1 00:00:00,000 --> 00:00:03,000 any good night on Saturday leading Democratic presidential contenders 2 00:00:03,000 --> 00:00:06,350 address the Iowa Democratic Party gathering known as the Jefferson Jackson 3 00:00:06,350 --> 00:00:10,670 dinner the high-profile party dinner has been a defining moment on the campaign 4 00:00:10,670 --> 00:00:15,599 calendar since 75 this is former Secretary of State Hillary Clinton there 5 00:00:15,599 --> 00:00:25,680 is something wrong when the top 25 hedge fund managers earn more in a year than 6 00:00:25,680 --> 00:00:39,399 all that kindergarten teachers in america come by or when top CEOs make 7 00:00:39,399 --> 00:00:45,59 three hundred times what a typical worker died or when corporate profits 8 00:00:45,59 --> 00:00:52,280 soar but employees don't share in those profits when it's easy for a big 9 00:00:52,280 --> 00:00:58,930 corporation to get a tax break but it's still too hard for a small business to 10 00:00:58,930 --> 00:00:59,839 get a loan 11 00:00:59,840 --> 00:01:04,479 Hillary Clinton well vermont senator Bernie Sanders also spoken Iowa over the 12 00:01:04,479 --> 00:01:08,270 weekend calling for a raise in the minimum wage 13 00:01:08,270 --> 00:01:13,259 use the middle class of this country 14 00:01:13,260 --> 00:01:18,210 disappearing and when you see people you know 15 00:01:18,210 --> 00:01:25,639 jobs trying to cobble together some in comments on health care 16 00:01:25,640 --> 00:01:30,740 shoulders and say that's the way it is 17 00:01:30,740 --> 00:01:38,908 you fight to raise the minimum wage to a living wage vermont senator Bernie 18 00:01:38,909 --> 00:01:41,810 Sanders speaking at the Jefferson Jackson dinner in Iowa which has become 19 00:01:41,810 --> 00:01:46,40 the bellwether of democratic support well as presidential candidates spar 20 00:01:46,40 --> 00:01:49,619 over economic policy is one of the nation's leading economist is calling 21 00:01:49,619 --> 00:01:53,310 for comprehensive overhaul of the us- economy Nobel prize-winning economist 22 00:01:53,310 --> 00:01:57,850 Columbia University professor Joseph Stiglitz has just published a new book 23 00:01:57,850 --> 00:02:03,48 it's called rewriting the rules of the American economy an agenda for growth 24 00:02:03,49 --> 00:02:07,509 and shared prosperity Joseph Stiglitz it's great to have you with us back to 25 00:02:07,509 --> 00:02:10,729 democracy now talk about these candidates and what they're saying 26 00:02:10,729 --> 00:02:17,549 and what they actually do what they support I think we're in a new moment in 27 00:02:17,549 --> 00:02:21,769 america's I think we've had a third of a century of it you might call an 28 00:02:21,769 --> 00:02:27,129 experiment a grand experiment we're beginning with the reagan and we said 29 00:02:27,129 --> 00:02:33,329 works well with the tax rates in the top black strip away the regulations were 30 00:02:33,330 --> 00:02:36,610 gonna we're going we're going to free up the american economy we're going to 31 00:02:36,610 --> 00:02:42,250 extend devised it the result will be the economy will grow so much 32 00:02:42,250 --> 00:02:48,129 yes the top will get a larger share but everybody is going to get a bigger piece 33 00:02:48,129 --> 00:02:53,260 and so everybody's going to be better off we'll we've had a third of a century 34 00:02:53,260 --> 00:02:53,679 of it 35 00:02:53,680 --> 00:02:58,989 of this experiment and it has failed it has failed miserably the fact is the 36 00:02:58,989 --> 00:03:05,230 bottom 90% have seen their incomes stagnate median income today as well was 37 00:03:05,230 --> 00:03:09,599 it is as well as it was a quarter century ago talked about the minimum 38 00:03:09,599 --> 00:03:15,99 wage minimum wages the adjusted for inflation it was 45 50 years ago 39 00:03:15,99 --> 00:03:19,899 economy can't deliver for most of its citizens its ability connie was so 40 00:03:19,900 --> 00:03:25,440 striking is technological change without globalization all the things that we're 41 00:03:25,440 --> 00:03:31,220 supposed to make the economy perform better and in fact it's performed were 42 00:03:31,220 --> 00:03:36,260 so with the two candidates are saying israeli echoing I think the basic 43 00:03:36,260 --> 00:03:41,750 message of this book which is something is wrong with the rules of the economy 44 00:03:41,750 --> 00:03:45,790 that the american workers they're working hard productivity has continued 45 00:03:45,790 --> 00:03:55,590 to grow with striking is how their high is being shared not fairly and in fact 46 00:03:55,590 --> 00:04:00,720 the distortions in the economy that hillary was talking about 47 00:04:00,720 --> 00:04:06,90 have actually imputed media economy performed more poorly than otherwise 48 00:04:06,90 --> 00:04:11,840 would you take those CEOs getting three hundred times the amount of the typical 49 00:04:11,840 --> 00:04:17,399 worker when you're taking the corporate income 50 00:04:17,399 --> 00:04:23,539 giving so much to the top you gonna have less either to give to the people at the 51 00:04:23,540 --> 00:04:29,20 bottom or you can have the west to invest in the corporation and actually 52 00:04:29,20 --> 00:04:34,659 both of those are happening so weak or investment 53 00:04:34,660 --> 00:04:40,289 wages and then you get a vicious cycle going so the economy isn't performing as 54 00:04:40,289 --> 00:04:41,900 well as it as it should be 55 00:04:41,900 --> 00:04:45,70 know the candidate John actually agree in fact I think hillary clinton's 56 00:04:45,70 --> 00:04:50,550 getting rather nervous at the massive crowds that Bernie Sanders is drawing 57 00:04:50,550 --> 00:04:56,610 across the political spectrum and so she has moved in on criticizing him speaking 58 00:04:56,610 --> 00:05:00,000 at that very same dinner the Jefferson Jackson dinner Saturday Hillary Clinton 59 00:05:00,000 --> 00:05:07,199 appeared to question bernie sanders electability I know when you know it's 60 00:05:07,199 --> 00:05:11,940 not enough just to rail against the republicans or the billionaires we 61 00:05:11,940 --> 00:05:19,50 actually have to win this election in order to rebuild the middle class and 62 00:05:19,50 --> 00:05:23,150 make a positive difference in people's lives 63 00:05:23,150 --> 00:05:27,820 what is Bernie Sanders message why do you think it has resonated so strongly 64 00:05:27,820 --> 00:05:32,479 and actually it seems like forced Hillary Clinton to adopt some of the 65 00:05:32,479 --> 00:05:38,199 same language that he has been used yeah I think the point is that the american 66 00:05:38,199 --> 00:05:45,990 people have figured out that this model has it worked you know that the model 67 00:05:45,990 --> 00:05:53,830 that began thirty of a century ago so angry and they they want this is very 68 00:05:53,830 --> 00:05:59,280 important but like 35 years ago some kind of a natural phenomenon that we 69 00:05:59,280 --> 00:06:03,198 cannot get in the way of we have to allow capitalism to work you're saying 70 00:06:03,199 --> 00:06:06,419 this is a very new invention that has written rules and these rules should be 71 00:06:06,419 --> 00:06:11,180 changed exactly so you know take one example productive american workers has 72 00:06:11,180 --> 00:06:16,699 continued to grow pretty steadily historically will use moved with 73 00:06:16,699 --> 00:06:22,90 productivity you know you do those two charge they just move right together 74 00:06:22,90 --> 00:06:27,909 suddenly around 1984 activity continues to grow but wages stagnate this is a 75 00:06:27,909 --> 00:06:29,440 really unusual for now 76 00:06:29,440 --> 00:06:32,750 and that was one of the things that motivated writing the book was it was 77 00:06:32,750 --> 00:06:38,720 going on and we said what's happened is particularly in america that we began to 78 00:06:38,720 --> 00:06:43,880 change the rules who rules of labor rules are rules about the potential said 79 00:06:43,880 --> 00:06:51,909 to rose about corporate governance tax rules you know it wasn't inevitable that 80 00:06:51,910 --> 00:06:54,440 you tax 81 00:06:54,440 --> 00:07:01,20 speculation they don't lower rate the you docs people working for a living in 82 00:07:01,20 --> 00:07:06,320 a market economy actually what we say is this is a distortion of capitals in this 83 00:07:06,320 --> 00:07:12,570 is the story of American economy and so what do you think we're most contributed 84 00:07:12,570 --> 00:07:18,190 to the inequality in terms of the rules I think probably say one thing I think 85 00:07:18,190 --> 00:07:22,760 the whole package but the financial sector you know the financial sector was 86 00:07:22,760 --> 00:07:29,110 about two and a half percent of GDP it went to as large as a percent of GDP as 87 00:07:29,110 --> 00:07:35,950 it grew to the economy growing so much faster you said well they're getting 88 00:07:35,950 --> 00:07:40,610 their just desserts very helping always do better but what they really were 89 00:07:40,610 --> 00:07:46,120 doing you can't see in the data at all at all any effect on economic growth 90 00:07:46,120 --> 00:07:50,370 what will we do know is that led to this kind of greater volatility the Great 91 00:07:50,370 --> 00:07:55,120 Recession of 2008 from which we are still have not recovered and what they 92 00:07:55,120 --> 00:08:00,330 were doing is figuring out how to seize a larger share of the national income 93 00:08:00,330 --> 00:08:03,539 pie in a whole variety of ways 94 00:08:03,540 --> 00:08:08,200 American labor movement into this well that's another important piece because 95 00:08:08,200 --> 00:08:14,200 you know you go back to the nineteen thirties we passed away your act in the 96 00:08:14,200 --> 00:08:21,450 way correct said made it easier for workers to bargain what has happened in 97 00:08:21,450 --> 00:08:26,909 the last 35 years we've made it more difficult for workers to Bergen 98 00:08:26,910 --> 00:08:31,680 globalization is made that even more difficult because you sitting there with 99 00:08:31,680 --> 00:08:37,450 two billion people around the world and be brought into the labor market 100 00:08:37,450 --> 00:08:43,800 and weakening the protection strides drinking the competition inevitably is 101 00:08:43,799 --> 00:08:47,890 weakened the bargaining position of workers and you get results today for 102 00:08:47,890 --> 00:08:53,240 instance where america is almost unique among the events countries in not having 103 00:08:53,240 --> 00:08:59,630 family leave sick leave you know we're at the bottom and you know put another 104 00:08:59,630 --> 00:09:07,470 example America has more inequality than any other events countries why is that 105 00:09:07,470 --> 00:09:11,590 it's because of the way we've written the rules 106 00:09:11,590 --> 00:09:16,760 expects a kind of choice that we've made a key part of that is the fact that 107 00:09:16,760 --> 00:09:18,970 unions have been made 108 00:09:18,970 --> 00:09:23,800 weaker glass steagle glass steagle is another important explain what it is 109 00:09:23,800 --> 00:09:31,670 it's a glass steagle was again after the Great Depression we we divided the banks 110 00:09:31,670 --> 00:09:36,120 that had two groups the commercial banks to take your deposit ordinary people 111 00:09:36,120 --> 00:09:43,370 both to give money to small businesses to help grow the economy and investment 112 00:09:43,370 --> 00:09:49,680 banks taking money from rich people testing it more speculative activities 113 00:09:49,680 --> 00:09:55,579 and we had a big fight during the Clinton administration over whether we 114 00:09:55,580 --> 00:10:00,640 should eliminate that division I strongly opposed and why it was chairman 115 00:10:00,640 --> 00:10:08,520 of Council of Economic Advisers it didn't happen under clinton but then you 116 00:10:08,520 --> 00:10:14,310 know Citibank wanted to bring together these you know various financial 117 00:10:14,310 --> 00:10:21,660 institutions in and around clinton and the result of that was that we repealed 118 00:10:21,660 --> 00:10:27,10 glass steagle and what I was worried about precisely happened when we wound 119 00:10:27,10 --> 00:10:32,380 up with bigger banks that became too big to fail we the culture of risk-taking 120 00:10:32,380 --> 00:10:37,790 that is associated with investment bank spread to the whole banking system until 121 00:10:37,790 --> 00:10:43,319 all the banks became speculators and actually 122 00:10:43,320 --> 00:10:50,830 lending to small businesses lower than it was before the crisis and the kinds 123 00:10:50,830 --> 00:10:56,570 of conflicts of interest that were rampant in the years before the Great 124 00:10:56,570 --> 00:11:00,960 Depression started to appear all over the place in our potential sector so 125 00:11:00,960 --> 00:11:03,790 bernie sanders is called for the reinstatement of glass steagle hillary 126 00:11:03,790 --> 00:11:05,180 Clinton has not 127 00:11:05,180 --> 00:11:11,540 yeah I I hope that that she will but I think the fundamental issue here is we 128 00:11:11,540 --> 00:11:16,280 have to take the financial sector and in our book rewriting the rules we describe 129 00:11:16,280 --> 00:11:24,660 how that can be done now there are many things one approach that I increasingly 130 00:11:24,660 --> 00:11:28,600 come to we actually don't talk about it in the book there some other ways that 131 00:11:28,600 --> 00:11:37,170 we do focus on things like curbing their their excessive risk-taking one of the 132 00:11:37,170 --> 00:11:41,459 important things that people have realized is every time they use the 133 00:11:41,460 --> 00:11:50,120 debit card merchants pay a significant price further using its like a tax on 134 00:11:50,120 --> 00:11:55,260 every transaction tax that doesn't go for public purpose it goes to enrich the 135 00:11:55,260 --> 00:12:02,130 coffers of the credit card companies the debit card companies we were supposed to 136 00:12:02,130 --> 00:12:06,140 curtail that the one part of that the debit card was called the Durbin 137 00:12:06,140 --> 00:12:12,370 Amendment to dodd-frank but we don't get into the Federal Reserve the Federal 138 00:12:12,370 --> 00:12:19,260 Reserve staff recommended that I thought was excessive and then the Federal 139 00:12:19,260 --> 00:12:24,370 Reserve devil would defeat that they had recommended so it's much better than it 140 00:12:24,370 --> 00:12:25,790 was before 141 00:12:25,790 --> 00:12:33,339 dodd-frank but it's still a tax on every transaction that winds up you know being 142 00:12:33,340 --> 00:12:39,580 paid for by everybody who buys any good in our economy so that's an example of 143 00:12:39,580 --> 00:12:44,850 how you transfer money from ordinary individuals to the financial sector and 144 00:12:44,850 --> 00:12:49,459 it's one of the reasons why the financial sector's making so much money 145 00:12:49,459 --> 00:12:54,170 and the rest of us paying price went under example that President Obama has 146 00:12:54,170 --> 00:13:05,689 emphasized is you know people have savings accounts variety IRA Hayes and 147 00:13:05,689 --> 00:13:12,259 questioned years when you put your money in an IRA does the person who's supposed 148 00:13:12,259 --> 00:13:19,189 to manage that have a fiduciary responsibility that is a can he manage 149 00:13:19,189 --> 00:13:24,389 to put his own interests turning it over and getting a lot of commission or does 150 00:13:24,389 --> 00:13:28,660 he have a responsibility of fiduciary responsibility to managing your interest 151 00:13:28,660 --> 00:13:35,59 that you would say obviously should have that producer responsibility but the 152 00:13:35,59 --> 00:13:43,459 banks are resisting imposing there is a condition and results of not having the 153 00:13:43,459 --> 00:13:47,209 ideas that the banks are making billions and billions tens of billions of dollars 154 00:13:47,209 --> 00:13:52,660 every year more than they otherwise would finally Joseph Stiglitz you just 155 00:13:52,660 --> 00:13:57,439 recently wrote a piece the trans-pacific partnership charade TPP isn't about free 156 00:13:57,439 --> 00:14:03,629 trade all explained very much the point was made in your segment that you had 157 00:14:03,629 --> 00:14:10,839 about Indonesia joining the basic point is that this is a trade agreement that 158 00:14:10,839 --> 00:14:18,269 has all kinds of provisions intended to restrict regulations we carved out one 159 00:14:18,269 --> 00:14:25,809 little piece to be carved out one little piece that was so so outrageous that 160 00:14:25,809 --> 00:14:32,600 everybody was with open arms and that was a provision but tobacco and a 161 00:14:32,600 --> 00:14:38,740 provision very similar to this is being sued by phillip morris the successor of 162 00:14:38,740 --> 00:14:46,490 gilmore's because we're way past the regulation as the Australia on the 163 00:14:46,490 --> 00:14:50,559 package you have to say that this is bad for your health 164 00:14:50,559 --> 00:14:54,689 what we have in the united states more graphic as they had the picture of what 165 00:14:54,689 --> 00:14:55,949 it did 166 00:14:55,950 --> 00:15:04,430 it worked people started and stopped smoking not everybody but smoking was 167 00:15:04,430 --> 00:15:15,719 reduced under the provisions of this PPV like provision for the loss of their 168 00:15:15,720 --> 00:15:20,260 expected profits as a result of the regulation in other words the view is 169 00:15:20,260 --> 00:15:25,600 they have the right to kill people if you want to take away that right you 170 00:15:25,600 --> 00:15:31,540 have to pay them not to kill now we carved that that provision was carved 171 00:15:31,540 --> 00:15:36,60 out all the other areas were left so they were talking about climate change 172 00:15:36,60 --> 00:15:42,829 regulation we know we were going to need regulations to restrict the emissions of 173 00:15:42,830 --> 00:15:50,610 carbon under these provisions corporations can sue the government for 174 00:15:50,610 --> 00:15:54,930 including the American government by the way so called the governments in the TPP 175 00:15:54,930 --> 00:16:01,540 can be sued for the loss of profits as a result of the regulations that restrict 176 00:16:01,540 --> 00:16:09,839 their ability to jus emit carbon emissions that lead to go get this 177 00:16:09,840 --> 00:16:14,630 provision had been place when we discovered that asbestos was bad for 178 00:16:14,630 --> 00:16:16,390 your health 179 00:16:16,390 --> 00:16:23,30 the current provisions is bestest manufacturers have to pay for the damage 180 00:16:23,30 --> 00:16:26,850 that they're doing they pay billions and billions of dollars in the TPP had been 181 00:16:26,850 --> 00:16:32,260 in place we would have to pay the asbestos manufacturers for not killing 182 00:16:32,260 --> 00:16:36,10 us expects outrageous we have to leave it there but we're going to continue the 183 00:16:36,10 --> 00:16:39,660 conversation right after the shown posted online at democracynow.org Joseph 184 00:16:39,660 --> 00:16:43,319 Stiglitz a Nobel prize-winning economist Columbia University professor chief 185 00:16:43,320 --> 00:16:46,890 economist for the Roosevelt Institute his new book is called rewriting the 186 00:16:46,890 --> 00:16:51,50 rules of the American economy and agenda for growth and shared prosperity go to 187 00:16:51,50 --> 00:16:52,790 democracynow.org for part two