He saw where they had gone astray and that helped inform his proposals at the Constitutional Convention so classical sources were important to him. But practical sources were important to him as well. He not only wrote what had happened to pass republics, he wrote what was wrong with the current run one and that he had learned from stating serving in State Government and the continental congress. Its a nice pairing. He not only undertook this philosophical exploration. He undertook an understanding of the art of politics. He was a genius at both ends so his reading was part of that reading sources like montague but also his practical experience was crucial to his successes. Ladies and gentlemen lets thank the cheneys for this great presentation. [applause] i want to thank them. s been my first reaction was surprise because i had worked. I coached the clippers in the year 2000. He invited me to his daughters wedding. I had no idea exactly what was going on but i also because of my association i know what he was complaining about so i was confused not knowing exactly which set of facts mr. Sterling stood behind. And then when his words came out it was so obvious and shocking and just discussing all of those things wrapped in one. Economy must Thomas Piketty is the author of capitalism in the 21st century. Currently number ten on the New York Times nonfiction bestseller list. He took discussion on the income any quality with senator Elizabeth Warren at an event hosted by the Huffington Post. This is just under an hour. Welcome to a special edition of huff post live which is the birthplace of the actual tea party. The real one. [laughter] [applause] i will be your host. Im ryan grim of the Huffington Post with two people that have searched the top of amazon New York Times bestseller list. The first one, l. 21st century by professor Thomas Piketty. [applause] and senator Elizabeth Warren a fighting chance. [applause] senator warrens book makes the case that the system is rigged on behalf of the rich and against the middle class. [inaudible] fortunately i wont be doing much of the talking. These two are going to be doing it. So, professor pikettys book makes the same case except he makes the empirical point of this has been happening for 250 or more years. So, senator warren come i want to start with you. Tell us what you have made. I get to describe your book in front of you. I like it. [laughter] i saw this as a book that had a pretty straightforward pieces. The rich get richer and everybody else gets to poor. That kind of shows with this book is about and has drawn the data together to show how this has happened across countries, across time. And i have to say the first thing i thought when i read this book or one of the first things is i thought george bush senior was right. Remember when he called trickledown economics do voodoo economics . He assembled a lot of data to show that while does not trickledown, it trickles up from everyone else to those that are rich and he demonstrates that it keeps happening as i said over time and country. Does that sound about right . [inaudible] in the strategic defense and also between the countries and within countries as everyone has said so the institutions in the market can make a difference. Right now the real level of the minimum wage is less than quite peculiar in the country that has a lower wage. It was invented in this country. The Education Institution can produce different outcomes. Going to the point whether or not this is an extra bold whether it has to be this way, these are two points that are made simultaneously. It started with a question on trickledown economics because i think that the math behind trickledown economics is if we let the rich maintain more of their wealth, somehow that is going to flow down to everyone else and it will make us all healthier. The first part of the message is this is simply not true. It doesnt work that way. It is not like gravity that if we hold it here it will trickle down over time. But the second point is also powerfully true. What happens in the distribution of wealth over time tends importantly on the government, on the policies that any government follows that can either make this problem a bigger problem if we can get more in the economy or that we make it a worse problem and exacerbate. A lot of questions are about this particular issue on the taxation. As a matter of fact in georgia we want to know how do you propose to convince more people that taxing themselves at a fair rate is in their own interest as well as ours . To take the decision but everybody has to agree. They have to be however we are not exactly on one vote here anymore. They create to make it even more but at the same time, we are on the Information Technologies in the formations in the political motivations and so i think, you know, and this is what people seem to do when theyve read my book. There is time for [inaudible] the question about how you persuade people that they should pay more taxes if they already have a great deal. Part of this goes to the integrity of the tax system itself. A world in which anyone in moderate means looks left and right and says wait a minute. He gets a tax loophole, he gets to move his property overseas and doesnt get taxed. He gets a break for moving jobs overseas. That over the air to get a special deal. The cost of that is not just a cost in dollars. If the cost of integrity in the system. When people feel like we are not all in this together and we are not paying a fair share of our income or our wealth, then i think what you get is its sort of all comes unraveled. Everyone moves towards i will pay the least because he is paying the least. Hes cheating so that means there is no reason for me to go ahead and be scrupulous about what i paid. So partly this is about your ad a moment in American History the tax system has become so riddled with loopholes you talk to Small Business owners Small Business owners pay on taxes because the loopholes arent as available to them that you look at fortune 500 companies that are profitable and end up paying zero in taxes the cost is the integrity of the system and the sense that we are all in this together and so the first place for me that we have to start this is we have to clean up the tax system he got. That has to be the first step. [applause] speaking of integrity and the power of the big money youve recently been on the receiving end of the power. So a lot of people are familiar with this row and the Financial Times. You have rebounded this week. Basically its turned out the Financial Times didnt understand how to do that you creation. So even after that was pointed out they follow it up and i want to read you the followup and get your reaction to it. Further debate on many of the items is difficult because the professor accepts that he makes still undocumented adjustments to the data and of the forces appeared to be secondary to the professors pry your expectations of what the data needs to show. Yonder that being in an incredibly selfaware statement how would you respond and do you plan to respond or do you think this is over . What is sent ove they sent oa request for more transparency. My book is not the problem. It was the fact that [inaudible] you take the rankings that had been writing three times faster and does the Financial Times has a different ranking so they should step out . With respect to this matter there is a lack of transparency and this is the best thing right now. Its attached to globalization and can make the interest of everybody to be competitive on the times that everybody gets a fair share in the organization and so whoever has a treaty that is one cost of the gdp and we cannot just go for more transparency. More regulation and we need to make sure that the multinationals pay their fair share. You cannot just make huge profits in the free trad freetd pay no taxes anywhere. You have to have some balance so that everybody makes an effort. The dynamics try to produce more. In fact the main reason with a form of taxation with an exchange of information and the financial aspect is so that we will no. And its sad that today all that we can do is to learn more information it would be better if you could read the ims factor and what is going on with different groups. Without this the democratic transparency and accountability, we cannot address our policies and we cannot have a peaceful conversation about these issues. It sounds to me like you have explained a lot of people that wont want to see more data about the inequality thats out there. Youre right. Democratic institutions are stronger. Youve been on the receiving end your self. Any advice for the professor . Get back. [laughter] back to the inequality you mentioned that it was the shock of the two world wars douglas and any quality and much of the 20th century. Century. Im wondering if the reverse might actually be true. In other words, was it any coincidence that on the e. Of world war i we have historic levels of inequality . If you look at the situation in ukraine now you have heidi any quality and oligarchs battling for the resources. You demonstrate the connection and the inequality. Does it go the other way and can there be a connection . I think that sometimes if you do not manage to address it in a peaceful way is easy to blame others. So the National Response is sometimes the First Response so we start to blame Foreign Workers or neighbors. So in france and europe we could see that a week ago and people usually dont know how to serve domestic ecology problems for the European Unions are they doing germany and china. There is always someone to blame. And yes, sometimes it can be aggravated. Now let me say there are many that have played in by changing some of the distribution but there are more peaceful ways. And in fact through the rise of the free expectations practically the response in the role and the response of the democratic process themselves and particularly it was invented in the 1920s and 30s not just in world war i which was much less than in europe and still the new institutions were invented by the u. S. Democracy institutions. So there is a lot to learn. We shouldnt just be me that they were starting years ago. They have been with us forever and there is a lot to learn on the perspective. As most of you probably know it is an extension of the property tax to include the attacks on the other properties and that has been called utopian by some people, but if the income tax was called utopian 100 plus years ago, could you talk about the iq test experience for the income tax . Its partly about the notion that we were appalled about the idea of the income tax but we began to tell a personal story. And as i listened to them talk about this, think about every time how its the story of our understanding of ourselves and why we are in these economic circumstances. So you talk about one of them ie many cases of extreme inequality, people blaming the political leaders by saying its their fault. Its that group or that other country. There is a question of how we can describe it any different time the pressures on most people, on the economy. If you feel like this is a work hard play by the rules economy where there are some ups and downs but mostly, if i work hard, my family is going to do okay. And if i worked really hard my kids are going to have a chance to do a little bit better than that and they are chance to veto kids will have a chance to do better than that. That sets the stage if you believe that for everybody to participate in an economy you have a lot of stability and production and hard work and you get a lot of investment in the future if you build a strong and robust future. At that moment the income tax is part of how the finance of the things we do together and we do it progressively partly because people have more, partly because they have been rewarded by what we have done together. And we all have this sense of shared responsibility and shared investment in the outcome. When things start to break apart, its when you have people begin to say they diminish davis that isnt how. Those that are rich have managed to write the rules so they get more and more and they get to break syntax is. So the regulations told in their favor so they have Better Business opportunities, so they have a better ability to earn ban everyone else thats out there working and when that starts to happen, when that starts to happen, then what we get is we get a country that is headed in the wrong direction. When people start to feel like its not about how hard i work but i think the risks that i would work hard and end up with nothing is when the pieces start to break apart. And so, the way that i see this is that we have a right to talk about the taxes and where the tax is should be appropriately placed. Its fundamentally this question about whether or not the games are rigged. Right now the game in america is rated so that those at the top keep Getting Better and better. Everyone is increasing economic strength and my view is that is why that is happening. Those at the top te and hired a lobbyist and the lawyers. Now under Citizens United effects the electoral system so powerfully that they get a set of rules written over and over year by year. The rules are Getting Better for those that are sliced up atop. That is the major that we see from the great inequality. There is a very particular way that its rigged. Now is it similar in other countries or does inequality grow in different ways . In other words is th that how dynamic the same but the particular way that it plays out in Different Countries different . Some countries have been able to read into the institutions into the other. In the tax system theyve been able to keep the investment and skills so that the very last part says [inaudible] the institution regarding the financing of the Political Parties and political life and its definitely one of the differences between the countries. In the legal constitutions it can make a huge difference in terms of the inequality and the dynamics. Of notice he goes to finance the opportunity. Its about education. Its about making sure that everybody had a good education so that you have got talented kids that may not have been born into wealthy families that would still have opportunities. I just expand that saying its about investment and infrastructure. The business wants to start it needs power to plug in and to be able to get the goods to market. Making those kinds of investment are the kind of investments for which everyone feels like i got a piece of this. I got an opportunity. I work hard and play by the rules. Im going to succeed. But if we look at Something Like the iranian budget. Ryan budget look at the basic premise behind the ryan budget. Budget. Presumes lots of loopholes and cut taxes to those at the top. And how do they plan to pay for it . By cutting the investments that create opportunity. Cut the investments in education and infrastructure and research, the things that help to build a future. That drives us towards more inequality. But more critically it undercuts the basic premise of this country of work hard and play by the rules. You have a stake in the outcome. Not to drag this in a pessimistic direction [laughter] another move reader asks how well the costs and consequences of Climate Change interact with economic inequality . You talk about Climate Change that shows we have much more difficult problems to solve than just exchanging. So if we are afraid, we sit down and see they are too strong for us then what are we going to do . So i think we have to solve the problems and the lack of transparency right away so that we can focus on the real issue and part of the issue is the investment in the Energy Sources and do something serious about the Climate Change. Its very sad that we are losing so much time in a way that we issue here just making sure that i am from a country where the president was unaware and they started saying he was assured that the french government would never give information as a what is this world where we are losing time and are we going to be about to get this formation and at the end of the day the state department puts the sanctions that have made a difference so the good news is that you can make a difference. Because they are smart and for the proper sanctions to say can we all attached to free trade but we need some fair tax systems we can move onto more important issues such as Climate Change. We separately to Climate Change from this other debate on inequality. The same is occurring with different words but think about it this way. We have now tens of millions of people who live right near the coast can adjust to pick one example. And if so, what is happening right now in the debate in the United States . There are giant industries that pollute and the consequence is that they make immediate profits into the effects of pollution will be felt by lots of people in the country and around the globe. It is in their interest to continue because they can make shortterm profits and everyone else will bear the cost. Think about it. They are able to ask the lobbyists to go to washington to influence the lawmakers and the regulators to do everything they can to maintain their opportunities to poison the water. In order to promote shortterm profits. Everyone else who has to pay the price on that doesnt have that same kind of organized ability to make their voices heard in the same way with lobbyists and lawyers in washington. And so for me this just one more example of how we have inequality and a system where a handful are able to reap the benefits that the cost of everyone else. And i think that Climate Change, like economic inequalitmike ecoe both symptoms of the same problem. At the same problem of those that we have writing the rules too much in their favor and everyone else being left behind. [applause] we have a ton of questions submitted on one particular issue and that was the student lending. I dont know if the situation is that here in the United States there are probably two people appear that still a Student Loans. [laughter] and there are a variety of different questions, but barbara from arkansas into the moveon members asked if he would support a version of the student loan forgiveness. Do you think we are headed in a direction where it has become so unsustainable that there would have to be some outright forgiveness . Let me do a couple of the facts on the Student Loans. You will sit down on these because okay. Right now we have 1. 2 trillion outstanding to Student Loan Debt. 40 million americans are dealing with outstanding Student Loans. Over 60 collectively owed about 43 billion in Student Loans. 60 and over. Think about that. People that have guaranteed other loans and went back to school later in life. So we have a lot of Student Loan Debt. Its starting to be so much that it is dragging down the economy. The reports are starting to pile up from the Consumer Financial protection bureau, from the department, the treasury department. And what it shows is that people are not going home at the rate that we would anticipate. They are no they just are not doing that economic things that we would expect them to do because they are burdened with debt. As we have a situation and one more case, its growing and its growing fast. Oveover was the band a decade te amount of Student Loan Debt has grown by 70 . So think about that. What can we do about Student Loan Debt . About the outstanding Student Loan Debt there are forgiveness programs. That is a piece of it. We can bring down the Interest Rate on all Student Loan Debt outstanding. [applause] keep in mind for the debt outstanding and we are in the low environment they have refinancerefinanced and a businn and theyve refinanced their township load, you cannot refinance your Student Loans so people are stuck in 7 from 8 , 9 . Wave your hand when i had your number three of the day we go. Student loan Interest Rates. The idea is that this gets to the heart of what we are talking about. The idea for the bill that we have pending with more than 30 cosponsors in the United States senate is the bank owned students is the title of it and it says lets refinance it down to 3. 86 creative that was the rate that the republicans in the house anhouse and the senate ago last summer for all of the new Student Loans issued last year. We decided that one works we will pick that number. Number. Its high year undergraduate student numbers but lets refinance down to that race but here comes the trick. Why does the u. S. Government not just refinance the debt . The answer is because the debt at 7 from 8 , 9 is producing tens of billions of dollars in profits for the United States government. In other words, if in the government budget right now the data from the 2007 to 2012 unadjusted that little slice of loans is on track to produce 66 billion in profits for the United States government. So two people to finance the debt, we have to find the money somewhere else. The proposal in the bill is to say fine we will pass the bill. Closedoublequote polls so the billionaires pay at least the same rate of taxes that the secretary of pays. [applause] but thats why it is so critical in the middle of the debate and what we started out talking about. This puts us directly i cant think of a better way to put this. Of the unitethis. The United States as a country can invest in young people by putting tens of billions of dollars towards reducing the Interest Rate on Student Loans. This is getting to the forgiveness question that reducing the Interest Rate or the United States government can continue to invest tens of billions of dollars. In th tax loopholes for billionaires and millionaires. Think about it for a minute. There are lobbyists who will protect every one of those tax loopholes will be there morning noon and night to make sure the rule doesnt go through. They stay open and billionaires hang on to every thing all penny that they can now get further loopholes. What have we got on the other side of Student Loans . All that we have is our voices and our votes. For the billionaires and millionaires or are the rest of us going to say enough of this we want to an event instead of an billionaires we want to invest in our students and take back the country. We want to make our voices heard. [applause] this event is actually sponsored by the group of the United States the patriotic billionaires and this is a group of more than 100 millionaires and billionaires that are calling for their taxes to get hired. Do you have anything like that in europe . We usually dont pay much to go to the university but sometimes we dont get that much in exchange either. I think that each country has to they have to find ways to combine the opportunity [inaudible] struck me as extremely important in the access to the Higher Education in the country. We look at what is maybe more difficult to make progress on that kind of issue, but i think that for me beautiful europe this is in excess of the education in this country. Thats not saying that sometimes the equal access is the sort of expansion of the lower institutions. We all have to learn from each other and misdirection. We also have a number of questions on the role of the free trade and inequality. And also the role of organized labor. We dont do much about the organized labor and i was wondering what your take on the labors role and inequality have even exacerbating an equality by allowing the capital free flow. I think it is clear that theyve put groups into the highpressure. One of the reasons why that unions are playing the role today are because of the change in the structure in the Manufacturing Services and productions to address and its interesting to see that a number of European Countries which have been introducing the minimum wage in britain and germany into the European Countries where the union used to do the jobs and from 20 years ago there were the National Wage is because that unions had the right place to negotiate the wages in a different industry and in these countries we have Different National minimum wage is because this can be a way to conduct the wage that is more suitable. Its not enough but if you need to think about this in light of the evolutions. I would add something more about the unions. In the america that unions help build americas great middle class. They do. [applause] and they did back in two ways by getting them organized in the working conditions that would pay. Those things work and every one of the benefits that unions negotiated for ultimately worked out for everyone else. They ended up raising wages for the union an and then on union y ended up getting Health Benefits for the union and nonunion workers. But here is the key area to the second thing that unions did as they were out there as a force to be able to argue for things that were in the interest of working people generally. So they were on the front line in the social security. They were on the front lines for civil rights. They unions were out there to try to argue for what benefits the middle of america. What benefit working people in america. The biggest thing tha big thingh trade policy was that it hit in the unionized industries and helped take a lot out of from underneath the unionized workers in the United States. And that the consequence is not only economics at the consequence is political. And we see the rising inequality at a time when they Union Strength has declined. I think those are deeply tied to each other. You called for the wealth tax and we have a onetime version of that here in the United States that has maybe one or two people known as the estate tax. Is a beast of a state ta tax enh or do we need to go to something more annual . I think we need more. It is an attack and its very important and i think it is good that it wasnt suppressed in this country years ago and i think that it is going to keep being something very important for the future. The reason that we are most taxing on the wealth is we already have the annual tax. It was not progressive and so you pay in proportion to the value of the Real Estate Property and also it doesnt take into account Financial Assets or financial inabilities. So, people were saying that there was a large debt to him sometimes the mortgage can be even higher. [inaudible] sometimes it is the same property tax as someone with no knowledge and so even in addition we would have millions of billions in Financial Assets. So i think that this is a sustainable taxation. So the question isnt really need to introduce taxation but how do we make it work better. It was created at the same time of this building two centuries ago and at the time property was about the Real Estate Property and Land Property into there was no financial asset or financial ability. Of course this isnt the right way to tax the 21st century so i would propose the u. S. Tax code right away. I would take the same tax revenue and i wouldnt increase it. I would keep it exactly as it is and in effect i would reduce the 90 because of the huge amount of debt and ive increase that. Its not as if everybody is going to go to mexico and the problems are in the organization as a local matter that it was the same century ago according to the institution and the government couldnt do anything and then things happen and we didnt plan for them to have been. We know in advance what happened. I think the tax system has to adapt to the problem and it may take time. Thats the best way to make it happen one day. Out is that the bill sound . neck i am in. Im in on the notion that we have to rewrite our tax code. And thinking about the part of whathat part ofwhat youre talke state taxes as a fundamental question in this country. Which do we think needs rewards . Is that those who work hard and are smart and get out there and make something happen or those who were born into the right familys . And who are protected by the tax code that says generation after generation. They never even have to work they just get out there and live off of whats happened a generation before, two generations before them in three generations before. And we have prided ourselves as a country being built by a country of people that get out there and work and make it happen. Our tax system has to reflect the same value. It has to reflect the importance of work. People who achieve and people who accomplish being born into wealth and i think that is how this works. [applause] we have time for one more question. We want to read a portion of the book and see if you want to be elaborate. You write i worry that we are running out of time, but i am determined, fiercely determined to do everything i can to help us once again be the america that creates opportunity for anyone that works hard and plays by the rules. I feel even what we can do together and what we will do together. All we need is a fighting chance. I imagine some people in the room to think of something that you could do. [laughter] [applause] professor piketty isnt eligible for this question because he wasnt born in the United States. What do you think . Sputnik i do believe in us and iadb lead in sundays like this on a morning where a whole lot of people come together to talk about ideas, to talk about the books because what we are talking about in here is we are talking about economics, we are talking about power that we are also talking about values. This is a moment in time for the country and for the world a moment in which we decide who we are as a people and what kind of future we are going to build. As your book shows its tough. It is an uphill climb. It will not happen naturally that the world will even back out. Thats what it also shows is that these are not Natural Forces that make it happen. It is a set of rules by which we govern ourselves. And here in america we the people get to decide what the rules are. So i get how hard this is. Its about concentrated money and power on one side its about our values and voices and a votes. I believe we can fight back and we can win. [applause] [applause] thank you all for doing this. [applause] thank you. [applause] thats one of our biggest issues. Its great to see you. She will give me the download. I am so glad that you are here. Its wonderful to see you. This is a great space. Its the right place for it. Its nice to see you. I am so glad that you are here. Thank you. It is very nice to see you. How are you . Its nice to meet you