Bill Moyers – Charlie Rose 07-07-13

Salient to Investors:

Bill Moyers said:

  • The crisis of millions of working families falling into poverty is the defining story in the US in the last 30 years. The social contract has been shredded in the last 30 years.
  • The belief that if you work hard and play by the rules you will get ahead in America is no longer true. 22 million Americans who are seeking jobs can’t find permanent work, while 49 million are on food stamps.
  • Madison warned against the oligarchy of a nation with people at the very top and people at the very bottom and no stabilizer in the center.
  • If we don’t address the issue of inequality we will end up with a two-tier society with 1% doing well and the other 99% struggling. All the productivity gains have gone to the top while the wages for the working people have stagnated: that used to be a temporary problem but is no longer the case. The percentage of GDP going to the working class has been sliding for 10 years.
  • Losing faith in a middle class leads to people losing faith in the political process, and a feeling they have no representation in government.
  • The crisis is the result in large part of engineered inequality – a series of political decisions over the last 30 years, the chief one of which being the owners of capital businesses and corporations deciding to change the rules to benefit themselves including driving wages down, a crusade to diminish the cost of labor, the elimination of collective bargaining, along with legalized graft in Congress, tax changes.
  • The policies from both parties benefited those at the top at the expense of everyone else.
  • It will take a long time to reverse the decline, but it must be done or else democracy itself is at risk from a permanent underclass with no future. The Urban Institute said people under 30 are not doing as well as the generation that went before them.
  • Good people go to Washington but they have to raise a lot of money to get elected. The Sun Foundation found that a third of the money given to campaigns in 2012 came from just 138,000 people.
  • The US has lost its sense of collective responsibility, with both parties serving powerful financial interests. Their monopoly is not just of capital but of politics.
  • While profits are at a record, the share of GDP going to wages is at a record low.
  • The US should raise the minimum wage to $15, despite the always present argument of cheaper labor abroad because it is not a perfect equilibrium. Wages must be sufficient to raise  a family and buy the goods we produce.
  • There has to be a sustained uprising by people taking risks, just as our founding fathers did when they risked everything.
  • When attributing the blame for poverty, never underestimate the power of learned helplessness.
  • Some of our financial elite are hopeless in that they live for more and more and more, but our financial class needs to respond not with charity but with justice.
  • All governments lie including our own.
  • What matters is not how close to power you are, but how close you are to the truth. Power tempts everybody but doesn’t corrupt per se. Power shifts your perspective from what is right or wrong to what is necessary and when you start to think about what is necessary you change your system of reasoning and sacrifice some of your personal values – a danger to government and corporations and Wall Street leadership.
  • My fundamental  conclusion is that life is a lottery, and so I do not buy the philosophy that people are self-made – we don’t choose our success or failure. A just society takes that into consideration and says that people who don’t win the lottery should not be cast off on a desert island or condemned to hell.
  • Because life is a lottery, we have an obligation to each other to create a society where the lottery is determinant but not decisive in the quality of our lives, and that a society that wants to be just and fair must work to balance the unintended consequences of the lottery.

Charlie Rose said everyone knows there is something wrong and not enough people are committed to change – we need to redistribute the wealth in America.

Watch the full video at

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Matt Taibbi and Chrystia Freeland on the One Percent’s Power and Privileges – 10-19-12

Salient to Investors:

New York City’s economic inequality rivals that of a third-world country – in 2011, the median annual income for the bottom 20% was less than $9,000, the top one percent was $2.2 million.

Income inequality is the highest since the Great Depression – the top 1% took 93 percent of the income earned in the first full year after the recovery. Studies indicate the divide between the superrich and everyone else may stifle jobs and growth for years to come. Never before in modern history has the top .o1% owned more of our wealth or paid so low a tax rate.

Chrystia Freeland of Thomson Reuters Digital said:

  • Income inequality is still taboo in American political and cultural life and why we have the billionaire class. People at the bottom and in the middle are being hammered.
  • The two real and present dangers of inequality are the people at the very top capturing the political system. Willem Buiter at Citigroup said that one cause for the financial crisis is that the entire intellectual establishment – investment banks, regulators, academic economists, financial journalists – have been captured by the financial sector’s vision of how the economy should work, with light touch regulation.
  • Elites think of themselves as acting in the collective interest, even as they act in their personal vested interest. As a result, social mobility will increasingly be squeezed, while powerful sectors, finance, oil, and soon technology getting lots of government subsidies. Much less money will be spent on the middle class and poor. Plutocracy want to cut entitlement spending because they don’t need it and don’t want to fund it.
  • Economic growth will be stifled as America moves to a more Latin American economic structure, with a few incredibly rich having great lives and the people at the bottom struggling.
  • The winner take all economic dynamic exists separate from politics, which are exacerbating the division rather than mitigating it, and is a global phenomenon.
  • Even in France and Canada, income inequality is increasing, and in the emerging market economies. Politics allowed globalization to happen.
  • There’s a battle of the millionaires versus the billionaires. While 93 percent of the recovery went to the one percent, 37 percent went to the top 0.01 percent. The elite are very keen to divide the world into good plutocrats and bad plutocrats, but everyone believed that they and their business belonged to good plutocrats, and somebody else belonged to bad ones.
  • Absolutely sincere self-justification is one of the biggest dangers in our society. Since the Reagan era there has been this vision of the successful businessperson as really a leader for the whole society, the hero of our capitalist narrative. The elite frame their influence as for the greater good, thereby devaluing the role of government as an independent, respected arbitration body in the center of the ring.
  • Leverage at U.S. levels was not allowed in Canada and Canada didn’t have a financial crisis – it’s the only G7 country that didn’t have to bail out its banks.
  • While the bailouts were absolutely essential, they should have had strings – Warren Buffett drove a much harder bargain with Goldman Sachs than the U.S. Treasury.
  • Barack Obama is in many ways a plutocrats – in education, in thinking. He could very easily be a top corporate lawyer. He thinks like them.

Matt Taibbi at Rolling Stone said:

  • The inequality began with Clinton and the New Democrats, who vowed never to lose the funding battle again after Mondale lost in 1984, though continue to campaign on social issues the same way. Democrats began to side more and more with Wall Street and the very rich – now neither party represents the very poor. The middle class is being decimated.
  • The poor are incredibly demoralized, with the media’s relentless message that being poor is your own fault and being rich is deserved.
  • A caricature of what is happening in America. and which the world is drifting towards, was when Russia in the mid 90s went capitalist, resulting in an instant division between hugely rich people at the top and everybody else who had nothing. The merger of state and private power empowered this one tiny little class – loans-for-shares privatizations essentially handed the jewels of Russian industry to a few people, many ex-KGB types.
  • The smaller hedge funds and banks get upset at bailouts for Citigroup, Goldman Sachs and J.P. Morgan Chase that enable them even greater market share. Since the very biggest commercial banks will never be allowed to go out of business, they are able to borrow money more cheaply and gain an inherent financial advantage over small, regional commercial banks. Smaller hedge funds believe big investment banks are selling them out to even bigger hedge funds that are giving away information about their positions to even bigger clients so that somebody else can trade against them.
  • Financial services people, particularly at the very top, sincerely believe that they have not done anything wrong and have built a very powerful insulating psychological justification for their lifestyles. They genuinely believe that they are the wealth creators and that they should get every advantage and break whereas everybody else is a parasite and they’re living off of them.
  • We are headed towards a community of rich people completely disconnected with the rest of the world, with the power and influence over the government to legalize whatever it is that they want to do. Raising money for campaigns is just too overwhelming for most legislators to get past. We face a continual worsening of the situation, continued decimation of the middle class.
  • The bailouts were necessary but were done without any conditions at all and without any investigations like in the S&L crisis.
  • Obama has surrounded himself with elite people, like Larry Summers and Bob Rubin, and has accepted many of the justifications and arguments that come from Wall Street and the business community. He is emotionally and culturally much closer to the elite than he is to the rest of us.

Read the full transcript at or watch the video at