Charles Ferguson's Post-Oscars Appearance this Wednesday in San Francisco

“Forgive me, I must start by pointing out that three years after a horrific financial crisis caused by fraud, not a single financial executive has gone to jail — and that’s wrong,” said Charles Ferguson, the documentary filmmaker who opened his Academy Awards acceptance speech last night with a declaration that encapsulated his Oscar-winning film's thesis.

That film, Inside Job, presents the case that the finance industry took advantage of a deregulated atmosphere and tried to get rich at the expense of others. In conversations with industry insiders and government officials, Ferguson's film calls the meltdown a preventable disaster that was created by greedy and deceptive men. And on a night dedicated to glitz and glam in Hollywood, it was his cry for accountability that left many in the crowd captivated.

Political speeches are nothing new to the Oscars, and they are often controversial. At an event where LA stars shine the brightest, it was a documentary filmmaker who stood out. Inside Job received Hollywood’s highest honor, and its director made the most of the moment, despite the decidedly uncontroversial nature of this year's program. Ferguson was greeted with cheers from the movie-making elite at Sunday's Oscars and was credited by some with breathing fire into the otherwise tame telecast.

With his film's stock on the rise, the filmmaker continues to spread his message to fans by coming to The Commonwealth Club this Wednesday.

He will be taking part in a Q&A with Fortune magazine Senior Editor Adam Lashinsky; the documentarian will talk more about his film and personal views. Ferguson will be heard by a sold-out crowd in The Commonwealth Club's San Francisco club office; but for those unable to attend in person, please join us for our live stream at BeNowTV. The program begins at 6 p.m. Pacific time.

–By James Dohnert

New Issue of The Commonwealth Magazine

The February/March 2011 issue of The Commonwealth magazine has been published and is appearing in members' mailboxes this week. Commonwealth Club members receive the magazine as a benefit of membership; they also get access to the digital edition of the magazine (via the weekly Club e-mail newsletter).

Here's a preview of this issue:

Cover story: U.S. Treasury Secretary Timothy Geithner: "The Recovery, Part II"
Author James Ellroy: "L.A. Story"
Arianna Huffington: "Middle-Class Dilemma"
AEI President Arthur Brooks: "Earned Success and Happiness"
Reza Aslan and a panel of Muslim artists: "Cultural Exchange"
CDC Director Thomas Frieden: "The Economic Imperative of Preventive Measures"
Historian Simon Winchester: "Tales of the Sea"
U.S. CTO Aneesh Chopra: "High-Tech Health Care"
Plus: Dr. Gloria C. Duffy on why "Wikileaker Is No Hero," an interview with Kiva.org President Premal Shah, former First Lady Rosalynn Carter on national mental health care policy, the Club's annual report, complete Club event listings, and more.

Your State of the Union Prep: Economic Outlook for 2011

The Commonwealth Club hosted a private, off-the-record panel discussion on the U.S. and California economies, prior to the member’s-only Bank of America/Walter E. Hoadley Annual Economic Forecast luncheon on Friday, January 21, 2011. Panelists included former U.S. Representative and California State Finance Director Tom Campbell, former Semiconductor Industry Association President George Scalise, Public Policy Institute of California economist Dr. Jed Kolko, and Brian Riley, managing director of Merrill Lynch.

In light of the expected focus by President Obama on jobs and economic growth in tonight’s State of the Union address, we thought some of the ideas and observations of the panelists last Friday might be of interest. Because the session was not for attribution, we have not identified the individual sources of the observations below.

• In California, increases in output are still outpacing employment growth. The latest statistics on California unemployment rates show a recent rise: the jobless rate in the state now stands at 12.5 percent.

• The semiconductor industry experienced 30-percent growth in the past year, and technology and electronics remains California’s largest export industry. There was 10-percent growth in both the film and tech industries overall. But with the manufacturing companies mainly investing in capacity overseas, the future picture is not so rosy. In the longer term, based on decisions that have already been made and are being made, the growth and the jobs will occur outside of California and much of that outside of the United States.

• The federal budget deficit is extremely worrisome. Currently 38 percent of our budget is borrowed. The national debt has escalated to $45,000 today for each person in the United States. This is about triple what it was in the mid-1990s. Investment by business, particularly by small businesses, is driven by future profit expectations; large federal budget deficits increase uncertainty about the future stability of the economy. The result — businesses invest less and thus hire fewer workers. This, in turn, impedes the economy's recovery.

• The budget deficit must be addressed through Social Security and Medicare means-testing, probably also through cuts in defense spending. Unfunded pension liabilities must also be addressed.

• One thing the federal government could do to encourage businesses to hire employees would be a moratorium on costs to hire new employees, for a year. The cost of a new hire now is $10,585 in addition to salary, with required benefits and other costs imposed by regulation.

• The government must create incentives for companies to build their facilities and base their business in the United States. A five-year tax holiday for companies would have a dramatic impact. The economic activity caused by the resulting job creation would compensate for the lost tax revenue three to four times over.

• There is $1.8 trillion of cash on hand in the private sector. Economic policy needs to take the appropriate steps to increase confidence and certainty, such as reducing the deficit and creating incentives for businesses to expand and do it here in the United States.

• The industries that have been hurt the most will be the sites of most growth in the future – e.g. housing construction.

• Expanding sectors will include professional business services. Health care and nursing will be important, due to the aging population.

• Agriculture is still the largest industry in California, but government policy is getting in the way. The limits of access to water (federal regulations) and labor (immigration) are limiting the growth of this industry.
• The underfunding of higher education in California is a serious threat to our long-term leadership in technology, medicine and the other fields in which the United States and California have been so successful.

Where Does Unemployment Rank Among Washington's Priorities?

By Sally Schilling

While Congress is focused on Bush tax cuts, former Newsweek senior White House correspondent Richard Wolffe says the government’s first priority should be addressing unemployment.

President Obama’s Council of Economic Advisors put out a report last week warning that if Congress does not extend unemployment benefits, which expired on November 30, two million people could lose coverage in December and as many as 600,000 jobs could be lost over the next year.

Facing an inevitable congressional stalemate on tax-cut issues, Obama told legislators that they should work beyond political lines on unemployment benefits. Wolffe told MSNBC that Obama’s optimistic “moving beyond party politics” message is not a demand for action so much as a political strategy.

Wolffe – who, at the very beginning of the campaign, was asked by the Obama himself to write a book about his journey to the presidency – said that though bipartisan action on unemployment benefits is highly unlikely, speaking about the parties working together is what Obama needs to do to get re-elected.

The president needs to appeal to independent voters, Wolffe said, and independent voters want to see the parties working together. Having the inside scoop on the White House (his new book, Revival, describes his first-hand look at the challenges Obama faced in the first two years of his presidency), Wolffe thinks he knows exactly what is behind Obama’s every move.

So is Obama’s focus on getting re-elected a sign that unemployment doesn’t merit immediate attention?

A recent New York Times article compared the unemployment crisis today to quicksand, and said if the issue remains unaddressed, could become more like cement. Catherine Rampell wrote in the Times that instead of resolving high unemployment, European countries have grown to just accept it, and the U.S. could very well do the same. “The real threat, economists say, is that America, like some of its Old World peers, might simply become accustomed to having a large class of permanently displaced workers,” writes Rampell.

Millions of Americans undoubtedly feel that the urgency of the unemployment crisis is real, but, Wolffe’s observations suggest, Washington is too tied up in politics to act. Does Richard Wolffe think there is still hope for Washington to make a move before high unemployment becomes a permanent fixture of our economy? Come ask him when he speaks at the Club at 6 p.m. on Tuesday, December 7.

Milton Friedman at The Commonwealth Club: A Reader, Part II

This is the continuation of a previous post.


We decided to make Milton Friedman's Commonwealth Club speeches available here for anyone interested in what this guru of the modern market economists had to say. We think that even if you disagree with his politics and theories, you will find him to be an engaging speaker, and it might help people understand how Friedman's many acolytes in free-market circles think.

The speeches are presented here as scans of the published speeches and question-and-answer sessions from The Commonwealth, the official publication of The Commonwealth Club. We apologize if some of the quality of the scans are not the greatest; we did the best we could without doing damage to the bound copies of the publication. Unfortunately, we do not have audio or video files of these speeches, or we would gladly link to them here.

Click on the images to view them in larger sizes.

July 17, 1987: "In Defense of Dumping"

July 15, 1988: "Internationalization of the U.S. Economy – Fact or Fiction"

July 21, 1989: "Communism and the Market"

June 1, 1990: "A Welfare State Syllogism"

August 7, 1992: "Parental Choices: The Effective Way to Improve Schools"

August 14, 1998: "Two Lucky People"

See the first part of this Milton Friedman reader here.

Milton Friedman at The Commonwealth Club: A Reader, Part I

When conservative political satirist P.J. O'Rourke spoke at The Commonwealth Club of California in February 2007, he was asked who he thought was the modern equivalent of Adam Smith. O'Rourke replied, "Unfortunately, he just died. Milton Friedman was the guy."

More recently, a request for information about famed economist Milton Friedman's appearances here set us off on a mission to find all of his speeches at The Club, and we found he had spoken at The Commonwealth Club 12 times between 1977 and 1998.

We decided to make them all available on this blog for anyone interested in what this guru of the modern market economists had to say. We think that, even if you disagree with his politics and theories, you will find him to be an engaging speaker, and it might help people understand how Friedman's many acolytes in free-market circles think.

The speeches are presented here as scans of the published speeches and question-and-answer sessions from The Commonwealth, the official publication of The Commonwealth Club. We apologize if some of the quality of the scans are not the greatest; we did the best we could without doing damage to the bound copies of the publication. Unfortunately, we do not have audio or video files of these speeches, or we would gladly link to them here.

Click on the images to view them in larger sizes.

November 1, 1977: "Liberal McCarthyism: A Personal Experience"

October 31, 1980: "America: It's Economy and Government"

April 15, 1983: "The Real Threat to the U.S. Security"

July 27, 1984: "The Economy: Where Are We Headed?"

June 28, 1985: "Is Hyper-Inflation Necessary?"

June 13, 1986: "What We Know That Ain't So About Economic Policy"

See the second part of this Milton Friedman reader here.

Free Speech for Organizations, or Purchasing Congress? Big Money in Big Campaigns

By Camille Koué

Yesterday, the first Monday in October, the Supreme Court started a new session. The court will be hearing an array of fascinating and controversial cases, and everyone will be interested to see how the most female Supreme Court of all time will vote on such heavy matters at lethal injection and lifetime prison sentences for juveniles.

But before such matters could even be considered, a letter was delivered to the United States Congress on Monday asking that one of the court's most controversial rulings of this year, Citizens United v. Federal Election Commission, be overturned with an amendment to the constitution.

The letter was submitted to Congress by FreeSpeechForPeople.org, a campaign devoted to the cause of reversing the ruling via a constitutional amendment.

The Citizens United v. Federal Election Commission 5-4 ruling permits corporations and unions to promote and finance the campaigns of electoral candidates up until election day. The ruling overturned longstanding campaign finance rules and regulations, and it elicited outrage in many and applause from many others, dividing the country largely along party lines.

The idea of “corporate personhood” was protested across the country by liberal think tanks and politicians. President Obama called the ruling “a major victory for big oil, Wall Street banks, health insurance companies and the other powerful interests that marshal their power every day in Washington to drown out the voices of everyday Americans.”

Conservative think tanks and politicians applauded the court for overturning what they saw as years of unconstitutional obstruction to free speech. Mitch McConnell, Senate minority leader at the time, stated, “For too long, some in this country have been deprived of full participation in the political process. With today's monumental decision, the Supreme Court took an important step in the direction of restoring the First Amendment rights of these groups...”

This was the first Supreme Court case heard by Justice Sonia Sotomayer and the first Supreme Court case argued by then-solicitor general and now Supreme Court Justice Elena Kagan. So the issues of this ruling touch even the newest on the court.

On Monday, October 11 The Commonwealth Club will have its own debate on this topic. The superb panel of Bob Edgar, president and CEO of Common Cause, Lawrence McQuillan, director of business and economic studies at the Pacific Research Institute, and constitutional law expert Jesse Choper, Earl Warren Professor of Public Law at UC Berkeley, will take on the question of the constitutionality of the recent ruling and discuss what is really electing our political leaders, money or merit?

Treasury Secretary Timothy Geithner to Address The Commonwealth Club in San Francisco September 30

With the country working hard to pull out of one of the most difficult economic climates in the past century, the Obama administration's powerhouse economic team is the focus of much hope and much criticism. Are they taking the right measures? What's really happening with the economy? Just how close did the United States' economy come to going off a cliff two years ago?

On September 30, The Commonwealth Club of California is hosting a program featuring U.S. Treasury Secretary Timothy Geithner. The event will take place at the Mark Hopkins Hotel in San Francisco.

This is your chance to hear for yourself what the nation's top financial policymaker has to say about the current and future state of the economy.

Tickets are available for advance purchase.

UPDATE: This program was postponed. We'll keep you informed about any rescheduling.

Paul Saffo: Bay Area Should Flex Its Economic Muscles in the Political Arena

The Bay Area would benefit from thinking more like a city-state and less like a region within a dysfunctional state, futurist Paul Saffo writes in yesterday's San Francisco Chronicle.

Noting that the Bay Area's economy would be the 25th largest in the world if it were an independent country (which would put it ahead of Austria, Denmark, and even Taiwan), Saffo writes that local-based pragmatism would result in better economic management than the state currently provides. He argues that "a sudden outbreak of city-state pragmatism might shock Sacramento out of its ideological deadlock and into a serious exploration of how to effect essential but unpopular solutions – from service cuts and tax increases to a rewriting of our state Constitution."

You can read his entire essay here.

The ever-provocative Saffo will be on a high-powered panel at The Commonwealth Club tomorrow night (July 13) that includes Laura Tyson (an economic advisor to President Obama), DBL Investors Managing Partner Nancy Pfund, Robert Klein (governing board chair of the California Institute for Regenerative Medicine), former Assembly Speaker Robert Hertzberg – all moderated by KPIX-TV anchor Sydnie Kohara. The event is part of the Chevron California Innovation Series at The Commonwealth Club.

For details and to order tickets, visit The Commonwealth Club's web site.

Robert Reich Gives 2010 Economic Forecast

Robert Reich, former labor secretary during the Clinton administration and currently a professor at UC Berkeley, gave the Commonwealth Club's annual economic preview. The Bank of America Walter E. Hoadley Economic Forecast saw Reich speak to a sold-out crowd on January 22, discussing how far we've come since the financial crisis began, what legislation can work and what won't, and what we can expect in the coming year.

Presidential Transitions

As President-Elect Barack Obama moves with unusual speed to select and present the cabinet for his incoming administration, a great deal of attention is being focused on his possible and actual choices.

Today, Obama presented his economic team to the country. In coming days, we expect to hear about his foreign and domestic policy teams. Clues about the team and its goals can be found at the transition team's web site.

To provide some perspective on transitions past and present, we present Commonwealth Club President and CEO Dr. Gloria C. Duffy's most recent "InSight" column from The Commonwealth magazine. The column, called "Transitions," explains why a slow transition can present a danger to the nation. For a full-sized image of the column, click on the picture to the right of this posting.

Paul Krugman Wins Nobel

Princeton economist and New York Times op-ed columnist Paul Krugman has won the Nobel Prize in economics.

The Royal Swedish Academy of Sciences gave him the $1.4 million award in recognition for his work on a new theory regarding free trade. His work "thereby integrated the previously disparate research fields of international trade and economic geography," the Academy said, according to the Associated Press.

Krugman's whose most-recent Commonwealth Club speech was on October 30, 2007, as the first speaker in the A-Ha Speaker Series, presented by The Club and Orrick. In that speech, he spoke about the future of the middle class in the changing economic world, a topic that could be even more relevant today in light of recent stock market meltdowns. See the above video for the Fora recording of that speech. Or you can listen to streaming audio of that speech.

And if you want to go back in time nearly five years, you can listen to streaming audio of his January 6, 2004, speech to The Commonwealth Club, entitled "From Heroes to Scandals: The Collapse of Fiscal Responsibility."