Let me welcome you today. I'm Sheryl Sweniger, Director of Economic Growth Program. And we're very pleased to have with us today the Pulitzer Prize-winning author and reporter, Hedrick Smith, to talk about an important new book he has written called The Who Stole, The American Dream, which was released two days ago or three days ago by Random House. So we're getting Hedrick early on his book tour. I think the title could have gone on a bit. It was Who Stole The American Dream, but he also answers how to repair it or how to restore it as well. So that's an important part of this book. Hedrick has a extremely distinguished career and a very long resume of accomplishments. And I can't do it justice, but just let me mention a few highlights in case any of you have forgotten just the magnitude of this man's work. 26 years as a correspondent for the New York Times in places like Washington, Moscow, Paris, Saigon, Cairo. He won in the Pulitzer Prize for International Reporting in 1974 for his reporting on the Soviet Union at the time. From 1976 to 88, he was the Washington Bureau Chief of the New York Times. And I saw him nightly on this week in review, I believe, and other news programs during that time. Author of several national best-selling books, and we'll have another one to add to that list, The Russians, The Power Game, How Washington Works, The New Russians, Rethinking America, and Now Who Stove the American Dream. Crater, producer, director of 20 award-winning PBS Prime Time, specials, documentaries, and mini-series on a great variety of subjects showing enormous intellectual reach. Today, we're going to divide this in sort of three parts. The first part is that I'm going to have a conversation with Hedrick about some of the main ideas and themes in his book. The second part, we'll open it up for questions from the audience. And third, we'll have time for a little reception and book signing period, in which lunch will be available for those who want to stay. I understand that many of you may have to get back to your offices, but I hope you will stay and we'll try to reorganize this a little bit so you can be comfortable while you're eating lunch. Before we go into part one, I just wanted to make a couple important acknowledgments to my colleague, Josh Friedman, for doing all the hard work in making this possible, to Aaron Stopak for making the introduction and arrangements with Hedrick Smith to the George Wasserman Family Foundation for its support of work on major issues of the next social contract. And this book is about the social contract to Cameron Callan, who's also a very important supporter in Bernard L. Swartz, another supporter of our work here at the New America Foundation. So we'll now go to the first part of our program, 30 to 40 minutes of discussion conversation with, you'll be able to hear Rick explain in much greater detail some of the important points of his book. I assume these mics are working, but we'll find out. Yeah, no, yours works good, better than probably. The one way of approaching the book Who Stole the American Dream is almost slightly in a literary sense that it reminded me in terms of a serious social economic political investigation into what's gone wrong with America over the last 30 to 40 years. And so it sort of also reminded me of sort of that social economic version of the murder on the Orient Express. In the sense that as you go through this history, and one of the great strengths of the book is the fact that you put this in a 30, 40-year historical time frame as opposed to the immediate partisan period, although that's part of it, nonetheless, arises out of this 12 or 13 rather guilty characters and suspects that are all part of the co-conspiracy, if you will, to steal this great theft of power and money and wealth in America. And so I wanted to go through with you some of those in your great journalistic and analytical investigation here. I wanted to go with you through some of those main suspects and characters that stole the American dream, so to speak, without being pushing the analogy too far. And it all begins with this notion of what called, or in 1971, you identified it with the Powell memorandum. It's attorney Lewis Powell. Why was this important? Why is Lewis Powell and the Powell memorandum the first organizing suspect or co-conspirator? Well, it will allow me a moment to thank you and to thank the New America Foundation and to thank my friend Aaron Stopak for introducing me to Sheryl and to you all for hosting this and to Josh Friedman for doing it. And thank so many of my friends that I can see in the audience. I won't name them one by one, but all the way in the back and all around here. Thank you, friends, for showing up. It's important to me. I wonder if, before I go into that, if it would allow me to make that the second question, because the first question is actually prompted by your initial remark, which is this is a detective story. And that is literally how it evolved. I have to confess to you, Sheryl. This is not the book I started out to write. The book I started out to write in the contract with my publisher was called The Dream at Risk. So I started out with the notion that lots of people have that the middle class in America is in a lot of trouble. Jobs are getting shipped overseas. People are losing their homes. They're worried about whether or not they can afford to pay for their retirement or whether or not they can support their kids' college education, whether or not their kids are going to be better off than they are. How do we go from an era of middle class prosperity and power? And the power is a very important part of that. People tend to forget that. Those two things went together. And effective bipartisan government and politics to an era of partisan gridlock, starkly unequal democracy that we see now, dominated by super PACs and well-heeled lobbyists, and grossly gaping inequalities in the economy with the middle class stuck in a rut. So I started out looking at that. And I started to look at the housing crisis, the housing bubble. And I looked at the pensions and the 401k. And I looked at offshoring. I've got three chapters on offshoring. I got offshoring blue collar, offshoring white collar knowledge. And I've got on-shoring H-1B visas. So the further I got into it, the more I found. And as I got into it, Cheryl, I said, this didn't just happen to the middle class. This was done to the middle class. And I began to see the people and the forces. By then, I don't mean there were a half a dozen guys that Guy Noir could have found. And they were in some room in a dark building in the city that those had a hide its secrets. No, I don't mean that. I mean that there were people who deliberately set out to achieve what they wanted to achieve, the business leadership and so forth, people on the political right. And they set out to do it. And the middle class lost in the process. But it was deliberate. It wasn't accidental. I don't buy the argument that this is just impersonal market forces. And I hope you'll get me to that subject at some point. That it's just technology. And it's just innovation. It's just globalization. Because there's evidence to the contrary. I just hope I buy those arguments. So I'd just like to say that without knowing how, in fact, I wondered how you were going to open this discussion. You opened it in just the right place because it was a detective story. I mean, the book wasn't set up that way because that's a clever way to write it. I started out as a reporter with a bunch of reporters questions. And I went after the answers. And that's what led me to where I am. And that's why the book unfolds the way it does. And I felt I was reading a master investigator who, a very fair one, but one that was not willing to shy away from drawing some very potentially controversial conclusions. And I also found it interesting that rather than beginning with Goldwater or Reagan, as is typically done in some of these things, you began with Lewis Powell and the Powell memorandum. And then you moved to the sort of second character great political moment, which was the 95th Congress in 1978. So those are your first two characters. So let me do justice to your question about Lewis Powell. Lewis Powell is an embarrassment to me. I was the Washington Bureau Chief of the New York Times in the late 70s. Lewis Powell wrote this famous moment. How many in the room remember the name Lewis Powell? It is just OK. And you associate him with the Supreme Court, correct? 17, 18 years on the court appointed by Richard Nixon at the end of 1971. I think he actually starts to serve in early 1972. A man with a tidewater drawl and a man with the aristocratic sort of background of old Southern Virginia and yet a man of such modest temperament and demeanor that people mistook him occasionally in the Supreme Court for a custodian as he was walking around the grounds. But he was no mild-mannered guy. Lewis Powell, to my surprise, when I went back and worked the history, was extremely distraught in 1971, before he was named to the court. That American free enterprise system was under assault. Under assault from Ralph Nader and the consumer movement. Under assault from the labor movement. Under assault from the environmental movement with all the new environmental regulations. Under assault from the regulatory regime, ironically, the regulatory regime of the Nixon administration, not the Johnson administration. There's EPA. There's OSHA. There's the Mind Safety Commission. There's the Traffic Safety Board. There's one thing after another under Nixon. So the anger that Powell is expressing and the fear that he's expressing is directed, although he doesn't say Nixon, it's directed really against the Nixon administration. And he says business has got to get organized. They've got to get tough. They've got to get aggressive. They've got to play hardball politics the way labor does. They've got to pull together. Instead of having disparate business interests, they've got to pool their money. They've got to have a long-term plan, and he laid out the plan. And what was interesting was unbeknownst to the rest of us beneath the radar of most journalists in Washington. By the way, I've talked to a bunch of others, and very few of them were aware of this. I mean, I can count them on the fingers of one hand who had ever even heard of the Powell memorandum. He set off, this Paul Revere corporate manifesto thing, set off an enormous reaction. In 1971, when Powell wrote, there were 170 businesses in America that had lobbying offices in Washington. A decade later, there were 2,225. In 1971, when Powell wrote, there was no business roundtable. Can you imagine living in Washington today that there was a time when there was no business roundtable, which is the most potent political force of the 150 or 160 major corporations, blue chip corporations in America. It formed within a few months after the Powell Memo was distributed by the US Chamber of Commerce. The National Association of Manufacturers decided to move its headquarters to Washington. The National Federation of Independent Business, the organization of small businesses, went from, catch these numbers, 3,000 members in 1971 to 600,000 in 1980. Enormous explosion of political activity. 50,000 people by the end of the 1970s were working for trade associations. There were 9,000 registered corporate lobbyists and another 9,000 corporate PR people. There were 130 registered lobbyists or PR people for every single member of Congress by the famous Congress of the 95th Congress. I say the pivotal period, and the pivotal watershed Congress was the Congress of 1978. Now I have to tell you, I knew a little bit about the Congress of 1978 before I started this book because I'd done some documentaries about retirement. And what I discovered was the 401k plan was actually put into legislation in the tax code in 1978 by Barbara Conable, a name that some of you may recognize, an upstate New York Republican, a fine man, a guy I knew well, good source of mine. He was doing it as a favor to the executives of Kodak and Xerox because they wanted a new tax shelter for deferred compensation, retirement compensation for executives. So that's how it was put in. It was never intended to be a retirement plan for the mass of Americans. That was never in the cards. And we'll talk a little bit more about that a little bit later. But the other dramatic change that you described that came very quickly was a change in the normative culture of the corporate world. You had what you called the CEO sea change. I think you titled one of your chapters. And then you also talked about the gang of six, which we mostly think of the gang of six as these centrists. Yeah, centrist senators. But in fact, it was this group of business organizations. So the organization of the lobbying effort was one thing. But simultaneously, you had this enormous change in business philosophy in the way of conducting the corporate governance but also in how corporations treated their employees and solved their operations. So this was sort of the third suspect that I identified in the great staff keeper. You got one more than I do. I only, the two big things that happen, Sheryl, and you're absolutely right from my perspective, the power shift that occurred. And by the way, we need to remember when we're looking at the Lewis Powell memo and what it said and what it did, what preceded it. Because remember the era of the 1960s, the 1970s was the era of the civil rights movement, the era of the environmental movement, the era of the consumer movement, the era of the women's movement, the era of the peace movement. So you had these massive movements. The labor movement was at its great strengths. A half a dozen major movements in American life that were exercising power on behalf of the middle class and were powerfully influencing policy in Washington. I mean, after the Earth Day in 1970, there was a slew of environmental legislation. And a guy like Richard Nixon, who was no tree-hugging environmentalist by a long shot, they've got some wonderful stuff in there about Bill Ruckelshaus talking, first head of the EPA talking to Nixon about the environment. So you had this great power being exercised by the middle class and then you get this reversal that occurs in the late 70s and then it carries on of course in the 80s. So that's one great trend and the other one is the one you're talking about. I try to find a way, I'm always trying to find a way as a journalist and as a writer to capture a difficult change and a difficult concept in a phrase that will stick with people and convey the essence of what happened. And my term is wedge economics.  They're a cleavage to one side and another. In my opinion, wedge economics are the same thing. What happened in the late 70s parallel to this power shift was a change in the business ethos in the corner office, in the CEO's office and in the boardrooms of America from a notion of stakeholder capitalism which you got from Charlie Wilson when he was head of GM and you got from the head of Exxon, Exxon, Esso it was of course at that time, standard of New Jersey, General Electric, all these major corporations that you had to take care of all the stakeholders, the job of the CEO. We have to stop and remember this because this is so different from what people say and believe today that it's hard to believe that in America the leadership of all these corporations said you got to take care of your shareholders yes but your employees as well and management and customers and the communities you lived in. That is stakeholder capitalism, the notion that everybody has a stake and if you're in the success of the corporation and all those parties deserve to get some reward from the corporation's success. That's what existed and that got overturned. I'll get to it, just give me one sec. No, no, I was just going to prompt you because the other part of that story was that that stakeholder capitalism led to the virtuous circle that you talked about where everyone shared in the growth and development. Absolutely, thank you for prompting me, you're right. The stakeholder capitalism notion was that if you took care of your workers and you paid them well, this not only benefited the workers, not only benefited the corporation but in fact it benefited the whole economy. There was what the economists call and Sheryl has just cited the virtuous circle of growth. The virtuous circle of growth was simply that if people were paid well, they went out and most middle class workers didn't save a heck of a lot of money, they spent their money. If you had tens of millions of workers spending a lot of money, then in order to meet that consumer demand, that was powerful consumer demand. That was what was driving the American economy. Then corporations would have to, businesses would have to expand production, build new plans, buy new equipment, hire more workers, and that would power the next round of growth. And that is essentially what happened through the 40s, 50s, 60s, and 70s. That began to change when you got a change in the business ethos which was we're gonna cut back. And what, it was the most striking picture of that and wedge economics that I have been able to find and I found it with the help of my friend Larry Michele and others at the Economic Policy Institute is that the productivity of the American workforce rose on a fairly steady graph from the mid 40s to the mid 70s just about double. It rose 97% and the wage of the median worker, hourly wage of the median worker rose about 95% over that period. So as productivity was going up, hourly wages, living standards of the middle class, the core of the middle class were going up right along with productivity. And what is really striking to me and hit me one day when I looked at one of the charts in the state of working America was this chart that showed this line that continued to go up and this other line that went flat. And the line that went flat was the wages and salaries of workers since 1973. The productivity continued to grow until 2011. It grew 80%. But the average hourly wage rose only 4%, 4.2%. And if you throw in benefits, it was 10%. 10% up in money, 80% up in productivity, corporate profits rising over that period, 13% a year on average, wages rising less than 1% a year. So what's going on is the middle class is getting cut out of its share of the growth and the profitability of American enterprise. That's why I call it wedge economics. The country grows, the corporations profit, the middle class doesn't. It's a wedge. And another aspect of that wedge economics and the new economy and another one of our suspects that you lay out. I like it, keep going. Right, is what you call the great burden shift. And one of our colleagues in New America is called it the great risk shift. But this connects 1978 up with what was going on in the mid to late 80s and on into the 90s. What is the great burden shift that you were? Well, it relates to the 401K plan directly. The numbers are absolutely stunning. In 1980, I believe 84%, six out of seven workers and companies that had more than 100 employees had a lifetime pension. When they retired, their employer guaranteed them a monthly paycheck as long as they lived. Today that number is 35%. In 1980, something over 70% had fully paid health benefits from their employers. Today the number is 18%. Now you hear those numbers and you realize a whole lot of cutbacks in corporate America. You can look at it another way. In 1980, corporations paid for about 89% of the retirement costs and the health costs of employees. By 2010, that number had dropped to 49%. And the percent that the employees were paying rose from 11% to 51%. That's the burden shift. That's hundreds of billion dollars a year get moved off the corporate cost sheets and accounting sheets and put on the backs of individuals. This is a time, remember, this is at a time when wages are flat. The Census Bureau has told us that the median wage adjusted for inflation for a male worker in 2011 was just a shade lower than it was in 1978. That's 30 years of going nowhere. But inflation's going up and costs are going up. So all those people who were borrowing for their mortgages were not buying second homes and speed boats and red pickup trucks and going on long vacations. A lot of them were covering the cost that they could no longer cover from a wage scale and a salary scale that wasn't going up to meet the rising cost of living. So that's another part of this. And the shift was from the corporate to the individual, the burden risk. If it had been, some of it, more of it had been shifted to the public sector or the government in spreading out the risk in a social insurance way. It may have not been quite as devastating to the middle class, but in fact, most people were not capable of managing the 401k revolution in your analysis. Well, we love the slogan, power to the people. I mean, the mutual fund industry, it's interesting. The banks used to manage the money. Dallas Salisbury over here from Ibris, the guy who educated me on a lot of this. So I thank you, Dallas and your colleagues. But the banks used to manage the money for the corporations, for the lifetime pensions. And they managed it, so there was enough money there so the corporations didn't go broke. And the mutual fund industry saw this 401k thing and once it got a treasury approval, so it wasn't just for executives, it was for rank and file workers. Mutual fund industry said, whoa, now we could get ahold of those hundreds of billions of dollars, and if we could get the people to manage it themselves, then we could be their advisors, we could manage the money, and we could get all that money away from the banks in the mutual fund industry. That is exactly what happened. And they sold it with a gossamer promise, power to the people, do it yourself for retirement, you can do it. And they started in the 80s and it built up, but it really took off in the 90s. And guess why? The stock market was going up, pretty steadily. Had some ups and downs, but it was going up. So everybody thought, saving and investing, that's easy. We can all do it, right? You don't have to do anything, just put it on an automatic pilot, we're all gonna be better off. Oh, boom. Then we hit 2000s when it rockets around and people start losing their shirts. This was even before we get to the Great Recession. Now, again, Dallas Salisbury's eBree figures, I got in from Jack Van Der Huy. The last numbers he was able to give me before my book went to press, the average balance in a four-way K plan was $18,000, $18,000. Now they said, okay, Jack, what about people who are just ready for retirement? Cause they'll be more conscientious, they've been in the program longer, they're just ready to retire. He said, oh yeah, it's much better, $85,000. They said, is that good? He said, it's a disaster. I said, why? Cause if you've been making $50,000 or $75,000 a year, you need something like 10 times, 12 times your salary to carry you for this long lifetime we're now only. That means $500,000, $600,000, $85,000. If you divide it by the average life expectancy of people who turned 65, the average life expectancy is 17 years. 17 into 85 goes $5,000, $5,000 a year on top of social security. For an awful lot of people, that means a big cutback on their standard of living. But worse, Van Der Heis says that by his calculations, using the actual spending experience of people in retirement, that 45 to 50% of the people in the Baby Booner generation are not gonna be able to cover, listen to this, their basic economic needs, not a good standard of living, their basic economic needs. To me, that says poverty. That's a nice statistician's way of saying poverty. Roughly half of the Baby Booner generation is headed for poverty in retirement. And that is largely the result of this great burden shift. And this is a silent crisis that we're gonna be seeing on playing out over the next 10 to 15 years. At the same time, you had this great burden shift and with 401k playing a starring role in this, you simultaneously had the growth of a change in CEO compensation, not just up, but the way compensation was made. And here you had the 401k shifting the burden of retirement and healthcare on to more and more to the workers. But then you had an effort to square the circle, so to speak, of shareholder capitalism with stock options becoming an increasing part of the corporate landscape. And you, in your analysis, you, I think very accurately, give a very prominent role to the way this additionally changed corporate culture, corporate compensation in a way corporations operated. How did stock options in your view play such a prominent role in what, I think you also called the great wealth game in redistribution as well. Well, I think that if I had to put my finger on an idea that was among the most pernicious in terms of the fate of the economy and the fate of the middle class, I would say shareholder value is it. In the first place, it isn't really shareholder value. It's really a disguise for management value. And don't take my word for it. Talk to Jack Bogle, who is the founder of Vanguard funds or Warren Buffett or a good capitalist like that who are owners, who see the world from the viewpoint of owners. And they say, this isn't run for us. This is run for management. Michael Jensen, an associate professor of business at Harvard Business School and his colleague whose name at the moment, I forget it, Rochester University, came up with the idea of pay for performance, that there were problems, not terribly notable to most of the rest of us, but there were problems between CEOs and stockholders and their interests weren't always aligned. And you wanted to align their interests. And so the best thing to do would be to pay corporate executives in stock. By the way, what's interesting is, and I went back to read John Kenneth Galbraith on the new industrial state back in the 60s. Back in the 60s, the idea of paying corporate leaders in stock was considered akin to insider trading, damn near criminal and its implications. And when you stop to think about it, there's some logic to that, right? Because if there's anybody who's got inside knowledge, it's the people who are running the companies. So it's wrong for them to be able to profit excessively by knowing when the corporation's gonna announce that it's spinning off or losing subsidiary or it's about to build a new plan in China or whatever. But now we've enshrined that as one of the great noble things that can be done for the growth of American capitalism and the dispersal of the growth and the profits of the company. What happened was the idea took off again in the 1980s, just as these other ideas are going. What's interesting is you've got several of these trends going on, all reinforcing each other, all pushing the incomes in opposite directions. By the way, one of the things we've forgotten, we may not get to, but I've just thought of it and I want to not forget it. It's while we were lowering the maximum tax rate from 92% on Eisenhower when we had good growth and 77% under Kennedy when we had good growth to 35% under George W. Bush when we had lousy growth, the tax, the payroll tax was going from roughly three and a half percent to 7.65%. So while we were dropping the tax rate on the people at the top, and also the estate tax rate in the capital gains rate. And the capital gains. It was terribly important. While the stock happened. So this is where the power shift comes in. All those things are going on thanks to the power shift. At the same time, we're not raising the minimum wage as fast as the average wage and as fast as inflation, but we're raising the payroll tax, but we're putting a cap on it so people who actually make more than $106,800 don't have to pay more. So a guy like, well, I won't mention any news, but somebody who might make $20 million a year is paying maybe a 0.1% payroll tax rate, whereas the average person is paying a 7.65% tax rate. Strikes me as a little sort of out of balance. Anyway, Jensen had this idea. He sold it, pay for performance was it, and then it went, ran amok. It absolutely ran amok. Corporations learned how to jimmy this. They literally cheated. They changed the dates of the time when they issued the stock options. More than 800 major corporations did this. Apple was in the lead. Steve Jobs was one of the primary beneficiaries of this. Apple finally under investigation by the SEC had to admit that there were more than 4,000 cases in which it had falsely changed the dates of the dates when they'd issued the stock options. The reason they changed the dates because they changed them back to a date when the price was lower because instead of the stock going up, linking the CEO's performance to the shareholder experience, the stock price went down, and the CEO said, hey, I'm not making any money. I want a lower price on that. So they backdated it. Apple went so far as to actually make up a fictitious meeting. Most of them backdated it to some other meeting of the board. Apple actually fictitiously made up a meeting at which Jobs was, I forget what the number is, but $175 million worth of stock options. There never was a meeting that took place. And they said, well, Jobs really didn't profit by that. Jobs profited by that. The numbers are in there. So this game was jimmyed. Last example on that. Lehman Brothers and Bear Stearns go down. Bankrupt, out of business, bust. So what's the shareholder value experience there? Zero, right? Zero. The top five executives at Bear Stearns and Lehman Brothers walked away with $2 billion in stock options and cash bonuses during the last three or four years of those companies. Now, if that isn't evidence that this was a totally bogus idea, or at least the way it worked out, was a totally bogus idea. And as I say, you don't have to take my word for it. If guys like Warren Buffett and Jack Bogle, who are investing money for themselves or for the public, are saying, as owners, we're getting screwed, chances are, it's right. I want to spend some time on the off-shoring and on-shoring parts and the hauling out of jobs and manufacturing. The one thing I got to say to you, Cheryl, is you're thorough. You are thorough. This guy is walking it right through. Well, but these are very important. These are the themes that make up the mission of our work. And so you're carrying out our mission today in that sense. That's terrific. I want to cover those in a little greater detail, but to continue with this change in sort of the culture and power of both business and finance, there does seem to be, and I think you make a logical leap to the next, perhaps almost defining blow to the middle class. And that was what you call the new mortgage game. And there was a sense that as corporate executives were getting rich with stock options and as people were encouraged to play the market with 401Ks, et cetera, that there was, then we were crystallizing the Clinton administration and then given greater definition in the Bush administration, this notion of an ownership society. And if people didn't necessarily have stock options or even a lot of money to put in 401Ks, they could still play the game or be victims of the game, in this case with the housing because they owned their own home and they could see their wealth grow because home ownership was the key to maintaining their middle class status in a couple of ways, not only because of rising home prices, but then they could take equity out of their rising home prices to maintain their middle class. And you write, and I thought this stuck with me, the housing bubble and bust did more to devastate middle class wealth in a relatively short period of time than any other single development. I have to say, so I've tried to bring out a book that is temperate, but tough.  I could not believe it. What we talk about, we talk now, I guess jokingly about trickle down economics. And we know trickle down economics doesn't work. But what I didn't realize, and this gets to your point about the housing, I don't have an image for it. It's geyser up economics. There was a massive transfer of wealth that took place from the middle class to the elite over the last 30 years. And the most striking element of that, that most clearly, sharply defined over the shortest period of time is this transfer of wealth in the housing bubble. Roughly $6 trillion was lost by homeowners basically before the bubble burst. They went from roughly 70% ownership of the assets in the American housing stock were in the hands of the people who were technically called the homeowners and the other 30% was held by the banks. And by 2009, that figure had dropped to 40%. So homeowners had lost 30% of the value of a $20 trillion housing market, which means $6 trillion. And it was in the hands of the banks and the investors. That's an enormous erosion, not an erosion, that's an enormous Niagara waterfall of loss for average Americans. And an enormous windfall gain for the wealthy and the super elite who were operating the mortgage game until it blew up in their faces. And they still had most of the money left. What's interesting and very important to me in what helped ties together the various themes that you have very kindly and ingeniously teased me to lay out in short form when it took me 400 pages to do it in a book is that the groundwork for these things to happen in the 2000s was very carefully and very deliberately laid in the late 1970s and early 80s. And this takes us back to the Congress of 1978 because in the Congress of 1978, we had a federal law passed which for the first time overruled all the state usury laws. States set a limit on what interest you could charge on home markets. This federal law in 1978 overrode them. Why is that important? Subprime game isn't interesting to banks unless they can charge 12, 15, 18% on people whom they know are bad risk. They gotta make their money on the interest rate fast. As long as the interest rate has got a lid on it of seven or eight or 9%, that market isn't attractive.  First thing you get is adjustable rate mortgages. Before that, you didn't have adjustable rate mortgages. Second thing you get is 100% financing. Before that, you couldn't get 100% financing. Had to put down 20%. Remember the old fascination days when you had to put down 20%. And the last thing you got was what the bankers loved to call negative amortization.  What that means is you can go further into debt every month. In other words, instead of paying your mortgage down, this is what I call the upside down mortgage.  That was the whole idea. In the 90s and 2000s, we turned it upside down. The idea was, and you literally have bankers saying, this is great. This is an ATM machine. People can get money. Why do people need money? Their pay is not going up. So they wanna pay for anything, particularly if they have any catastrophes, any medical problems or some kids gotta go to study nursing or whatever. They need it, so they take it out. Who says that's a good idea? The bankers, the old fashioned bankers say that's a terrible idea. You shouldn't be doing this.  Fellow named Greenspan said, this is a great idea. This is called equity stripping. Equity stripping is a good idea. Now why would a banker like Alan Greenspan think equity stripping is a good idea? Because it was adding $750 billion of consumer spending to an economy that otherwise would have been flat. He's responsible for the growth of the economy in people's minds. Greenspan says, great.  Then I got all that purchasing power and that's driving growth. So we got all this phony growth going on while people are getting deeper in debt. That's how we went from 70% down to 40%. Year after year after year. And there are economists, good economists saying, this is crazy. This is gonna be disastrous for the country. It's gonna blow up in our faces. This is a bad idea for the families. It's gonna leave them in terrible shape. But it didn't suit the powers that be at the time. And it cost us dearly. And bubble economics and debt finance consumption based on rising housing prices was in part a response to this fundamental point that you just made, which is that wages during this period was stagnant while the basic costs for many middle-class families in terms of the middle-class squeeze, in terms of transportation, housing, healthcare were increasing. So even though we had very modest inflation, the middle class was cost, was caught in this middle-class squeeze that you described. And you relate that directly to what was happening in the real economy with jobs and wages and production and manufacturing. And so you have one chapter on offshoring where Walmart and American corporations in China and India play the main roles in that series of analysis and investigation you did. I wanna make one other point before I get to that. Listen to what we were talking about a moment ago. $750 billion that you're getting sucked out of housing. Why? Consumer demand. Why? It is consumer demand, ladies and gentlemen, that drives the American economy. So when we're being told today that we need to protect the tax rates of the super elite because they're the job creators, that's not true. The job creators are actually the middle-class consumers. And the reason we're having such a terrible time getting out of this long, slow, jobless recovery. And the reason why this is the third long, slow, jobless recovery in a row, and the reason why this long, slow, jobless recovery is longer than the last one, which is longer than the one before it, is because we're getting weaker and weaker consumer demand. And what Alan Greenspan was doing was recognizing that and pumping all this money, encouraging all this money to get pumped in from the housing market. So we had this false bubble. And as you pointed out, I mentioned that because we're having an argument right now. I don't believe this country's got a chance in hell of digging itself out of the mess we're in unless we understand the real causes of the problems we have today. And the public debate we are having today in this campaign, but not just in the campaign, but for the last two or three or four years, it's just removed from reality. We're not talking about the kinds of issues we're talking about here. And I have to say, I repeat, this isn't the book I started out to write. This is where the evidence took me. And yes, we had enormous offshoring and we lamented it, had to happen. What do we have? We had 59,000 factories or plants in America closed in the decade of the 2000s. That's a lot of people. And every one of those plants had equipment providers and had suppliers, so there were ripple effects going on for that. And the jobs were going overseas. And there are estimates, there are wonderful estimates from Rob Scott at EPI and others about how many jobs we've lost to China and so forth. And those numbers are all in there. People are somewhat familiar with that. So I told that story. It's interesting, I'd done a documentary on Walmart. Walmart was an actual driver here. I mean, I talked to business executives who told us that Walmart flat-out told them that if they wanted shelf space in Walmart stores for their products, they better move at least 20% of their production to China. Flat-out told them, okay? And that's in there. My problem is I couldn't get very many of them to agree to let me quote them on the record. But I talked to several and I got one guy who's in there, who's pretty close to saying exactly what I just said. But I was then interested, not just in that because that's a familiar story. I wondered about the knowledge economy and what happened there. You know, back in the 1890s, it was go West, young man. And so in the 1990s, it was go high tech, go knowledge economy. All right, those factory jobs are gone. We gotta be a service economy. That's the way to go. Get yourself a good education, you know. Get STEM, science, technology, engineering, mathematics. You'll be safe, okay? So I started to look at that. In this case, I took IBM as the story. The knowledge economy jobs that have been lost have been absolutely staggering. And by the way, it's going on right now. And the banks that were doing the consolidating, buying each other up during the recession and the recovery, have been shipping the jobs overseas that process the consolidation that's going on in America. So jobs are going down in America while they're doing it and they're increasing in the banking industry. And then the role of the Indian companies that have come in and offered college educated talent, but not special science and engineering talent through the H-1B visa program is another problem. We've lost hundreds of thousands, if not millions of jobs that we could have protected with not barriers, but sensible policies that didn't allow people to be in effect get an industrial subsidy. Before we get into that, because I think that's one of the most interesting and controversial parts of your book about the on-shoring of foreign talent through foreign skills, medium skills through the H-1B visa program which plays a prominent role. But in the chapter on and dealing with the hauling out of even sort of the more sophisticated parts of the manufacturing sector, you do spend a lot of time on the strategy that China employs to lure American companies in not just in terms of the attractiveness of low wages but the subsidization they provide. But then it's sort of almost a in the end it's a very difficult bargain for many corporations because they give up technology and other things. And I was, I thought you did a very good job of explaining how the short-sighted corporate interest in immediate shareholder value combined with a long-term Chinese strategy of luring American companies work together to create a very hauled-out manufacturing sector at the high end as well as the low-end Walmart end. Well, the two points here, it seems to me, are very important to make. It may be true, at least as some economists argue, that in the 80s, particularly after 1984 and the Plaza Accords and the revaluation of the Japanese yen and the Korean currency and the Taiwan currency, and the devaluing of the Chinese mainland currency that the differential in wage rates was the crucial factor in attracting not only American but other industry to China. But if you talk to industrial leaders and advisors today, that's no longer the case. And the public debate that we are having about why American corporations are still going to China is out of date, it's wrong. If you talk to them, they will acknowledge to you that the subsidies that the Chinese offer in form of sometimes free land or low-cost land, infrastructure, highways, electrical utilities, power, water, all that kind of stuff at very, very low rates, tax abatements, and other subsidies that the Chinese provide are much more important in terms of getting companies to come there. And also the pressure on them if you want to sell any aircraft Boeing to China Airways, then you better build some of the components in China or we're not gonna let you do that. So it's denial to the market. So those factors are much more important. Craig Barrett, the former CEO of Intel said, it cost me a billion dollars less to build a new chip fabrication plant, microchip fabrication plant in China than it does in the United States. And that's all those subsidies. So those are critically, terribly important. I wish I could say that three times because we continue to have this debate as though the wages are the critical factor and they're not anymore. In fact, there are some jobs coming back because Chinese wages have gotten to a certain point and American wages have deteriorated so badly that even though there still is a differential, it isn't enough to make it worthwhile to be in China without the subsidies. Right. And now I wanna go back to this other important story that you were telling, your investigation, because I think this is one thing and it's difficult for an organization like New America which is very closely associated with a lot of high tech companies where the H1B visa is sort of a, and the pushing of the pressure of saying, of providing more high skilled immigration. But your investigation led to a different conclusion about that. And that was probably the most surprising part of the book and perhaps one of the more important ones in light of it. I don't know how much you know about the H1B visa program. It's a visa program that was designed to attract high tech talent from the world. And of course we look around at American industry, there are lots of people, particularly in the high tech industry who've come from Russia or come from Asia or come from elsewhere in the world, Hungary, whatever, at the top of Google and Intel and lots of other companies. So it's understandable that people from that particular sector of our economy are passionate advocates of an open door policy. And there were, in the late 80s and around 1990 when the H1B program was first passed, there were real serious bottlenecks in the American immigration process. It was very difficult to get a green card. It was very slow. And people were arguing that some of the brightest people in the world were coming to American universities and getting graduate degrees and getting PhDs and they couldn't get visas, I mean they couldn't get green cards, they couldn't become American citizens and we were losing that talent. So we had to do something about it. So the H1B program was initially designed as a stop-get program to try to tap that stream of talent. Now what does that mean, that stream of talent? Remember we were talking about people with graduate degrees and PhD degrees, but the H1B program didn't say that. When it got set up it said all you had to do was have a bachelor's degree. We're now a little longer talking about a pool of talent which is necessary to the cream of the world. This is not necessarily the world's best and brightest. Had it been a program that only allowed at least masters or preferably PhD, then you might have some reason for it. The number started small, the numbers got larger. And the argument was that there simply weren't enough Americans studying STEM skills, science, technology, engineering and mathematics. It wasn't adequate. And therefore we had to have this pool and the pool gradually had to be expanded. And people get visas for three years. So if you're allowed to, they start out with 65,000 they eventually got up to 185,000 a year. So you multiply that by three and that means you can totally have 540,000 or something like that. And then they're renewable for another three years so that gets multiplied by six. So you're starting to talk about a million people in very good jobs. And the argument was and Bill Gates makes it and every time Bill Gates goes up to Capitol Hill everybody goes salam and said you must be right Mr. Gates. And we need those million people. Well, if some other people went and took a look at this at UC Berkeley, at Rand, at Lehigh. And they went and studied the flow of American students out of engineering, science and technology. And they said there's an adequate supply. There's no shortage in America here. It's not to say the cream of the crop shouldn't be attracted no matter what. But for college BA, BS graduates, we got plenty of them at that level. There's no reason in the world to have this program. And then they took another look and they actually said that these examinations came after the H1B program had been in place for quite a while. And they suggested that it was the H1B program that was actually causing the quote shortage that the high tech companies were reporting because they were hiring foreigners as such low salaries that it drove down the salaries in the high tech industries for Americans. And the Americans said, well, I'd rather go write derivatives for the banks and make 10 times as much money as I could make making for Microsoft or Intel. So what the analysis was was you're actually diverting the available pool of American talent by the way you're behaving. And the corporations are saying, well, we gotta do that because we can't get the talent. So we're in a chicken and egg thing, but I think it's pretty good evidence that we certainly don't need a million foreign workers occupying those jobs. Right, and one thing that I forgot that your book reminded me that is that when he was labor secretary, Bob Ryash actually brought a number of cases against high tech companies who were laying off American workers who were paid at a higher wage and throwing them with... Well, the law was very badly written. All the speeches on the floor said we'll protect American jobs, we won't let companies hire foreigners at lower rates, lower wages than American wages and so forth, but the protections written in the law were totally inadequate and people have been getting away with absolute murder and the Labor Department has been reporting it. And if there's one thing America does a bad job doing, it's enforcing labor standards on things like cost, prices, wages, and determining what the prevailing wage rate is and all that kind of stuff. And there are zillion ways to get around it. And what's interesting is you got a guy like Chuck Grassley joining forces with a guy like Dick Durbin. Chuck Grassley, the Iowa Republican, Maverick, chairman of the Senate Finance Committee under the Republicans when they're in the majority and the minority ranking Republican when the Democrats are in. And Dick Durbin, the deputy leader of the Democrats in the Senate, two guys of rather different ideological and political persuasion from very different kinds of economies Illinois and Iowa and they agree and they make very strong statements about what a fraud this thing is. In fact, even Milton Friedman before he died said this was a bogus corporate subsidy and there was absolutely no excuse for this. And the notion that Microsoft and Intel needed a special foreign farm system for them to play major league high tech ball was nonsense. I mean, this is an outrageous ripoff of qualified Americans who need those jobs. We should move to the second part of our program and involve the audience. Do we have to turn them out now? But I just wanted to, before that, I wanted to make sure that I acknowledged a couple other major themes of your book. And one was what you called the bathtub conservatism radical right, which obviously was referring to the reference of starving or drowning government in the bathtub. Well, you gotta flesh that one out. This is Grover Norquist. Grover Norquist who wants to cut the government in half and then when he gets it cut in half then he wants to cut it in half again. And then somebody asked him, I guess, Mar-a-Lieson, an NPR asked him, I said, well, you against government?  He says, no, I just want to get it small enough so I can put it in the bathtub and drown it. That's what I call bathtub conservatism. Right, and then you have the high cost of imperial overstretch in particular in terms of the enormous amount of money and treasure we expended in Afghanistan, have expended in Afghanistan in Iraq on wars of occupation. And finally, the collapse of the middle in political terms and where we no longer you'd set up two litmus tests of whether you can have a Congress that supports a minimum wage and a strong estate tax and both of those are in danger. And then your book does lay out a 10-step domestic Marshall plan, which I'm going to let the audience sort of, I think they will ask questions, will allow you to talk about that. But one of the things we should end with and with the audience is your definition, you call one of the points you make in terms of the 10 points. Is to restore the political middle. And I'm just struck by all the ideas that you lay out in your other nine points. I absolutely agree with them, but that's not what passes as the center or middle of American politics today, which is increasingly defined by Boll Simpson and educating more STEM undergraduates. So hopefully some of those issues will come up and we'll have time to get into them during the audience. But I do want to open it up now. Yes. And please identify yourself and there's a microphone. And please know that this is being recorded. It's actually being live streamed to another 5,000 to 10,000 people. So when you're speaking, you're not only speaking to us, but you're speaking to a large audience out there. So just to give you an ample warning. David Rusk, Building One America. For 30 years, at least, the conservative mantra has been Americans are over text. Americans over text, gotta slash taxes, gotta slash taxes. The fact is that if you add up all federal level, state level, local government level taxes, tax revenues in this country and compare it to gross domestic product, we pay 24.8% of our total GDP in taxes. That is the third lowest tax rate among the 34 member nations of the Organization of Economic Cooperation and Development. This is not some secret. It's readily available. Why have liberals and liberal institutions allowed conservatives to get away with this absolute fraud in terms of the reigning philosophy about taxation? Well, I don't know that I want to take on the responsibility of defending the liberals.  I ask the same question. I have the same numbers. Only Chile and Mexico are below us in terms of tax rates. So there's no question. Not only that, the level of American taxes today, the tax take of the federal government today is the lowest in 60 years. And if you listen to the political rhetoric, you'd think it was the highest in 60 years. And not only that, but we had much better growth rates under Eisenhower when the maximum tax rate, marginal rate, was 92% and in Kennedy when it was 77%, than we did under Bush when it was 28%. So it's just a whole lot of nonsense. The problem is it sounds so good. If I can pay less taxes, then I've got more money and then I can invest it and that'll help things grow. Intuitively, it rings true. And the notion that you can have high growth with high taxes seems counterintuitive. It seems like pushing water uphill. We just have to keep talking to people about what the historical evidence says. And I think one of the reasons why lots of liberal politicians run away from that is it's such a tough argument to make. But there's another problem. It's also hooked to this notion of whether or not the government has a positive role to play in the economy and in people's lives. Cornell University, and I cite this in the book, did a poll not too long ago, asking people how many of them benefited from federal programs and they answered. And I think my recollection is something like 26 or 27% of the people they polled said they were benefiting from some federal program. The other 73% said no. Then they went and questioned people in detail about their lives. And it turned out that 92% were actually benefiting from some federal program and 54% were benefiting from two or more programs. So the information gap on taxes and on government is enormous and it's very difficult to have an intelligent discussion about what to do with policy when people are so out of tune with the facts about their lives. I mean, it's like the famous guy in the middle of the Obamacare debate who said, take the government's hand, keep the government's hands off my Medicare. I mean, a few people laugh at that but a whole lot of other people give you a blank stare and say, well, what's wrong with that? You know, yeah, you gotta remember. So we've got a serious information problem. I'm doing the best I can, but at 400 pages I'm not doing very well. This has been terrific. I'm Mitzi Wertheim. I know. I have this crazy recollection. It's probably 50 years old that the federal government wasn't allowed to sort of talk about what it did because it was perceived as propaganda. Am I wrong about that? I mean- No, USAA, the US Information Agency, which is a propaganda agency, was not allowed to operate in the United States because this job was propaganda. That's absolutely correct under Edward R. Murrow. They were banned by law from doing that but I didn't say that. How could anyone imagine that the politicians in Washington would pass a law that they couldn't talk about what they were doing? They don't just want to select which they want to talk about. So how do we tell a story so the general public gets it? You do it beautifully with words. The complexity of this is so enormous. I think it has to be done visually. I've been working at that too. Good, when does it come out? For 20 years. No, for 20 years I've been making documentaries about some of these subjects. So when's this coming out in a documentary? Funding. It's called David Fanley. Thank you. Yes, gentleman back. Thank you very much for the informative remarks. My name is Abraham Avidor, retired Foreign Service. To what extent the aggressive monetary stimulus announced by the Fed and other central bankers is going to help the middle class? And in general, what do you expect the middle class? What will happen to the middle class going forward? I couldn't hear the end of your question. Okay, the first question is. I got the first part. The second one is, going forward, what do you expect will happen to the middle class? Okay, I'm glad you asked that last question. I want to be sure I got it. I don't know about the Fed. I'm not a real good monitorist. I read other people and they say if the Fed does more of this monetary easing, it'll help, but this is the third round and it's helped, but not a hell of a lot. So my hunch is it's about the same. But I don't know, okay? Now what's gonna happen to middle class? One subject that this very thorough and excellent questioner did not get into, which was what do I recommend? And the eight points that I recommend in the economic area are not surprising. I have to tell you, I feel a little awkward as a reporter. I'm not a policy guy, but my editor said you can't take people this far out of the limb and not give them something to hang onto. So I agreed to write that. But what I did say, and I think I've got some decent ideas from other people about restoring the political middle. What I said was, if you go back, and we didn't spend a lot of time covering this, if you go back and you look at the period of middle class prosperity, particularly in the 50s, 60s, and 70s, the 60s and 70s were a period of middle class power as I pointed out before. Those two things go hand in hand. They're not disconnected. Let me repeat, middle class power and middle class prosperity go hand in hand. So if the middle class wants to regain its prosperity, it's got to start to exercise its political power. Now, I gotta tell you, $25 donations are not gonna do it. They're not gonna do it. And election is not gonna do it, because what happened? After 2008, he had a Democratic majority in the House, Democratic majority in the Senate, and he had a Democratic president. And he actually got a remarkable amount done given the political difficulties of getting anything through Congress. But they sure as heck couldn't run rampant because they were up against the total opposition. The public totally disengaged, right? We thought we elect this guy, he promised change, that's it. We pushed the button. It's up to him to run the machine. I'm sorry, that is not how democracies work. If you wanna go back to the heyday of the middle class, there were people marching in the streets because they found the state of the environment intolerable. They were outraged and they acted on their outrage. There were people who said, Ralph Nader said, General Motors is building cars that are defective and causing crashes. We gotta fix it. People said there's not truth in labeling. You walk into a grocery store, any other store today, and you can find all kinds of things about the content of those products. That's the result of the consumer movement back in the 1970s. Same thing, women's movement, same thing, peace movement. That was a peace movement that got us out of war. What happened? Iraq, Afghanistan, nobody had to pay any higher taxes. Very smart on the part of George W. Bush. So people weren't really unhappy in their own pocket books, their own lives. We don't have a draft anymore.  We pay somebody else to do it. So we don't have to pay, we didn't pay for it, by the way, we borrowed the money from China. So we keep all the problems away and we don't get disturbed. My experience talking to people is there's a lot of anger in this country. Anger is a useful thing politically, but we don't know what to do with our anger. Blacks in Birmingham, Rosa Parks said, I'm not going to the back of the bus. Martin Luther King in Birmingham said, we wanna drink at those water fountains, we wanna eat at those lunch counters and we wanna ride on those buses and we're gonna march until you let us do it. I'm telling you, I don't believe the situation is gonna change. Missy, this is a simple answer. I don't believe the situation is gonna change until middle class people say, hey, we're gonna set up tents on the mall and we're not going away until Congress forces the banks that got $700 billion worth of bailouts, bail out the 20 million families who are now sitting with bubble era high interest mortgages, which they're paying off and the banks are profiting from. But are denying them consumer spending that they could be spending somewhere else or jobs in the infrastructure or fighting the H1B problem. There is issue after issue after issue out there and Americans have become passive. I have a friend named Ernie Cortez and if I'm passionate about this, you're right. I'm passionate about it. I think it's outrageous and we have ourselves to blame for a lot of this. And it's the blame on the liberals, blame on the bankers, blame on Greenspan, blame on the guys that ran the power shift but we're partly to blame too because we're not doing anything about it. Ernie Cortez, great organizer among Latinos in Texas, Southern California, across the Southwest, he said something to me profound. Lord Acton said, power corrupts, absolute power corrupts absolutely. The Cortez amendment to that is powerlessness corrupts. Powerlessness corrupts the very core of our democracy. When we don't believe we can have an impact on our government, our democracy is dying, it's atrophying and that's partly our fault. We can do something about it. Everybody will say to me, as soon as I say that, we're gonna get the leader.  Who knew of Martin Luther King before he came out of the woods? Who knew the people who ran the mob against the war? Who knew the people who ran the environmental movement? If we stand around waiting for another Lincoln to solve our problems, it's not gonna happen. I'm sorry, and everybody, when I say this to people, they look at me like you are nuts. Well, let me tell you, if you think it's gonna happen in Washington, regardless of who wins the election, without public pressure, I think you're nuts. My name is Catron Anna Grime at George Mason University. I appreciate what you just said. What is the link or the difference between what you just said, between the movements and Occupy? Well, I'll tell you, Occupy did something very important. Occupy changed the dialogue in this country. If you say the 1% and the 99% today, nobody needs an explanation for what they're talking about. That is what Occupy did. Occupy raised a very salient issue that resonated with the rest of the country. But it stopped there. It stopped there. If you asked Martin Luther King what he wanted, he said, drink from the drink you found, sit at the lunch counters, equal jobs for blacks as for whites, ride on the buses, stay in the hotels. You knew what his goals were. Do you know what Occupy's goals were? I don't. I read every story I could find about it. They very studiously avoided stating a short list of goals. Do you know who the leaders were? They were leaders. They named a camel or a monkey in Denver, I mean, that's not a serious movement. That's not a serious movement. I mean, I think they did something very important. I don't wanna belittle it, but I'm talking about people sitting down and saying what are the things that really matter? What are the things that are gonna make a difference here? What are the things that really outrage us and that are absolutely bald-faced in your face unfair? I think it's bald-faced unfair that banks should take that taxpayer bailout and then turn around and thumb their noses at 20 million homeowners and foreclose, and they foreclosed on so many people falsely that they had to agree to pay $25 billion in penalties to the state's attorney general, but they had to be pushed to that.  I'm sorry. I sound like an agitator. If I do, I'm agitated. Let's put it that way. Let me create a cue so that you don't have to keep raising your hand. So I had the gentleman in the glasses right behind you, then the gentleman in front of you, and then our good friend, Pat Malloy. I'll be faster. And then there's one in the back who had his hand up, I believe. So we got four in the queue, five in the queue, and then we'll close for lunch and book signing. I bet I asked quickly, Ernie Prigg Manufacturers Alliance about the outsourcing to China and the various cost advantages over there versus us and how serious it is, but there is the exchange rate which affects across the board. And if they have an exchange rate, 20, 30 or whatever percent, all those advantages get that much larger. Their trade surplus in manufacturers, global going up 24% the first half of this year, 23%, 27%, it's doubled in three years to 800 billion. And we're the biggest on the other end, which is it's a bottom line in jobs and production. So how important is manipulation as the IMF term, the undervalued exchange rate, and only one of the comment is, if they ever do let their rate come up toward a market rate, who gets squeezed the hardest in China? A lot of American manufacturers there will. Well, you know, in order to move this along, let me just say amen. Okay. I don't believe it, but you're gonna find it. You're gonna find that in my book. I mean, in my 10 steps, that's one of the 10 steps. Okay. This gentleman. You're number four. This guy's an agitator too, I wanna warn you. Thank you. Arlie Schaert, former Time and Newsweek correspondent and editor and then got very involved in the public interest movement. Rick, I've bought your book already, but I'm not sure I'm gonna read it because I'm so angry already that I think I'll blow a blood vessel if I get all this other stuff. There's some good stories in it. There's some fun, there's some nice people in it. We'll make use of them, I know that, but my question is that one of your, you've hit the nail on the head in terms of the fact that broadly, the middle class has to organize some way. There has to be a movement that takes on some of these destructive interests, but my frustration is that there are a lot of organizations out there in what I would call the public interest movement who are trying to address some of the various problems that are going on right now, but I don't see that the media is educated. The key obviously is educating the American people. People have gotta be educated about the thousands of constructive things in their lives that are the result of some level of government and they've gotta be educated about how these things have gone on. And I don't see that happening in the media. You have to get onto a particular website from a particular group or something if you're really gonna find out what's happening. So I'd like to get your take on what the role that you think the media is playing in what I regard as the general ignorance of the public today about what's going on. I'm embarrassed to say that I agree with you. I think the role the media has played is not helpful. I think the sounds like one generation blaming another generation, but I think there is a real generational difference in journalism and it's happened over the last 20 years. And there really is a notion in journalism today that if you ask the one side should the tax rate go up and would that help the economy? And they say yes and we need more federal income and we need to help people who need help and we need tax revenues to do it. And they say yes and you go to the other side and they say absolutely no cut the tax raises that's gonna grow. And the journalist thinks the job is done. I mean, I just, our job, you made a very interesting and to me very flattering comment at the beginning, Cheryl and I'm grateful to you for saying this and that is that you thought this was a temperate book and it's thought to be fair.  And it is not adequate to call balls and strikes to ask one side this and the other side that. People can have opinions, people have policy disagreement, that's fine. But there are plenty of facts out there and it's our responsibility to go get them. And I mean, that's what's in that book that you're not gonna read. You know, no, I'm serious. I mean, I worked very hard at that and I think that we've lost that ethic and not everybody, of course. There's some really one, we wouldn't even know about the black prisons if it hadn't been for great reporting in the Washington Post. We wouldn't know about the NSA eavesdropping if it hadn't been for great reporting in the New York Times. And we are following it. There was a census report that came out the other day that said the income disparity once again has exploded. So there is stuff coming out, it's unfair. But there's not anywhere near as much enterprise reporting and effort to put things in context and to stay in there. One of the other things that's terrible, in my opinion, is that if we say something that's right and intelligent and correct, we say it once, we say we said it. The people who are saying the lies say them again and again and again and we cover them a thousand times. But we said once that that wasn't true. So we don't need to say it again. I'm sorry. In my opinion, there should be that paragraph after every time somebody says cut the tax rate. Here's the record. Judge it for yourself, but here's the record. Now we've fallen down on the job. Thank you, I got your book yesterday and I'm really anxious to read it. I'm Pat Malloy, I teach trade law at Catholic University Law School, but I was on the US-China commission for 10 years and I have a sense. I read a book or an article by Warren Buffett entitled, the trade deficit is gonna sell the country out from undress. He wrote that in Fortune magazine in November 2002. As you know, we've run $9 trillion worth of trade deficits during the same period you're talking about over the last 30 years. That means that we have to import things we used to make. Now the thing, I don't know whether you got this in your book, but what's happening now is Chinese state-owned enterprises are beginning to buy real assets in this country. These are government-controlled entities controlled by the Communist Party. We have not traditionally wanted our own government to own chunks of our economy. On the road we're on now running these massive trade deficits, we're gonna have foreign governments owning chunks of our economy. Have you gotten into that or is that it? No, I haven't, Pat, I got another book right tomorrow. Now I, I mean, I got a lot in this book, I don't have that, and you're right, it's a serious problem. Yeah, I think we need to set a national goal to balance our trade by the end of the decade, but I don't know whether, see, simple goals like that can get the American people activated to move ahead on these issues. And I must say, I'm, I didn't have time to go into Rick's 10-step program, but it's a very solid, important program that is understandable to both the broader public as well as the expert audience, and it could be a guiding platform for a middle-class movement that is likely to arise. I just want to make sure everybody knows I'm not running for office. Right, so we have two more, this gentleman with the bow tie, and then this young lady up front. My name is David Atchison. Rick, I knew Lewis Powell, I regarded him as a friendly, mild-mannered lawyer, not very interested in the issues that his memorandum speaks to. My question is, did he write that memo for a client? And so who was it? I assume he was not yet on the court. He was not yet on the court. This was two months before Nixon named him to the court. He didn't, of course, join the court right away. He wrote it for a client. His client was the U.S. Chamber of Commerce, but he negotiated the need for the writing of the memo. It was he, he really initiated it. And I forget the name of the guy who was the chairman of the Education Committee of the Chamber of Commerce at that time, was the guy who actually arranged for Powell to do it and then to disseminate it. But Powell was the originator not only of the concept, but of the need for the, for the called arms for the corporate manifesto. Yeah, I mean, that's one reason why I was so surprised. I mean, my picture of him is this mild manner and tied-water drawl and courtly gentleman. Yes, please. My name is Nicole Ross, a student at university, no, American university. And you mentioned several times that this is not the book you intended to write. Could you please tell me more about that process of how you stumbled upon this and when you became really angry? Well, what I started to try to write was a book that explained what happened to the middle class. And when I, when I got into the reporting, I discovered it didn't just happen, it was done. And so the narrative changed from a sort of a passive, this is the force of history kind of story into a story in which I saw people very deliberately changing power, changing in Washington, changing the power situation. And in terms of inside industry, changing their priorities, changing their values, changing their notion of what kind of capitalism we should have. And I was talking earlier about stakeholder capitalism and now shareholder capitalism. So I mean, there was a change in the mindset. And that's what led me to say, the dream got stolen, it didn't just evaporate or slip through our fingers. I mean, that's what I was trying, that's the analogy that I was trying to draw. Is that correct? No, what happened? Well, my observation was at the beginning was simply people are in bad shape. There was plenty of evidence of that in the newspapers. And I've been doing reporting on front line and other PBS documentaries on job offshoring, on retirement, on surviving the bottom line on a number of economic and political issues. So I had pretty good experience that told me things were not good, but even just personal observations. So then I began to dig into how did it get this way?  And then how did that go? And when did the legislation get passed that set that up? I mean, as I said before, all the legislation and policy changes that were needed for the kind of housing bubble that we had, that was all passed in the seventies or eighties. I didn't know that. I had to go back and discover it. This concludes the second part of our program. We're now going to, there's lunch out there. I'm not sure exactly how it works, but I think you're all very intelligent people. We'll figure it out. Hedrick has agreed to stay around and partake in lunch and book signing and additional conversation. But let me formally thank Hedrick for a very stimulating period.