any good night on Saturday leading Democratic presidential contenders
address the Iowa Democratic Party gathering known as the Jefferson Jackson
dinner the high-profile party dinner has been a defining moment on the campaign
calendar since 75 this is former Secretary of State Hillary Clinton there
is something wrong when the top 25 hedge fund managers earn more in a year than
all that kindergarten teachers in america come by or when top CEOs make
three hundred times what a typical worker died or when corporate profits
soar but employees don't share in those profits when it's easy for a big
corporation to get a tax break but it's still too hard for a small business to
get a loan
Hillary Clinton well vermont senator Bernie Sanders also spoken Iowa over the
weekend calling for a raise in the minimum wage
use the middle class of this country
disappearing and when you see people you know
jobs trying to cobble together some in comments on health care
shoulders and say that's the way it is
you fight to raise the minimum wage to a living wage vermont senator Bernie
Sanders speaking at the Jefferson Jackson dinner in Iowa which has become
the bellwether of democratic support well as presidential candidates spar
over economic policy is one of the nation's leading economist is calling
for comprehensive overhaul of the us- economy Nobel prize-winning economist
Columbia University professor Joseph Stiglitz has just published a new book
it's called rewriting the rules of the American economy an agenda for growth
and shared prosperity Joseph Stiglitz it's great to have you with us back to
democracy now talk about these candidates and what they're saying
and what they actually do what they support I think we're in a new moment in
america's I think we've had a third of a century of it you might call an
experiment a grand experiment we're beginning with the reagan and we said
works well with the tax rates in the top black strip away the regulations were
gonna we're going we're going to free up the american economy we're going to
extend devised it the result will be the economy will grow so much
yes the top will get a larger share but everybody is going to get a bigger piece
and so everybody's going to be better off we'll we've had a third of a century
of it
of this experiment and it has failed it has failed miserably the fact is the
bottom 90% have seen their incomes stagnate median income today as well was
it is as well as it was a quarter century ago talked about the minimum
wage minimum wages the adjusted for inflation it was 45 50 years ago
economy can't deliver for most of its citizens its ability connie was so
striking is technological change without globalization all the things that we're
supposed to make the economy perform better and in fact it's performed were
so with the two candidates are saying israeli echoing I think the basic
message of this book which is something is wrong with the rules of the economy
that the american workers they're working hard productivity has continued
to grow with striking is how their high is being shared not fairly and in fact
the distortions in the economy that hillary was talking about
have actually imputed media economy performed more poorly than otherwise
would you take those CEOs getting three hundred times the amount of the typical
worker when you're taking the corporate income
giving so much to the top you gonna have less either to give to the people at the
bottom or you can have the west to invest in the corporation and actually
both of those are happening so weak or investment
wages and then you get a vicious cycle going so the economy isn't performing as
well as it as it should be
know the candidate John actually agree in fact I think hillary clinton's
getting rather nervous at the massive crowds that Bernie Sanders is drawing
across the political spectrum and so she has moved in on criticizing him speaking
at that very same dinner the Jefferson Jackson dinner Saturday Hillary Clinton
appeared to question bernie sanders electability I know when you know it's
not enough just to rail against the republicans or the billionaires we
actually have to win this election in order to rebuild the middle class and
make a positive difference in people's lives
what is Bernie Sanders message why do you think it has resonated so strongly
and actually it seems like forced Hillary Clinton to adopt some of the
same language that he has been used yeah I think the point is that the american
people have figured out that this model has it worked you know that the model
that began thirty of a century ago so angry and they they want this is very
important but like 35 years ago some kind of a natural phenomenon that we
cannot get in the way of we have to allow capitalism to work you're saying
this is a very new invention that has written rules and these rules should be
changed exactly so you know take one example productive american workers has
continued to grow pretty steadily historically will use moved with
productivity you know you do those two charge they just move right together
suddenly around 1984 activity continues to grow but wages stagnate this is a
really unusual for now
and that was one of the things that motivated writing the book was it was
going on and we said what's happened is particularly in america that we began to
change the rules who rules of labor rules are rules about the potential said
to rose about corporate governance tax rules you know it wasn't inevitable that
you tax
speculation they don't lower rate the you docs people working for a living in
a market economy actually what we say is this is a distortion of capitals in this
is the story of American economy and so what do you think we're most contributed
to the inequality in terms of the rules I think probably say one thing I think
the whole package but the financial sector you know the financial sector was
about two and a half percent of GDP it went to as large as a percent of GDP as
it grew to the economy growing so much faster you said well they're getting
their just desserts very helping always do better but what they really were
doing you can't see in the data at all at all any effect on economic growth
what will we do know is that led to this kind of greater volatility the Great
Recession of 2008 from which we are still have not recovered and what they
were doing is figuring out how to seize a larger share of the national income
pie in a whole variety of ways
American labor movement into this well that's another important piece because
you know you go back to the nineteen thirties we passed away your act in the
way correct said made it easier for workers to bargain what has happened in
the last 35 years we've made it more difficult for workers to Bergen
globalization is made that even more difficult because you sitting there with
two billion people around the world and be brought into the labor market
and weakening the protection strides drinking the competition inevitably is
weakened the bargaining position of workers and you get results today for
instance where america is almost unique among the events countries in not having
family leave sick leave you know we're at the bottom and you know put another
example America has more inequality than any other events countries why is that
it's because of the way we've written the rules
expects a kind of choice that we've made a key part of that is the fact that
unions have been made
weaker glass steagle glass steagle is another important explain what it is
it's a glass steagle was again after the Great Depression we we divided the banks
that had two groups the commercial banks to take your deposit ordinary people
both to give money to small businesses to help grow the economy and investment
banks taking money from rich people testing it more speculative activities
and we had a big fight during the Clinton administration over whether we
should eliminate that division I strongly opposed and why it was chairman
of Council of Economic Advisers it didn't happen under clinton but then you
know Citibank wanted to bring together these you know various financial
institutions in and around clinton and the result of that was that we repealed
glass steagle and what I was worried about precisely happened when we wound
up with bigger banks that became too big to fail we the culture of risk-taking
that is associated with investment bank spread to the whole banking system until
all the banks became speculators and actually
lending to small businesses lower than it was before the crisis and the kinds
of conflicts of interest that were rampant in the years before the Great
Depression started to appear all over the place in our potential sector so
bernie sanders is called for the reinstatement of glass steagle hillary
Clinton has not
yeah I I hope that that she will but I think the fundamental issue here is we
have to take the financial sector and in our book rewriting the rules we describe
how that can be done now there are many things one approach that I increasingly
come to we actually don't talk about it in the book there some other ways that
we do focus on things like curbing their their excessive risk-taking one of the
important things that people have realized is every time they use the
debit card merchants pay a significant price further using its like a tax on
every transaction tax that doesn't go for public purpose it goes to enrich the
coffers of the credit card companies the debit card companies we were supposed to
curtail that the one part of that the debit card was called the Durbin
Amendment to dodd-frank but we don't get into the Federal Reserve the Federal
Reserve staff recommended that I thought was excessive and then the Federal
Reserve devil would defeat that they had recommended so it's much better than it
was before
dodd-frank but it's still a tax on every transaction that winds up you know being
paid for by everybody who buys any good in our economy so that's an example of
how you transfer money from ordinary individuals to the financial sector and
it's one of the reasons why the financial sector's making so much money
and the rest of us paying price went under example that President Obama has
emphasized is you know people have savings accounts variety IRA Hayes and
questioned years when you put your money in an IRA does the person who's supposed
to manage that have a fiduciary responsibility that is a can he manage
to put his own interests turning it over and getting a lot of commission or does
he have a responsibility of fiduciary responsibility to managing your interest
that you would say obviously should have that producer responsibility but the
banks are resisting imposing there is a condition and results of not having the
ideas that the banks are making billions and billions tens of billions of dollars
every year more than they otherwise would finally Joseph Stiglitz you just
recently wrote a piece the trans-pacific partnership charade TPP isn't about free
trade all explained very much the point was made in your segment that you had
about Indonesia joining the basic point is that this is a trade agreement that
has all kinds of provisions intended to restrict regulations we carved out one
little piece to be carved out one little piece that was so so outrageous that
everybody was with open arms and that was a provision but tobacco and a
provision very similar to this is being sued by phillip morris the successor of
gilmore's because we're way past the regulation as the Australia on the
package you have to say that this is bad for your health
what we have in the united states more graphic as they had the picture of what
it did
it worked people started and stopped smoking not everybody but smoking was
reduced under the provisions of this PPV like provision for the loss of their
expected profits as a result of the regulation in other words the view is
they have the right to kill people if you want to take away that right you
have to pay them not to kill now we carved that that provision was carved
out all the other areas were left so they were talking about climate change
regulation we know we were going to need regulations to restrict the emissions of
carbon under these provisions corporations can sue the government for
including the American government by the way so called the governments in the TPP
can be sued for the loss of profits as a result of the regulations that restrict
their ability to jus emit carbon emissions that lead to go get this
provision had been place when we discovered that asbestos was bad for
your health
the current provisions is bestest manufacturers have to pay for the damage
that they're doing they pay billions and billions of dollars in the TPP had been
in place we would have to pay the asbestos manufacturers for not killing
us expects outrageous we have to leave it there but we're going to continue the
conversation right after the shown posted online at democracynow.org Joseph
Stiglitz a Nobel prize-winning economist Columbia University professor chief
economist for the Roosevelt Institute his new book is called rewriting the
rules of the American economy and agenda for growth and shared prosperity go to
democracynow.org for part two