Transcripts For CSPAN3 Money 20240705

Making of modern america which is a chronicle of the first gilded age, the one that happened just before the one that we are in today. Enough about me. I would like to introduce our gilded and gifted panelists. To my immediate left is are the coauthors of the big with the big myth which delves deeper into the way the free market credo has worked its way into our markets and policy as a sort of religious credo and the damage that has done to our way of life and politics and society. Shes the professor of the history of science at harvard and also taught at uc san diego and has written for the Los Angeles Times among many other newspapers. We valued her at the Los Angeles Times as a very important source on issues of Climate Policy and others. Eric is also a historian of science and has been published widely and serves as the historian of at the jet Propulsion Laboratory in pasadena. Next to them, bill cohen. His book is power failure, the rise and fall of an American Icon and as he puts it the astounding rise and unimaginable fall of General Electric, one of the few american corporations that could be described as iconic. Bill holds degrees from columbias journalism and Business Schools and has been a journalist and investment banker, which allows him to write about business with unique insight and the patrician he is currently at an online Media Venture he founded and that is keeping him busy because he has been covering such topics as the downfall of ftx and that is a fulltime job. [laughter] rick cordesman, his book is still broke which will tell you about walmart, probably one of the most heavily covered american corporations. Rick is a former Business Editor at the Los Angeles Times where he inherited the mandate to make me write shorter columns. [laughter] a task at which he was no more successful than any of his successors. [laughter] rick was the founding executive director of the Drucker Institute which honors the work of the late peter drucker. To this day, our most penetrating business sage. And is currently copresident of a consulting and research for firtash firm on Workforce Development among many other things. Lets get started. I would like to start by putting a round of questions to each of our panelists based on their terrific and insightful books. Your book, the big myth, there are a number of fascinating characters thats read the misleading idea that free or by say founding tenant of the United States. I wonder if you could start by talking about one of those characters in particular and that is rose wilder lane. Her name may not be familiar to many of you in the audience, but i bet her family story is. Thanks to a tv series of great popularity i think is still watched today, either streamed or in reruns. Could you talk about her role in this movement and place her influence in context . Thank you for that question. Rose wilder lane is one of the most influential libertarian journalists and thinkers. She was a correspondent not J Edgar Hoover not it is still early in the day. Herbert hoover. A friend of j howard q, the president of sun oil and one of the key figures in our story. Shes known to libertarians people who admire her call her one of the three furies along with sign rand and isabel patterson, three of the key libertarian thinkers in the mid century. But what is not as wellknown about her is she was also the ghostwriter for her mother, Laura Ingalls wilder. The little house on the prairie series, the books, the Television Show many of us watched growing up were marketed as the true life stories of Laura Ingalls wilder as a young girl growing up on the american frontier whose families succeeded by dint of hard work, the strength of the Nuclear Family and, most importantly, with no help from the government. But the reality was, Laura Ingalls wilder did not write this books. Her libertarian daughter did. And they were not true stories. Laura made rough notes for the story but her daughter recrafted them into libertarian parables. And they were misleading on many levels, but most importantly, the fact that the federal government through the homestead act and other initiatives to send the family to be there. The family was not a success. There story is one of mostly repeated disappointment and failure. But rose rewrote them a Success Stories to promote this individualistic libertarian he thousand. That is the cultural story but one of the interesting things that happens to rose after the Second World War is because of her friendship with jr pugh, she is brought in to be the book editor of an economics journal to steer the way of economists begin to see their field. She also gets involved in an effort to bandaid ban a textbook, and economics an economic textbook whose crime was that it was not communist mckinsey and that promoted the ideal the government should play an active role in the nations economy. She became influential even in Academic Circles despite the reality shes a journalist and novelist. And in fact had never even gone to college. Lets move on to bill. Your book is a chronicle of jack welch is tenure at ge. He was one if not the longestserving ceos and chairman of that company. 20 years. When he retired in 2001, he was lionized by all of us as a titan of american business. At the time, ge was one of the biggest if not the Biggest Company in america. His reputation has undergone something of a revision since. First, i would ask if you agree his legacy doesnt look as good now as it did in 2001 . If so, when did their reconsideration begin and why . I was very fortunate to spend a lot of time with jack. He passed away in march of 2020 right as the pandemic was beginning. I also spent a lot of time with his successor. I thought a lot about that question and i really dont think the revisionism is fair. I think it is easy to do. It is not nuanced. Jack was a very complicated guy. He was an only child, he revered his mother. His father was distant. He was an athlete even though he had no reason to be. He is very competitive and when he worked his way up from the old joke plastics he was the founder of the Plastics Division at ge in pittsfield mass and commercialized plastic pellets we literally take for granted now and are in everything we use. It is not owned by ge anymore. He was incredibly successful and rose up through the company and took a real liking to ge capital, which was ges play on arbitrage in its aaa Credit Rating, borrowing money cheaply and lending in out expensively, which became a real achilles heel during the 2008 financial crisis. Jack was intent on remaking the company and he succeeded. When he took over, the company had a market value of 12 billion and by august of 2020, a year before he left, i was with it was the most valuable company in the country, if not the world. That is why everybody thats an easy metric to gauge and i think thats why everybody was fawning all over him. I think one other point is its important to remember jeffrey immelt, his successor, took over his first day in office as ceo was september 10, 2001. I would say the world changed dramatically for jeff and for ge, which reinsured the buildings at the financial center, that first day, jeff was actually out at boeing, which is one of ges big customers, so he was not even at the office when all this went down. I think jeff materially contributed to the dissolution of the company. It is clear from your interviews with jack welch in the books that he had a low regard for jeff emil. Jeff in melt. He said this is the worst mistake i made or bad mistake. A little more colorful than that. [laughter] i said jack, this is the biggest decision you had to make. How can you make the wrong one . He admitted he made the wrong one. He said i have to live with that and hes right. The impression i get from your book about walmart and it is an exceptionally fairminded book for good and ill, that walmart has had particularly, more recently than throughout its history, the ambition to be a leader among big retailers, big consumer corporations and its treatment of employees, that is as a cause of associates. But it has never been fully able to break from its conception, how far it could go in terms of pay and benefits. In a way, this was the same problem Herbert Hoover confronted after the crash, which is he wanted to do well and wanted to do more than he did do but was constrained by his own feeling about what the limitations were of the law and economics. Could you talk about the tension between walmarts ambition and its actions . For sure. Just a point of clarity. This is water. I looked at the label and it looks like we are drinking malt liquor appear at two in the afternoon, but i assure you it mountain water. If it was liquor [indiscernible] my book traces the arc of how walmart has become a more socially responsible company. This took off after katrina in 2005. The federal government and fema really failed to provide essential water and food and medicine to the stormravaged gulf coast and walmart stepped in and used its vast knowledge and logistics and supply network and its bigness to be able to bring relief to this part of the country that really needed it. In the wake of that, the then ceo took a look and said you are showered with praise for this, something we are usually criticized for, our scale, something people saw as a virtue. Could we do more of this . The Company Began to make changes in a bunch of areas where it became purposefully socially conscious. It became a leader in environmental and sustainability, far from perfect , plenty of flaws, but being mainstream environmental groups like the environment old defense fund and Conservation International would praise walmart as a real leader on the environmental front. What has now become billions of pounds of food to food banks. Stuff that they were able to provide. They lowered the price of prescription drugs. They became, rather improbably, the Largest Company and one of the few Large Companies to back the obama administrations employer mandate and a call for universal health care coverage. They made progress on a whole host of fronts but the one they could not move on was around wages. To a degree employee benefits. But fundamentally, wages. Their whole Business Model is built on the low cost of labor so it can in turn provide low cost goods on the shelf for consumers. In 2015, they began to raise wages for the first time. My book looks at how and why that came to be. The rub is exactly what you are saying, which is they can only go so far, so fast based on their model, based on the pressures of wall street, based on other constraints, many of them of their own making. They made real progress. When they began to raise wages, their average starting wage in 2015 was seven dollars 65 cents an hour. Barely over the federal minimum wage which is still 7. 25 an hour. They has totally raised wages so just in january, they raised wages, their starting wage to 14 an hour and the average wage is going up to 17. 50. On the face for many folks, that sounds good, we are still in the midst of a fight for 15, so 17. 50 might sound good. Translate that into manual wages for the average fulltime walmart worker and there still under 33,000 dollars. That is not a living wage. It points to they have made progress but walmart, the largest employer in america, the Biggest Company by revenue, they are a source and symbol of this problem that america can only Corporate America can only go so far, so fast. We can talk for a couple of minutes about what forces can bring Corporate America to be better. Before we get to that, i want to direct eric and naomi one thing that emerges from your book is how much of this mantra of Free Enterprise is the answer to everything. It originated in the 30s and 40s and suggests to me that it was very much a reaction to the new deal. To decry that social policy, that amounts to socialism, that originated in the same time went against al smith who used it against fdr when he became an app estate in the democratic party. An app estate in the and in the democratic party. What the governments role should be in serving the everyday american . When episode we go into in some depth in the book is the National Association of manufacturers had a Marketing Campaign called the tripod of freedom. The idea was Free Enterprise capitalism or private capitalism should have the same backing in the public mind as religious freedom and our First Amendment freedoms, freedom of the press, etc. So they created this idea of the tripod. One leg is Free Enterprise, when leg is Political Freedom and the other leg is religious freedom. The idea being if you take away Economic Freedom than the tripod collapses and all of our other freedoms go away. That tripod of freedom, i think it is their 1939 Marketing Campaign. It is reiterated throughout the 40s and 50s in various incarnations but always with the same sort of rhetoric, this slippery slope idea that if businessmen arch he did however they want we call that the indivisibility thesis because suddenly business freedom has become inseparable from our other rights under the constitution. At the constitution never mentions Free Enterprise, certainly not corporations. You are right that the book gained momentum in the 1930s with the National Association of manufacturers who at the time was americas largest trade organization representing groups like General Electric. But you can trace it back even earlier to early 20th Century Progressive arguments about child labor which the Business Community for as an infringement on freedom. The freedom of corporations there is a deeply patriarchal element to the story. The Business Community fighting against workmens compensation because the American Workplace was incredibly dangerous in the early 20th century and that was partially fixed through the development of workmens compensation. We show how this argument begins to take shape in the early 20th century and we were talking about ge today and i grew up thinking ge was a good company they brought good things to life they brought progress. Ira release slogans from my childhood. But General Electric was one of the Key Companies building this mythology of the tripod of freedom, writing this revisionist history of the 19th century in which government played little or no role in our development. They did this through their participation in a trade Organization Called the National Electric Light Association and launched a Massive Propaganda Campaign in the 1920s not just to promote electric light, which would be normal Public Relations but to rewrite american textbooks, influence academic curricula, to promote capitalism as the american way of life and suggest any compromise even for something as something as virtuous as preventing child labor would interfere with Political Freedom. What is scary and telling as we are seeing again today people trying to bring back child labor. Who thought that would happen . Can i just add to connect the dots a little and speak to this. General electric being at the center of that by the 40s and into the 50s, i think it is worth noting studying under him was a young tv pitch men by the name of ronald reagan. Do you talk about him in your book as well . Some things ended up on the cutting room floor. It is a huge part of the story how ge influences the Young Ronald Reagan and how they help finance his first run for office when he decides to run for office in california. I would encourage all my panelists to interact as bill jested to keep the conversation as lightly as possible. Taking a page from another popular Television Show, that is a question of succession. For all that ge under jack welch was viewed as a seedbed of corporate managers, im not sure the heirs of jack, not only his successor and others he went to other companies did as well as one might have expected and certainly the successors who are groomed within ge were unable to keep the company at the top of the corporate pyramid. We used to talk but how General Electric was the only company that was an original member of the Dow Jones Industrial average in 1896 to still be a member in 2018, though there was one brief time went it dropped out in the early 20th century but that era ended in 2018 in favor of walgreens. None of the successors came close to serving the 20 years he did and im not sure any of the groomed would be ceos who went elsewhere were at the top of their companies for two decades. Is it fair to say the c suite blood got thin or what do you think would account for this phenomenon . I think the selection of ceo is literally the most important thing. The successor ceo is literally the most important thing the current ceo can do. It is remarkable to me how often we see that process get messed up. Look down the street at disney, for instance. Bob iger personally selected bob chapek and then could not let go and hovered around and lo and behold, hes back two and half years later. Now hes got the task again, i might add i guess hes got about a year and half left of finding his successor at disney. It could go down as the first ceo in history to screw up the Succession Process twice. Jack it is important to understand why jack welch conducted this Succession Process at ge the way he did. The reason he did the way he did his he didnt like the way it was done to him. Hes like a child in that regard to some extent. What happened to him, rich jones was his predecessor and ge just moved from new york city, lexington avenue during the wave when america seemed to think having campuses in the suburb was a real thing. Jack was very happy up in plastics. He had his own fife them up there his own fiefdom up there. He loved it. He was like the king and did not want to go to fairfield and register. He did not want to have if you want any chance of being my successor coming have to come to fairfield. After several promotions, it was clear that she moves to fairfield and has to compete for two years against the other four or five top candidates to become the successor. Jack was the youngest, jack was a renegade, jack wanted to totally renovate the country. He could not have been more different than jones, who was a british aristocrat and asked me times to be in jimmy carters and on many occasions was a regular advisor to jimmy carter in the white house. Jack hated that process because every day for two years, it was like this parading around of him and his potential competitors and they are all preening and sucking up, if i may use that word, and he just hated it. Turned out he was very good at it. And he got the job. He did not want to do that, which turned out to be, ironically, a big mistake. I will try to be quick here. What he did his he kept the three candidates he had chosen to potentially be the successor. To stay out in their operating units in the country. Nardelli was at the electric power business in schenectady. Jeff was running the Health Care Business in milwaukee. Instead of bringing them to fairfield where he could watch them every day and find out what they were really like, they would come a few times of year a few times a year for their review to fairfield and they would be in total, utter preening mode. Jeff turned out to be the best politician among the three. So jack literally fell for him because jeff is everything jack wasnt. Jack was a football player, Harvard Business school graduate, very articulate with a commanding presence. Jack fell for him. Ironically, the way jack was selected proved to be the downfall for the company in a way because he selected the wrong person in a process he was trying to get a way from. Rick, in your book, the closing thought, if ive got it water if ive got it right, is you observed walmart and other corporations like it simply will not move fast enough and far enough on their own initiative to provide workers with a living wage, to improve workplace conditions unless the government steps in with mandates. And yet, it is the walmarts that will always be in the forefront of fighting against the very concept of government mandates. Why dont you talk about that and i would ask the other panelists to give their thoughts on the same topic of what the governments role should be in making the free market freer for everybody. Still broke and with a full throated cry for a government mandated living wage. That needs to be phased in for Small Businesses with a sub minimum wage for teenage workers eating their first taste of work experience. But, fundamentally, something needs to change. We live in a country where depending on how you measure it, it is 25 to 40 of the workforce, 45 million, 65 million working people get up, they go to their jobs and very often face these painful choices at the end of the month by pay rent or do i buy medicine . Do i put food on the table for my kids or do i heat my apartment . Tens of millions of people with like this. I think it is at the root of a huge number of our problems in this country socially, politically you just wrote about it. Life expectancy in the u. S. Declining and there is a real connection between the fact that work doesnt pay enough. Its not that people dont want to work, it is that work is not a solution to poverty anymore. The federal memo wages still 7. 25 an hour and has been since 2009. I look at it like Climate Change. Weve had stagnated stagnating wages for decades, 50 years, and recently theres been a much welcome rise, too late for those on the late spectrum where they see their wages bump up but you have to keep that going for an awfully long time to catch up. Its like Climate Change. We dug a hole so deep that i dont think incrementalism is going to fix it. We need a bold Government Action to do so. The last thing i will say is im sure this sounds insane and it may be two people and what are the odds politically . We are not going to they cant get to 15 an hour. The fight for 15 began more than a decade ago. Its the wrong number to focus on. Thats why focus on 20 and theres an argument in the book why 20 an hour or more. I will quickly say theres a great Organization Called living wage for us, real math, they look at this county by county across the United States. 90 of people live in a county where the living wage is 20 or more. I guess i just want to say this needs to be fixed and i hope we can figure out as a society how to elect folks who will get us there because the alternative, staying where we are now is unsustainable. Im so glad to hear you say that because this is the entire argument of our book. Weve spent five years together working on this and a few things come out of this story that are really important. Im glad you mentioned Climate Change because thats how we came to this. We are historians of science, not business or labor historians. We spent decades working on Climate Change, communicating client science climate science, trying to understand why this country was not making progress on a problem that was scientifically settled decades ago. What we concluded in our first book was its because of opposition not just from the Business Community and the people you would expect like the fossil fuel industry. That was important but it was not the whole story. There was a much bigger story about the ideology of the free market. People would say and the wall street journal still says it today, this will be solved by the progress of unregulated markets, the invisible hand. But we know that is not true. In the case of climate, we know because scientists have known about this you can pick your favorite day the one i like to use his 1988 because that is the year jim henson testified that Climate Change was happening, it was caused by people, it was already doing damage in the 80s and that was reported on the front page of the new york times. So, we have known about this for a long, long time but we have not acted. So to step back from the Climate Change issue to say where this ideology come from, why do so many people believe the market will solve this when it is actually markets that created this problem and they have now had 40 years to respond . There is a market response. I dont want to downplay the good work some of these have done this space but the market response is not even remotely commits written. When we step back, we discover this much bigger story about the credo of market fundamentalism in the way in which the arguments for the market for the free market and you can put this in quotes because theres no such thing are use repeated repeatedly not just to block Government Action in things like Workplace Safety to rewrite history and make us forget the lessons of history because the whole point of our argument with the debates over child labor, this country has more than 100 years of history showing the cost, if you just leave things to the private sector, some companies will be good and some companies will do good things and there are a lot of myths about ge. I have a lot of bad things to say about ge but they certainly helped make electric light bulbs available to millions of american people. We are not trying to bash the private sector but the reality was very few companies, left to their own devices, would take seriously things like adequate wages come or place safety, protecting children, protecting women, protecting against discrimination. The list is very long. And of course, environmental protection. What was the lesson of history . You need a government to step in not just to protect workers but protect capitalism itself against monopolistic practices which led to the first gilded age, which you wrote about. That is why the story is so interesting as historians because what we discovered was this incredibly complicated, deep, rich and expensive program to rewrite american history, to rewrite the history of capitalism, to make us think we could trust the free market when the evidence was clear we could not. If i could jump in, i find the irony just so dramatic and stunning that we cannot get, congress cannot pass a decent minimum wage bill but they can pass a Corporate Tax reduction law that takes Corporate Taxes down from 35 to 21 which literally drops billions of dollars in profits to the bottom line for corporations all over the country and we have the Federal Reserve that from 2008 or 2009 2 2020 two made money especially essentially free. If you think about who benefits when money is free, its not people on fixed incomes or people who rely on their savings. It is the people who make money from many people who make money from money had a bonanza for the last 13 years because they had their raw material for free. Just one quick example in 2021, j. P. Morgan chase, where i once worked, i made 48 Million Dollars in net income. It is raw material its raw material is the 2. 5 trillion dollars we give j. P. Morgan chase every day to sit there. They use that money that is our money, they use that money and lend it out. They pay us on that money. If you look at your checking or savings account, one basis point or two basis points. Im talking about. 01 . Then they lend that money out for prime plus whatever it is plus and make 48 billion dollars of net income. That is what we live through for 13 years no sector did better postfinancial crisis than the Financial Services sector. Now we are seeing a tiny bit of correction but nothing is going to change that these corporations get huge benefits either directly from congress or indirectly, frankly directly, from the Federal Reserve monetary policy. One of the interesting things as we are having this discussion in the context of a landscape that is that has changed a lot rhetorically, mainly, but to some degree in reality over the last 10 or 15 years. If we had been talking about this in the 80s or in the 90s, into the 2000s, there would have been from a corporate perspective, the primary aim was to bring shareholders value, maximize profits, plain and simple. All of these good things would trickle down from that. Over the last 10 years and increasingly the last five, business is saying actually, we believe in stakeholder capitalism. We are trying to take care all of our constituents. The Business Roundtable made up of 200 ceos from the most important American Companies signed the statement where they said the purpose of a corporation is provide value for its stakeholders. This reversed the statement they had that said the interest of all other stakeholders were derivative to the interest of shareholders. What i think is interesting is it complicates the argument and complicates the push against. You see this with walmart where they raise wages and, to their credit i dont want to minimize it, every time they raise wages incrementally, it helps hundreds of thousands of workers. It is important. I just dont think it is enough. But where they are praised is on the cover of fortune. They made the list when they raise the wage to 10 nor. Folks who specialize in socially responsible investing say walmart has gone from being part of the problem to part of the solution. So you hear a lot of the stuff and i think its important to recognize in a changing landscape. Sometimes i think people are hearing esg, companies are doing good now. The rhetoric is way outpacing reality. I think those latest remarks have underscored the theme i saw this panel as exploring with the email i shared with all of the panelists the other day, which is skepticism. Skepticism about how much we should accept the mantras of american corporate capitalism and how much we should weigh them against whats actually being done. With that, i would like to turn the session over to our audience. We have moving microphones, so raise your hand and a microphone will be placed in it. We need to do it that way so cspan can hear what you have to say. Bring the microphones down and there is a gentleman right here. Didnt jack welch introduce that make money from make money and didnt he undermine the industrialization model at ge . Ge credit i assume this is directed to me. Ge credit was started during the depression to provide financing for customers to buy refrigerators and dishwashers and ranges. Simple enough that credit was incredibly tight. We couldnt really borrow money to buy cybill things like that in these were incredible innovations. Ge was the apple, google, microsoft built into one. It still produces incredible technology. Ge credit sort of rambled along like that. What jack did was when jack was promoted to be in addition to plastics to also being over ge capital as well as other businesses, he really got into this idea of arbitrage in the Credit Rating. Ge was the longtime member of the dow and had a aaa Credit Rating and only 10 or 12 companies had a aaa Credit Rating until the whole world did when it was mortgagebacked securities being rated. We know what happened with that. Jack said i can borrow money in the commercial paper market, which is shortterm, very inexpensive lending. Its rolled over every 30, 60, or 90 days. I worked at ge capital when i got out of Business School and i was, of all things, financing leveraged buyout scum which was absurd. I was a journalist and then i was financing leveraged buyouts. Thats how things change and how crazy things got. We were criticized as being the most expensive on the street and it turned out we were the only ones getting paid properly for the risks we were taking. Jack really understood this business and eventually, it became 50 of ges earnings. That was ok until ge, like the rest of the Banking Industry in 2007 and 2008, got caught up in the maelstrom of borrowing short and lending long, which is exactly what happened to Silicon Valley bank last month. This is the neverending achilles heel of the fractional Banking System we are all living under, borrowing short and lending long, executives do not understand how dangerous that thought is, how dangerous it is to borrow short and lend long. Jeff emerald did not understand it, the ceo of Silicon Valley bank did not understand. Jimmy kane at bear stearns did not understand it. Wall street is a very dangerous place. We have a question over here. I have a question based on the walmarts and how they are slowly expanding into more two areas and relying on subsistence farming and local businesses and dont really have many commercial options in areas like chinatown and l. A. Specifically, in 2014, walmart wanted to open another location in an area that had been vacant for 20 or 30 years. However hey large role in the cultural value and because chinatown is not home to just people who are chinese immigrants but other people from around asia, multiple parts of asia, including myself, i went there a lot as a kid and i am of korean descent. It raises a lot of questions of how its going to take a lot of revenue away from these local businesses that rely on people of the same cultural backgrounds and same immigration challenges. This is affinity marketing. Walmart did have this incredible time of expansion, particularly as they got into the grocery business and expanded that business. I think the growth has slowed down somewhat. They are closing some stores, you may have seen, in chicago and portland. But it is a colossus. Its got about 5000 locations if you include sams club, which they own. If you have been in a walmart supercenter, each one of these is a 300 million year operation , nation general merchandise and grocery store. Over time, as they did expand into different areas, they wiped out a lot of momandpop businesses, Small Businesses, ethnic businesses where they have been. I should say there is mixed economic evidence if you look purely at the economics. There have been studies that said walmart pushed down wages when they moved into a committee. Some Academic Studies suggest wages actually went up a little bit because smaller businesses struggled to pay as much as walmart does. There is no denying in terms of changing the character and aesthetic of community, it can be devastating for walmart and other retailers. I read two articles for an essay i had to do on this topic and how walmart, there executives and marketing officials would claim they are bringing in more taxes, more Job Opportunities when, in the long run, it almost declines because local governments, statewide governments would gift tax breaks to Huge Companies like walmart and it is shown in other places like sharp saver. Lets see if we have another question. Who has a microphone . I want to get some clarification on what you said about the fed which makes it sound to me like lowering rates is a racket. It seems like i misunderstood what you mean. My understanding is when inflation goes high, they raise the rates and throw a Million People out of work. What did i misunderstand . I dont know quite what you mean by racket but i get it. In 2008, the economy, the great recession, because of the crisis on wall street, the economy went into a deep tailspin and the fed under ben bernanke, who studied the great depression, landed on this idea of quantitative easing, which the assets of the fed rose from 900 billion before the financial crisis to over 8 trillion in 2022. They were buying going into the marketplace, buying bonds, creating a market when there was no other buyer. When you buy bonds, you raise their price and lower their yield. They effectively lowered the price of money to its lowest level in the history of recorded time. So basically money was free and that encouraged people to borrow it and take risks with the end to people who specialize in making money from money, they had a bonanza. Another question . The gentleman in the yellow shirt . Ok. I want to backtrack to something i think you use the term protecting capitalistic practice in some measure i dont know if i misheard that. What would you say if somebody said isnt capitalism practice the way it is done in general, isnt that the problem creating these social ills . One of the things naomi and i thought about but ultimately didnt but that there is many varieties of capitalism. There are many varieties of socialism, but there are also many varieties of capitalism and the United States version is particularly pernicious. European companies have versions of capitalism that are better regulated and not as bad for their populations. They dont have the declining life expectancy, they have better social welfare protections and so forth. To us, the idea was to figure out why the u. S. Had bought this idea of market fundamentalism. That we are harming ourselves through a particular kind of extremely unregulated, hyper exploitive capitalism. That takes us back to the idea there are varieties and the conversation we ought to be having is how do we make a better version of it because we are not communists. It didnt work out. [laughter] we tried. Not by us, not only did it not work out as an economic system, it was disastrous for those systems. We should figure out how to improve the system that we have. And other question . Its interesting because that was exactly my question, from a slightly different vantage point. In europe, they call themselves social democrats and im wondering why Bernie Sanders calls himself a democraticsocialist and i wonder if that feeds into the paranoia . About we cant become a socialist country. You just sort of answered that saying the various different types of capitalism and socialism and, to my year, i think if Bernie Sanders and people who have similar political ideologies as mr. Sanders, senator sanders, perhaps, the average american could digest the actual definition of a social democrat because it is emphasizing democrat. I think it should be changed to social democrat. I have no idea why Bernie Sanders does what he does or doesnt do. I agree i feel the phrase democraticsocialist is not helpful and think it is a shame he uses it but one of the things that is important to point out, we could have a long conversation about European Social democracy in the different ways in which many metrics shows it works better in terms of health and wellbeing and happiness. The evidence is really clear and we talk about that toward the end of our book. But also, you dont have to go into social democracy. You can go into the history of this country. One thing i like to quote a lot is under Dwight Eisenhower who was a republican. The marginal tax rate on the wealthiest americans was 90 . That would be staggering today. Hard enough to get people to talk about a minimum wage of 20 an hour. If we were to propose marginal tax rate of 95 , people would say they are definitely communists. But the reality is, with a lifetime of some of the people in this room, that was what we did in this country. Under a republican president. Part of what we are trying to do is reopen his conversation to say why did we give up on the idea the wealthy should pay Pretty Healthy taxes because no one really needs to be a billionaire and we may accept the idea there should be rewards for hard work. I do accept that. But to the point some people get everything, tens of millions of americans can barely make ends meet even when they work fulltime jobs. [applause] and if you agree with me, then please buy the book. I think we have time for one more question. Hello. You are just beginning to touch on the fact that there are actually people at the top of these corporations. Are you saying that the only way to reach these people who must have worked up their way and are now at the head of the company do not care about anybody else in the country except themselves, and that the only way we are going to do this is by the government telling them to take care of other people . Let me just jump in on that and then i will pass it back over to the folks who have studied Corporate America. Were not saying it is the only way, but i think what we are saying is that history shows if you simply rely on the goodwill of Corporate America, it does not work. One of the things that has happened, again, in more recent decades and this was driven by Public Policy change, and i think really changes in Corporate Culture norms. Ceos now, the bulk o ftheir pay is in stock and equities. So, they have every incentive to see the stock price rise. The stuff i write about, the easiest way to do that is to cut labor costs, pull down wages and cut jobs. Look, i know a lot of ceos, i also spoke about doug mcmillon, the ceo of walmart. I think doug is really wellintentioned, he is pushed in the right direction within the constraints of wall street, within the constraints of someone who makes 25 million a year. I will just be personally, that would be hard for me to sort of, you know, want to push for rapid change when i benefit from that system in that way. Theres a lot of impediments that i think are pulling Corporate America into place. And again, theres change, but that is not fast enough. That is why i fell on the idea that, yeah, we really do need a government solution. Ok. Well, i think our time is up, unfortunately. I would like to thank, and i think you all will join me in thanking our terrific panel. [applause]