Requiem for the American Dream

1

During the great depression,

which I'm old enough

to remember, there was...

And most of my family

were unemployed working class...

There wasn't... it was bad,

much worse

subjectively than today.

But there was an expectation

that things were going to get

better.

There was a real sense

of hopefulness.

There isn't today.

Inequality is really

unprecedented.

If you look at total inequality,

it's like the worst periods

of American history.

But if you refine it more closely,

the inequality comes from

the extreme wealth in a tiny

sector of the population,

a fraction of one percent.

There were periods like

the Gilded Age, in the '20s (Gilded Age,

the time between the Civil War and World War I)

and the roaring '90s and so on,

when a situation developed

rather similar to this.

Now, this period's extreme...

Because if you look

at the wealth distribution,

the inequality mostly

comes from super wealth.

Literally, the top

1/10th of a percent

are just super wealthy.

Not only is it extremely

unjust in itself...

Inequality has highly negative

consequences on the society

as a whole...

Because the very fact

of inequality has a corrosive,

harmful effect on democracy.

You open by talking about

the American dream.

Part of the American dream

is class mobility.

You're born poor, you own a car, you get rich.

It was possible for a worker to get a decent

job, buy a home...

Get a car, have his

children go to school.

It's all collapsed.

Imagine yourself in an outside

position, looking from Mars.

What do you see?

In the United States,

there are professed

values like democracy.

In a democracy, public opinion

is going to have some influence on policy.

And then, the government

carries out actions determined

by the population.

That's what democracy means.

It's important to understand

that privileged and powerful

sectors

have never liked democracy

and for very good reasons.

Democracy puts power

into the hands of

the general population

and takes it away from them.

It's kind of a principle

of concentration of wealth

and power.

Concentration of wealth

yields concentration of power...

Particularly so as the cost

of elections skyrockets,

which kind of forces

the political parties into the

pockets of major corporations.

And this political power quickly

translates into legislation

that increases

the concentration of wealth.

So fiscal policy like tax policy...

Deregulation...

Rules of corporate

governance and a whole

variety of measures...

Political measures, designed

to increase the concentration

of wealth and power,

which, in turn,

yields more political power

to do the same thing.

And that's what

we've been seeing.

So we have this kind of

vicious cycle in progress.

You know, actually,

it is so traditional that it was

described by Adam Smith in 1776.

You read the famous

"wealth of nations."

He says in England,

the principal architects

of policy

are the people

who own the society.

In his day, merchants

and manufacturers.

And they make sure

that their own interests

are very well cared for,

however grievous

the impact on the people

of England or others.

Now, it's not merchants

and manufacturers,

it's financial institutions

and multinational corporations.

The people who Adam Smith

called the "masters of mankind,"

and they're following to the vile

Maxim, "all for ourselves

and nothing for anyone else."

They're just going to pursue

policies that benefit them

and harm everyone else.

And in the absence of a general

popular reaction, that's pretty

much what you'd expect.

Right through American history,

there's been an ongoing clash...

Between pressure for more

freedom and democracy coming

from below,

and efforts at elite control

and domination coming from

above.

It goes back to

the founding of the country.

James Madison, the main framer,

who was as much of a believer

in democracy as anybody

in the world in that day,

nevertheless felt that

the United States system

should be designed,

and indeed with his

initiative was designed,

so that power should be

in the hands of the wealthy...

Because the wealthy

are the more responsible

set of men.

And, therefore,

the structure of the formal

constitutional system

placed most power

in the hands of the senate.

Remember, the senate was

not elected in those days.

It was selected

from the wealthy.

Men, as Madison put it,

"had sympathy for property

owners and their rights."

If you read the debates

at the constitutional

convention...

Madison said, "the major concern

of the society has to be

to protect the minority

of the opulent against

the majority."

And he had arguments.

Suppose everyone

had a vote freely.

He said, "well, the majority

of the poor would get together

and they would organize

to take away the property

of the rich."

And, he said, "that would obviously be unjust,

so you can't have that."

So, therefore the constitutional

system has to be set up

to prevent democracy.

It's of some interest that this

debate has a hoary tradition.

Goes back to the first major

book on political systems,

Aristotle's "Politics."

He says, "of all of them,

the best is democracy,"

but then he points out

exactly the flaw that

Madison pointed out.

If Athens were a democracy

for free men,

the poor would get together

and take away the property

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