.com. Funding for Ideas in Action is provided by Investor's Business Daily. Every stock market cycle is led by America's never ending stream of innovative new companies and inventions. Investor's Business Daily helps investors find these new leaders as they emerge. More information is available at investors.com. This program is a production of Grace Creek Media and the George W. Bush Institute, which are solely responsible for its content.