Good afternoon. My name's Catherine White, and I'm a member of the University of Michigan Board of Regents, and first I would like to recognize our president of the University of Michigan, Mary Sue Coleman, who's here with us, and we also have two Regent Emeriti, Phil Power and Neil Nielsen here with us today. So thank you. And so on behalf of the University of Michigan, I would like to welcome you all here this afternoon. It is a tremendous honor to have Federal Reserve Chairman, Dr. Ben Bernanke, as our featured speaker. Chairman Bernanke will be introduced more thoroughly in a moment by today's host, Dean Susan Collins, from the Gerald R. Ford School of Public Policy. The first portion of our program will consist of a conversation between the Dean and the Chairman, and as such, let me take a moment to introduce Dean Collins to you. Dr. Collins is the Joan and Sanford Weill Dean of Public Policy and a professor of Public Policy and Economics. The Ford School is one of the top public policy programs in the nation. The Ford School is known for its excellence, from its faculty that is outstanding to its firm grounding in degree programs in social science research, and additionally, the Ford School has remarkably strong connections and affiliations with scholars, programs and opportunities from all over the nation and the world. Dr. Collins' area of expertise is international economics, including issues in both macroeconomics and trade. She is currently a non-resident senior fellow at Brookings and vice president of the Association for Professional Schools of International Affairs. Just last month, Dr. Collins was appointed to the board of directors of the Federal Reserve Bank of Chicago's Detroit Branch, and she joins a group of private sector leaders, scholars and analysts, whose responsibilities range from general supervision of the bank to making recommendations on monetary policy. And very importantly, Dean Collins and her colleagues continually share their understanding of our region's economic conditions to advise monetary policy. Her work on the board and indeed today's event itself are clear examples of the University of Michigan's strong commitment to helping our state and our region grapple with its urgent policy challenges. And now, to begin our program, let's welcome Dean Susan Collins to the stage to formally introduce Chairman Bernanke. Thank you very much, Regent White. It is also my great pleasure to welcome all of you here today and on behalf of the Gerald R. Ford School of Public Policy, the University of Michigan is extremely honored to welcome the honorable Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System. Today's conversation is the latest in our series of distinguished lectures, policy talks at the Ford School. We're so pleased that Regent White could introduce today's event, and we're also very pleased to have President Mary Sue Coleman with us today, as well as Regent Emeritus Nielsen and Power, who were already mentioned to you. We also have several of the University's executive officers and deans, and I would like to welcome all of them and thank them for joining us today. Well, it's an honor and truly a personal pleasure for me to introduce our special guest. As the central bank of the United States, the Fed's charge is to promote a healthy economy and a stable financial system. This is a complex and critically important mission, and that makes the person at its helm one of, if not the most important, economic policy makers worldwide. Chairman Ben Bernanke was first appointed Fed Chair in 2006, and he has served in that role during the most challenging period for monetary and financial policy since the Great Depression. The financial crisis, the Great Recession, very slow recovery with persistently high unemployment, evolving global challenges, and the very contentious situation between Congress and administration, which continues to stymie fiscal policy. Chairman Bernanke was uniquely prepared for this extremely complicated role. As a highly respected economist, he taught at Harvard, MIT, and Stanford before joining Princeton's faculty. He had already served as a Fed Governor and chaired the President's Council of Economic Advisors. He's an expert on the role of central banks, and he's renowned for his research on policy during the Great Depression, specifically how the Fed could have handled things better. In fact, in 2000, he wrote a paper entitled, A Crash Course for Central Bankers, which was published in Foreign Policy. He has a deep and long-standing commitment as well to education, and I know he recently took time out to do a town hall meeting for K through 12 teachers. And so I'm particularly pleased today that joining us in the audience is an advanced placement economics class from Chelsea High School, a special welcome to you. We're delighted to have you with us. A word about our format. For the first portion of our time, Dr. Bernanke will join me here on the stage in a conversation about a number of economic issues. For the rest of the time, he has graciously agreed to take questions from the audience, and so at around 4.30, our staff will be coming through the aisles to collect question cards from you. Those of you who are watching online or even those of you in the audience are welcome to tweet your questions to us as well using as a hashtag Ford School Bernanke. Professors Catherine Dominguez and Justin Walfers will select questions along with two of our graduate students, Hayden Allen and Kirby Smith. And now it is my great pleasure and honor to welcome to the stage Chairman Ben Bernanke. Susan, before we get started, I wanted just to take a minute to remember Ned Gramlich, who taught here at University of Michigan more than 20 years and was one of the first deans, if not the first dean of the Public Policy School here. I knew Ned as a member of the Board of Governors of the Federal Reserve in Washington. He was a terrific colleague. He was one of the first people to figure out the subprime issue, as you probably know. And it was a great loss when he passed a few years ago. So I just wanted to say that and to thank you for inviting me here to Michigan. Well, thank you very much. Both, we are delighted to have you here, but also for your special words about Ned Gramlich, who has played such an important role in the Ford School development. And we're delighted to have you recognize that. Perhaps a good place for us to start our conversation is with something that I'm sure many in our audience have been paying close attention to in recent weeks, and that is the fiscal cliff. I actually believe that that's a term that you're credited with popularizing last February. You've stressed that uncertainty about fiscal policy is one of the real concerns that is slowing economic growth. Well, a deal was struck recently. What are your views of the outcome? Well, when you think about fiscal policy, there are a whole lot of issues, but I think the two big issues right now that we need to think about first is the long-run sustainability of our debt. As the Congressional Budget Office and a lot of other experts have shown, if there's no change over the next couple of decades, deficits will rise, debt to GDP ratios will rise, and our debt will become unsustainable. So a very, very important objective for policy is to find a plan to bring the federal budget under control over the next few decades. The second issue, though, which in some way seems contradictory to the first, is that, as you know, we're still in a relatively fragile recovery, and we want to avoid taking fiscal actions that will push the economy back into recession. And that was one of the risks that the fiscal cliff posed, that if tax increases and spending cuts of that size were all to occur in the short run, the CBO and others estimated that unemployment would rise, and we very well might go back into a recession. So the challenge is to achieve long-run sustainability without unduly hampering the recovery which we have. Now the deal that was struck together with the previous work in 2011 that involves some spending cuts made some progress in both of these goals. On long-run sustainability, at least over the next decade or so, we have seen some movement towards stability in terms of the debt-GDP ratio, for example. More work to be done for sure, a lot more work to be done over the longer period, but some progress there. And then on the short run, the fiscal cliff deal on New Year's eliminated a good bit of the restrictive components of the fiscal policy that would have had such adverse effects. Again, not completely, but at least a good start. So there was a bit of progress on both of these two goals, very importantly. But I should hasten to say that we are not out of the woods because we are approaching a number of other fiscal critical watersheds coming up. We've got the funding of the government. We've got the so-called sequester, which is a set of automatic spending cuts that were delayed by two months as part of the fiscal cliff arrangement. And we have the infamous debt ceiling, which will come into play. So we will be seeing a lot of activity in the next few months, debates about the appropriate size of the government, about the size of the deficit, and a lot of back and forth over these three issues. I think I just want to, without going into all the different ramifications, I want to say one word about the debt ceiling, which is that not everybody understands what the debt ceiling is about. The debt ceiling, raising the debt ceiling, which Congress has to do periodically, gives the government the ability to pay its existing bills. It doesn't create new deficits. It doesn't create new spending. So not raising the debt ceiling is sort of like a family which is trying to improve its credit rating saying, oh, I know how we can save money. We won't pay our credit card bills. Not the most effective way to improve your credit rating. And it was the very slow solution to the debt ceiling in August 2011 that got the US downgraded last time. So it's very, very important. All these issues are important, but it's very, very important that Congress take necessary action to raise the debt ceiling to avoid a situation where our government doesn't pay its bills. Well, a number of people have expressed concern about how much of the challenges actually were addressed in the deal. As you've mentioned, it certainly went part way, but it leaves a number of issues still on the table, and the additional negotiations are looming. Would you characterize that as an additional cliff that is facing us, or do you think that it's not as concerning as it was when you raised that term initially? Well, as I said, the fiscal cliff, if it allowed to take place, would have probably created a recession this year. A good bit of that has been addressed. But nevertheless, we still have first a fairly restrictive set of fiscal policies now. It's estimated that federal fiscal policy will subtract from real GDP growth, something on the order of 1 to 1.5% this year, quite significant drag on the economy. And at the same time, we have quite a bit to do to address our long-term sustainability issues. So there's a lot more work to do. Let me be very clear about that. But it's going to be a long haul. It's not going to happen overnight. Basically, because the government budget represents the values and priorities of the public, and decisions being made about what to spend on, what to tax, and so on, are very difficult and contentious decisions that are going to take some time to address. Well, those issues, of course, are not the specific purview of the Fed, and so why don't we shift gears and talk more explicitly about some of the things that the Fed is doing and things that the Fed might do. Perhaps a way to introduce that is to say that the Fed, of course, has been keeping interest rates at close to zero since roughly 2008, and it's dug pretty deep into its arsenal of very unconventional policies more recently, in terms of, in particular, the very massive asset purchases recently launched its third round, which are intended to bring long-term interest rates. Can you tell us how well you think that is working? So to go back just one step, as you said, we've brought the short-term interest rate down almost to zero, and for many, many years, monetary policy just involved moving the short-term, basically overnight interest rate up and down and hoping that the rest of the interest rates would move in sympathy. Then we hit a situation in 2008 where we had brought the short-term rate down about as far as it could go, almost entirely to zero, and so the question is what more could the Fed do? And there were many people a decade ago, there were a lot of articles about how the Fed would be out of ammunition if it got the short-term rate down to zero, but a lot of work by academics and others, researchers at Central Banks, suggested there was more that could be done once you got the short-term rate down to zero, and in particular what you could do is try to address the longer-term interest rate, bring longer-term rates down, and there are two basic ways to do that. One way is through talk, communication, sometimes called open-mouth operations, the idea being that if you tell the public that you're going to keep rates low in the long term that that will have the effect of pushing down longer-term interest rates, but the question, the one you're asking about is what we call at the Fed large-scale asset purchases, or otherwise known as QE, the idea there is that by buying large quantities of longer-term Treasury securities or mortgage-backed securities that we can drive down the interest rates on those key securities, and that in turn affects spending investment in the economy. The latest episode, so far we think we are getting some effect, it's kind of early, but overall it's clear that through the three iterations that you refer to that we have succeeded in bringing longer-term rates down pretty significantly, and clear evidence of that would be mortgage rates, as you know the 30-year mortgage rate is something like 3.4% now and incredibly low, and that in turn makes housing very affordable, and that in turn is helping the housing sector recover, creating construction jobs, raising house prices, increasing activity in that sector, real estate activity, and so on. So I think broadly speaking that we have found this to be an effective tool, but we're going to continue to assess how effective, because it's possible that as you move through time and a situation changes that the impact of these tools could vary, but I think what we have decisively shown is that the short-term interest rate getting down to zero, what economists call the zero lower bound problem, does not mean the Fed is out of ammunition. There's still things we can do, things we have done, and I would add that other central banks around the world have done similar things and have also had some success in creating more monetary policy support for the economy. So you had mentioned that of course there's been evidence that the longer-term interest rates, mortgage rates, had come down through the initial rounds. A concern is that the unemployment rate remains very high, and to further increase activity to try to bring that down, one would hope to see some additional movement from the most recent round. Are you suggesting that one would need to be patient, or can you say a little bit more about how you would assess whether this most recent round is having the kind of effect that you would expect or anticipate? As I said, we'll be doing that on a regular basis. We'll be looking first at the impact on financial markets, and we do see some impact there. We'll be looking to see whether or not the labor market situation is improving. There has been some modest improvement. When we first began talking about the latest round, the unemployment rate was about 8.1, now it's about 7.8. There's been some movement, but we would obviously like to see a stronger labor market. A labor market with nearly 8% unemployment, with 40% of the unemployed having been out of work for six months or more, that's not an acceptable situation. That's a situation where there's too many people whose skills and talents are being wasted, who are suffering significant hardships. We're looking to see improvement in the labor market and in the economy more broadly. We'll continue to evaluate. I can't give you specific criteria except to say that we'll be assessing the impact of our actions on financial market conditions, and looking to see how those link up to developments in labor markets and in the broader economy. As always, you have to make assumptions. You have to think, ask yourself what would have happened if we hadn't taken these actions. Again, the evidence seems to be, and I would cite not only evidence on the US, but also on the UK and elsewhere that these types of policies do have some impact on the economy. At this point, of course, having reduced the short-term interest rate close to zero, we're looking for the tools that we can get to get better outcomes. Certainly, hopefully there will be more of an impact going forward to continue to bring the unemployment rate down more quickly. You mentioned that you were looking at the kinds of tools that are available. Is there more in the Fed's toolkit that might have the kind of power to have additional effects? Well, first, on the pace of improvement, that's an interesting question because the pace of growth, of economic growth over the last few years since the beginning of the recovery, has not been as strong as you normally would think would be needed to get really big improvements in the labor market. Nevertheless, we have seen a decline in unemployment from 10 to 7.8, which is fairly significant, and we hope to see an ongoing improvement there. So it's a little bit hard to judge exactly how much more improvement we'll see, but certainly we want things to keep things going in the right direction. In terms of additional tools, as I mentioned earlier, once you get the short-term interest rate down to zero, there's basically two principle approaches, either securities purchases or communication. There are a few other things of smaller magnitude, like the interest rate we pay on the excess reserves, for example. But I think those are the two basic approaches that we have. Of course, we can continue to try to improve our communication, look for ways to be more effective, but as far as I'm aware, there's no completely new method that we haven't yet tapped. We have just had a meeting of the Detroit Board of Directors of the Chicago Fed, as you know, which provides some information about the conditions more explicitly in this region, and certainly the conditions across the country are quite varied. And I wonder if you could share how you factor in the differences across different parts of the economy when making decisions that, of course, are more aggregate. Well, first, thank you, Dean Collins, for joining the Detroit branch. People probably don't know, unless you have been studying this, but every Federal Reserve Bank around the country, the 12 Reserve Banks, and a good number of additional branches, each one has a board of directors drawn from the private sector. It could be academics, it could be business people, it could be community leaders, nonprofit organizers, and so on. And we draw these people in primarily to get their input and their insight. This is a very large and complex economy. There are many different sectors, and it's very helpful to us to have people from leaders from different parts of the economy, from different parts of the country, providing this input and giving us somebody to bounce ideas off of to help us make a better decision to understand what's going on. So that's very useful. And I attended at least part of the meeting this morning with the Detroit branch, and I heard from a number of people about the auto industry, health care, academics, industry, a variety of things. So that's actually very useful. Now, in terms of the local economy, you know, Michigan is still notwithstanding that it's become much more diversified, it still has a pretty significant reliance on auto production. And because auto sales drop so sharply during the Great Recession, the unemployment rate here rose, I think, like to 15% or something like that, compared to a 10% national peak. It's now come back quite a bit as the auto industry has improved.  Housing market also, I think, has come back some in Michigan. But like many other industrial parts of the country, like Pittsburgh steel plants and other places, Michigan also is diversifying and is bringing in high tech, various kinds of services, health care, education, and so on. And places like University of Michigan and Arbor are a tremendous resource for entrepreneurs, people trying to develop new high tech businesses. So it is a good sign to see that America still has a powerful industrial base, but it is diversifying into a wide range of new types of industries. So it is a large and complex economy. I don't know if you want me to talk about the broader economy or not, but we can come back to it if you like. But we have been seeing some improvement in the labor market is still not where we'd like it to be. Growth has been moderate. There are some positive signs to look at. And I think one of the key positives I already made reference to is housing. As you know, house prices in the U.S. fell about 30%. And the manner of construction fell extraordinarily over this recession. And now for the first time, really since 2007, 2006, we're starting to see increases in production, high rising house prices. That's going to affect household wealth. So that's one positive factor that's going to help us have, I hope, a better year in 2013 and then in 2014. A few other things that are positive just to point out. One is that state and local governments, which have been in very contractionary mode because of the loss of tax revenue during the recession and laying off people have been postponing spending, they're in much better shape now than they were a few years ago, including in Michigan, I think. And as a result, they're not going to be the drag on the economy that they've been for the last few years. Energy, the energy industry in the U.S. is looking much stronger. Consumers are more optimistic. University of Michigan publishes the index of consumer sentiment, which is one of the very best guides to how consumers are feeling. And as long as the fiscal policy thing isn't getting too messed up, the consumers seem to be a little bit more upbeat. So there are some positives, but I want to be clear that while we've made some progress that it's still quite a ways to go before we're where we'd be satisfied. Well, let me shift gears a little bit. Certainly, as you well know, there are some very vocal critics of that policy. And I wonder what you might say to those who argue that, for example, the policy that has maintained interest rates at such low levels has actually taken some of the pressure off of Congress to try to address these fiscal challenges. And that the massive asset purchases have created extremely high risks, perhaps underappreciated risks for future inflation. Well, they're critics on both sides, you know. You should give the other guys a chance. I'll get there. You'll get to that later. I'll get there later. Well, let me first say that as we think about the costs and risks of any policy, we should also think about what we're trying to accomplish. And I made reference already, but the Federal Reserve has a dual mandate from the Congress to achieve or at least to try to achieve price stability and maximum employment. Price stability means low inflation. We have basically taken that to mean 2% inflation. Inflation has been very low. It's been below 2%. And appears to be on track to stay below 2%. So our price stability record is very good. Unemployment, though, as we've already discussed, is still quite high. It's been coming down, but very slowly. And the cost of that is enormous in terms of lost resources, hardship, talents, and skills being wasted. So our effort to try to create more strength in the economy to try to put more people back to work, I think that's an extraordinarily important thing for us to be doing. And I think it motivates and justifies what has been, I agree, an aggressive monetary policy. So that's what we're doing. And that's why we're doing it. Now, are there downsides, are there potential costs and risks? There are some. You mentioned inflation. We have obviously used a very expansionary monetary policy. We've increased the monetary base, which is the amount of reserves that banks hold with the Fed. There are some people who think that's going to be inflationary. Personally, I don't see much evidence of that. Inflation, as I mentioned, has been quite low. Inflation expectations remain quite well-anchored. Private sector forecasters do not see any inflation coming up. And in particular, we have, I believe, we have all the tools we need to undo our monetary policy stimulus and to take that away before inflation becomes a problem. So I don't believe that significant inflation is going to be a result of any of this. That being said, price stability is one part of our dual mandate. And we will be paying very close attention to make sure that inflation stays well-contained as it is today. The second issue I think would probably worth mentioning is financial stability. This is a difficult issue. The concern has been raised that by keeping interest rates very low, that we induce, the Federal Reserve induces people to take greater risks in their financial investments. And that in turn could lead to instability later on. Again, a difficult question. I probably could take the rest of the hour talking about it, so I don't think I'll do that. But what I will say is that we are, first of all, very engaged in monitoring the economy and the financial system. The Fed has increased enormously the amount of resources we put into monitoring financial conditions and trying to understand what's happening in different sectors of the financial markets. We have also, of course, been part of the very extended effort to strengthen our financial system by increasing capital in banks, by making derivatives transactions more transparent, by toughening supervision, and so on. So we are taking measures to try both to prevent financial stability and to identify potential risks that we would then address through regulatory supervisory methods. So we're very, very much attuned to those, to these issues. But once again, I think this is something that we need to pay careful attention to. And as we discussed in our statement and have for a while, as we evaluate these policies, we're going to be looking at the benefits, which I believe involve some help to economic growth, to reduction in unemployment. But we're also going to be looking at cost and risk. We have a cost-benefit type of approach here. We want to make sure that the actions we're taking are fully justified in a cost-benefit type of framework. Now you mentioned, I didn't talk about the congressional issue. You know, I think that, you know, it's not really up to the Fed to try to be playing games, to try to induce Congress to do what it's supposed to be doing. Congress needs to be addressing these fiscal issues. And interest rates will eventually rise. We hope they'll rise because that means the economy will be strengthening. So, you know, we're not going to be playing games with that. We are going to follow our mandate, which means do what's necessary to help the economy be strong. Congress should take care of their job, which is to address the fiscal issues, which I talked about earlier. And I don't think that small changes in interest rates are really going to make that much difference. Indeed, I think the worst thing we could do would be if we raised interest rates prematurely and caused a recession, that would greatly increase budget deficits and would just make the solution to the problem all that much more difficult. So, I don't see that raising interest rates in order to force Congress to take action on the fiscal policy is a very sensible way to go. Well, as I mentioned in my introduction, you came to your position with a real expertise as one of the world's experts on the Great Depression and how policymakers should react in the midst of a crisis. Now that you have actually lived through a major global crisis, I wonder if you could tell us what surprised you most? The crisis. I was very engaged, very interested in financial crises. As an academic, I worked on the Great Depression. I did theoretical work on the role of financial crises in the macroeconomy. And I was very interested when I came to the Fed in addressing issues related to potential crises. But obviously, you know, this was a very large and complex crisis that was more severe than I anticipated, certainly. And I think we fear to say that most people anticipated. But we did learn some things from history. And I think there's a lot of value to studying history, particularly from our perspective economic history, because it helps you see what your predecessors did wrong and did right. Two things we learned from the Great Depression, one was not to let monetary policy get too tight. In the 30s, the Federal Reserve did not actively try to expand monetary policy accommodation. And as a result, there was a deflation, about 10% of your deflation falling prices, very damaging. The Fed also did not do very much in the 30s to try to stabilize the banking system, which, you know, about a third of all the banks in the country failed. So those were two lessons that we really tried to learn from. We, of course, have been, as we've been discussing, very aggressive on the monetary policy side. And we took strong actions to try to stabilize our financial system, because we understood that if the financial system collapses, then the economy is likely to collapse as well. So we took those actions learning from what had happened in the 30s. A couple of other things I think that were useful. During the 30s, in part because, obviously, the world was still recovering from World War I, there was a lot of international enmity. Cooperation among central banks, among governments, was not very good. In fact, you may know about, your audience may know about the Smoot-Hawley tariff and the tariff wars and all the other things that happened during the 30s. It's very important, if you can, in a global crisis like this one, to cooperate, to coordinate as much as possible with policymakers around the world. And that was something that we did quite actively, both in terms of banking and financial regulation stabilization, and even to some extent in monetary policy, when at one date, five or six of the world's largest, most important, central banks coordinated an interest rate cut. We've also worked with other central banks in making sure, for example, that they have enough dollars to lend for banks that need to use dollars in their transactions. So cooperation has been very helpful in the latest episode. That was another thing that we learned from the 30s. One last thing that occurs to me. One reason that the Fed and other policymakers didn't take more aggressive fundamental action to try to end the Great Depression was they were afraid to do anything that was unorthodox. There was the gold standard. There was a whole variety of standard practices, and given the great uncertainties that they face, and I'm not being critical because it was an incredibly difficult period, they often maintained a very orthodox approach. The person who changed that in the United States was President Roosevelt, who did a lot of different things, some of which didn't work, some of which didn't work. But sometimes when you're in a very severe situation, you need to consider unorthodox approaches. The Fed and other central banks did undertake some unorthodox policies, which not all of them worked, but a lot of them did. And we did help to stabilize the global financial system and begin a process still underway of bringing our economy back to where we'd like to see it. Well, you raised the issue of what's going on globally and the cooperation that has emerged, which certainly is a very positive thing. But of course, those global linkages are very important in terms of prospects for U.S. growth. If you look over the medium term, where would you see a plausible scenario to generate the demand for the growth that we hope the U.S. is able to achieve? We aren't eager, I think, you would agree, to go back to the very high household consumption levels that were arguably unsustainable. Given the challenges in Europe and slowing growth in China, it's not so clear where that growth might come from. And I wonder what your thoughts are about that set of concerns. Well, it's true that global growth has been somewhat slower for a variety of reasons, different reasons. One is the European situation, which you alluded to. Europe, much of Europe, is in recession at this point following the very difficult financial problems that they've had. Some emerging market economies have slowed for, again, for a variety of reasons. The slowdown in China was at least partly a policy goal to try to create a more sustainable and stable growth path and to try to shift the sources of demand in China from foreign buyers' exports to domestic demand. So a variety of things have happened to slow overall growth. And we saw in the U.S., just the last reading, we saw pretty weak export numbers. And that's, for us, that's a loss of, again, potential growth from our perspective. So there are a couple of challenges. One globally, the different parts of the world that are facing slowdowns, each has to address its own set of issues. In Europe, there's some progress that's been made in addressing their sovereign debt and banking issues that they have. The European Central Bank has taken some important steps to try to stabilize the financial markets there, have been helpful. They're working on improving their fiscal arrangements, both to create longer-term sustainability in individual countries, but also to put up a set of agreements under which countries will be willing to work with each other on fiscal matters. They are working to develop a banking union where bank regulation would take be done throughout the Eurozone by the ECB or some other agency. And that would strengthen the European banking system and make it less dependent on individual countries. So steps are being taken in Europe, which I hope will help stabilize that situation over time. In the emerging markets, again, you have a variety of different stories, but I think the fundamentals there in the emerging markets are pretty good, as you know. And even if there is some moderation of growth in some countries, we are seeing overall a rather remarkable transformation of places like China and India, which has been the biggest anti-poverty program in history. The growth in those countries has lifted many millions of people out of poverty. So I think the growth will proceed in those areas as well, with each country, each region, Latin America, Asia, dealing with different sets of issues. Well, I know that our audience has many questions to pose to you. Perhaps let me ask one final one before I turn over to our students to read questions from the audience. And that has given all of the range of things that we have already discussed. Are there one or two particular things that keep you up at night? Well, we have a dog that's this big that sleeps with us. I tried to get as much sleep as possible. I think that's probably good. It didn't work out this today because the airline canceled and it's a long story. But no, I want to see our economy recover. I'd like to see this. I'd like to see stronger labor market. I'd like to see fiscal policy address the issues that I mentioned. There are a lot of obviously difficult issues out there. But I do think things are moving not as fast as we would like, but in the right direction. And I'm therefore cautiously optimistic about the next couple of years. Thank you. Well, as I mentioned, I'm sure that there are a great many questions that have already been shared with our presenters. So let me turn the floor to them. Thank you for your comments, Chairman Bernanke, and for your questions, Dean Collins. My name is Kirby Smith, and I'm a master's student at the Ford School of Public Policy and the Ross School of Business. And the first audience question is that if Treasury had printed or minted a trillion dollar platinum coin, would the Fed have accepted it and credited Treasury's accounts? If not, why not? And what does this mean for the independence of the Fed moving forward? Well, I'm not going to give that any oxygen. As you probably know, the Treasury and the Federal Reserve over the weekend, the Treasury issued a statement which the Federal Reserve approved, stating that we didn't think this was the right way to deal with this problem. I mean, there are legal issues or policy issues. I think the right way to deal with this problem, as I said earlier, is for Congress to do what it's supposed to do and needs to do and authorize an increase in the debt ceiling so that we can pay our debts, we can pay our bills. And that's the right way to do it. And, you know, I think that's what will eventually happen, but I don't think that going off in that other direction would really be all that helpful. Hello, Chairman Beneke. My name is Haven Allen. I am a second-year MPP at the Ford School and also studying for a graduate certificate in science and technology. Second question for the audience, does the debt ceiling still have a practical purpose and could it be eliminated without much consequence? Does what have? The debt ceiling. Oh. No, it doesn't really have. You know, it's got symbolic value, I guess, but what, no other country, I believe, and maybe the one or two other countries, but I think, essentially, no other countries in the world have this particular institution, just so everybody understands what it is. The Congress appropriates a hundred dollars, tells the government to spend $100 on whatever, and then it raises $80 in revenue through its tax code. Now, the arithmetic here, so it says, you know, you've got to borrow $20, right? No, the Congress has to give a third rule, which says that 100 minus 80 equals 20. There really is, I mean, if the Congress is approving spending and it's approving taxing and those two things are not equal, then it's kind of logically that there's got to be something to make up the difference and that difference is borrowing. Now, I'm not saying that deficits and debts are a good thing, I'm not saying that at all, but the way to address it is by having a sensible plan for spending and a sensible plan for revenue and make decisions about how big the government should be or how small it should be. But, again, as I was saying before, this is sort of like a family saying, well, we're spending too much, let's stop paying our credit card bill. That's not the way to get yourself into good financial condition. So, yes, I think it would be a good thing if we didn't have it. I don't think that's going to happen, and I think it's going to be around. But I do hope that Congress will allow the government to pay its bills, not raise the possibility of default, which would be very, very costly to our economy, and then address very seriously these fiscal issues. I'm not saying we shouldn't do that, absolutely. There are a lot of important issues and very basic fundamental values involved. So, let's do that, but we don't need to do it in the context of the debt ceiling. So, do you believe that the Fed should actively prevent future asset bubbles, and if so, what tools do you have to do that? Well, asset bubbles are very, very difficult to anticipate, obviously. But we can do some things. First of all, we can try to strengthen our financial system, say by increasing, as I mentioned earlier, by increasing the amount of capital and liquidity that banks hold, by improving the supervision of those banks, by making sure that every important financial institution is supervised by somebody. There were some very important ones during the crisis that essentially had no effective supervision. So, if you make the system stronger than if a bubble or some other financial problem emerges, the system will be better able to be more resilient, will be better able to survive the problem. Now, you can try to identify bubbles, and I think there's been a lot of research on that, a lot of thinking about that. We have created a council called the Financial Stability Oversight Council, the FSOC, which is made up of 10 regulators and chaired by the Secretary of the Treasury. One of whose responsibilities is to monitor the financial system, as the Fed also does, and try to identify problems that emerge. So, you're not going to identify every possible problem, for sure, but you can do your best, and you can try to make sure the system is strong. And when you identify problems, you can use, I think the first line of defense needs to be regulatory and supervisory authorities that not only the Fed, but other organizations like the OCC and the FDIC and so on have as well. So, you can address these problems using regulatory and supervisory authorities. Now, having said all that, as I was saying earlier, there's a lot of disagreement about what role monetary policy plays in creating asset bubbles. It is not a settled issue. There are some people who think that it's an important source of asset bubbles, others who think it's not. Our attitude is that we need to be open minded about it and to pay close attention to what's happening, and to the extent that we can identify problems, we need to address that. The Federal Reserve was created in about 100 years ago now, 1913 was the law, not to do monetary policy, but rather to address financial panics. And that's what we did, of course, in 2008 and 2009. And it's a difficult task, but I think going forward, the Fed needs to think about financial stability and monetary economic stability as being, in some sense, the two key pillars of what the central bank tries to do. And so we will obviously be working very hard on financial stability. We'll be using our regulatory and supervisory powers. We'll be trying to strengthen the financial system. And if necessary, we will adjust monetary policy as well. But I don't think that's the first line of defense. Okay. This question comes from Twitter. Since the Fed declared it was targeting, targeting a 2% inflation rate in January of 2012, the FOMC has released its projections five times. In each one of these projections, the inflation rate has come in below this target. Why then has the policy been set to consistently undershoot the target? Was that 140 characters? I suspect many in our audience had related questions. That's a very good question. And when we've tried to address, as I said earlier, when Dean Collins was asking me about the risks of some of our policies, I was pointing out that inflation is very low. Indeed, it's below the 2% target. And unemployment is above where it should be. And therefore, there seems to be a pretty strong presumption that we should be aggressive in monetary policy. So I think that does make the case for being aggressive, which we are trying to do. Now, the additional point that I made, though, was that the short-term interest rate is close to zero. And therefore, we are now in the world of non-standard monetary policies, weird asset purchases and communications and so on. And as we were discussing earlier, we have to pay very close attention to the costs and the risks and the efficacy of these non-standard policies, as well as the potential economic benefits. And to the extent that there are costs or risks associated with non-standard policies, which do not appear, or at least not to the same degree, for standard policies, then you would, you know, economics tells you when something is more costly, you do a little bit less of it. We are being quite accommodative. We are working very hard to try to strengthen the economy. Inflation is very close to the target. It's not radically far from the target. But in trying to think about what the right policy is, we have to think not only about the macroeconomic outlook, which is obviously very critical, but also the costs and risks associated with the individual policies that we might apply. So I'd actually like to follow up on that question a little bit. One of the things that you mentioned earlier, which is in the toolkit and which you have been trying to use in a variety of ways, is the way that the Fed explains its policy to the public First, there was a number of announcements that set dates for how long interest rates would remain low. More recently, the move to making it conditional on performance. And a variety of changes such as more information in the minutes about the kind of information or the kind of discussion that has happened at the Fed. And I wonder whether that increased information about what the Fed's thinking you see as helping to be more effective or perhaps being complicating the message to some degree. Well, of course, that's up to some extent in the up to the auditors, the beholders, to determine whether they think it's helpful or not. But I think that to address your specific point, that switching from the date, when we started out by trying to convey to the markets when we thought short-term interest rates might start to rise, initially we gave a date, which was just our best guess. And as conditions changed, we changed that date a couple of times. A better way to do it, in my view, is instead of talking about a date, which is a very non-transparent way to explain what you're doing, people say, well, how did they get that date? What does it mean? Instead, what we've tried to do in our more recent evolution is to try to explain what we will be looking for in terms of unemployment and inflation, our two main mandate objectives, before we would begin the process of raising interest rates. So that is, first of all, much more transparent. It helps people understand what our thinking is and what we're looking at. But also, if the outlook changes, suppose for example that some really good news comes in, I hope it does, some really good news comes in about unemployment. If we were using the date, people wouldn't know how to adjust that. I mean, how do we change that? Is the date still valid or not? But if we're using these guideposts in terms of inflation and unemployment, then the investors in the market can say, well, the date where we get to 6.5% unemployment seems to be a little closer now than we thought, and that would allow us to change our estimate of when the Fed is going to respond. So that should allow a greater clarity about how policy will evolve over time, and that's our goal. I mean, we have worked as a committee. It's not easy to work with 19 people, all who have very strong opinions, but over time we have tried to increase our clarity and tried to communicate more clearly. Each individual change can be debated, but I think if you look at the broad sweep of what we've accomplished in the last 15 years or so at the Federal Reserve in terms of communication, there's just been an enormous change. And we are just much, much more transparent and easy to understand, I think, than would have been the case 15, 20 years ago. So the shift from Fed speak to talking about fiscal clips is really quite striking. This question is from an audience member. What's one aspect of financial policy that you think requires reform but which isn't currently being discussed in the media? Well, I think the main area that has been put aside for the time being is the government sponsored enterprises, Fannie Mae and Freddie Mac, which were taken into receivership at the very beginning of the crisis because of the losses that they suffered on mortgages and because of their low levels of capital. I think there's a pretty wide spread agreement in Washington that reform is needed for those institutions. And the Treasury has put out some alternative suggestions. Other suggestions have been made by members of Congress, but so far not too much progress has been made in that area. And I think that's one pretty obvious area that needs to be addressed. But I would say that the bill, Dodd-Frank bill, of course, is very broad and has covered a lot of the major parts of the financial system. This question comes from an audience member. How do you respond to the people who question the constitutionality of the Federal Reserve and would like to severely weaken it? And furthermore, how do you respond to members of Congress who wish to audit the Fed? Well, I'm not a lawyer, so I do know Article 1, never mind. I'm not a lawyer, but the Fed has been around now for a century and nobody so far has had a Supreme Court case, so I'm not going to get into that issue. I think the Fed performs the critical role of managing the monetary system, which is, of course, a power that Congress has to delegate, which it has done. Let me talk to the other issue, which is, I think, more substantive. As you know, there are bills in Congress that would, quote, audit the Fed. And it sounds like something, how could anybody object to auditing the Fed? I mean, don't you have to look at people's books and see what's on their books? Well, the trouble with audit the Fed is that that's not what it's about. That's a misnomer. The Fed's books are thoroughly and completely audited. We are audited first by an outside private sector accounting firm, which gives us a clean bill of health. Secondly, all of our books, all of our financials, everything is open to the GAO, the Government Accountability Office, which works for Congress and for the government and can look at anything it wants to look at. And third, we also have an independent inspector general that is able to evaluate any aspect of the Fed's financials or activities that it would like. If you'd like to see more about this, the Fed's website, FederalReserve.gov, has a detailed discussion of all the various audits that the FederalReserve goes to. So all our financials, all of our activities are thoroughly audited with one exception. And that exception is that in the law which created the Government Accountability Office, the GAO, there is an exception made for monetary policy. In other words, GAO can do anything it wants at the FederalReserve, but what it can't do is go in and audit a monetary policy decision. Now, what the Audit to Fed Bill would do is very simple. It would strike that clause. So if the Audit to Fed Bill passed, then a congressman who didn't like the Fed's latest interest rate move could say, GAO, go audit that. And what that would mean would be, it would be the Government Accountability Office would send its staff into the FederalReserve to look and see, you know, why did you guys raise interest rates and begin to investigate that decision. And it seems to me that's the first step toward basically the FederalReserve no longer being an independent central bank. Now, there's a very strong agreement around the world that if you want monetary policy made based on long-term considerations and not based on short-term political considerations into central bank needs to have some independence in making monetary policy, what this bill would do is strike at the very heart of that independence. So it's my opinion that many people who support the bill just think it means what it sounds like, which is something about the financials. It has nothing to do with the financials. It has to do with whether or not Congress can ask the GAO to investigate a decision by the Fed that it doesn't like. And again, I think if you want a healthy economy, you want to have a strong and independent central bank and that is not consistent with that bill. This is the last question and it comes from Twitter. So there's a vibrant discussion of macroeconomic issues on social media. Do you get any information from these discussions and if so, how? Well, you know, I read blogs. I have to say the 140 characters kind of limits the discussion on the Twitter. So those, I mean, I think blogs have become a pretty important source of intellectual exchange. The same way, there was a very important step, Dean Collins will remember this, used to be that years ago, way long time ago, if you were an academic and you wrote a paper, then you had to submit it to a journal and took two years and it got published and it was like three years after you wrote the paper before anybody knew what you were working on. And then came the internet and working papers and so on and pretty soon papers were available almost immediately for professional evaluation. But even that, of course, involved the long delay involved in doing the research and writing the paper and so on. What if you had a shorter perspective, a shorter idea that you wanted to put out there? Well, again, the internet has provided useful ways for people to communicate, to discuss interesting ideas and monetary policy or anything else. I follow a lot of baseball blogs myself actually. So that's just the next natural step to creating a conversation among people and I think that's been very constructive. So there are a few Federal Reserve blogs. The Atlanta Fed has one, the New York Fed has one and we have Twitter, we have Facebook, we're really moving along here. So we're still a little bit old fashioned, but I think the social media do provide a really convenient way to communicate quickly to a group of people, to exchange ideas and to keep track of what's going on in a particular area. So I think there's some positive developments there. Well, perhaps we should encourage you to follow the Tigers while you're... Unfortunately, we are out of time. I'd like to thank our questioners for posing the questions. I'd like to thank all of you in the room and online for joining us in today's conversation. You can find information on future policy talks at the Ford School on our website and through our Twitter site and I hope you'll follow us. We certainly will be following the Fed. Chairman, thank you very much for joining us today. We are...


Are you going to be a chef when you grow up?  That is the goal of Kinship Partners' lunch buddies. Lunch buddies is when someone in our community comes into the school over the lunch hour and has lunch with a child. In addition to eating lunch with their mentor, the lunch buddies also make a craft every session. This week, they made reindeer ornaments just in time for Christmas. The lunch buddies program takes place twice a month and allows community members to be introduced to mentoring. For the children, they feel very special. And so to have someone show up, and it is the same mentor that shows up every two weeks per month, after a couple times, already the kids are overflowing with things to talk to their mentor about. And it's actually a real big support system. I just like visiting with the children on a kind of a small group basis and meeting lots of different kids. Many of the mentors work for area businesses that sponsor them to be able to take an hour out of their day to mentor. We have people who are working that get to take a break. And then we also have other people in the community. We have some people that are retired. That's kind of common. The program has had a huge impact on the students, as well as the mentors. There's a benefit both for mentors and for the kids. For the mentors, their benefit really is to come in and have an impact on their community in a very real way. I think they just like having another adult around to hang out with and to talk to. And it's not trying to teach them anything or we just can enjoy our times together. I have been with her. Research indicates that successful children can identify one adult in their life that has made a difference. Mentoring is very important. I think there are plenty of kids that don't always find that person, or that person doesn't find them. And so what we like to do at Kinship is intentionally find people who say, well, sure, I'd like to do that. And then match them with a child.  Though with such a simple gesture, the students having lunch with their lunch buddies has a lasting impact. Reporting from Brained with This Week's Golden Apple, Rachel Johnson, Lakeland News.


My name is Hai Ge. My name is Liu Zewen. Feng Jiachen. Zheng Juzhi. Liu Xinran. Yan Huhe. Xu Bohao. Jing Jiwen. During Chinese New Year, international students at Columbia University had their name text turned up in an act of racism. This has inspired several Chinese students to fight back with the campaign Say My Name about the meaning of their names. Even at UC Berkeley, some international students feel embarrassed when peers and professors repeatedly mispronounce their names in class. Instead of correcting people's pronunciations on this, many international students decide to simply adopt English names so that their peers and professors may more easily remember their names. This is Paulina Jing. This is Shuki Ma with CalTV. With approximately 42 percent of Cal students identifying as Asian, any unfair treatments to Asian populations come back to affect a significant portion of the student body. In 2009, Betty Brown, a former American and American professor at Columbia University, In 2009, Betty Brown, a former Texas state representative, came under fire after suggesting the voters of Asian descent adopt English names that are easier for Americans to deal with. NPR reported that a study from Ryerson University and the University of Toronto showed that job applicants with Asian first names were 28% less likely to be called in for job interviews compared to their English-named counterpart. What do you think we can do as a society to make sure that we eradicate this kind of behavior? I think awareness is one of the most important things. National students feel pressure to assimilate into American culture. Keeping their given name is a choice that they are forced to make when coming to study in the United States, leading some to feel like they are abandoning where they come from. What these dilemmas boil down to is whether or not they feel they belong. Paulina Jeng and Shuki Ma reporting for CalTV News.


It's time for the Lawn Jean Chronoscope, a television journal of the important issues of the hour brought to you every Monday, Wednesday and Friday, a presentation of the Lawn Jean Wittner Watch Company, maker of Lawn Jean, the world's most honored watch, and Wittner, distinguished companion to the world-honored Lawn Jean. Good evening. This is Frank Knight. May I introduce our co-editors for this edition of the Lawn Jean Chronoscope? Larry Lasser, CBS News Correspondent, and John B. Oakes from the editorial board of the New York Times. Our distinguished guest for this evening is the Honorable A.S. Mike Panroni, United States Senator from Oklahoma. Politics, like life, of course, is unpredictable. But as far as we can look ahead right now, we're going to be hearing about at least three issues in the next year. And they are taxes, farm prices, and power. That is, of course, if the foreign situation leaves us alone. Now, our guest tonight is one of the most experienced legislators in Congress, so I'd like to ask Senator Manroni. Since we've been arming a lot of countries abroad, Senator Manroni, do you think this is going to ease the tension overseas? Frankly, I believe we can ease some tensions by following out the NATO policy and arming Western Europe, our firm and old allies. I think this business of passing machine guns to every hot and top, and to try and place vast amounts of military equipment in the hands of Asians. Or in the Near East is very dangerous. I think you might start wars instead of prevent them in that way. Well, Senator, how do you feel about this so-called Marshall Plan or Stassen Plan for Asia? Do you go along with that? Well, I feel definitely there is a plan that needs to be given to Asia. I think we've got to win the hearts and minds of Asians to what democracy really means. And I'm afraid that if they're talking in terms of the Marshall Plan, in terms of multi-billion dollar projects with industrial development and with balance of payments and things of that kind, then you're going to get into an expensive operation that will do no good to winning the peasants and the people who have suffered so long from starvation and disease there. I think we need something else. Well, Senator, you don't sound as though you're a believer in the bipartisanship that we've been hearing so much about in the realm of foreign policy. Well, I think in bipartisanship, the Democrats should have a right to suggest some of the means as well as the Republicans and the administration. And by that, just because President Truman proposed Point 4, I don't think it should be reduced as it was last year. I think Point 4, to expand that, to help people to help themselves, to show them how to raise more food, to eliminate malaria and cholera and diseases, to help them on agricultural methods by replacing the wooden plow with the steel-pointed plow, is the way to get at this situation in Asia. Senator, speaking of the Far East, Senator Wiley has said that if the Chinese communists don't release those 11 airmen of ours that they're holding, he thinks we should go back to the United Nations and ask for the use of force. Can you go along with that? Well, I would rather see us trust the United Nations at this time. They're working on it. There's been a conference scheduled. And to go to the conference table with six shooters on their hip is not the way to resolve these things. I think it's despicable. The violation of international law for them to hold men in uniform has spied. But I think we should exhaust every single means possible, short of force, to get them returned to this country. And I feel sure we will. To get back a moment to the bipartisanship question, Senator, do you think that the President will actually be able to achieve what he is trying to achieve in this sphere of consultation prior to decision making? I believe so, Mr. Oaks, definitely. That if he sincerely wants bipartisanship, then democratic views on whether it should be vast billions or whether it should be a self-help program is subject to bipartisan discussion. And by discussing it, we may find that we do have a bipartisan foreign policy. But this doesn't apply to domestic policy. No, indeed. I think there'll be plenty of issues domestically before we finish these next two years. What do you conceive the main ones to be? Well, I think the farm issue will be one of the principal issues there that you're facing pretty hard times in the agricultural areas already. And when you find weak legislated downward by 56 cents a bushel when the Benson plan becomes fully operative, you're going to find bad business in small rural towns and bigger towns. Senator Moroni, you're obviously a supporter of rigid 90% parity, but what are we going to do with all these surpluses on the major commodities? Are they running out of our years right now? Well, we have piled up some, but bear in mind that we have cut the production down. These farmers voted to cut the production down. That's right, and your crops are reduced. Your acreage is reduced by about a third.  The rest have always been flexible. Nobody proposes they'd be anything else but flexible. But on your cotton, corn, wheat, peanuts, and tobacco, those are rigid. And the 90% support has brought prosperity to the farm community on those basic commodities. Is this the biggest political issue in your part of the country, Senator? I think it's the biggest political issue outside of your metropolitan centers, particularly after you cross the mountains. The big one in the metropolitan centers, too. Well, that's right. Considering the cost, we pay for food. Well, but did you see that Senate report of last week where, although the price supports on dairy have gone down, lowered by Benson from 90 to 75, that the consumers are paying more for dairy products now than they were before the reduction? Well, shouldn't there be some sort of investigation to find out why the farmers are losing money and the consumers are spending more for food? Well, it goes into transportation and processing. Your processing clients have shown larger profits this past year. Than they have in the past. Incidentally, Senator Ronner, you were active, I recall, in drafting the government reorganization bill back in 1946. Well, we're almost 10 years of past since then. Are you completely satisfied with the way that's worked out practically? No, indeed not. We realized only about 50% of the goal that Senator LaFollette and I had in mind. We did improve a considerable number of things in the Congress. We have run onto one bad mistake that I feel we made. And that was in giving the investigating powers to standing committees instead of to select special committees, which had to be established or reestablished every two years. When we give them to permanent standing committees, you have no way of ending the investigation or transferring it to other people, other committees. And I think we need to do something about that to put the power back in the Senate over its agents because our committees and investigations are the agents of the full Senate. Well, do you feel that is why the Senate subcommittee on investigations ran away with the whole situation, the McCarthy committee? Well, I think it ran away because of a runaway chairman. But bear in mind, the Senate had no way of dealing with that committee procedures. Well, excuse me. If you had amended the law, would you think this would have avoided the whole Senator McCarthy episode and the necessity to call a special session? Well, I don't think it would in that case because it had gone too far. But I do think the mechanics of our Senate rules were wrong in that we couldn't discharge the special committee from investigations over which it had no jurisdiction. By that, I mean that the Foreign Relations Committee should have investigated the voice of America and the overseas information service instead of Mr. Cohen and Shine. Yeah, they did. They did at the same time. Yeah. But nobody ever heard about that because Cohen and Shine were running over all the face of Europe and grabbing the headlines. Is the Senate really going to do something about this committee situation, this session for years, various proposals have been made? Are they really going to do something now? Well, I definitely feel, John, that they are going to, one, give us a code of ethics that unfair play for Senate investigations. But that will do no good if you've got a willful chairman that doesn't pay any attention to him because he's the judge who has to administer this code of ethics. So I think the Senate itself should have a weapon so that we can discharge that committee from that investigation and transfer it to another standing committee that has a better jurisdiction and a better understanding. Mrs. May Boomerang, against the Democrats since they are in a majority in Congress, should you want to spend a long time investigating, we'll say, power like the Dixon Yates bill. On incidentally, on that subject, the chairman of the Atomic Energy Commission, Mr. Stroz, has said that he now regrets that Dixon Yates negotiated with the Atomic Energy Commission instead of with the TVA, but he feels the bill is ideal otherwise. Do you share his regrets and his feeling that it's ideal? Well, I don't share that at all. And I think that that's going to be debated a great deal in this coming Congress, because we still think it's special privilege and it's a bad deal for the government. But worse than that, I think Admiral Stroz is right that using the Atomic Energy Commission as a dummy to a contract breaks down the independent status of the Atomic Energy Commission whose job it is to keep us ahead of the world on atomic and hydrogen development. I'd like to ask you about a political dilemma, if you will answer, Senator. And that is that if the Democrats in control of Congress build up a good record this session, both that were down to the benefit of the Republican administration in 1956, and doesn't this happen when you have a split? Yeah, but that's a problem I guess we have to face. I think the Democrats would choose to look like a responsible political party rather than an irresponsible political party. I believe that was why the Republicans stayed in the minority so long that their opposition to the president was so great and so blind that the people just got the idea that the Republican party was irresponsible.  But I still think we can find plenty of issues on which honest men can differ and we can take our points to the public in a campaign. You Democrats seem to be getting more conservative every day now. You're not going to spend vast money on martial plans. But tell me this, Senator Monroni, of all the issues that are bound to come up, as far as you can see ahead now, domestic issues, we'll say. Which one do you think is going to be the most important in the forthcoming year? Well, undoubtedly, I think the means to maintain national prosperity is going to be one of the principal issues. How we go about that, there'll be many arguments, whether it's farm price supports, whether it's a maintained annual wage, whether it is amendments for the Taft-Hartley bill, whether it's improved unemployment compensation, whether it's lower interest rates or government lending, all of these things will be fully discussed. But I believe your national prosperity will be the key issue in this campaign on domestic policy. Thank you very much, Senator Monroni. Well, thank you, Mr. Sears. It's a pleasure to be here with you. The opinions expressed on the Laun Jean Chronoscope were those of the speakers. The editorial board for this edition of the Laun Jean Chronoscope was Larry Lecer and John D. Oaks. Our distinguished guest was the Honorable A.S. Mike Monroni, United States Senator from Oklahoma. To give a Laun Jean watch this Christmas is to give just about the finest watch made anywhere in the world. Made to the unique standards of excellence which have won for Laun Jean, 10 World's Fair Grand Prizes, 28 gold medals, highest honors for accuracy in fields of precise timing. For a lady, there are superb examples of the jewelers art such as these. Made in the traditional Laun Jean manner, they're exclusive in style, exquisite in taste, and uncomfortable in timekeeping. There's a Laun Jean watch for every personality, one suitable for every occasion. For a man, the variety of Laun Jean watches is equally extensive. There are watches for dress and sport, many self-winding. There are Laun Jean waterproof and shock resistant watches for rugged service. Laun Jean Chronograph watches for sportsmen and for scientists. Yes, to give a Laun Jean watch this Christmas is to give just about the finest watch made anywhere in the world. Yet, your jeweler can show you many models of Laun Jean watches priced as low as 7150. Laun Jean, the world's most honored watch. The world's most honored Christmas gift. Premier product of the Laun Jean Wittner watch company since 1866. Maker of watches of the highest character. This is Frank Knight reminding you that Laun Jean and Wittner watches are sold and serviced from coast to coast by more than 4,000 leading jewelers who proudly display this emblem. Agency for Laun Jean Wittner watches. You're cordially invited to see the sixth annual Laun Jean Wittner Christmas Festival, an hour of story and song, presenting Michelle Piastro, Eugene Lowell, the Laun Jean symphonet and the corollaires and our special guests, Miss Judith Anderson and Mr. Monty Woolley, distinguished stars of the American stage. On this station, Christmas afternoon, the Laun Jean Wittner Christmas Festival.


Welcome to English at the Movies, where we teach you American English heard at the movies. Today's phrase is Scaredy Cat from the movie Goosebumps. Goosebumps comes from the very popular children's books by R.L. Stein. He writes about monsters that live in books. Let's take a look. Listen for the phrase Scaredy Cat. Did you unlock a book? Oh no, I'm sorry. I'll put it back where it belongs. Look, here it is. No, don't open it! All the monsters I've ever created are locked inside these books. I'm Scaredy Cat. So what does that mean? What is a Scaredy Cat? A person on the run? Or a person who is afraid? Let's listen again and see if you are correct. Did you unlock a book? Oh no, I'm sorry. I'll put it back where it belongs. Look, here it is. No, don't open it! All the monsters I've ever created are locked inside these books. I'm on Scaredy Cat. A Scaredy Cat is a person who is very afraid. It is two words put together, scared and cat. Children often use it to make fun of each other. They call people a Scaredy Cat if they have big fears about something. But when it comes to watching scary movies, I am definitely a Scaredy Cat. And that is English at the Movies. I'm Anne Ball. I think this is the beginning of a beautiful friendship.


Hello and welcome to The Art of Thinking Smart. This is a program that was originally developed by David Chang at Wealth Bridge, and I've been hosting it for some time. I'm Michael North, and in this program we try to interview some of the leaders of Honolulu's business and social and cultural and political communities to discover what are their secrets of success, what makes it possible for them to do the work that they do, both from a personal and a professional standpoint. So we're interested in their story and what they're doing, but we're actually trying to get behind the scenes to understand who they are and why they're doing it, and that's The Art of Thinking Smart. So today our guest is Antonio Trincal, who is originally from Portugal, but he's living now in Honolulu and running an exciting young company called You Can Event. Now, I want you to think about You Can Event for a moment and think, what could that possibly be? And now we're going to ask Antonio, what is that You Can Event? Hello Michael, thank you so much for having me.  So basically You Can Event is an online community where brands can easily identify vendors when organizing an event. So for example, if you want to do an event for Think Tech Hawaii, you can find entertainers catering venues and easily you can do your event. So why wouldn't I go to an event organizer and event management company that bundles all of that together? Yeah, because basically, most of the times those event agencies are just working with a few number of vendors, and with us you can find all the vendors available in Honolulu. Okay, and you put together your own virtual team based on the recommendations that come from your system. Exactly, so our customer, in a comfortable way, he just typed, I want to do an event in Honolulu for 200 people and I might need catering venue and entertainer. And our wide network of vendors, they get back with a lot of proposals and we have a local event planner to help you in operations, management and advertising for your event. So do you have a kind of an eBay auction kind of thing where you hear from several different vendors? Yeah, I like to say like we are kind of like Uber, so the customer just send the request and then the vendors get back with proposals, with bids. Okay, so Uber for parties, Uber for conventions, Uber for business meetings, Uber for weddings. Right now we are not focusing on that market, but soon we will be. I think that will be called like You Can Marry. Oh, so you can, all of that. You can, exactly. Okay, that's your brand. Exactly. So how did you get into this? You just like to party and you want to help your friends to party better? So as you said, I'm originally from Portugal and on the Latin-European culture, we have a lot of pleasure on the art of restoration and tourism and events. And since I was a young boy, around my 15 years old, I work on the bartending industry, nightlife industry, and then I belong to a non-profit organization called Azituna. And I did a lot of... Say that word again. Yeah, okay, Azituna. Azituna. Yeah, it's similar than tuna, the fish, but it's called Azituna. And basically we did a lot of international tours. We played all over the theaters in Europe. And so every time that we were playing on those theaters or organizing international tours or doing events on the nightlife industry, we had this question. How should we do an event? Where should we find the vendors? How can we negotiate with vendors easily to do an event? So that's how it came. Yeah, especially in a big city like Lisbon, for example, there's so many options. And unless you produced an event successfully before you really don't know where to start. Exactly. And you could end up spending a lot of money for somebody else to advise you on how to do it. Exactly, yeah. Yeah, okay. So this is outsourcing and pushing the expertise out to the edges so that people can access the knowledge and contacts that they want, as opposed to getting it from single sources. So you said you were a bartender. You were like a Tom Cruise in cocktail? Yeah, yeah, so... I want to see a trick or two. Yeah, if I have a shaker here, I would like to do it. I could do it with a piece of paper. If we do this again, we have to bring some shakers. Yeah, so basically I love the cocktail culture. I have a friend that we worked together, called Antonio as well, and we worked together for a lot of years and we had a great pleasure on the art of the cocktail production.  Exactly. There must have been something that helped you to get girls? Yeah. I'm sure that didn't hurt. Yeah, it's perfect. We can give a lot of different pleasures to women. There must be something deeper to sustain the interest. Yeah, so the thing is that I always had a real passion about the entertainment industry. So since I was a young boy, I was like the guy that was like the actor on the school was singing a lot of songs with my colleagues. So I always had a passion for entertainment industry. So when I got into the nightlife industry, I saw that I had a good way to build relationships with people because when you are serving on a bar, you tie strong relationships with your customers, with the people that surround you. And at the same point, creating a personal experience for the people that you are talking to. The way that you talk, the way that you do your cocktail, the way that you create your own show is perfect to bring you soft skills in terms of entertainment and selling as well. So would it be safe to say that you have the soul and the heart of a networker, of a relationship builder, and it really turns you on to see people come together? Yeah, it's like my real pleasure, it's I live together people. That's why we are doing You Can Event. I worry a lot about people. I'm the guy that if I'm going to a restaurant, the person that I really care about is the guy that is serving the food. A lot of times, and like a lot of people that know me, knows that, that I'm going to the restaurant and I steal the bartender or the employees and I bring them to our party saying, oh no, now we have to join the party with us. Now we have to drink with us. Yeah, exactly. Somewhere in there there's a feeling like people are not connected enough. People are missing opportunities. There's energy that is left unmatched and you feel like you can be the spark plug that brings people together. I have a nice vision about that. I always say to my team members and co-founder that I came from the future and in the future I am known as the god of celebration. So I gather a lot of people. So a person that gathers the entire world with celebration and events. So I always use this metaphor about what we want to achieve and so we want to really connect people and we believe that in a world full of technology having personal relationships and connections with real people physically on site, it's the future to ensure the humankind. So we're not going to go completely virtual and just live as a simulation in a... No, I don't believe because we human beings we have two sides on our brain like the side that is disruptive and wants to create massive evolution but on the same point we care about keeping the nature as we know, right? For example, you can see that now we are caring a lot about the environment and the foods and the organic foods. You go to the supermarket and you see a lot of those things and I believe that the people that are doing that is because we know that we have to stop in some way the massive growth that the earth is facing. So in a sense you're using the tools of cyberspace to bring people together better in human space. Exactly. So the easiness of technology can empower the real connection, the physical connection.  Exactly. Somewhere the seed got planted in young Antonio Trencal maybe from your father, your mother, a mentor, a teacher. What's your earliest recollection of the energy that became your can event? Yes, so I have like one important moment on my life that was created by my father that basically he offered me like a trip when I, on my 18 years old birthday and I traveled to New York City with him, you know. And when I arrived in the United States the feeling that I had was okay everything that I see in the movies it's real, you know. So that whole Tom Cruise thing was actually real. Yeah, you know. And when I felt that the movie thing what happened on the movies is real in the United States I felt that I can be the actor of the movie, you know. So when I felt that I decided that I will have to do something really big to the world. So you followed a very interesting path from your beginnings in Lisbon. I think a few years ago you started working with an incubator type company that made some investments. You went to one of these entrepreneurial kind of gatherings where you get to pitch and you won that or you got some recognition from that and then you bounced through to an event in New York you got more visibility from that and can you describe the progression that you made? Exactly, so before answering that question our objective since the beginning used to be a quarter in the United States because we have the biggest event cities in the world on Alulu, Los Angeles, New York City are the main hubs of events and entertainment in the world. And so on the beginning of our journey in Lisbon our startup was incubated on Startup Lisboa that is a really famous incubator in Europe, one of the best. And we had a lot of events on the week and I had to do a lot of networking, a lot of pitch sessions and that allowed me to connect with companies with customers like Microsoft, Primark, Merike and many more. Interesting. How do you experience with Microsoft, for example? Yes, so Microsoft we just partnered with them to do a big event on their headquarters and we have done like, it's called a tech meetup where we gather a lot of companies from Portugal to meet disruptive ideas that are being done by the startups in Portugal. So Microsoft headquarters, they have everything for us. Microsoft has a headquarters in Lisbon? In Lisbon, yes. For just Iberia or for all of Europe? No, it's for the Iberia. So Portugal and Spain? Yes, exactly. Oh, that must have been fantastic. Exactly, perfect. Wow. So then you got spotted by Blue Startups which is one of the elite incubators, I think in America, if not in the world. Top 20? Yeah, really. It's amazing for such a small city and out in the middle of the Pacific where nobody notices us on a global picture. It's amazing that there's such talent and they spotted you and we're going to go into a little bit of the details of that on the other side of this break with Antonio Trigal. Thank you. Aloha, my name is Raya Salter and I'm the host of Power Up Hawaii and you can see live from 1 to 130 every Tuesday at thinktechhawaii.com and then later on YouTube. I am an energy attorney, clean energy advocate and community outreach specialist and on Power Up Hawaii we come together to talk about how can Hawaii walk towards a clean, renewable and just energy future? To do that we talk to stakeholders all over the spectrum from clean energy technology folks to community groups to politicians to regulators to the utility. Please join us Tuesdays at 1 o'clock for Power Up Hawaii. Victories for Veterans. Go to DAV.org. And we're back with Antonio Trigal and we're talking a little bit more about Blue Startups and Honolulu. Antonio, you're a long way from Lisbon. I'm sure you heard about Hawaii and Honolulu and you thought about Mai Tais and grass skirts and sand and sun and so on. Did you ever think that you were going to come here and organize a company? That is a curious question. So first, Hawaii was a dream for me. Since I was a young boy, being here, it's a dream. And second, I believe that Hawaii, Texas and Hawaii as a hub for entrepreneurs is perfect to build your culture. So the first reason that we decided to come to Honolulu was because I wanted to build a culture on our team. The values, the mission, the higher purpose. And Hawaii, it's the best place for that because of the hollow spirit, you know. So I believe that in the future a lot of good companies will come to Hawaii to build a culture to define the values because this is really important on your team. And after that, of course, they will move to San Francisco, Los Angeles, New York City because of the market industry. But on the first stage, building the culture, developing your product, build an MVP, Honolulu is one of the best places. And it's a gateway to Asia, too. Exactly. The biggest markets. Exactly. So I want to break from this subject completely and look at a piece of video that came from about five years ago in an earlier stage of the company. Can we bring up that video? It's an event video from Lisbon. So talk us through. What are we looking at here? So that's our nonprofit organization where I met my co-founder. Azay Tuna. Azay Tuna. And we organize a lot of events. This event is called SELTA. SELTA is one of the biggest events in Europe. It brings more than 10,000 people on the weekend and involves all the Portuguese scene and student community. So it's really big. We bring a lot of famous artists. You will see further on the video. The theater, the music, the lighting, the audio visuals. It's really, really, really engaging. You organize all aspects of this. The ticket program. Precisely this festival. I organize with my co-founder, João. Here you can see the theater. I organize with my co-founder, João. And like I said, it's a huge event. It costs hundreds of thousands of dollars. It's a big event. You will see the theater further. I'm familiar with the management and I know what it takes to make something like this happen. Yeah, exactly. You see the theater? What theater is this? It's called Teatro Circo. It's in Braga. It's really, really big. I think that won a reward for being one of the best theaters in the world. It's similar to one theater in Paris. So that kind of represents the apex of what you guys want to help people to coordinate. Exactly. Pretty much everything that people do is going to be smaller than that. Exactly. It could be a really small event, but even a small one needs a bunch of different aspects. Of course. So let's go back a little bit further. We were talking about what it takes for Antonio to be Antonio, and I expected that somebody who started out as a bartender and has kind of freelanced his way through incubators and so on would be kind of a non-linear thinker, but you're not, right? Can you tell us about your day and how it begins and how it ends and how you manage it? So my daily basis is built on this sentence. I want to be the best. So I have strong methods during my day to keep my fresh mind and my body healthy. So every day in the morning I wake up at 6.30. I drink a glass of water with apple cider vinegar and a little bit of pink Himalayan salt to keep the body detoxified. And then I go further and I drink, right now here in Anululu, a cup of Hawaiian spirulina. It's algae. It's really, really cool. And then I have my breakfast. Usually I eat things without gluten because gluten hurts a lot. I eat things like coconuts and a lot of healthy things. And then I move forward with my daily meeting with my team. I speak with my team. I share the objectives for the team. I try always to heal it healthy as much as I can. And then on the end of the day I do sports. So between 6 to 8 p.m. I try to do my daily sports. We have lots of options here because it's always summertime here. It's perfect. So do you keep track of things on a piece of paper or on an app? I'm developing a method that basically I do these three things.  And I write three themes of my life. You can event my professional area. Yeah, so exactly. So you can event then my personal life, personal, and then sports. And then I do the weekly preparation of everything. So I just define like, okay for you can event, I will do this, this, this, the follow up for this customer, the meeting with that customer, whatever. And then for personal, I have to talk with my father, with my mother, with my friends. I have to... With your six girlfriends. Yeah. Try to keep track of them. Yeah, from Portugal in episode. Yeah, so and then the sports. So I want to practice everyday sports and I want to do that. After doing that preparation, I put everything on my calendar because we are not productive with to-do lists. We are productive with everything scheduled. And the final piece of this puzzle is that every day I have like on my laptop sticky notes, okay? And every day I do the history of my day. So I talk with that customer and he said that he's not able right now to meet with me or I close the deal or I will have an interview and all of those records I type on the sticky notes. Okay. And when I'm closing the meeting, I can compare my brainstorming. Yeah. My schedule of tasks and then the follow up of those tasks. So that leads into the next day. I don't miss anything. Yeah. It's perfect. I don't know if we can catch this on the monitor here. This is Antonio's technique. You see, there's U-CAN event. There's the personal. There's the sports. And there's a calendar that ties them all together. And at the end you do the wrap up of how it all worked out relative to how you planned. This technique I learned from Darren Hardy is a big international mentor. And I just learned from him. He fought to us. And it's perfect. Okay. That's very useful. I'm sure everybody will have their own variation on that. And I'm able to speak with anyone in the show if they want to ask me how do I manage that. Right. So talk a little bit about blue startups and what the experience has been like. I spoke with Chanoa yesterday. I asked her to refer to us one of their best young companies who like to be on the art of thinking smart. And she came back in half an hour and said Antonio is ready. So what has been your experience just across the street here? Yeah. So it's been amazing.  But at the same point, so valuable that this was our best decision. So you're part of what they call the ninth cohort, which means there's a group of companies, a variable number, 6, 8, or companies or so. And this is the ninth wave of those companies over the past few years. And I think we have here a slide that tells us about an upcoming event on July the 7th, where you can come and meet Antonio Trincal and his brothers and sisters in the ninth cohort. And out of that, well, Guy Kawasaki, who is one of the gods of the Apple universe, will be there as a speaker, very excited to see him again. And it's an amazing person who has such a global vision. So I want to encourage everybody to come, if you can, and see that event with Antonio and Guy Kawasaki. And just understand a little bit more about Blue Startups, because they're always bringing in new people, right? They're always like six months or less away from bringing, starting a new cohort. And they're always looking for great new ideas. So let's say we're 10 years in the future and U-CAN event has accomplished everything that you want to accomplish. What will that final vision look like for you? Doing an event on Mars. Oh, okay. We will be the first brand of doing an event. That's too bad David Bowie has gone, if we could take him. Yeah. No, but basically, we have to win all the industry sectors of our industry. So sporting entertainment, events, corporate events, wedding, bartending, nightlife industry, everything. Wow. So are you going to do an Olympics or something like that? The Oscars, Victoria's Secret Show, Super Bowl, that's our vision. We will be the platform for doing all the events in the world, but in terms of branding and awareness and creating, beautiful experiences, we want to do those events. I'm looking forward to seeing it. I'm looking forward to going. You will see. We have Antonio's name and contact email here if you're interested in being in touch with him more and go to ucanevent.com to see the whole program in action. Exactly. So I want to thank everyone very much for tuning into this Art of Thinking Smart and until next time, from Think Tech Hawaii in Honolulu, Aloha.