Hedrick Smith ─ Reclaiming the American Dream

Hedrick Smith ─ Reclaiming the American Dream

It’s my pleasure
to introduce one of the widest ranging
intellectuals writing on the American scene now. Hedrick Smith broke his
journalistic teeth reporting on the civil rights movement
in the American South in the early 1960s– knew John
Lewis, knew about the sit-ins. That prepared him for
assignments in Saigon and Cairo and then the in Paris. He was bureau chief for the
New York Times in both Moscow and in Washington DC. He won two Pulitzer Prizes, one
for his role in the Pentagon papers, and another
for his reporting on Moscow from Russia
and from Eastern Europe. He has written a string
of bestsellers, including one entitled “The Russians” and
one called “The Power Game,” which is one of the
few books in Washington that the power brokers
read to find out how they should be playing the game. He has moved to
doing television, has sponsored, written,
produced 26 different television programs, ranging across the
entire American experience, from Walmart to Wall
Street to Dave Brubeck. I could go on and on, but you
want to hear from him, not me. Please welcome Hedrick
Smith to Brown, thank you. [APPLAUSE] Thank you, Jim. And thanks to all of you
for taking some of your time this afternoon. Although it’s nice to be inside
out of that great Providence spring that you threw. Unfortunately, Washington
is under the same clouds. I’m not going to talk
about the campaign, at least, unless
you drag me into it. But I do want to start
from the campaign because it’s such
a wonderful campus. I can’t remember as wild,
raw, nasty, angry, troublesome upheaval in American political
campaigns, I think, since 1968. It’s really– that’s the last
moment we had quite like this. And to me, it’s
interesting not in terms of the horse race, which
my colleagues are all worried about, and the
collection of delegates, or the cheating of delegates,
or the stealing of delegates. But I’m interested in the
campaign as an MRI of America. How do we go from the
campaign into our society? What do we see? If I were a foreign
correspondent covering Washington and
covering America today, what would I be writing about,
aside from the delegate count? What would I be learning
about this country? And that– and it’s
taken the press, I think, about six months to get
to this part of the story. You’re now seeing– in
the last month or so, I’ve seen a lot
more of the stories that I think should have been
written last fall at least. But in any case, we’re
starting to get into it, and that’s what I’m interested
in getting into with you today. I think one of the things
that I would say immediately, and you might say
it too as well, is that this campaign has
changed the axis of conflict. Normally the axis is
right and left, right? It’s on a graph, it’s
on that horizontal line. The axis now is up and down. It’s up and down
in both parties. So we have a populist
rebellion going on in each political party
today, challenging what’s euphemistically
called the establishment. What they mean is
the power brokers who are used to running the party. How many stories have you
read in the last several weeks saying, quoting somebody
saying somebody, i.e. Trump, is stealing our party. Wait a minute– who gave you
the ownership of the party? The assumption is
it’s our party. The assumption of the
elite is it’s ours. So what you have going
on is this challenge. And to a certain degree, there’s
a “why doesn’t Bernie go away” feeling among the Democratic
establishment as well. So it’s a similar
sense of ownership. All right, it’s fine. You can go out and
run in a few things. You can run in a few primaries. Go to the Iowa caucuses,
show up in New Hampshire. Of course we’re going to
kill you in South Carolina, and you can go a little
bit, but by the time we get to the Midwest–
get out of our way. You’re messing us up. We need to get to the general. We need to focus
on the other party. This is not happening. And the fact that it’s
not happening this late tells you something
else that’s important, and that is the depth and the
breadth of the unhappiness. The depth and the breadth
of the disenchantment. The issue is inequality. It’s inequality of power as
well as inequality of income. It is absolutely essential. Whatever the issues
you’re hearing about, whether it’s trade
agreements or Wall Street speeches or whatever– all
that is lingo, it’s rhetoric, it’s wrapping around
the issue of inequality of power and income. And it is deeply
troubling this country. And I will contend today that
long after the victor is known in this year’s
presidential campaign, we will still be talking about
and addressing this issue. And I’m not sure, if
we’re in American history, whether we’re really at 1860
or we’re rather somewhere around 1852. I have a sense that
we’re not watching the final chapters of
this argument about power and the inequality in America. We’re a seriously
divided country. We’re divided by money,
we’re divided by power, and we’re divided
by whom we trust. Think about it. I mean, if you can step
back from your own feelings about Trump and the
outrageous bigotry and authoritarianism and
ignorance of the world, and all these terrible things
that he’s said, spoken, and represents. And just sort of ask
yourself, as an analyst, how the hell can so
many people– millions– be voting for him? It doesn’t make sense to you. All right, get out
of your skin and go to find out where they are. And the answer is they don’t
trust the rest of them. They’ve turned down a governor
from Texas who, in my opinion, they should have
turned down, but it’s a governor from a big state. They turned down a sitting
governor from New Jersey. They turned down a lousy
governor from Louisiana, and they turned down a pretty
good governor from Florida. So all those things
that should give people credibility, weight, and
connection with the voters didn’t count. So why? What is it that’s going
on in the body politic and in the society that we live
in that we’re learning about? We’re deeply divided,
as I said, and there’s a loss of faith in America. Part of the problem– we
have some very good pollsters in this country, and
polling has become very hard to do in this country
for all kinds of reasons, mostly having to do with cell
phones and people’s mistrust. But there’s a loss of
faith and a loss of trust in all kinds of institutions. And what the polls that
are really interesting, that are worth
following, are not the ones that tell you that–
it used to be Obama’s rating was down. Obama’s up over
50% now, which in the current
political atmosphere, is actually pretty good. But Congress is way down. We in the media are way down. The lawyers are way down,
the ministers are way down, the Catholic church is
down– on and on and on. What’s really
interesting is not just the opinion of people
about the politicians, but the loss of faith
in our political system. If you look– I saw one poll
that said 91% of the people think the political system
in America is broken, 91%. You can read poll
after poll after poll, and this goes back
probably 12, 13 years, and find that 70%
to 80% of the people say lobbyists have too
much power in Washington. Corporations have too
much power in Washington. People in Washington don’t
listen to people like me. The wording varies
one way or another, but people have got it. They’re disconnected. So politicians
who come to them– and what we haven’t
had before is we haven’t had the translation
of people’s opinion in polls about general attitudes
translated to the way people vote. But we’re now starting to see
it come through in the voting. And politicians start
to take that a lot more seriously,
which then begins to make the political game
a lot more interesting, both to follow and
to get involved in. But there’s this loss
of faith, there’s this disenchantment out there. 91% say the system is broken. I saw two polls, one of
which said 60% of the people said America is in decline. America is in decline. Another poll said 63% said
America isn’t in decline. We’ve seen our best days. Our kids are not going
to do as well as we are. The students we’re
teaching today can’t look forward
to as good a future as we have had in our past. It’s really dramatic. John Gardner, and this
isn’t just this year. I’m trying to get
beyond this year. Just use this campaign
as an indicator, as a litmus test, as a
canary in the coal mine, not as a reality that we want
to study in detail itself. But John Gardner said,
I think about 2005, 2006 before he died, we’re
walking the edge of a precipice here. Civilizations die
of disenchantment. Not politicians lose,
not countries have debt. Civilizations die
of disenchantment. If enough people lose
faith in their society, he said, the whole thing
begins to fall apart. I would contend that
that’s where we are. I would contend
that’s where we are. And if we start thinking about
our problems and our issues in our society and what we
should do, it seems to me we need to get somewhere near
that as a starting place. And part of the difficulty
is too much of the analysis and too much of
the recommendations don’t get anywhere near to
the right beginning place, so we don’t have much chance
of really doing much more than tinker around the edges. You know, look at Washington. Look at what we’ve
now just come to take for granted in Washington. They not only can’t
pass a budget, and you have to understand,
I’ve been around Washington long enough where budgets actually
got passed every year, and 13 appropriations bills
got passed along with them. That was fairly routine. We don’t pass a budget anymore. We pass a continuing resolution. Do you know what a
continuing resolution is? It is an acknowledgement that
we cannot come to the collective policy agreement
represented in a budget, so we’re just going to kick the
ball a little bit further down the field and continue to
do what we’ve been doing. A continuing
resolution, which is now hailed in the
media as a success, is actually a policy failure. So we have that,
just for starters. We had a situation not long
ago, and I covered 401st for a long time, I’ve
never seen anything like this in my whole
reporting career. 40 plus Republican senators
wrote a foreign government and told them not to trust an
agreement then being negotiated by an American president. They wrote to the
leaders of Iran. They wrote to Khamenei and said
don’t make this deal with Obama on regulating your nuclear
weapons because you can’t count on
the next president after Obama to keep it. Unheard of! Unbelievable when you think of
all the things we went through in the Cold War and the
bipartisan– politics ended at the water’s edge
was a rule that governed American politics,
certainly through World War II, and I would say
throughout the Cold War, at least until Gorbachev came
and visited Reagan and well beyond that. It was phenomenal. And now we just
take it for granted. We’re not going to
have a Supreme Court justice for the next
eight or 10 months. So one of the principal
institutions in our democracy is going to be
hornswoggled, basically, by four to four ties on a whole
number of important issues. And it’s just–
that’s just politics. Think of the dysfunctional
failure that that represents, those two things. I don’t need to go on
through the list for you. When I think of Washington, I’m
reminded a little bit of one of my favorite cartoons. It’s the Charlie Brown one. It’s Peanuts. It’s the one where Lucy has set
up a card table in a backyard. And it says Psychiatry one cent. Well, you know who walks up. Charlie Brown walks up. He puts down his penny, and he
wants to get therapy from Lucy. And she says, well
Charlie, before I can give you any advice, I
need to ask you a question. I need to have you think of life
as a voyage on a great ocean liner. She said there are some people,
and they take their deck chairs, and they take
them back to the stern to see where they’ve come from. And there are other people, and
they take their deck chairs up to the bow, and they
look into the future to see where they’re going. Which group do you belong to? Charlie scratched his head
and thought for a moment. He said, Lucy, I’m having
trouble getting my chair unfolded. [LAUGHTER] So Washington is having trouble
getting its chair unfolded. And we laugh about it,
but it isn’t funny. And you can see that
being played out today. And you can see it
being played out in the polarization, this
up-down division, the schisms, the rifts in American society. And as I was starting to
write about it, work on this, I got thinking back to
my days at Oxford when I read some of Arnold Toynbee. You know he wrote that 12 volume
history of human civilizations. It’s 21 civilizations,
6000 years. I want to say right off the bat
I did not read all 12 volumes. I read an abridged
two volume summary which is a pretty hefty
piece of work itself. And he tells the story
of human civilizations in terms of the rise and fall
of civilizations in terms of challenge and response. Every civilization is faced
with one or multiple challenges, and it either sustains
itself and rises and carries on by meeting that with
an effective response, or it fails to meet it
with an effective response, and it disappears. And he goes way back. And he starts talking, as
I recall, with a challenge that I wouldn’t have
thought of, which is an environmental challenge. And he talks about the Inca
civilization in Latin America. And he talks about the Egyptian
civilization on the Nile and the challenge of
a hostile environment. Could they even establish an
effective agricultural economy that would feed people
and nourish civilization? And of course they did. We know that from the temples of
Machu Picchu that not only grew enough stuff to feed
everybody, but they built those magnificent buildings. And the same thing
with the pyramids and all the great ruins that
we see up and down the Nile. But they fell victim
to another challenge. And that’s the challenge of
an outside military invader, the Spaniards in the
case of the Incas, and the Ottoman Turks in
the case of the Egyptians. And that outside-invader
challenge is one that we’re used to. We as Americans know
something about that. We’ve dealt with that. We dealt with that
in World War I a bit, but really in World War
II with Hitler and then, eventually, in the Cold War
with Stalin and the Communists. But what he goes on to talk
about– Toynbee– that’s so interesting is the
challenge that was really fatal to the civilizations that
we most admire– Ancient Greece and Ancient Rome– was
a challenge from within, internal conflicts,
what Toynbee calls schisms in the soul
of the society, schisms in the body politic. And when I hit that and
thought about that, I thought, this is what we’re looking
at here in America today. We have a challenge
today– which is internal, which goes
way beyond this election and will continue to go
way beyond this election– that we need to cope with. Or we literally are
with those 60% or 63% of the people who told those
pollsters, we’re on our way down. And there is hope. I think we can do
something about it. But we do have to
recognize, I think, the depths of the problem. And we have to understand
how we got into it. I don’t think there’s
a chance in hell that we can deal
with it if we don’t understand how we got into it. And the normal
explanation for where we are and for the economic
inequality today– and it’s interesting that the focus
of a lot of the debate in the campaign is on
trade– is basically, this is globalization. This is modern technology
coming in and destroying old industries– the horse
and buggy going its way and being replaced
by the car; and then, the computer coming
along and replacing all kinds of other
things; and the internet coming along and basically
running us print-media guys off the map and so forth. And that this is
sort of inevitable. And there’s really not much we
can do about it, relax, folks. Adjust, learn new
skills, and move on. And certainly,
there’s truth to that. But it’s a half-truth. And it’s misleading. If it were the whole truth, we’d
see replications of America all across the globe, and we don’t. If you look at German
society– if you look at other
advanced economies, they don’t have anywhere
near the inequality of income that we do. They have very different
social institutions. They have different
attitudes, different ways of going about
problem solving, which we might learn from– that we’re
very proud about not learning from other people if
it’s not invented here. But we don’t see that. The economists have come up
with a thing called the Gini coefficient, which
essentially measures how unequal a society is. And they have to go
through all kinds of complicated computations, but
if everybody is totally equal, your society gets a rating of 0. And if Bill Gates owned it
all, we’d have a rating of 1. And so, well, if it’s really
unequal and you’re European, your rating is somewhere
between 0.25 and 0.33 or something like that. We’re off the chart. We’re up at 0.47. There’s no other country
anywhere near us. And you don’t have to
take my word for it, Citibank put out
a report in 2005 to its wealthiest clients
talking about investment opportunities, and they said,
invest in the companies that cater to the top 1% or 2%. Because there’s so
much concentrated purchasing power and
wealth in that 1% or 2% that that’s where the
money can be made best. And in the process,
they said, we had a degree of
inequality of income that, among major
powers in world history, was the greatest since
16th century Spain. OK, that’s 500 years. There’s a pretty good yardstick. We’re off the charts. The question is,
how did we get here? And was this inevitable? And was it ever different? And if there was
something different, is there something
we can learn from it? Well, I’ve been around a long
enough and so have some of you, judging by the hair color
in some of the people in the room, that I
think I remember a more shared prosperity, when
I came out of Williams and went into the
marketplace and so forth. But you know,
you’re white-haired. You’ve got to be careful. Because there’s a tendency to
say, back when I was young, boy, everything was just fine. If we’d just get back
to where we were, we’d fix everything up. So I decided I better
go back and check. What’s interesting
is, if you look at the period from the end
of World War II– ’45– until the mid-late
’70s and see what happened to wealth and
growth in this country, the productivity of the
American workforce– which is the driving force for
growth, increased productivity, increased technology–
went up 97%. And the median hourly pay and
benefits of the average worker went up 95% during that period. 97% and 95%. In other words,
as that technology was introduced, as the
economy became more global, as we became more efficient,
as the corporations made more power and we had
enormous growth, the middle class
standard of living is going right up with it,
was right on an escalator with that, going up. Really interesting
that that was going on. And if you actually look at
what economists like to do– which is cut us up into
quintiles, top 20%, second 20%, bottom 20%– the average income
in all five quintiles moved up, pretty much in tandem. In fact, the ones in
the bottom two quintiles moved up just a little bit
faster than the one at the top. I’m not saying we
had convergence. I’m not saying we
had equality at all. Charlie Wilson, the head of
GM– the best paid executive back during that
period– probably made 35 times as much pay as the
average General Motors worker. But 35 times today–
they’re within shouting distance of each other. Today, it’s 300. And two or three years ago,
Tim Cook, who runs Apple, made 4,622 times as much as
the average Apple worker. And I’m not talking
about the workers who are Chinese overseas. I’m talking the ones who
are in this country here. So it’s changed enormously. So there was some shared
wealth and some convergence, in the sense that the
distance from the top to the middle to the
bottom wasn’t that great. Did we have business
booms in cycles? Yes. Did we have poverty? Yes. Did we have problems? Yes. I’m not suggesting
any of that away. I’m just trying to give
you some indicators that you can compare to today. So the question is,
how did we do that? What drove that kind of society? And two things matter. It’s interesting. You keep coming across
this in history. It seems as if it’s
not true, but it is. Two things matter,
ideas and power. The idea that mattered at the
time, that made that possible, was the leaders of
American businesses, the Charlie Wilsons
of General Motors, the Reg Jones at
General Electric, Frank Abrams at Standard
Oil of New Jersey, Remington at Coca-Cola, on and
on, Irving Shapiro at DuPont. All those guys believed
it was smart business and it was the duty
of the CEO to balance the economic interests
of all the stakeholders in the corporation. “Stakeholders” as an enormously
important word and concept. Everybody who had a stake in
that corporation had to do well or the corporation
couldn’t do well. That was the central idea. And when you read the
statements of these guys and what they say,
they’ll talk about ethics. They talk about
moral responsibility. They talk about it in definitely
ethical and, sometimes, almost religious terms. And Peter Drucker,
the management guru from Southern California, from
Claremont University– he’s running around the
country teaching this. And business schools
are teaching this. It was absolutely central to the
paying of lots of middle class people lots of money. And the idea behind that
was what economists call the virtuous circle of growth. If you pay tens of millions of
middle class Americans well, they don’t save a lot of it. They might be buying a mortgage. They might save a bit for
their kid’s education. Back then, they weren’t saving
much at all for retirement. We’re still not saving
it enough for retirement. But if you paid
them, they spent it. And that generated the consumer
demand that drove the economy. So you had this process
of paying people well, robust consumer demand, which
generated higher production, the need for new factories,
new equipment, new technology, and hiring more workers. That is the basic secret of
America’s phenomenal growth from the end of World War
II up until the late 1970s. And that idea has changed. But that is absolutely central. So that idea was critical. The other thing that was
really important to the way we had shared power
and wealth– we’re talking about unequal
power and wealth now versus shared power
and wealth before– was a vibrant citizen activism
that was typical of that era. It’s epitomized,
in my experience, it’s been referred to the
civil rights movement. That was a movement to
expand American democracy, to bring more people into
both political and economic potential. But there was a women’s
movement at the same time. Betty Friedan wrote The
Feminine Mystique– what?– 51, 52 years ago. Women were making
$0.41 on the dollar for doing the same work as men. We’re not all the way there yet. But we’re about twice as high. We’re up in the 80%, 82% now. And women were demonstrating. Women were active politically. Gosh, I remember,
men in that period were buffaloed and baffled. Women went braless. We didn’t know what to do. We didn’t know whether
to be excited or what. And women were saying, notice
us and give us a fair shake. And it had a tremendous
impact on public policy. 1963, John F. Kennedy signed one
of the first equal employment payment pieces of legislation
in American history. So there was a direct impact,
just like the Voting Rights Act and the Civil Rights Act and
the Civil Rights Movement. There was a strong
labor movement that demanded
bargaining and being part of the economic compact. That was prevalent
all over the country. After we came out
of World War II and there were a lot of
wildcat strikes and so forth, Charlie Wilson at General
Motors wanted to get to work. He said, cut this out. Went to Walter
Reuther, cut it out. We need to get back to work. Let’s get the production going. And Walter Reuther
said, sure, fine. Give us a good contract with
wages rising 2% or 3% a year, with some kind of
health benefit, with some kind of retirement
benefit, and you got it. And Charlie Wilson
said, that’s a deal. And that became a template not
only for the auto industry, the steel industry, the rubber
industry, the electronics industry, atomic
industry, and all kinds of non-unionized companies
all over the country. That was the deal– labor
peace, long-term employment, job security, production, profits. It worked really well. But it was countervailing power. It wasn’t strictly
managerial power. There was an
environmental movement. Do you know, on Earth Day–
there’s a demonstrations going on in Washington today. 400 people got
arrested for protesting our broken political system. And there are going to be more. And I’m going to get
down there next week and do a little filming
of some of that. It will be fun to get
back in that game again. 400 people. And I saw that in Birmingham,
when I was down in Birmingham. I saw that in Nashville
many, many times. On Earth Day, 1970, April
22nd– this is coming up, yeah? I wonder how many people are
going to be out on Earth Day this year. What? We’ve got another 10 days to go. That many years ago there,
were 20 million Americans who went into the streets, went
to college campuses like this, went to radio and television
stations, went to talk-a-thons, went to shopping malls. 20 million Americans, close
to 10% of the population of the country at that time. 8% of the population– enormous. Within one year–
within one year!– Congress passed seven major
pieces of environmental legislation– Clean Air
Act, Clean Water Act, Safe Drinking Water Act,
Anti-Toxic Substance Act, on and on and on. Beau Ruckelshaus who was
the first head of the EPA, appointed by Nixon,
is a friend of mine. I said to him at one point,
Bill, have I missed something? Was Richard Nixon a
closet greenie and we just didn’t know about it? He said, Rick, in all the years
I worked for him, he never once asked me, Bill,
is it bad out there? Is it really true that if you
put your arm into the Potomac River it comes out covered
with green slime because of the nitrogen and
phosphorus pollution, which causes the algae
and hence the slime? He said, he never once asked me. He said, but he did
say one thing to me. He said, Bill, when
you get over there, don’t let the bureaucrats
at “Epa” capture you. “Epa.” Ruckelshaus said
Nixon– who had created the EPA– was the only
person in Washington who didn’t know the
acronym was E-P-A, and he thought it was “Epa.” He said, that’s how
engaged Nixon was. I says, so why did he do it? Why’d he sign all
this legislation? He said, the people
were demanding it. The public was demanding action. People were demonstrating. People were marching. People were showing up
in congressional offices. There was a huge– all
those pieces of legislation I mentioned to you, they
passed by 88-4, 92-1. The bipartisan support for
those things was just enormous. And he said, this is the way
democracy is supposed to work. Interesting idea. The people spoke. The people demanded it. We in government are
supposed to respond. That’s how democracy works. That was the solipsism
that Ruckelshaus repeated to me, which made a lot of sense
back in that era and almost sounds funny today,
which is a tragedy. That was the deal. People also demanded that
the tops and the bottoms not be that far apart. There was a fairly
regular process that the minimum wage
was raised, again, by a huge bipartisan majorities. Again, 70 to 80 people on
both sides of the aisle were raising the minimum wage
every three or four years. Not on a regular schedule,
but it was done regularly. Stopped in 1981. The minimum wage
today– the minimum wage today– is more than 30% below
1968, adjusted for inflation. So the whole idea of “fixing”
the economic bottom floor under the economy to
generate that consumer demand to get the virtuous
circle of growth going again is gone. That’s part of what happened. So there was also a demand
that the people of the top be taxed higher. Now, we’re told
today that, if you raise the taxes significantly
on the top 1% or 2%– or on those of us in
the room, the top 10%– the economy would
come to a dead halt. We need a little history there. I went back and checked that. Under Eisenhower in the
1950s– Republican president– the top marginal
tax rate was 92%. Under Kennedy, it got
cut to 77% and stayed at that level for a long
time, until Reagan came down and dropped it down to 35%. Under Obama and George W.
Bush, the top marginal tax rate for a decade was 35%. The average annual growth
rate in the ’50s and the ’60s, when the tax rate was high,
was between 3% and 3.1%. And the average
annual growth rate during the decade of the 2000s,
including the period prior to the financial
collapse, was 1%. High taxes, high growth rate. Low taxes, low growth rate. I’m not saying
there’s a connection. I’m saying there
is no connection. It’s nonsense. But people back then
wanted a fairer economy. And they got both a fairer
economy and a 3% growth rate. That’s very important. Because if you’re talking
about how to generate jobs and how to start to
deal with the people who are so enthusiastic at
the moment about Trump– particularly about Trump,
but also about Bernie– you’ve got to generate the kind
of jobs that will give them the kind of standard of
living that lets them go back to raise their families, instead
of coming out in the streets and rallies to a guy who
says, if you don’t give me the nomination,
there’ll be riots. There is a connection,
ladies and gentlemen, this is what I’m simply
trying to suggest here. So what went wrong? What went wrong was
ideas and power changed. It’s ironic. The citizen movements–
women’s movement, civil rights movement, environmental
movement– in some ways were so successful,
their success put them out of business. There was an assumption that
you could turn the job over to the public. You could turn the job
over to the government. If you had passed all
those environmental laws, then that was
taking care of that. If you raised the minimum wage,
that was taking care of that. If you passed the
legislation dealing with equal pay for
the opposite gender, that was dealing with that. So part of it was success
spoiled Rock Hudson. People said, oh,
well, the job’s done. We can go back to
doing other things. But part of it
wasn’t that at all. It’s like Newtonian physics. There was a
deliberate, opposite, and equal– even more
powerful– reaction. There was a political revolt
of the bosses, which actually begins well before Reagan. Maybe you’re not surprised,
if you think back to Barry Goldwater in ’64. But what’s really
interesting is it begins to take root in the ’70s. There’s a guy who’s famous
for other reasons named Lewis Powell, who was
put on the Supreme Court by Richard Nixon in late 1971. He actually went on
the Court in 1972. Powell was a famous
corporate attorney from Richmond, Virginia,
very close to people at the US Chamber of
Commerce, and very upset by the power of labor
unions, by the power of Ralph Nader and
the consumer movement, and by the power of both the
environmental and the women’s movement and the
civil rights movement. All of which, he
felt were impinging on the profits, the
efficiency, and the freedom and flexibility of American
corporate leadership. And he went to his friends
at the Chamber of Commerce and he said this. And they said, hey,
you’re a lawyer. Write us a brief. He went and wrote
what I think is the most ignored or
under-appreciated document in American history
over the last 50 years, the Lewis Powell
Memo of August 1971. And I persuade Random House
to print the whole memo in the back of my book, Who
Stole the American Dream? What Powell did
was he, basically, was a Paul Revere for
the corporate world. He wrote a corporate manifesto. He said, you are getting
killed by all these movements, particularly by organized
labor, but by Nader and by these other– you’ve
got to go organize and get down to Washington. You’ve got to pool your
resources financially. You’ve got to plan
for the long-term. You’ve got to take the
political high ground. You’ve got to play dirty ball. You’ve got to get nasty. You’ve got to get tough with
your political opponents. And believe it or not,
that’s what happened. Not because Powell was that
personally influential, but because business leaders
were ready and waiting for somebody to articulate
their frustration and give them a plan. I couldn’t believe it when I
went back through the history. And you have to understand, I
was a Washington correspondent and, indeed, a bureau
chief through much of this. And I saw the symptoms. But I really didn’t know
what the causes were until I went back to write this book. And I learned so much. I was embarrassed. I was both thrilled
and embarrassed by how much I
learned every week. At the time that
Powell wrote his memo, there were only
175 companies that even had offices in Washington. Eight years later, before
Reagan gets into office, there are 2,425. The National Association
of Manufacturers, which had been headquartered in
Chicago, moved to Washington. The US Chamber of
Commerce doubled its staff and tripled its budget. The National Federation
of Independent Businesses, the organization of
small businesses, grew in membership between 1971
and 1980 from 3,000 to 600,000. By 1980– before
Reagan is elected– there are 50,000 people working
for business trade associations in Washington. There are 9,000 registered
corporate lobbyists. And there are 8,000
corporate PR people. There is a veritable army. I call it Powell’s Army. Powell’s Army
actually goes to work. And the pivot of policy
in American history actually occurs
with the Democrats in control of both
houses of Congress, and a fellow named Jimmy
Carter in the White House. The pivotal year is 1978. It is the year where they
rewrote the corporate tax laws. They establish the
401(k) program. They change the
corporate bankruptcy law. They dropped the capital
gains tax from 48% to 28%. It was just phenomenal change. And they began the
deregulation of the trucking and the communications
industries. It goes on. It accelerates. The tax cuts really
come under Reagan. But it’s important
to understand that it wasn’t so much the election
of Reagan that did it. The pendulum had already begun
to swing in the late ’70s under Carter. And Reagan is really
an accelerator. The tax cuts under
Reagan– if you look at the inequality
of wealth today– are enormously important. They’ve added $1
trillion dollars to the wealth of the
top 1% every decade. That’s $1 trillion
dollars in the ’80s, $1 trillion dollars in the
’90s, and $1 trillion dollars in the 2000s. And the George W. Bush
tax cuts of 2001 and 2003 added another trillion. So that’s $4 trillion. So this political power
swing that occurred– and I don’t know
if we’ve got time to go into the Gang of Six–
but the way the business lobbies organize subsequent
to 1978– it just dominates the
writing, particularly, of economic policy legislation
and tax legislation. And if there’s any indication
of who runs power in Washington and how the power
game is played, it is the writing of tax policy. That tells you who’s in charge. And the chances are, that power
and influence is rippling out in all kinds of other policies. So when you see those enormous
tax cuts under Reagan, you also need to know
that the regulations on the financial
industry are radically changing, which sets up
all the conditions that happen for the housing boom and
bust that hits in the late ’90s and into the 2000s. There are all kinds of
antecedents that come. And think of the
unintended consequences. It’s a huge shift for
the middle class, when you go from 1980 when 84% of the
workers for companies with more than 100 employees had lifetime
pensions from their companies, which meant you got a check
every month from the day you retired until the day you died. That is a financial security on
top of Social Security that’s phenomenal for the middle class,
which it doesn’t have today. And it gets replaced
by a 401(k) tax plan. 401(k). If you were going to dream up
a revolutionary, reformist, tax plan, would you call it 401(k)? No, we wouldn’t. It’s called 401(k) because it’s
buried so far in the tax code that it is 401 paragraphs
down and it’s subparagraph k. i.e. Nobody knew what was going on. It wasn’t intended to
do what it’s doing now. It was intended as a tax
shelter for deferred income from the profit sharing
of a bunch of New York banks and Xerox and Kodak. And it was put in the tax
code by Barbara Conable, a Republican congressman
from upstate New York, who happened to have Xerox and
Kodak headquarters in his home district. And that’s how
legislation gets written. That’s how national
policy got written. It all got transformed. And I tell the
story in the book. But my point is, these
kinds of things– and it happened in ’78. It happened under
the Democrats and it happened under Jimmy Carter. I’m not trying to put
political blame here. I’m simply trying to
open the textbooks, so we can look at it in an
honest way and then figure, is that a smart way to go? And what should we do about it? So that’s what happened,
policy changed, power changed, ideas changed. Question– can we do
anything about it? Well, what’s interesting to me
as a reporter– and thank god I did start in the
South and thank god I did become a foreign reporter. Because the worst thing
in the American media today is the concentration of
reporters, editors, producers, air time and space
in Washington, DC. As a foreign correspondent
in Moscow, I covered Russia. It was closed in the Cold War. I could only travel
to 40% of Russia. But 40% of Russia–
or the Soviet Union, back in those days– was a
hell of a lot of territory. And I got out
every time I could. I covered the civil
rights all over the South for several summers. When I was in Cairo, I
traveled around the Arab world. I went to Yemen. I went to Sudan. I got lucky, I
went up to Turkey. My point is, I got out. If you’re a Washington
correspondent for almost any medium,
you sit in Washington. What do you cover? Think about it. What do you cover in Washington? You cover words. You cover what people say
about what reality is. How do you then learn
anything about reality? You don’t. The only reality
you know is who’s up or who’s down in Washington. Put in terms of
reality, you don’t. You have to get out
into the country. That’s one of the good things
about political campaigns. It makes some Washington
correspondents get out. But the problem is, the only
thing they’re interested in is who’s ahead. I mean, really, the only
thing they’re interested in. They’re not interested in
finding out about the country. They just wonder how the vote’s
going to be next Tuesday. And then, after that, they don’t
care about Indiana or Wisconsin or whatever. Yeah, those people are
unhappy about trade. Now, what’s the next issue? What’s the next state? So I’m hopeful about what
we can do in this country. Because I’m here in Providence. And in the last three years,
I’ve probably been in 25 states in the country and I’ve spoken
at 200 or 300 different places. And what’s happening in
America that is important is happening in the states. One of the most
serious problems we have in our gridlocked
political system– I think I mentioned it to you
before– is gerrymandering. Today! And it’s a result of
a couple of things. You don’t have that problem in
your congressional delegation. You might have it in your state. I don’t know enough about
your state legislature. But you’ve only got– am I
right?– one congressman. Two. Two? You got two? Well, see– Two, but next census
we’ll be down to one. Yeah, OK. All right, well then, you’ve
got a little bit of room. But in most states,
gerrymandering is absolutely critical. And it is now done with
sophisticated, modern, computer software. And it is also politically
organized and highly financed. And a good political
reporter today and a good political
reporter a year ago could have told you the partisan
outcome of this fall’s November election for districts
of Congress in 85% to 88% of the districts. The reason is, they’re
political monopolies set up by both parties. Just north of you
in Massachusetts and in my former home
state of Maryland, it’s the Democrats who do it. In Texas and in Wisconsin and
in Michigan and Pennsylvania and a lot of other
places– Indiana and Ohio– it’s Republicans who do it. And the numbers are
absolutely astonishing. There was a Republican program
called the Red Map, which was funded to the tune
of about $30 million by a number of major
American corporations. And they deliberately
set out to capture as many state legislators
as they could in 2010. Because in 2011, with
the census report, there’s a redistricting. Nationwide, the Republicans
were extremely clever and extremely successful. And the Democrats were
totally asleep, got caught asleep at the switch. The Republicans picked up a
total net 625 legislative seats nationwide. It left them in control
of the governor’s chair and both houses of
the state legislature in states that controlled
40% of the seats in Congress. By contrast, the
Democrats controlled 10% and the other 50% had mixed. The governor, one
party or one house under control of one party and
the other house under control of the other. And the result was, they
did one hell of a job in the gerrymandering of 2011. And I can give you a few states. In 2012, the next election,
in North Carolina, Democrats out-voted Republicans
for congressional seats to the same degree they had
in the previous election. In the previous
election in 2010, Democrats had seven of
the North Carolina seats and Republicans had six. After the Republican
gerrymandering, the vote was almost identical. Republicans had nine seats
and Democrats had four. In Pennsylvania, the Democrats
out-voted the Republicans. In Pennsylvania,
they have 18 seats. So it should come
out 9-9, maybe 10-8. It came out 13-5. A Democratic state
senator in Pennsylvania took the same numbers and
redrew the district maps and it came out 13-5
for the Democrats. So if you don’t think
the drawing of the lines makes much difference, it
makes a huge difference. Nationwide, the Democratic
vote for Congress was a million and a half
more than the Republican vote for Congress. But the Republicans wound
up with a 33 vote majority in the House of Representatives. Now, that wasn’t
all gerrymandering. Some of it actually is
simply the way people live. But a huge percentage
was gerrymandering. Now, what’s fascinating
is there are now 21 states that are engaged in
a fight against gerrymandering. There are seven states
that have set up independent
redistricting commissions and taken it out of the
hands of the legislature. They’re not perfect, but they’re
a hell of an improvement. There are six other
states where there are lawsuits that
have been filed against the gerrymandering. And there are eight
other states– if my numbers are right– that
have popular movements that are now engaged in it. And these are going on in
the most amazing places. This is not like this is
happening in Massachusetts and Rhode Island and California
and Oregon and Washington State and nothing in between. The most dramatic gerrymander
reform of the last five years occurred in Florida. At the same time the state of
Florida was electing a heavily Republican legislature
and a Republican governor, the voters passed–
by more than 60%– a gerrymander reform to the
state constitution that said, you cannot redistrict– and
they used this language– you cannot redistrict in a way
that will favor one party over the other or will
protect incumbents. The Republican legislature
totally ignored that comment and caused– and a bunch of
people took them to court. It’s taken four or five years. The Florida Supreme Court
has ordered the redrawing of district lines. And this fall, at
least three seats will change party
identification. And even if they don’t
change party identification, the fact that they’re
no longer gerrymandered means that Independents and
voters of the other party have more influence. In the state of
Washington, they have a thing called
the Top 2 Primary, which is a nonpartisan primary. They used to have a
slightly different system. Today in Washington
State– they’ve been doing this
now for about four or five congressional
elections– there is no member– it isn’t just
the party line-up– there is no member of the Washington
State congressional delegation that is in the outer 20%
ideologically of the voting record of their party. They’re all playing
somewhere near midfield. One of the most
disastrous consequences of the political
battles we’ve had over the last 30 years in
America is the missing middle. The middle’s gone. They chart. Political scientists chart
the votes in Congress. They do them like Rorschach,
little charts like this. If you go back to the ’60s and
’70s, the two charts overlap. There were Democrats voting
to the right of Republicans. There were Republicans–
particularly from the North, the Saltonstalls
and Clifford Case and Jake Javits of New York,
people whose names you remember– they were voting
to the left of some Democrats. There was an overlap. And what happened
was, in the middle, you could make the
compromises that enable the government to work. The middle’s gone now. Those Rorschach things
are like this, literally. It looks like the
trenches in World War I. There is a no-man’s-land in
the middle between the parties. They’re actually separated. There’s almost no overlap. It’s very, very rare. You can’t have a government
like ours work with that. Gerrymander reform is absolutely
essential to actually getting the middle re-established. In addition to the
fact that they’re party monopolies, today,
people are fleeing the parties. Today, 40% of the
voters in America identify themselves
as Independents. And among the generation
of the young people sitting over here on this
side of the room, the figure as well over 50%,
and it’s growing. People are totally disenchanted. So if we want our
government to work, if we want our government
to deal with climate change, to deal with foreign trade, to
deal with Arab-Israel, to deal with the budget, to deal
with the entitlements, to deal with any
issue, we’ve got to get the government
back so that they actually can talk to each
other and you’ve got some of that
overlapping center. So we got to do
something about that. We’ve got to do something
about money in politics. You’ve got some good
laws in Rhode Island. I went and looked them
up today to be careful, so I’d be a little
bit more informed. You have a good law
on public disclosure that was passed in 2012. You have public
funding of campaigns, which is really important
to reducing the influence of mega-donors in campaigns. But you got a small problem. Not enough money in it. Because what happened
in the last race? The Republican candidate–
he was the mayor of Cranston, Allan Fung, am I right? Yeah, [INAUDIBLE]. OK, he takes public funding. Why? Because he is the underdog. He has trouble raising money. He can double his money. But Raimondo spends
three times as much. And by the way, did you know? The story I read said 65% of her
money came from out-of-state. Now, whether she’s a
good governor or not, is that the way
you want to pick? Do you would you want
funders in New York– and if it can be done in
New York, rest assured, the Koch brothers will
be here eventually. So think about it. So are we going to do
something about America? The answer is, we’ve got to
do it at the state level. We got to deal with
gerrymander reform. We got to deal with
money in politics. You got to deal with dark money. And we got to deal–
well, you may not have a problem
with voter turnout. But we got to make voter turnout
easier and more attractive. When you have
gerrymandered districts– and if you have gerrymandered
legislative districts, what happens? Sometimes, voters
don’t turn out. Sometimes, the other
party doesn’t even bother to field a candidate. It got so bad in
Indiana two years ago that in 42 of the legislative
seats in the Indiana legislature, there was no
opposition to the incumbent. Democracy breaks down. Think back to what I said. We’re walking the edge
of a precipice here. Civilizations die
of disenchantment. We’re looking at people
who are disenchanted. Are the people who
are voting for Trump, and are the people
who are backing Bernie, are they thinking
about all the things I’m talking about? No. Some of them are, but very few. But they understand
something is really wrong and something is really fishy. And unless people–
like those of us in this room who are all
fortunate, with our education, with our health, and
probably with our finances– unless we get engaged
and work on fixing this political and
economic system of ours, we are going to do what the
people are talking about. There’s a wonderful story that
I want to share with you though. It’s the story
about Alfred Nobel. Alfred Nobel– you know, the
famous Swedish munitions maker. Well, he didn’t have a
very great reputation during his life, because he made
his money making and selling arms. He had a brother who was
involved in another field. As I recall, he was in classical
literature and in the arts. And his brother dies before
him, a great tragedy, younger than Alfred Nobel. And there’s an obituary in a
French newspaper, Francois. And a friend of his
says, hey, there’s an obituary of your
brother in Francois. I’ll send it to you. And he sends it to him. And it says,
Munitions-maker dies. And Nobel reads it. He says, my god,
it’s my obituary. It’s not my brother’s obituary. And he says this to his friend. He said, this is the worst thing
that’s ever happened to me. And his friend
says, no, it’s not. It’s the best thing that’s
ever happened to you. You can now go rewrite your
obituary while you’re alive. And that is when he
set up the Nobel prizes and he began to move in the
direction of public service. So we can rewrite
our own obituary if we decide to do that. Thank you. Yeah. [APPLAUSE] Thank you for that
wide-ranging and fascinating and call-in-the-night, I
guess we’d have to call it. So we’ve got microphones. We’ve got some
time for questions. I guess, I’m going to
grab the first question. You did a marvelous job
doing something we try to do. We don’t always succeed. And that is to be balanced. You didn’t come off as
particularly Democratic or Republican. But a lot of us in academia
have more and more trouble with this. We even have a word for it,
asymmetrical polarization. And what that means is one party
has polarized a whole lot more than the other. Now, you were very
balanced in this. And I’d like your comment. The argument for
asymmetrical polarization says one party just
went off the rails, that the Newt Gingrich idea is
make people hate Washington. And it can only benefit
the Republican Party. So let’s not have
any compromises. The other view is, it’s
really a pox on both parties, having to do with money
and all that stuff. Give us some advice. Where do you stand on
that difficult issue? Well, I do try to
do what you said. But I do think that
there are two or three areas in which the Republican
Party has broken away from what were sort of unwritten rules. You mentioned Newt Gingrich. And I don’t think
there’s any question that Gingrich was critical. I don’t think there’s any
question that Gingrich did come up with the idea–
and he had it back in 1978 when he first
appeared in Congress– that Tip O’Neill, who said,
all politics is local, was basically
articulating a philosophy that every congressional
race is its own. And that’s going to work to
the advantage of the Democrats and to our disadvantage. What we need to
do as Republicans is to nationalize campaigns and,
particularly, nationalize them against the incumbent. And the incumbent
is the President, therefore it’s the
Democratic Party. But Newt did some other things. And I did a documentary on Newt
and his battle with Clinton called The People and the
Power Game back in 2005. No, way before that. But Newt did something else
that was really damaging and it has lasting effect. Prior to the class
elected in 1994, which is known as
the Gingrich class, because he had so
much to do with it, and– class then
elected him the Speaker in the beginning of ’95. Prior to that, all
the junkets and trips and fact-finding missions that
members of Congress went on and all the orientation
that new members of Congress went through was bipartisan. It was usually done at
the Brookings Institution or it was done at the
Kennedy School at Harvard. And the notion was,
it was a good idea to bring everybody
together, have them have a common experience
and also give them a chance to get to know each other,
because they’re going to have to deal with each other. And Gingrich said, no. This did not fit his model. He wanted to drive a
wedge between the parties. And so, for the first
time, the class of 1994 went and it had its orientation
at the Heritage Foundation, which was ideologically
very different. But it also really
divided them, just in terms of personal contact. And you even began to
see informal things, like the playing of basketball
and softball leagues and stuff like that, where
members would mingle and get to know each other– you
get to know each other, you can disagree about pieces
of legislation or about issues. But the next day or two weeks
later or three months later or even the following
year, there’s a time when you need somebody
and you know them a little bit, and you can pick up the
phone and call them. Evan Bayh, who became governor
and then Senator from Indiana, recalled his growing up
in his father’s home– Birch Bayh, Senator
from Indiana. And he said, every weekend, we
would have– now, interesting. He was not just
talk about having Republicans in his family home,
but Southern Democrats, which is like having a Republican. So he said, everybody was there. So Gingrich definitely did that. And I don’t think
that there’s anything that anybody on the
Democratic Party did that was comparable to that. And the second thing I think
that was really important is what I was just
talking about, the Republican Red Map Plan. Before, there’d
been gerrymandering. My god, it was invented
north of here, right? So it’s been going
on a long time. But nobody had ever–
to my knowledge– in American history, tried
to nationalize gerrymandering before. And this was a party’s
deliberate decision to go out and go after
the assets they needed to gerrymander on a national
basis and, then, in effect, lock up the control of
the House for a decade. It is totally counter to the
notion of the founding fathers, which was that the House
was the institution with a short election
cycle, in order for it to be responsive
to public opinion. So if you go gerrymander
all those seats, you create exactly
the opposite of it. Yeah, I would say
the Republicans have done definitely
gone much further to try to break
up the [INAUDIBLE] and break up the potential
for bipartisanship. And the two examples
I cited, I mean, I just have never conceived
that a majority in the Senate would band together and write
a letter to a foreign power in the midst of negotiations. If you did it afterwards,
it still would be shocking. But while there’s a chance
you can actually disrupt it! And the invitation of
Netanyahu and so on. I mean, there is a kind of
going beyond the bounds that has happened on the Republican
side that is more extreme. And then, within the
Republican Party, the notion that you’ve
got this Freedom Caucus expanded at 45 members
toppling a Speaker. I mean, people aren’t paying
much attention to Paul Ryan. But he’s got a lot of
trouble trying to get that budget through the House. And he’s going to
have to behave. We’ve got real institutional
problems, which is the reason I’m
out there saying, if you want to fix them, go
fix them at the state level. You can’t get them fixed
at the Washington level. Great. OK, introduce yourselves
and ask your questions. First question over here. Hi, I’m Alex. I’m an undergraduate here
and an aspiring journalists. Good. But you mentioned the
decline of print journalism. I was wondering if
you have any advice to get your foot in the door to
turn journalism into a feasible career. Yeah, is there
anything that can be done to turn journalism
into a feasible career and get your foot in the door? In the first place,
it’s very important to know that regardless of what
the technological changes are and what the medium is,
quality informational reporting and analysis will always
survive and prevail. The institutions that
are doing the best today are doing quality work. I don’t mean just
the New York Times. But if you go to
South Bend, Indiana, the South Bend
newspaper is no longer covering state politics
as well as it used to. It’s not covering the world
as well as it used to. But it’s doing one hell of a
job covering the whole region around South Bend. And people in South
Bend want that paper. And they either get it in
print or they get it online. So you can go either way. Either the technology
is changing, what it’s going to
look like, how you’re going to communicate–
I think you’re going to be deciding a lot more
about that than my generation is. But it’s doable. It’s a workable career. But you do have to
have a lot of agility. You have to bring quality. You have to bring
quality writing. You have to bring
curiosity, absolutely driving curiosity, a
drive to understand what’s really going on,
whatever you’re covering, whether it’s sports or health
care or politics or whatever. The best way to get
to build a career? Start right away. Start wherever you are. Start right here at Brown. Where do you live? Cincinnati. Start in Cincinnati. Go in the summer time
or go before summer time and go talk to the people who
are running the Cincinnati paper. Or if there’s a good
radio station there, there’s a good
television station there that you like to
work– go do it. What’ll happen is that
leads to other contacts. That builds an experience. It tells you what of this
you really like to do. I’m really interested
in this subject or I like that kind of reporting. I don’t like this. But do it. Great. Tony, [INAUDIBLE] and Caroline. OK, you located
a wonderful talk. And I really appreciate it. And I’m inclined to agree
with almost everything. And yet, you located
the primary force for the current disenchantment
in rising inequality, it seems, as the
central problem. But the central
fix you’ve offered is to operate at
the state level, to push the politics
at the local level. [AUDIO OUT] No, no, I don’t think we can. But you’ve got to figure
out where you can start. Let’s just take inequality of
income on the minimum wage. Washington’s stuck. 29 states now have
higher minimum wages than Washington does. More than 60% of the
American workforce is now working under a
different minimum wage regime than there is in Washington. You’ve just had these two big
states– California and New York– have put their workers
on a path towards a $15– does that fix the things? No. What it does is it
starts to signal that motion is happening. Last election, I
think four states that elected Republican senators
raised the minimum wage. And we’re talking about states–
Arkansas, South Dakota, Alaska. We’re not talking blue states. So that’s number one. Number two, there
are now 27 states that have passed legislation
for B corporations. Do you know what a
B corporation is? A B corporation is a
public benefit corporation in which the charter
of the corporation allows it to pursue
something in addition to maximizing profit and
return to shareholders. Now, there are a lot of people
who dispute whether or not federal law or even
Delaware law prevents that. But there are a lot
of corporate attorneys that are telling their
CEOs, you can’t do anything but pursue maximum return
to your shareholders, or you can be sued
and taken to court. Now, five years ago,
there wasn’t a single law like this on the books anywhere. Maryland became the first
state six years ago. Maryland became the first state
to pass such a law in 2010. There are now 27
states that have laws like that on the book. And there are now something
like 1,200 public benefit corporations. The first one floated its IPO
on Wall Street last summer. So there’s another
way in which you’re dealing with a corporate
sharing of wealth. There are proposals in
the California legislature to give a tax cut or some
kind of a tax benefit to corporations where the
ratio between the CEO’s pay and the average worker’s
pay is no more than 50-1. So people are starting at the
state level to devise policies. The history of America
tells us that, when you start to have– as
Louis Brandeis said– states as laboratories,
you start to get some of those policies
adopted in Washington. I think it’s important
for people to have a sense that there is movement and
that something can be done. Can we have eventually
deal with these things without going to
national policy? No. But at the moment, you
can’t– it’s like saying, if you’ve got to climb Everest,
you’ve got to climb Everest. But why not learn how to
climb the hills for a while, until you get to Everest. And if you look at the
progressive era, for example, and if you look at
the changes I was talking about in the ’60s,
in each of those cases, a lot of those movements–
gay rights has turned around. It began in Colorado
and a bunch of states and worked its way around. We’re still torn up
about that as a country. So the examples of political
change and movement starting outside of
Washington and eventually working their way to
Washington– pretty good track record in our history. It’s a good question though. Hello, I’m Caroline. I teach in environmental
studies and– In public policy. In public policy. Yes, right. I teach public policy. And my perception–
and I think it might be shared– is that
journalists are now kingmakers. So commentators on television,
commentators in the news, are actually as much
kingmakers as they are simply objective, impartial
reporters of the news. And I’m wondering if
you’d comment on that. Is that your perception? Or– even in this election,
I think it’s problematic. Well, let me just say a
couple things analytically. When we got rid of
the smoke-filled room as the way to select– that
is, to have party powerbrokers essentially pick the
nominee of the parties and we went to a
primary system, then you put the voters
theoretically in charge. But there always has to be
some medium of communication between the politicians. And that definitely changed
the role of journalists. So that, historically,
goes back really to the McGovern reforms
of 1972, from that forum. Now since then, I
couldn’t agree with you more about the role,
particularly of the Washington press corps. And I’ve spent some time in
some of those talk shows. So some of this commentary is
directed at myself as well. I think part of the
problem is that we’ve gotten away from the idea
that reporting is our job. When I got to the end
and I dealt with you and what we could do, I became
a citizen and maybe an advocate. But up until that point,
trying to analyze what’s been going on, I was trying
to do my work as a reporter and as an analyst. I think the real problem
with the Washington press corps in particular and the
people you see on television is there’s this
constant pressure to predict, to project, and to
tell you what’s going to happen or what should happen. That’s not our business. We’ve really left the corral. And I think you’re right
to be unhappy with us. Part of the difficulty
is that the ratings of shows that do that
tend to be higher than the ratings
of the show that do the dull, plodding
job of reporting. So to a certain
extent, the audience is helping to push journalists
in the wrong direction. But I couldn’t
agree with you more that we’ve left–
we’ve diminished our most important role. And Trump is a perfect example. I don’t think it should have
taken anybody until February to start writing that
Trump– aside from all the horrendous things
he’s said and done– was tapping into some great
economic angst that was telling us something about America. And I think if the reporters
had been doing their job, at least some of them would
have been on that issue three or four months earlier. I can tell you–
I mean, I adjust what I say every audience
and, certainly, over a period of time. But the notion that
Bernie and Trump were canaries-in-the-goldmine, I
certainly had in speeches that I was making last October. So it didn’t take until
February to discover that. It took some kind
of decision to try to go analyze what’s
going on and to take them seriously, rather than
simply try to cover the frosting of the campaign. Thank you for your
very interesting talk. I wanted to go back to history. And I wanted to ask you,
in short, what happened to the Democrats in 1978? If you had a Democratic
president and two Houses of Congress dominated by
the Democratic party– Yeah. Do you think there was some
kind of very deep loss of faith in the New Deal and
the Great Society that caused the whole ideology of the
country to shift to the right? I mean, a lot of mainstream
people– not everybody, but mainstream people– in spite
of the environmental movement and the women’s movement and
the civil rights movement– I certainly can’t explain it. But it seems like we’ve
never really got back. Obviously, we’ve never
got back there to, let’s say, the ideals of Lyndon
Johnson and that era or before. So I’m asking you this
question, not just to talk about history– which is
fascinating in and of itself– but to ask if you really
think that we have a chance of re-establishing
the kind of– maybe you’d say– social compact that we had? –that you talked about so well
in the 1945 to late ’70s era. I don’t want to be– you were
leaving us on an upbeat note and there are things you can do. And that’s great,
and let’s not– I still believe that. Yeah. Oh, no, no. I didn’t just do
it as a cheery end. No, no. I– I was not putting a
maraschino cherry on my talk. Exactly, exactly. And these are facts. These are facts. You’re talking about laws. And these are facts
that are going on, these movements and, you know,
redistrict– efforts to combat gerrymandering and all that. So I don’t want to sound
too negative, but– Well, let me take a shot. Yeah. OK, all right. I think, particularly,
if you look at ’78– and then you can
look beyond that. In ’78– I’m going
to go back and just be a very hard-headed analyst. I was running the Washington
Bureau at that time. We had a one-term
Democratic president who had been a one-term
governor in a one-party state. Not a formula for
effective legislation. Jimmy Carter did not know
how to play the power game. I wrote this book,
The Power Game. And I’m really contrasting
Reagan and Carter, not as a Republican as a Democrat,
but as power players, understanding how
the game was played. So in the first place, I didn’t
take the time to tell you, but Carter actually
sent to the Congress a bill that would have
worked along the lines, not of Lyndon Johnson, but
at least in that direction. He was going to raise
the taxes on the wealthy, raise taxes on the
corporations 2%, close some loopholes,
and so forth. And he was so ineffective
as a politician that the damn thing
boomeranged when it came back. So number one, in terms of
leadership at that time, the Democratic Party was
very poorly led, which encouraged the other side. Second thing that
happened was partly as a result of Watergate. In the latter part
of the ’70s, you had quite a few either
freshman or sophomore Democrats in districts that had previously
been Republican-leaning– not Republican, but
Republican-leaning. And they felt extremely
vulnerable headed towards the election of 1980. Not because Reagan
was the nominee– this is even before
Reagan gets in there. And you had Powell’s army
that was going to work on them and saying, you’ve
got to take care of us or we’re going to come get you. And it was very
effective lobbying. Tip O’Neill says that
period of lobbying is the most effective lobbying
he ever saw during all his time in Congress. So you had that going on. Then, you had another
phenomenon going on, which was an effort
by either border state or marginal
Southern states, like Arkansas– a
fellow named Clinton– who were coming up with
a Democratic Leadership Council and a different idea. The New Democrats,
they were called. And they were, basically,
pro-business Democrats. What’s going on is the Democrats
are starting to realize, as the Republicans and
as these lobbies start to move in with lots of money
into campaigns, that they’ve got a guy named
Tony Coelho who was very active in building the
Democratic fundraising machine. And they were raising
money from corporations. So what happened
was, corporate power began to come in and leach
its financial influence into the Democratic Party. You then begin to have Democrats
fashioning a political strategy aimed at those people. They were not
deliberately trying to walk away from the New Deal. They were trying
to keep in office. I think that’s
really how it begins. And then, I think,
there’s been– what’s the Will Rogers’
statement about it? Any party with– when
you said, I’m a Democrat. I don’t belong to
an organized party– I don’t belong to any organized
political party, that it. Thanks for reminding
me the quote. They’re very disorganized. And they have repeatedly
made the mistake of not rallying to
their [INAUDIBLE], and most strikingly
in this 2014 election. The notion that Democrats were
going to protect themselves in a midterm election
by running away from a President whose
rating was falling– that that was a smart strategy? All you’re going to
do is cause his rating to fall further, which was
going to endanger you more. So you should do–
but that’s like people selling as the market
goes down and buying as the market goes up. The Democrats are equally
foolish about– so they have not stopped and thought
strategically for a long time. I don’t know that you
can just go back– Reagan was a very effective
communicator at persuading a lot of people that
government is the problem, not the solution. Well, that goes
right to the heart of whether or not you’re going
to back the New Deal or not, right? So if you’re going to
come up against that, then you better start
developing a way of saying, government is helping
small businesses, the government’s giving
you the national parks, the government’s giving you
protection on food and drug, and so forth. As a party, if that’s where
your party position is, you better start doing it. They never, as a party,
during this long period I’ve been following them, were
never as purposeful as a party, even if they’d done
it to a lesser degree. So I don’t think it’s
just a loss of faith, although I think it
turned into that. I don’t think it began that way. I just think it’s cascaded. The answer– is there
a way to get back? Sure. Because California is
a long way from here. But if you look at
California’s policies, some of the stuff that’s done
in California is truly amazing. The family benefit,
the family leave things– they’re just
chipping away at– we’re back to this question, can
you make jobs better again? And it isn’t just
the minimum wage. They’re doing a bunch
of other things. They’re actually rebuilding
a social compact there. Out of the 1,100 public
benefit corporations there are, I think about 500
of them are in California. It’s now become an
ideology, a philosophy. It’s become a corporate ethic
that people are proud of. It’s not like we’re
being defensive. This is the good way to go. And what’s really interesting
about the millennial generation is a lot of young people
today want quality of work. They want to go work for a
classy banker, a classy tech company, or a classy something. But they want it to
be a humane company. So there’s potential pressure
in that next generation on young and upcoming management
to behave in a better way. And if you say, let’s go back
to Charlie Wilson, not a shot at that. Because that’s old-fashioned. But if they adopt the same
ideas in a new context, that’s modern. And that’s with it. And the business
about gays and being more tolerant of minorities
and transgender– all of that is a potential opening
here for a real change. But people have to be willing. What happened when
Occupy appeared? What happened when the
Tea Party appeared? There were some
very smart people on the right who said, oh
my god, this is a godsend. And they jumped in
and they organized it. The Tea Party really
started small. It was really populist. It wasn’t headed for
seats of Congress. But there were
people who saw that as a great base, a great
passion, a great prairie fire that they could ride. And on the other side,
Occupy came along. And where was the DLC? Where was the AFL-CIO? Where was the Americans
for Democrats? They never got together. They never rode it. And it’s part of the
Will Rogers thing. So some of it is thinking. But some of it is also sensing
what the political moment is. So we have time for
two more questions. Here’s one. Is that too long an answer? No! It’s a great answer. Thank you very much. No, it was [INAUDIBLE]. Hello, Mr. Smith. My name is Mara. I graduated from
Brown/Pembroke 52 years ago. And I’m an immigrant. I know who still believes
in government and America. It is the immigrants. And I think that’s
why we need them. We look to them. They’re the hardest
working people. And I have two
children, both of whom went to the New York
Times, the best education. One is still there. And The Times has that
wonderful scholarship program, most of which– the scholarships
go to these immigrants with extraordinary stories. And I just briefly
want to say something about this Toynbee
movement of tectonic plates and civilizations
rising and falling. I take your point. But I do see hope. And we have a Black president. We hopefully will have the
first woman as president. We have health care. Yes, there are problems. Do you have a question. No, I don’t really
have a question. I just have the glimmer of hope
and– and the young lady who wants to become a journalist,
my son went to art school and got to The Times
through art school. I don’t really have a question. I hope you don’t mind. I– [INTERPOSING VOICES] Well– There’s a question in there,
I think, about immigration. Yeah, well that’s another
one of those issues that we’re incapable of
dealing with, because of a broken political system. You saw the way
in which– I mean, it was actually remarkable
in the current environment that the Senate was actually
able to pass an immigration reform bill. But it got to the
House– the House is now run by 45 people on
the extreme right. And back to your
asymmetrical analogy there. So yeah, do we need the
refreshment of the new people? We not only need the
refreshment of new people, we got 11 million
people we have already integrated in our economy. And we couldn’t get
along without them. And this notion
that anybody thought we could send them home
without paying a high price is ridiculous. And the last question,
with apologies. Have you done any analysis on
the impact of Citizens United on your two main drivers
of ideas and power? And how do you overcome the
impact of a Supreme Court decision? Well, there’s
absolutely no question that Citizens United has
had an enormous impact. I didn’t mention it
specifically today. I thought it was implicit. But by unleashing unlimited
corporate contributions to political campaigns,
you’ve allowed this hyper-concentration of
wealth and economic power now to move into
the political arena. And the interesting thing
is– and the terrible thing is– the intersection between
that and gerrymandering. Because– and
people don’t always make this connection– I
don’t know if you know it, but in a lot of districts–
legislative as well as congressional districts
around the country– the turnout in these party
primaries is down somewhere 4%, 5%, 6%, 7%, 8%, 9%, 10%. It’s really small. And so, if you have a
wealthy, independent super PAC independent 501(c)(4), that
doesn’t have to report its donors and it has
corporate donors– either the corporation
or its executives– and they can go in and pin-point
districts in Rhode Island or in New Hampshire– I’ve
actually been in New Hampshire when this happened– or
in other states and say, if you vote for this piece of
legislation, we’ll primer you. We’ll run a primary
against you in a place where they know that turnout
is going to be under 2,000. And all they got to do is
to turn out 1,200 people and move 1,200 people. And in New Hampshire– and I was
up there about two years ago, I think it was–
anyway, they were going through a vote
over whether or not to extend Medicaid
under Obamacare in the state of New Hampshire. And the governor,
who’s a Democrat but who’s got a very
divided legislature, very intelligently set up
a bipartisan commission from both houses of the
legislature to study the issue. And they came back with a
virtually unanimous decision– Republicans and Democrats
in both houses– in favor of the expansion,
with some qualifications or whatever. And they came up with a plan. Literally, the next day,
Americans for Prosperity announced in another
conservative group that they were going to
go after X, Y, and Z. And within 48 hours, X, Y,
and Z had changed their vote, and the thing turned around. They didn’t even have
to hold an election. So that the threat of all
that money coming particularly into congressional
elections– less powerful than the presidential election,
because there’s so much money that specific money doesn’t
have that importance. But in the congressional
races that aren’t watched and in legislative races,
it’s very powerful. Absolutely. And it has a direct
impact on policy, direct impact on policy. In state after
state after state, ALEC is extremely
well-organized, the American Legislative
Exchange Council, which actually was the primary
force behind the voting rights laws that have been passed by
20 states in the last three or four years. They actually drafted
the model legislation and they did the same thing. By concentrating the money,
by going into the legislators, they got a whole
lot of stuff done. And it’s going to
take quite a long time to undo the damage
that’s been done there. So there’s a direct
impact, absolutely. Mr. Smith– I’m sorry. I know you’ve got
lots more question. [APPLAUSE] Before you clap– Mr. Smith
will be signing books out there. So if you want to, carry on
the conversation out there. Now clap. Thank you for a wonderful– [APPLAUSE] [MUSICAL TONES]

2 thoughts on “Hedrick Smith ─ Reclaiming the American Dream

  1. Excellent commentary / evaluation of our political system. Time we got Hedrick Smith on the lecture Cycle / college campuses.

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