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tv   Key Capitol Hill Hearings  CSPAN  April 22, 2014 2:00am-4:01am EDT

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or above, your real wages have been on an upward trajectory and classically, the more education, the more training, the better your wage trajectory is. the bottom three lines represent all workers with less than a college degree. those real wages are lower than they were more than 30 years ago. that is not good. the bigger problem is those bottom lines represent 60% or more of the american workforce. fewer than 40% of american workers have a college degree. majority -- you see them slowly losing ground here. click. this is what the superstar economies yielding us. the onenot the graft of percent, this is one percent of the one percent. 01%. is the top .
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of relative period equality in the economy and in recent decades, that has been going upwards. there was no are growing we are heading into more of a winner take all economy. do i have one more click? yes, i do. this is a line my co-author and i great -- call the great decoupling. it used to be the case that for things we cared a great deal about were all going up. before things are output, gdp per capita, productivity, job growth, and wages. all four of those are great. news is for several decades after the war, we had exactly that. the four of them were going up. in recent years, you see this
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best of times, worst of times pattern where the two lines related to productivity and output have essentially continued their nice upward trajectory. hasline of a job growth leveled off and in some cases even changed direction. the average median american household now takes home less than they did in the 1990's. simultaneously really encouraged by some economic statistics, those related to output. and finding some real challenges in the ones related to jobs and wages. thank you for bearing with me. when you think about these three factors, globalization, policy, where do you rate those things? >> my answer is going to be unsurprising. the smoking gun is technological progress.
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globalization has been the prime culprit in a lot of ways. the most careful research that is coming out says that is not what is going on. there has been some great work published over the past year by people who are not technology geeks like me. they have come to the same conclusion. when you look at the patterns over the past 30, 30 five years, and you look at capital versus labor or you look at the polarization and the problems of the middle class, the prime culprit is a technological ogress. computers can do stuff now that we use a needle made your -- mandalay before. -- manual labor for. the least skilled things like goodg your lawn, they are at complex repeatable tasks like accounting and bank telling. it's not're a busboy,
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that you have a very prestigious job. you have a job that is safe from technology for the foreseeable future. there is no robot anywhere in the world that can do this, let alone walk across a room without breaking everything and terrifying restaurant patrons. those restaurant involved, low-level, poorly payed -- dog groomer, busboy, and gardner. ener. jobs, ceos, stuff like that, also appear to be safe from automation. it is that big chunk in the middleware technology has been having its greatest effect and what i believe is that technology is about to get bigger both low and high in that midrange. is your sense that is what is going on -- going on around the
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world or to speaking about america? >> i see we're about out of time. [laughter] it is awake question. -- great question. it is pointing the finger pretty clearly at tech progress. lifted that labor versus capital graph. a lot of countries around the world -- he came to the very clear conclusion that it was tech progress. that redline has been going down along the world. in countries including china, india, and mexico. the amount going to wages is going up dramatically but gdp is going up even faster? the growth of the middle class that is very different in china. you are saying it is still not get -- gaining as a share in losing ground to the other outlets? >> the altar wealthy and china -- the altar wealthy in china are getting more money.
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>> how does not look compared to what you call the first machine revolution? do we see the same trends? >> guest and no -- yes and no. we have the first industrial revolution when steam power came on. had nls a vacation -- we electrification. that can be a transition period that can be kind of long but then those waves of progress give good news for the average worker. the optimistic view is wait a little while and we are going to see healthy job growth. i kind of said you had 3.5 decades. we are saying the opposite of that's why think -- i don't take that much comfort from the historic will pattern. -- historical pattern. >> i find that really helpful.
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i just want to add a few things. i think it is a murder mystery. who killed the middle class? who killed the american dream? >> it would be handy. andy. >> it could be the case that technology is the culprit but i think there are some combos is -- accomplices. markets work really well. we are all for markets but what would that markets work according to rules and right now the rules are pretty wacky if you are middle-class working family. they had an wacky for a while. whatever damage is being done by technology, i think there are some of congresses -- accomplices. about the minimum wage -- it is a completely arbitrary decision that the minimum wage should be
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tagged to something called -- whenever congress gets around to raising it. it could be pegged to cost of living. the minimum wage would be not seven dollars an hour but $19 and our. hour. that is a policy, political decision. is a purely policy question whether or not you have corporate charter reform. they have to take those quarterly or even paid through the nose for ceo salaries. you can have a different court -- corporate trotter -- charter that allows stakeholders have some influence. there are some actual decisions that get made. part of the reason i think this whole conversation is important the united states of amnesia.
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that is where we live. there is no history beyond the ofus thinkingst about anything. it is almost like the middle class fell out of the constitution. [laughter] the have america, middle-class. the greatest invention in the world is the middle class and it was invented here. it was created and built here not only by the employers, but by labor unions which you don't even think about anymore. labor unions used to be a huge, huge deal and trying to get employers to behave in a particular way. the way we got a middle class, the way we had the american dream, we put employers epicenter. -- at the center.
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employers had a contrast with the west of us, they were going keeping usgoing by investing in roads and education. they would pay fair wages. that was the deal. we build the whole economy around you but you keep the game going by paying taxes. employers decided they want going to do that anymore and now you have employers and corporations sitting on big piles of cash, but they are not investing it. corporations pay taxes and then they live in bermuda. it is a weird thing. you don't see anybody going to jail. agree want to say that i technology is doing something really terrible. wait.ght -- >> it feels terrible for a lot of people but i think there are accomplices that need to be
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called out. >> i am the guy that thinks technology is a good thing. >> i will stand up with you on that. >> i am a very big fan. >> so am i. >> i don't believe it solves things all by itself. i was reading andy's book and that's also really interesting parallels. van touches on some of this. when we lived through the industrial revolution, we saw the gilded age. we saw the stories of rockefellers and carnegie and the era we were living through and this real stratification. we also saw public policy come together to rectify some of that or change that direction. it was very bipartisan. and you see what the progressive republican aero was about -- era was about. >> when was the last time you heard those words side-by-side?
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>> how long is the work week? how long is the labor force? when can children go to work? pushing education, we kept pushing it. democratsway for the to take over which pushed labor unions, social insurance, massively progressive taxation. you had a whole slew of public policy that was directed to rein in what they saw as excesses. part of that require there to be a consensus. you had to have a political consensus. we are going through something similar. adept technology driving for this incredible opportunity. you can replicate things cheaply for a lot of reasons. you get a lot of mass creation. we haven't figured out the public policy terrain that in and share it more broadly. figured it out and we
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don't have any consensus around solving the problem which is part of what makes a tricky. that me give you my one epiphany from reading this. if we lived through that last year and we drove education from something that wasn't even accessible if you were rich or yearsnd required for 10 -- what have we done for 70 years? we haven't move that forward. maybe the answer is two years before -- universal pre-k or universal pre-pre-k. at 16.e you can't quit when you see the chart that says of the get through college you're going to make so much more wealth, we have to figure out how to motivate ourselves to drive people through that. andid this to joe earlier he said people are not made to go to college, some of them. 50, 60 years ago, how many people sitting in this room were not made to go to college
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because of their at the carriage, the religious heritage, because of their gender? there are a lot more people we can push a lot more further. we have the right policy and the right support. people knew this is what the community expects. you have to do this to be part of where we are going and we have to get out there and motivate and work to make that happen. maybe we need to require people to get more education and see where that takes us. >> that sounds like a democrat. >> i want to jump in. on my technology rant, my fellow policies -- my fellow people told me technology must be bad. no. the old joke among economists is that technological process is the only free lunch we believe in. trying to stop the flow of technology were stop this era makes less sense to me then had locking the schools. is the worst possible move we can make. technology is growing the pie.
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question is about the distribution of the pot because there is no economic law that says that everybody has to benefit equally from the benefit -- from the bounty of technology. was mya i was showing attempt to get across the fact the distribution has becoming -- is becoming a thornier issue. this is not written in stone. when i show my data, you can walk away a little fatalistic. we are absolutely not screwed. thatldn't agree more technology is not destiny. we get to shape our destiny. there are policy changes and choices we can make that will be effective at reversing the course and bringing back some of the stuff. a large stable of prosperous middle class is just one of the jewels of what america has created. -- us policy that jewel
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polish that jewel. >> what i want to point out is -- we talked a little bit about inequality in pure numbers. the african-american middle class in particular is in real peril. that is why i am interested in this conversation. i want to point out -- we talk about african-americans as of the proxy for the poor. there is an african-american middle class, some of which are living in the white house right now. [laughter] junk of the middle-class -- chunk of the middle-class, i want to point out that african-americans had a tragedy -- had a strategy after dr. king to get into the middle class and stay there.
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all three pillars of that strategy had been knocked over. employmentcation, mainly in the public sector -- you talk to most african-american middle class, their dad was a teacher or firefighter and homeownership. that was it. the homeownership piece of it was huge. so huge you never heard a single african-american athlete when they get their big contracts say , i am going to buy my mom stocks and bonds. [laughter] once. a house. that is a huge deal. you are allowed to own property for a very long time and the middle-class folks said stocks and bonds are like gambling. we are not going to be a responsible. -- he responsible -- irresponsible.
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college's unaffordable, the public sector is shrinking. we lost 70% of our wealth. we are back to the same wealth that we had back when dr. king was killed in three years because of that strategy. important now, it is as we are thinking about where the middle class goes. you have some parts struggling. what some of you guys were saying about -- as we see this so-called superstar fact where there was a return. you have this different think in a knowledge-based economy where there are so many more wages and our you can make. you can be 10,000 times as productive as a software engineer. is there something inherent to that as we see individual productivity?
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how we sort of catch up to that? >> this is a great question because there are two very different views on what is going on with that super star chart. one is a little bit what joan just said which you are seeing a meritocracy in action. every guy or woman running a high-tech company that i talk to says, i cannot place a high enough premium on really good engineers. a good one is worth, not 10 or a hundred times worse than an average one, it is like thousands of times better and i will pay them ridiculous premiums to come work with me. the poaching that goes on is crazily. zuckerberg andk some of the superstars of silicon valley have created ridiculous amount of value. andother point of view is -- it is kind of like up at the top of the chain.
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i pay you a lot, and you pay me a lot. the debate rages about which of those two is going on. the clearest answer is both are pretty clearly going on. i have also seen some work that most at the top of the one --cent are basically people they are not innovators, they are the people running very large organizations. how much is that meritocracy? they are clearly both of those effects going on at the very high-end. .> yes welcome. >> sorry i was late. i couldn't get here any faster. >> i work as a venture capitalist and there is no doubt that we pay people to run big companies too much because of they are running them.
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one of the things that is interesting is that we are continuing to see small businesses, when you have private equity ownership, the men and women who own the company are on the board and are very involved day-to-day, we are continuing to see that. we are pushing ceo pay up dramatically. its base of the fact that we think there is a meritocracy. people are not just lost in the public and nobody knows he has a sweetheart deal -- >> you are saying paying the people that are involved. because the talent is so severe? back to the meritocracy you are seeing -- the company is worth so much more than somebody else. maybe it is a rebel down of -- ripple down of winner take all.
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we are willing to pay up a lot there that even at the early stages of the company. i know this stuff makes a lot of sense if you think about it real hard. thisu are regular person, is just horrible. we have to be honest. normal people are not sitting here trying to figure out, why is this great even if it is great. i live in california. we have this thing called the flash. essentially, in northern california, there was a town called oakland. it is easy driving distance to silicon valley, about half an hour. people are making so much money in silicon valley that it feels purchasedon valley
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oakland to be a community for itself. we have seen that before but this is weird. inally when some group comes and they have some income, they start doing things to make things better for everyone. on the contrary. public transportation is not that good in oakland so google bot buses. you are waiting for a bus in oakland. no city bus comes. withoogle bus comes by wi-fi for the people. cousin.that is weird . privatized a set of games. there is going to be situation at some point where my fear is that silicon valley is like the
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new wall street. it used to be that silicon valley was the proof of the american dream. it was the proof that you or anybody could go into your garage and you can work hard and you could succeed. proof,her it being the in some places it looks like the killer of the american dream. in this winner take all economy, these are the people that are going to disrupt everybody. disruptbe happy if they the music industry because i'm not in the music industry. i thought they were going to stop there. i wasn't a communist. they are coming for me to. o.
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i want to turn the heat up a little bit because i think for ordinary people that are trying to understand, all they know this new technological elite that have been able to disrupt -- i didn't vote for these guys. they disrupt everything they can get their hands on, then make a ton of money. they are paying their ceos more than some countries got. how is that cool? >> i want to bring andrew in. -- he is than long involved in new york politics. vancurious how you see how it's playing out or not playing out in new york? >> i want to apologize for not being a woman. we should have a woman on this panel. [applause] want to make sure everybody understands is that silicon valley does not represent the entire tech community.
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there is a lot more going on in new york where there is a tech renaissance happening. it is a very different culture than one you would see in silicon valley where the businesses are built on hardware. companies like apple and intel and google, and basically the infrastructure of the internet. in new york, we're living in the application where the resource is human talent. there is no city in the world that has a higher density of human talent the new york. you will see some sort of tech renaissance happening in cities where people are thinking about starting their own companies, try to figure out some way to take advantage of these technologies which are disrupted but also create a lot of opportunities. the problem i see in a lot of parts of the country and around
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theworld is that legislative and regulatory environment is not able to keep up with the speed of technology. van is right. there is a vixen happening in oakland -- eviction happening in oakland. google figure -- figures a workaround and if we allow all these workarounds to continue, we are going to have more disruption. i had a chance to read the review. there was a fascinating book . >> when you are done reading our book, read this one. >> there are two big points to be made in that book. the title of it is capital in the 21st century. economict separate thinking from political thinking
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because economists for decades our scientist basically looking at data associated with economics and not how political theory would affect those economic determinations. the second big point is that when you have -- when capital grows faster than gdp, you will start seeing a big separation between richer and poorer. >> guess what is going on these days? >> that is what is going on right now. there are all kinds of arguments to be made that there will be a blip on the screen. in countries where gdp is growing, we are lifting up lots of people into the middle class. 70% of the world population is living in a much higher standard of living than 10 or 15 years ago. the increase of people used to live on one dollar a day to two dollars a day which sounds like a ridiculous amount of money. that is a 100% increase in your income in bangladesh or some
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poor part of the world. the point is that there is an argument made that humanity as a whole is much better off now than it is ever been. i think we need to be really careful not to look at this issue through a straw and wind to start thinking about this more holistically. >> it doesn't matter if what is going on these days is economically rational if it is perceived as unfair. and economist will look at the google bus and say this is awesome. it is not preventing anyone else from hopping on a bus. it is reducing carbon emissions. this is awesome news if it is perceived that this is bending the rules. of with you, there is a real danger that silicon
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valley is going to be perceived as the new wall street or engine of evil. that will be a dire outcome. it is incumbent on the tech engage in the conversation and make sure the perception doesn't head in that direction. to underscore something and you just said -- i think one of the most challenging elements of what we are going through is that the technology is changing so quickly that it is really hard for our institutions, our political decision-making processes to keep up. it is not the fastest moving part of the world but when things are changing this quickly, it is really hard for a lot of our existing organizations and institutions to keep up. the only thing we can do as members of our organizations and society is advocate for the right kinds of changes. if we wait for washington to lead, they are going to follow what we want them to do. >> that is a great transition towards the solutions.
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>> a couple of things -- one is we have -- i think why we have been telling ourselves and the public which is that we are the agents of change. there is campaign about hope and -- you got a problem? don't worry, we are going to change it. come to our protest or whatever. i think we have to stop saying that. these guys are driving change. of the valley and all metaphorical splendor, the technology guys in austin and boston and new york city and elsewhere, chicago, that is what is driving the change.
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politics needs this are saying we are not going to make change, someone else is doing that. we are going to make change your friend. the changes coming. to 3-d printers are coming, the robots are coming, the smart coming.oare you would drive up to mcdonald's, there will be a flatscreen annual order and there will not be human being touching her order. that is coming. you didn't vote for that. changes company -- change is coming. how do you may change your friend? at the same time, two things i think are important -- number one, i was just in silicon valley yesterday. non-diversity, you mentioned this panel not being diverse, the level of non-diversity -- i don't know if that is even a word -- the level of diversity -- the level of
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diversity was bad. [laughter] not to be too technical. see,s really shocking to first of all, you go on this campuses. amazing stuff. the energy and creativity, but you just see -- tha very badt is. we are wasting genius. there is genius in african-american communities, andno communities, genius housing projects, genius in tech centers and we are wasting it even know we are building an industry built on genius. somebody is losing out on money and market share. it also means there are people that are missing out on opportunities to be part of this economy. i think we have to focus in on that.
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steme all this talk about and all the stuff. >> technology, engineering. >> if you know the people who came up with this, tell them not to do that. is new york better? >> i digress. stem by itself -- i get the rose, you get the -- it's better than thorns. i am better for -- i'm all for science and math but that is not a job training strategy. that is a long-term play to try to raise that. there was a man that i love to death named hank williams. he is one of the great godfathers of technology in the
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black community who is here. hank williams has a plan to spend $1 billion getting 100,000 low opportunity young people trained to have a jobs. , 10,000 kids a year for 10 years, $10,000 a kid. that gives $1 trillion to the economy. why don't we go ahead and do that? the public sector cannot move fast enough. a $1 billion is not that big a deal in the overall economy. the first thing we have to do it technology is going to the leader, let's make sure technology includes everybody. [applause] >> one question is that what does andy's chart show that
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greater amount of education leads to more income. there was very little correlation between education and income. there was an argument to be made that education which we think of as equalizers become the great unequal as are. equalizer. education is highly hereditary. you look at silicon valley and they don't look very diverse. back they have got east asians and south asians. what are you talking about? that is pretty diverse.
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>> everybody is passionate about education. there is scarcity of abundance. the internet offers abundance.
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paid for, you will start to see a pattern of trying to connect the market. there are 19 that make it impossible -- 19 states that make it impossible to offer broadband.
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those lobbyists packed campaign , but it's worse than that. am going to give you different one, which is to name a company or institution which wants to see internet available as low-cost as possible. they hate the internet. it's disruptive to the market. they want to put the genie back in the bottle. look at the nsa regulation.
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what does that tell you about power trying to control information? the closer you were to ground zero starting your company, i.e. google, the more you want it to spread. the further and further away they have got, they have to turn themselves into a pretzel and are no longer able to do no evil because of two major reasons. ions arent corporat
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pushing back. they take our data. they try to monetize it. while the average person who wants access to information is getting screwed. how many of you have read the terms of service all the way through before you pressed agree on the app? one person. we are having a massive debate about the openness of the internet, about the use of data, and we are not participating in that conversation. you know who's fault that was? hours. we are letting -- ours. corporationsg huge make the decisions. we are not disrupting politics. that's the problem. we want the open internet, but it's not going to work that way.
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you have to have an open .emocracy the open internet is not going to create open democracy. >> you asked about the right playbook. it is actually really straightforward. remember all you have to keep in mind is the old mcdonald theme song. that will tell you what the theme is. entrepreneurship, infrastructure, original .esearch we are doing a lousy job at most elements of the playbook right now. we talked a little bit about education. i could not agree more. amber mentioned rock band.
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this is america. this makes no sense. econ 101 playbook is not going to be sufficient to the situation we are in. it's absolutely necessary, and we are doing a lot of it right now. as we have seen, we are currently fighting about how .uch to cut government budget a lot of things he said are pretty expensive. how can our political system actually get us there? gett requires people to involved and make the case to their elected officials that is
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doesthey really want. anyone think the world was different in the 1920's or 1930's when general electric controlled the electric supply and they said it was too expensive to run electricity to counties?e in rural sameutely it was the debate. can the government give them money? absolutely. the government decided to borrow money and to make an investment, and they didn't just admit to the large corporations. ruralctually build cooperatives designed to keep the cost down. a work for profit. they were designed to keep the cost down so forever they would have low-cost access to unbelievable technology. how much more education can you get when you have light? this is revolutionary change,
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and the guys in the city had it. yorkeople in upstate new weren't getting the same benefits. we had the political will to come together and do that. it requires people to say to their elected officials that's what they want. decisions can be done. it's not impossible. you can overcome selected interest fighting against it, and you can come up with a better solution than just giving the money to corporations. on immigration reform seems to be a classification of just what you are talking about. the majority of american people support comprehensive immigration reform. yet we don't have it yet. can you give us a quick explanation of why not? >> i can. thehave the speaker of house who said unless a majority of republicans want it to go to it wouldn't go to the
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floor. they won't let the bill come to the floor. that means there has to be a majority of republicans who are going to get called by people in their history -- in their districts by getting people locally, business owners and , to get the bill to the floor. >> that's a big part of it. need a majority of the republicans in the house and the majority of democrats in the senate to be pushing the same thing at the same time. that doesn't explain why we didn't pass it 10 years ago. there was less public support of its five years ago. the other big thing going on, and i think it's useful for people to understand. migration reform -- sounds simple? we all know what that means? at least republicans are talking
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about six different bills. there are things they agree about and things they don't. the coalitions aren't always the same. one of the things that goes on in washington is this might be popular with everybody, but leadership doesn't necessarily let that pass because they want these other three things. if they keep the popular thing and attach these other things, maybe it will pull it along, so there are pieces of immigration reform you could pass in the house and the senate but for various political reasons doesn't happen because people are trying to work the angles to get other pieces of it attached. >> it would be passed no problem. >> they believe they are less likely to get that reform. it's not that complicated. it's just frustrating. said we shouldn't put
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these things through a straw. your explanation of how the house is working is accurate but inadequate. there are lots of different things going on. first there is the way the public is being informed right now. you if argue with any of you haven't uncle or ex who gets or girlfriend their news from a news station named after predatory, dishonest mammal. >> you are not naming names. it is a predatory mammal known for being dishonest that you cannot trust them. i am not going to mention fox by
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name. i'm just saying. here's the reality. if we have to make real change we have to be more sophisticated than the thing we are trying to change. the strategy by itself will fail. what we have got to understand is we have found ourselves in a moment where we have the best information distribution system in the history of the world. access to more data, but we are getting dumber because the information system and the wisdom system is not. there is something missing at this stage of the story where we actually don't understand each other. i'm on a show called crossfire. toet a stand -- a chance
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stand by my friend newt gingrich. we live in different countries. we haven't figured out how to hack it where people can pick their own information and honestly believe barack obama has opened the borders and let .eople fled the country you know, these canadians, flood the country, when he has supported more than any president before, so we can't even agree on the facts. ruleuld not be a terrible if we could be outside of this pick your own blog rule reality where people can't even agree on basic facts, so the problems are much more complex. i think it's very important what hank is doing. he has got to get more people involved to have a stake in the
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problem so when you give people the tools and technology you are just giving it to one demographic. >> the unbelievable tech community stopped talking to each other. many of your not from here. probably most of you are not from new york. call your friends from alabama to theh dakota and talk people who watch fox news every day. don't talk to your friends who watch msnbc. >> i want to underscore this. most people that i know are people like myself.
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bully magnets, unloved by anyone outside of our immediate ourly and not everyone in immediate family. we have fled from the middle of the country where we reinvented ourselves and in the best to and nowll those people, most of us can't even go home for thanksgiving without inflicting or receiving massive amounts of trauma because we can't communicate. that's something we can no longer indulge. piss offhow to not everybody at the dinner table and make a point. frankly, as intolerant as we sometimes accuse.
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>> i live in cambridge, massachusetts, and i have no idea what you are talking about. >> you can ask questions through the ipad. to ask the audience questions. some of the questions have got an answer on their own. do we say simply working hard at mcdonald's isn't enough? when do we turn our attention to working a lot of people 50, 60, 70 hours a week at minimum wage jobs. they are not making anything close to middle-class wage. at what point does the mentality change? pointre was a really good by milton friedman. he said above some level of income you have got to give some money back. richard nixon, a bunch of these
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crazy pinkos got together in the 60's and said above some income you pay back. you give money to the government? it provides a direct incentive for work. we have this great fondness for think is i extraordinarily well placed. it gives you something to do. it gives you meaning. solution is if people are working hard and not able to make ends meet, let's talk them off. it for a while. it's time to bring these ideas into the public discourse. >> i agree with that.
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that's policy. that's the kind of thing you can get a working-class coalition going. can say it's good because it works and the people from the liberal station can say it's good because it's the quality. you get something done. suddenly a lot of those numbers will different because technology is different but because policy is different. i think that's important. be completely impotent when it comes to policy. >> the overt role in economics is to tax the stuff you want to see less of an subsidize the stuff you want to see more of. the government gets 80% of its taxes from taxes on labor. if we like labor we are violating the fundamental tenant of economics. we can shift that around if we want to.
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we can change our policies in the face of this financial tidal wave that is hitting us. we are not helpless at all. >> did you have any government transfer stuff that would be separate from what you are showing? >> it does not exist. would that have been in there? >> yes. >> there is one thing i wanted to address. immigration reform pushes it out of the way but it doesn't pay for tech executives. pushbackgration reform wages for skilled workers like ?oftware developers >> in some cases yes. in some cases no. a talent
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we have to figure out someway to get talented to this country to proceed and train teachers to go into public schools. in every way possible. we are not going to see any kind of tax reform in this country for a long time, so looking to the government to try to solve this problem by policy is a little ways off. be great if we were calling up our friends in parts of the country that should be calling their elected representatives and passing immigration reform, but we keep thinking somehow we are going to elect people who are going to solve our problems instead of looking around ourselves and try to solve our own problems. >> give me an example. >> you have probably heard of e-government. using where government is the tools we use every day to deliver the tools we expect them to deliver.
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government is starting to use ,ore of these tools every day but they are also collecting massive amounts of data. some governments are starting to release that data to the public. people are taking that data and building on top of that. we are collecting lots of data ourselves. when we are walking down the street or in a car we are collecting data. people are merging that data with government data. they are building new platforms that are useful to people in their daily lives. they are doing it faster than government. my favorite example is exit strategy, which tells you where to stand on the platform at the subway. the stairway is right in front of you. they took data they collected themselves. the police said it was a
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security threat, and they basically built that map. tool builturce during the kenyan election was disputed and used in haiti to help people identify where resources were. it was built by people. what we have an opportunity to do is to go from waiting for me government ande- get ourselves to we government where we built the village we want. in tribal times you weren't concerned about your neighbor's ability to throw a spear as you were about your own because your own life might depend upon it. we have lived in a factory model economics where we forgot about facing each other in solving our own problems.
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acts.'t need more civic we need acts that are more civic. imagine if air b&b started using it to rent to each other so they could petition for a bus or a better school or universal pre-k ? what if they were the drivers themselves? you talk about the shared economy. everybody talks about the share in economy, but they always get paid in cash. it's not a sharing economy. the way to solve political problems is not to wait for government alone. it is to partner with government and to partner with each other. >> the initial question was about immigration reform in middle and skilled wages. it is clear.
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very many people. it ate very much. if anyone is hurt it is set the low end of the wage. busboys and dog rumors and things like that. the evidence is mixed. if they are hurt it isn't much. rumors -- and dog groomers and things like that. a i want to go to forward-looking question. we all kind of agree the robots are coming. the question is when. if it is an is inevitable. at some point when androids can make androids, are there new jobs created, or do we need to reevaluate whether work is something everybody should be doing? we associate work as your
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purpose and your income, and has served us well. does that change in a world of massive automation esther marquardt i think that's the key question. -- does that change in a world of massive automation? think that's a key question. i think increasingly having the orientation he is talking about is going to be the key to the whole thing. i love what he is doing. the way this is going to come ,own, the middle class itself the strategy was how do you get the middle class getting middle-class wage? how do you get to be middle class? i think it's going to be very difficult in this country. expectation gap is getting bigger. people thought it would be living this way and they are not. out on the road i see
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it everywhere. >> it's about having a middle-class life, not necessarily a middle-class wage. there are going to have to be 30 strategies, not one. they will keep fighting for jobs, keep fighting for wages. i think it's a losing battle. we are going to be losing more jobs in the united states than we are creating, but i think you are going to have to do to other things. i think you're going to have to have some kind of redistribution at the government level. there is going to be something that is done so the middle-class cannot just collapse. point, wages, government has to get involved, and there has got to be some to some barnraising
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approach. the idea that we are in this together. not do it your self. it's do it together. usingasic ethic of technology to find ways to solve problems together, if you do it --ht, you might wind up with maybe if you are using your social capital more than financial capital, he you may have a better quality of life. the middle-class life may be better even if we have less jobs, but we have to come to some consensus that we have to start figuring out how we make that work. we keep telling people you're going to be able to get a middle-class wage, and if you don't it's because the government is run by crazy socialists kenyan or because you .re lazy at some point the stress gets to the point where people start turning to each other or on each other.
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turn to a way for us to each other, using technology to solve the problem. that's the only way out of this. are clearlys coming. the wrong strategy is to think that day is coming and start planning for right now. the right strategy is to look at the next decent chunk of time that the economy is recognizable. onneed people to have input the economy. maybe 50-75 years down the road it's not the case anymore. they say we have no idea what's coming with the next round of robots, "jeopardy" supercomputers but that's the opening act. even so, that will not happen the next five or 10 years.
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right playbook is to try to do everything we can to have economic growth because we are still adding jobs to the economy every month. right playbook is to grow the economy even faster and put in policies that, again, e-i-e- i-o. the kind of from narrow economic policy perspective. we shouldolutely what be doing. instead of doing planning where the robots are taking care of everything for us, that is coming in the lifetime of most people in this room. >> we have another major structural problem. >> there is so much wealth.
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what are you going to do with $19 billion? >> even if they wanted to give it away, they probably cannot. tell you the sad fact. they may have signed the giving pledge that they will give away half their money before they die, they will not die. they will figure out technology to keep them alive for 200 years. philanthropy of the 20th century industrial age has figured out how to edit the portfolios. rockefeller, gates, and others are giving money where they can but they are not putting a .assive amount of risk they could maybe make some mistakes and learn across the way.
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we need a new generation of start fundings to the projects that allow us to turn to each other. us to tune in but not turn to each other. we still need capital. that is when it will have to come from visionary, young leaders who understand the technology and understand that they don't need to just make solving problems of the first world but also the second and third world. >> i will give you the last word. >> i don't disagree with anything that andrew just said. if you look back on american history, one of the favorite things i talked about is how this country came to be. the famous battle as the battle of saratoga where they were coming down from canada and they were going to cut the country and two -- in two.
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they had the biggest army in the world. they kept coming in the americans kept fighting. they slowed them down. they slowed them down. the first time one of these armies had been fought and beaten by a ragtag rebel force and it happened in the sarasota, in my congressional district upstate. an army likead this lose to a colony. what happened with the british? does anyone remember? here 25 years later, looked around and said, what happened here? what did he find in the american spirit ? uniquede this country so was local community groups. it was the town square in new england, the people who came ofether and a little militia
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10 guys where they have the round government, solve their own problems but it was just a community coming together. then the army came and they went and fought. they kept coming from new hampshire, massachusetts, vermont, upstate new york. that little community group became the lions club, kiwanis club, anything else through history, and it's what made america strong. today? oing on with us technology can facilitate it. he can play mine craft with all his friends and we have to figure out how to bring about the same thing that founded the country and allowed us to break free which is the local community that you are connected .o they were willing to do that to have a community where they could do what they wanted in the community -- community could do that together.
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i think the panel deserves a big round of applause. thank you. [applause] that was fascinating. if you are interested in more such events, you should join f wd. are at theand staff entrance. $35 per year and you also get a copy of andrew's book. he may sign it for you if you are lucky. if you have thoughts on future topics you would like us to have a discussion around, we are all ears. like having serious, thoughtful conversations about how tech can be engaged in this was an awesome conversation. inc. you, everybody, for coming. we hope to see you again soon. >> thanks, joe. [applause] [captions copyright national cable satellite corp. 2014] [captioning performed by national captioning institute]
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>> coming up, venture capitalist tom perkins talks about income the wealthy.d then a look at how health care companies are responding to the health care law. followed by pennsylvania .ongressman tim murphy obama is speaking to of firstamilies responders one month after the killed 39 and left four missing. 6:45 have the remarks at eastern on c-span 2. jersey governor chris christie is the keynote speaker at the new jersey chamber of congressional dinner. starts atoverage 7:00 p.m. eastern on c-span.
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>> i want to thank you for all this week,u've done a lot of us have looked at this situation. came toretary paul son us about a week ago he gave us a three-page bill that said give a blank checkbook and put 700 billion in it. i was offended at that time. happened since then? we added 107 pains of taxpayer bill.tion to that we understand the gravity of this situation. with ourrked colleagues on the other side to make this bill a better bill. that there's up side to the taxpayer so that happens, when profits come to these companies, we get their stock warrants so the first person in line to get profits is the american taxpayer so they can get their money back. we made sure that there's an that makesrogram sure that wall street shares in of this recovery
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and we also made sure that the executives of these companies these bad bets don't profit from this rescue recovery plan. we cut the initial cost in half of this bill. approve will have to the second half of this next year. why did we do all of this? because this wall street crisis is quickly becoming a main crisis. it's quickly becoming a banking crisis. what does that mean? why does that matter to us, why to jaynesville, wisconsin? if it goes the way it could go, that means credit shuts down, toinesses can't get money pay their payroll, to pay their employees. can't get student loans for next semester, pee can't get car loans. not have access to their savings. of we standing at the edge
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this abyss? nobody knows. maybe. it's very probable. speaker, this bill offends my principles. for thisoing to vote bill in order to preserve my preserves, in order to this free enterprise system. moment.a herbert hoover he made some big mistakes after we great depression, and lived those consequences for decades. that mistake. there's a lot of fear and a lot of panic out there. this is about is getting that fear and panic out of the market. bumbledthe white house this thing. they have brought this issue up a crescendo, to a crisis, so that all eyes of the world on congress.ere it's a heavy load to bear.
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we have to deal with this panic, fear.e to deal with this colleagues, we're in the moment. this bill doesn't have everything i wanted, it got a of good things in it, but we're here, we're in this moment. to do the right thing, heaven help us. to pass this, i fear come.rst is yet to the problem we have here is we're one month away from an election. we're all worry about losing our jobs. and all of us, most of us say this thing needs to pass, but i want you to vote for it, not me. unfortunately, a majority of us are going to have to vote for this. do we're going to have to that because we have a chance of that crash. just maybe this will work. my ownfor me and for
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conscience, so i can look my snefl the mirror tonight, so i a clearo sleep with conscience, i want to know that i did everything i could to stop getting worse, to stop this wall street problem from infecting main street. and i want to get on my airplane and go home and see my three kids and my wife that i haven't seen in a week and look them in the eye and know that i did what thought was right for them and their future. and i believe with all my heart, as bad as this is, it could get a whole lot worse, and that's have to pass this bill. i yield. >> find more highlights from 35 years of house floor coverage on our facebook page.
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next, a discussion with fortune magazine senior editor adam about what he calls the demonization of the one percent. from san francisco, this is an hour. [applause] caroline and this is truly my favorite part of the evening. never as loud as i'd like to it be. good evening, welcome to ming of the for --ealth club's inforum. lashinsky. senior editor at large for fortune and your moderator for evening. tonight we're here for inforum's event, tom perkins, the war on the one percent. tom perkins, seated next to me, capitalnder of venture firm, kleiner, person is,
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caulfield and buyers, an alumnus he's aard and m.i.t., renowned businessman and as everyone in this room knows an outspoken capitalist. in january of this year, shortly after his 82nd birthday, is that correct? >> yes. >> he wrote a controversial letter to the editor which was published in the "wall street journal." the letter has since gained notoriety for the parallels it makes between jews and nazi oneany and the current percent, here in the bay area, toms comments on income inequality feel particularly relevant given the current among sanewing franciscoans and what is known as the techy community. without any further introduction, please join me in perkins. tom [applause] to star at the very top, which is to ask you what the catalyst was for your writing this short letter to the
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"wall street journal." think frustrations have been building up for a long the about what i see as demonization of the rich. but it was a particularly nasty ex-wife, which triggered my response. so i thought, being a norwegian herht, i should ride to defense and i i'm not sorry i it. >> i should point out that your ex-wife danielle steele is in auditoriumow of the this evening, she came to hear you speak. but you refer to an attack on her. explain. where was this attack, whose attack was it? >> i don't want to spend a lot of tile on this. over the years the san francisco ofonicle has had a series attacks on her. them,won't go into all of but there have been a lot of
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them. among one of the attack is she's seller usually on every book, "new york times" number one, obviously her books being read in san francisco. but they're never reported in ever.ronicle, so, any way, that is, that's all.started it >> so you decided to write a angry about ane attack in the san francisco chronicle, so you wanted to inequality.income tell everybody briefly what you said in the letter and what your was. >> well, it turned out to be the widely read letter in the history of the "wall street journal," which of course is surprising. but and it's because i used a forbidden word. word kristalnacht, which shouldn't be used ever, i suppose. you shouldn't compare anything cows --old oh to the holocaust, for example,
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it's incomparable. kristalnacth. i said is there a progressive war on the one percent that cristalnacht,the and that got everybody's attention. that inde the point germany 1% of the population is jewish, and a maddening lish dictator used incredible political skills to focus hatred that 1% and use it as a stepping stone to power. aparallel between our 1%.ere in america and that so that's the parallel i drew. >> you've subsequently having used the nazi reference, and you quickly you arehat up by saying not apologizing for suggesting that victimizing a small a bad idea, period, and that was your point,
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correct? >> that was my point. would like tost talk about this word for a minute. on "wall street journal" february 4 ran a rather long op i've extracted to be very short, and it by a harvard, ruth weiss, she's the professor of comparative languages and she's written a couple of books about the nazis and the holocaust. headline is the dark 1%. of the war on the truth phenomena, anti-semitism and the american class conflict. is there any connection between them? "wall streeto the journal," tom perkins called attention to certain parallels between nazim germany, jews and americans the on for comparing two such historically disparate mr. perkins was
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--mptly but there is something to be said for his comparison of the the two at work in situationings. are you unemployed? the jews have your jobs. is your family mired in poverty? money.hchilds have your the parallel that tom perkins drew in his letter was hiscially irksome to respondents on the left, many of of presidentorters obama, against wall street and the 1%. ranks of those harping on unfairly high earners are fire.g with anyone seeking to understand the inner workings of such a will find much food for thought in mr. perkins' parallel. i think our overall goal for the evening is to explore as much as we can the subject of inequality. and why inequality is such a hot button issue. subject of her
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academic point, was written in a very academic way, it's clear that that's her profession, you muse see the difference between, the one hand, a small was essentially powerless being persecuted by a handity, and on the other a small minority that is extremely powerful that has all of modern society and wealth being persecuted, i'll grant you, by a majority, namely the other 99%. although the group you're actually referring to is at various times several hundred protesters who are angry. >> well, no, i think the holds.l never metl german has a jew. but some of the jews are extremely wealthy and they own department stores and so forth and so forth, so they were very prominent. i think it's a very good
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parallel. the averageying occupy wall street protester has never met a rich person, or a google bus,ides is that your point? >> probably. i think so. do you concede the point chosen to speak for the 1%, i admire you for not only do you have the courage of convictions, but you have them repeatedly, right? this isn't the first time you've defend yourself. but the 1% has certain advantages and ways of defending itself that an ethnic group that isbeing persecuted that small does not. >> i think i've started to answer that already. if the, if germany had had american gun laws, there would been a now, that's controversial. nazi germany had gun
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laws -- gunf germany had america's laws -- >> making guns buyly available to the public. you're a fan much our current gun laws? >> no, not particularly, but our constitution and i'm a fan of that. guns.t have any >> ok. we will agree that we won't anyminate your thinking more on the comparison of the rich 1% with the jews and nazi germany. >> no, but i'd like to talk about the nature of the the 1% here in america right now. >> sure. >> okay. like to start with some
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facts. useful.l it's >> they may or may not be useful. but go ahead. see.ll, we'll first of all, i don't think anybody has any idea what the 1% is actually contributing to america. let me just get into that very quickly. i've got it here somewhere. let me talk a little about, before i do that, about the persecution of the rich. and i'd like to take the coke them,rs, there's three of i know one of them, women, who has nothing to do with the other political.e highly but they're all big contributors forth.ities and so and david coke was on the board of new york presbyterian hospital, and the hospital was going bankrupt. so david gave $100 million to the hospital.
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and that was interpreted as coke the hospital for the purposes of firing the nurses nurses union. the so there was a big rally and all showedf important people up. the nurses said, the coke brothers have a plantation mentality, and antiunion to the core, harry belafonte called them white supremacists. then, let's see, letitia james, who was head of the wing antiunionht prove iteers like david coke be medaling with health care in new york city. all have to stand together brothers coming to new york city. >> but so far these aren't than the other $100 million -- >> the rally and what people said are facts. >> but you wanted to talk about the contribution that rich think is an which i
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interesting line of discussion. >> so let's just start with simple arithmetic. successfulou're a author and your income is tax at if you liver 50%, in california. death, will be another roughly 50% tax. so out of the dollar you originally made, you kept 25%. twenty-five cents. you gave 75% of your lifetime's work in the form of taxes. including property and other taxes. so that's on an individual basis. and i just learned something today that i suspect nobody in the audience is familiar with, maybe you are. home andu sell your you're making more than $250,000 a family, and you sell your
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home and there's a capital gain selle home, let's say you it, you want to buy a retirement home or something. added a 3.8% tax gain.r how many of you knew that? okay.a few, all right. i didn't know. all right. finally, let me get to the statistics. this the top 1% -- i got this from the tax foundation. the top 1% of taxpayers pay a greater share of the income tax the bottom 90% combined. theh totals more than 120 million taxpayers. taxpayershe top 1% of which totals roughly 1.4 million paid about 37% of all
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income taxes. a big jump from 1985 when the top 1% paid a quarter taxes.income income tax burden on andbottom 90% has dropped, of bottom 50% pays only 2.4% to the taxes. toptop 10% of taxpayers, 10%, pay 70.6%. the argument of the rich are not paying their share, as obama to say, and they could do more and so forth and so forth, i mean -- >> let's be clear about what we're talking about. the argument is that there's a against the rich and that the rich of being persecuted. we're not having a conversation about whether or not the rich are doing enough. your argument is that the rich are being persecuted, that's
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your point. is this the persecution that you're referring to? >> of course. i think that taxation, i wouldn't say it's a form of extremeion, but the progressivity of the tax rate is a form of percent cues. the extreme progressivity first of all is not new -- worse. getting >> but first it got ber better, use your terminology and now it's getting worse to use your material nothing. but it's not unprecedented. the republic thrived and with stood high taxes before. and likely will again. i'm trying to put this in the scope much history to ask you where is the persecution in that. if you pay 75% of your life's earnings to the government, you've been persecuted, let's sum it up that way. meanwhile, let's get back to the for a minute and talk about
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them. they are not doing very well. badly. doing extremely their income, i've got data on in 1985 the average $250,000 a year tax.40% in income pay 47% in income tax. and about half of that increase obamacare. >> so i think we can -- >> so nobody is having a wonderful time with taxes. >> well, it's an interesting point. i think everyone in the room would agree it's part of the reason why people came out to hear this conversation is that for lack of a better expression, because it's an inel and imprecise measure of those who are not super wealthy, but the 99% are hurting, to make a generalization, there is income inequality, you are agreeing with that.
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>> i am totally agreeing with that. >> so the question is what to do it.t first of all. and secondly, there is a perception that you ought to there is a perception in the country, in san francisco specifically, that the people who are making this great wealth essentially don't give a damn. >> well, i give a damn, and i'm happeningabout what's to the non1%. but san francisco is, doesn't becomingexperience of a suburb of silicon valley. and that's what's happening. >> explain. i feel like san francisco relatively peeking, especially the technology community, is thriving as a center of job creation.wealth how is it becoming a suburb? >> because the people in silicon in sanare living francisco. more and more and more. and this is a trend that will continue. not, it's a great city.
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it has wonderful restaurants, great culture, beautiful bay and everything. but the economic effect of that has been to drive up rents about 30%. so what to do about that? much youhink there's can do about that. it's inevitable, as silicon valley thrives, which it is, more and more people will want francisco.san so then we have the phenomenon es.oogle bus which, i just fine it almost get angrynsible, to about google busses. going excel if they want busses, it's fine with me. windows in them and rough people up, i think is preposterous. so now we have google boats. they going to be out there shooting at the boats? issue is, well, i don't mind stating my opinion
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boarishrish behavior is behavior, and everyone should say that breaking windows on a a bad idea. the question is, it's a philosophical question. should the city specifically be reimbursed for the use of its facilities, namely the bus stops. number two, if we encourage companies like google and google is not the only one, if we encourage them and their opt out of the public transit system, is it only going to make the public transit system work? and again, do we care? do you care about a good public transit question. >> is there a question in there? >> yes. an opinion on the use of city resources and do you agree with the philosophical that, for example, public transit, public infrastructure is a good thing? course. of course it is. and it's available for everybody. fee forle is paying a using the bus stops.
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>> belatedly. >> but they're paying. now, is google responsible for the rising rents in san francisco? in indirectly, yes. what can they do about it? nothing. >> now, we started down the path income can be done about inequality. i think -- >> yes. that point get onto actually. that income inequality is, has been with us for a while it's caused by policy failure. a hugehink there's been failure of social policy, fiscal policy.and monetary so i hope i don't put you all those as i touch on points. but let's start with social policy. ago lyndon johnson did
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two major things. civil rights act, which is marvelous, magnificent criticism. without he also did the war on poverty, had wonderful aspirations. but which has been an absolute total failure. it has caused all kinds of problems. first of all, there's more now than there ever has been. when johnson started out, the spending roughly 1% of its gross domestic product of the poor.e now that's closer to 5%. increase.uge there's 77 million americans on stamps. but i think the biggest problem johnson unknowingly created of the loweruction end of families in america. in the 60's and early 70's,
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whitesorce rate between and blacks and hispanics was acrossqual, about 12% all of those sectors. poverty made it mothers to have single supporting their children theout a working man in household, and so the numbers changed radically. the divorce rates have skyrocketed. victorian term, the birth rate out of wedlock has gone from 12%, which is pretty races,iform across all in america, to 40% now for over 70% for blacks. >> so you're drawing a straight failed war onhe
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poverty and income inequality today? linem drawing a straight between the failed war on poverty and tin crease of poverty, yes. >> and you started talking about social spending. i think as i've read and listened to comments that you've made, you generally would to the theory that we have more government than we ond, that we spend too much government. first of all, that government spend too much generally. point? a fair >> well, government is the jibe beast that has to be fed and the is with to feed it taxes. and taxes will just go up and up and up. obamacare -- >> the question i asked, in your opinion, does the government too much?spend >> yes. it spends more than it takes in. takes 3 trillion a year in taxes and it spends closer to four. >> but don't forget, we were talking about tax policy against higher
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taxes, other people are for higher taxes. so presumably we could raise taxes to pay for these things, which gets me back to the question of do we spend too much. do spend too much. and there's so many examples of need to,n't think i but taxes had rise. -- will rise. there's been discussion by nancy pelosi, you're familiar with her. >> our congresswoman. >> our congresswoman. >> your congresswoman. tax. a wealth it would be 2% per year on your wealth. and somebody said, well, okay, retired andu're your wealth is in your house and it's worth a million dollars. that's no problem, the government will just take a 2% per year and that's how they'll get the money. and she's also talked about a tax, and much higher wealthy.the the beast will be fed and taxes
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will go up. i don't know which or maybe perhaps all of these things will happen. irony is that you took 100% 1%'s income and wealth, we're only talking about a million 400,000 people. that total would run the a month.t for about >> other than social spending, you cut?ld >> i think that we're getting where my bonafides stretched really we really could have a panel of experts, but of course they wouldn't agree with each other, you might as well go with what i've got to say. >> well, you are the man of the we have no alternative. thinkon't know, i
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entitlements are the obvious place that cuts have to be made. but their built into the law so that's extremely difficult. on --ke to skip >> before you do, and i asked this line of questioning to try a point which is, for example, one of your venture suckes in your capital career was genentech, it most successful bio companies, does it benefit from basic medical research that the national institutes of health does? >> yes. more at the university research, yes. i'm all for the federal government funding basic research. know, i'm for a strong military. on, we could go down the list. but entitlements are what is budget.p the >> so to be clear, companies compac in which you
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invested and helped create a lot of jobs also benefited from military and other basic research by the u.s. government boo the internet, without which of this industry -- >> you're wrong on that. tandem did no military business at all. >> not directly, but the infrastructure that was computing --y >> you're barking up the wrong tree. i'm not going to go there. the squirrel is in a different tree. want to get back to the policy isblem, the social policy the number one problem, okay. fiscal policy, let's talk about that. spend too much. tooell, we, yes, we spend much. incredible.are just astronomical.s
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iss the official debt $17.3 trillion debt. social security. but it does not, and that's roughly 105% of our gross national product. if you are an individual and you were earning $s hundred thousand a year owe. year and you were spending 105,000 and you had no other assets, you'd be in trouble. but the unfunded liabilities of medicaid, fanny and toddy and so forth, adds up $68 trillion. on top of the 17 trillion. we really have a debt to g.d.p. ratio of close to 400%. many european countries have that. but many countries in the world have that at all. australia has a ratio of 20%.
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zero. has i think norway has the largest sovereign the world of over a trillion dollars. policy matters, fiscal policy matters, it seems to me that the debt will not be paid back. there's no way to pay the debt -- wait, let me finish. >> briefly, how those factors discussing contribute to income inequality. >> well, it contributes to being far in debt that you can't spendin things you should on, because you're so hopelessly committed. and inevitably the taxes will just rise and rise and rise, think does anybody any good. 99% or 1% or whatever. i thinkoint is, we're
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incredible debt can't be paid back. it supported by faith in the dollar. off thel took the u.k. gold standard in the second administration. off thenow who took us gold standard? >> nixon. >> yes. that it was let's print money. if you have a recession, print money, stimulate the economy. have inflation, print money, devalue the dollar. in 1970 was worth a dollar. today it's worth 17 cents. me make an observation as a way of moving onto other subjects. move on.t want to >> i have a few more we need to cover before we go to the audience. there a disonance here that this horrible situation you describe is coexisting with this great period of wealth creation creation and formation of great new companies like
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linkdr and facebook and in and google that are in turn causing this consternation that aboutcome here to talk tonight? >> yes, and that get me, thank you, directly to monetary pom. >> you're welcome. it's the evening time and nobody to hear about -- >> we've had low interest rates for a couple of decades, a more. very low. historically low, for a long, look time. now, investors with capital are capital.un on their these low interest rates, the ise on a 10-year treasury 2.3%, i think, today. very low. investors are seeking returns of 7, 8, 10%. so incredible amount of money to get directly to your point has through venture capital. i,, when eugene kleiner and the late eugene kleiner, my dear
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friend. and cofounder. when we started kleiner perkins, we tried to raise $10 million couldn't. we raised 8 million, and that was the largest venture capital world. the and everybody said what are you going to do with it? turned out we had to start our own companies to make it work, but that's a different story. now we have, i don't think knows how many hundreds of billions of dollars in venture capital. immense.t is and that is causing the boom in san francisco. >> okay. >> within a mile of here there 1,000 --bly >> but in your opinion these are good things? >> no, not necessarily. >> why not? >> why no., because these startups and students are of m.i.t. in their junior year to come to san francisco and do a startup. but they're not starting
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companies. they're writing software which arens, products. a huge difference. a company.roduct and and their only route to liquidity is to sell it to google, apple, whatever. will fail. them and that's fine because there's so much money around, they can again andhen fail they'll keep getting financed. for them.ot good they're not getting the education that they should have gotten, they've dropped out. they're not learning how to be entrepreneurs. just writing software. and applications. and there are so many millions, somebody probably knows how many applications there already are. but there's no great shortage of them. so i see the building boom, the of this ism and all
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the result of terrible monetary policy. for 20 years. >> but i grant your point on monetary policy. the situation you describe of a flood of venture capital essentially to paraphrase you, are a bunch of bad ideas or ideas that won't be companies, isn't this a great capitalist free for all, isn't this just the market at work? >> yes, it is. and when the interest rate goes stop.p to 3%, it will no, 7%, excuse me. >> but it's a fascinating line of argument you're making. successes will come out of this. it's like a petri dish. may bloom and blossom. and we've been cleffer and them. good at picking >> but wasn't it like that in your days as an active venture apitalist as well, maybe on smaller scale? you invested in young companies, had a hare brained
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idea, maybe they had a great idea, maybe they'd have to go get a real job, right? give a speechld on venture capital in my sleep, therewould put you all too. i think that the unique thing about kleiner perkins and sequoia and the other great venture capital firms is the skills that they brought to the ventures. and typically they would help the entrepreneur build his team. they wouldn't expect to find a built.ready who is going to become vice president of marketing of a startup number 780 -- understand. >> so the venture capitalist can fill that role and provide all thingelp and get the going. i mean, that's the difference investor whogel
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oversort of sprinkles gold everything and a venture capital investor. slamming conway, because i think he's very good. are.ot all >> you have referred to this, in this conversation about the 1%, to this 1% as the most creative part of our society. >> yes. >> would you explain that? because the war on the rich has as theamed initially richest 1%, not the most creative 1%. a high, there's correlation. i guess kleiner and i were in creatingess of billionaires. we didn't do so for ourselves, right.all 20, 30 billionaires that i .ould name that we've created look at google. confused.
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couldn't there be a creative poet or creative artist who is most creative 1% in the country and why would you creativity with yesterday? owed with wealth? >> you are jumping interest a completely different philosophical seun verse. value, noting about wealth. i am talking strictly about the wealthiest 1%. not the brightest, not the best poets, et cetera. >> creative, though, was your word. >> well, yes. the wealthy 1% creates jobs. come from.e they not the government. the government can't create a save its soul. it spends millions and you get nothing. or i must say the government is right now the biggest venture capitalist. look at so land dra, which has death, but even
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kleiner perkins. we had an automobile company from theowed money watch.ent, not on my >> you're talking about? >> uh-huh. so everybody is in venture capitalism. you're bound to get some good out of all that. >> you mentioned to me earlier that you've been involved in all your career. and your current controversy you to surprised that the current parters of kleiner side onare not on your this debate. >> i don't really want to talk about that. think basically it didn't have to say anything and instead they me under the bus. i'm a big boy. a lot ofe had controversy in my life. for a long time i was the world's foremost mysogenist for firing patty dunn and carly
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fiorina at hewlett-packard. then when i was involved in i was going to destroy the world by releasing bacteria as new forms of life. thethere's a journalist in chronicle, maybe something you whomber, charles mccabe, just castigated me every day on that. and when i started my laser 60's, they the thought it was a death ray. and -- ( laughter ) yeah. and the year i ran the san ballet effectively was a year of extreme controversy. called me, well, an in charge of doing something he has no qualifications whatsoever which is true. but the guy i hired is still years later.
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>> it's almost time for audience questions. you mentioned herb kane who started your comments by mentioning the san francisco chronicle. are you surprised that the san aancisco chronicle has pages? tone in its >> i think there's only one newspaper in the united states populussn't have a tone. and it's the only newspaper in the united states that's making the "wall and that's street journal." >> point of fact, other money.ers make but believe u.s.a. today makes money. newspaper. the "new york times" does not make money. >> and "the new york times" does not make money. >> i'm not sure, but it's a public company, so we could go check afterwards. >> we could go check.
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>> anyway, the question that i asked is, are you surprised? you've made comments suggesting that you are surprised, shocked, upset, or something by the "chronicle's" tone. >> well, i read the "chronicle" every day. i want to know what's going on in town. i never read the editorial page. i could predict the editorial page. i don't need to read it. i read "the new york times" every day, and "the wall street journal." i don't get my information off the internet, like everybody else does. i think i know a lot more than people who do get it off the internet, but that's a matter of personal opinion. >> you also mentioned to me earlier that you've noticed a difference in the reaction you've gotten in the last handful of weeks, between people who email you on the one hand and people who comment about you on twitter on the ther hand. would you share that with everybody? >> it's very interesting. i've received a huge number of letters and emails, all very supportive of my position, 100%. the twitters are all pretty negative, and it's an age difference. older people use email and


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