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Robert rice in your new book the work of Nations on page 95 you write as stated earlier by most official measures America's 500 largest industrial companies failed to create a single net new job between 1975 and 1990 their share of the civilian labor dropping from 17 percent to less than 10 percent why is that happening well a number of reasons Brian American corporations are changing their shape you know in the 1950s about the top 500 American corporations were responsible for 1/2 of the gross national product in the United States and about a quarter of the gross national product of the entire world a free world but they were organized like pyramids few people at the top making all the decisions huge numbers of people down below walking in lockstep the philosophy of production was high volume standardized stable mass production that was a economies of scale and it worked like a like a charm in the 1950s 1960s but then about the mid 1970s - things begin to happen 1 the American market becomes saturated for high-volume standardized stable commodities the whole post-war pent-up demand new family formation you get repeat purchases but you don't get the same big increase in purchases every standard washing machine your standard car secondly you have global competition new technologies of transportation communication cargo ships container ships satellite communications technologies allow that hold high volume standardized stable mass production process to be fragmented hustled out wherever around the globe it could be done most cheaply and that meant that for the first time there was no longer any particular advantage in doing mass production in the United the United States so there's big colossal corporations based on economies of scale became endangered species by the late 1970s we heard Ronald Reagan during the 80s say many times during my administration we've created 16 17 million jobs in this country if those large corporations haven't added any jobs were they coming from well many of them are coming from small businesses but be a little care the debate between big business and small business is complicated much more complicated than people give it credit for because a lot of big businesses are becoming in a sense Federation's of small businesses they're their decentralizing into decentralized business units where they're farming out some contracting more and more of their work to smaller businesses so to simply say small businesses are creating all the jobs misses the big picture which is these still have these big groups of companies it's more accurate actually to say that American business small businesses are evolving into Confederations of small businesses large businesses are decentralizing into Confederations of small businesses what's a small business what's a large business well it this doesn't really matter any longer but there's something in between the two where do you live I live in Cambridge Massachusetts what do you do I spend my time writing lecturing I teach at the John F Kennedy School of Government at Harvard University I consider myself primarily in my books my writing my lecturing my consulting I do quite a lot of consulting for government agencies and for and for companies and above all in my teaching I'm an educator am i my goal in life my function in life is to take a look at reality to research it to talk to a lot of people and then to teach what I see and hopefully it provokes people it makes them see reality a little bit differently where are you born Scranton Pennsylvania wonderful town don't remember it at all I left there when I was about six months old and moved to upstate New York little farming community my neighbors were all farmers father had a little software soft goods store you know a little ladies dress shop but there was an old farmer down the street where I know who I used to business five six years old used to sit on his lap we talk politics that's where I got my political education years later I learned that his name was Henry Wallace for vice president the United States how did you have access to Henry Wallace he was a farmer down the street and at what age did you start talking to five how did you have access to it well it wasn't very difficult I walked down the street with my mom and she knew him and farmer Henry and I struck up a conversation in a friendship and from that point on until I was about 10 I'd walk down the street sit on his porch and we talked not difficult you know we farming you don't have to have access to people you're just a farm farm down the road how long did you know Henry walls well let's see he must have died when I was maybe 10 11 12 years old something like that I have only a dim recollection of him but we had great conversations about American politics about farms about where the country was going do you remember anything about what he told you he talked a little bit about Roosevelt I mean I do remember him talking about Roosevelt I remember him talking to me about history I must have been about seven eight nine years old in grammar school talked about the Second World War didn't talk about I don't remember anything about Truman and again I had no idea in those days that he had been vice president of the United States to me he was just a lovely old kind gentleman sitting on a porch okay what's next I mean that was rather unusual for somebody your age what did you go where'd you go school I went to local public grammar school local public high school again very small this is a real farm community and then I went on to Dartmouth College and over New Hampshire after that I went to Yale Law School and was fortunate enough to win a Rhodes Scholarship with Oxford University studied economics and then I decided I had enough of degrees I was about 50 years old by then and had to get on with life go back to Henry Wallace and right after that do you you point to any other factor that got you interested enough and learning that you did that well to get into Dartmouth oh I had some brilliant teachers inspiring teachers even a small farm country school in those days it's a big difference between now and then you know in those days a lot of very talented women went into teaching they didn't have many other alternatives and these days if we want talented women or men in teaching they do have many many other alternatives we don't you know we didn't have to pay our teachers very much in those we had a free ride on the fact that talented women didn't have all those other alternatives these days if we want down with the people to go into teaching where we are we are going to have to pay them unfortunately as I point out in the book we're really only paying our teachers these days only four percent more in inflation-adjusted terms than we paid them in 1970 even though supply and demand has changed considerably this year the average West German former West German teacher in the former West German schools is earning 51 thousand dollars grammar school teacher we pay our teacher than half that why do you think it's the case well teaching again has not been a terribly high status professional talking about K through 12 I think in large part because women dominated it we kind of assumed it was it was women's work there's little sexism implied it was never the high status occupation that it has become and it has been for many many years in Europe and also in Japan that's one of our problems I think instead of putting the teacher on the pedestal we tend to just poopoo teaching we tend to assume that it's just going to be there there will always be teachers that's not the case you're a liberal well Brian I don't I'm getting so confused these days I'm not even sure what liberal means any longer I'm certainly not a protectionist I own a servant I'm a free-market here I'm not a conservative although I got very worried because the Wall Street Journal Fortune magazine they loved my book so that I must be doing something wrong where do you think you started thinking like you think today well at what point in your life did you remember well there's a theory that people reach political consciousness that stays with them for the rest of their lives when they're about 17 18 years old that is that's the point at which your your basic ideas about American economics and politics get formulated they may change a little bit after that time but that's that's your that's your fundamentals in college I went to work for Robert Kennedy as an intern here on there on the hill didn't work very close to him I was in charge of the signature machine for the summer you know you put in the letters and it says a Robert F Kennedy in fact I used to type letters to my friends dear mr. Dworkin congratulations on having the largest nose gesture counter in Robert the F Canada he still has it on the wall but I was close enough that I was I was struck by by Bob Kennedy what he wanted to do one day I remember I I came out of my the signature machine place I was getting a little delirious with all those signatures and he was coming out of the elevator now I had not met him there were a lot of other kids working for him at the time and he looked at me and he said how are you doing Bob it's good to have you here with us I thought to myself knew my name and I sailed I was three feet off the floor I went back to the signature machine I was so delighted to do those signatures but he was an inspiring man and the people around him were very inspiring and I got caught up in that and I suppose you might say that that was the beginning of my genuine political involvement and and commitment how did you get that internship I got the internship because let's see Kennedy's a a in those days it was Jo Dolan if I wrote Carol had interviews with kids in Westchester Putnam northern New York State and I wanted to go down there I was a college sophomore at the time and I I went in to talk to Joe Dolan and obviously I must have said the right thing I don't know how else he would have selected me but he selected me that was what about 1966 that it must have bidding it must have been 66 must have been about 1966 right it was the Vietnam War was just beginning and I remember the the intern who worked for a Jacob Javits at the time it was Mark Greene who is now Consumer Affairs director in New York City mark and I contrived to get all of the interns working on the hill to sign an anti-war petition and it was a very big deal I mean we had hundreds and hundreds of signatures we got almost everybody Bob Kennedy invited me into his office toward the end of the summer just when the signature drive was really really in full full force I had not seen him since he came out of the elevator that day he said to me I understand you're one of the organizers of this anti-war petition I said that's right he said cease then what what do you mean he said I'm having enough trouble with Lyndon Johnson right now I don't need it gotta get out to the media that my intern is organizing this anti-war petition so I ceased another lesson in American politics you were at Dartmouth I want to ask you about the three institutions where you went to school Dartmouth what impact did that leave on you well Dartmouth College is oh is probably the best undergraduate liberal arts education in America it was clearly that in the 1960s it clearly is in the 1990s very dedicated teachers small classes and not a university not a lot of graduate programs but really a tremendous emphasis on liberal arts and I had some of the best teaching I have ever had anywhere at Dartmouth it gave me a love for learning I think I had that from high school days anyway I happened as I said before I was fortunate enough to have enormously it's how I didn't gifted school teachers but Dartmouth opened my eyes to history to politics to economics to ancient Greece literature it was a very wide-ranging liberal arts education Yale Law School I went to Yale Law School at a time when people went to Yale Law School not to learn the law but because that was a center of social activism and thought about changes in the country unfortunately when I got there I realized it really was a law school in fact most people graduated Yale Law School and actually went to work the corporate law firms I didn't want to do that I enjoyed Yale Law School I did learn a great deal one of my teachers there was Bob book and when he became Solicitor General here in Washington he invited me down to be his assistant years later so my first job a lot of people don't realize this you know I'm a liberal but my first job in the Ford administration was as one of Robert Bork's assistants what'd you learn from him he has at least did that I haven't seen him in years he had a wonderful sense of humor he was great to work for he and I did not see eye to eye on men the issues of the day I had to brief and argue Supreme Court cases taking positions many of which I did not agree with I wasn't very good at the job anyway I really wasn't cut out to be that kind of a lawyer but I learned about him as I learned about the human side of him which is something that a lot of people don't know did he get a bad deal when he wasn't confirmed by the Senate well I think that he got a bad deal in the sense that I think he was treated very roughly I'm gonna say something that's probably not very kind and but I think it needs to be said I don't think he was temperamentally or his temperamentally suited I personally even though I worked for him even though I could think very highly of him I don't think I'd like to see him on the high court so I think that the the actual decision was probably right the process I think he was badly hurt by it were you working for him when he became Attorney General acted I no no I came after that I came what he was a Solicitor General was was that in that way much you know I had only had to be sisters you know that he became because that was the third person around your apps you're absolutely right okay I was not working there when he became Attorney General I was there when he was Solicitor General I went over to the Federal Trade Commission I worked for at first none of the Republicans and then under Jimmy Carter I became director of policy planning for the Federal Trade Commission which actually in terms of the book is a very important step because most of my concerns most of my insights about the gradual competitiveness problems of America began when I was working at the Federal Trade Commission in the mid 1970s those were days nobody was talking very much about American competitiveness in those days but after going through industry by industry an awful lot of data about many American industries it became painfully clear to me that there was indeed a competitiveness problem what was the impact of Oxford on you and how did you get there how'd you get how do you get how do you get a road school I don't know there's no formula for getting a Rhodes Scholar they say you have to be genius and an athlete I was neither of those so was it was a fluke why I got a road scholarship the best well Oxford is another world I don't know if you've been there Brian or any a watching has been there it's an idyllic world it really is a nineteenth-century world it has absolutely nothing to do with the 20th century I had been very actively involved in American politics for a few years Robert Kennedy had been shot I was very disillusioned with American politics I needed a break I'm still a kid I was shaken by all of the stuff that was going on in America and Oxford was a wonderful place to retreat to I had a marvelous two years did a lot of acting and directing met my wife British woman in fact met her the first day we were both at Oxford she was a student coming up to Oxford they were both there waiting for an audition for a student play I didn't want to be a typical forward American an aggressive American asking her her name so she left I left and then I figured that I had blown it because he was a wonderful intelligent woman and she would probably go off into the atmosphere doubtful that we would both get parts in the play and I'd never see her again so I had an idea the best idea that I've ever had before or since I got my college at Oxford to allow me to direct my own play andI put up audition signs all over Oxford announcing that there would be auditions for the play hoping against hope that she would arrive at my auditions and she did and I cast her as the leading lady but she's been ever since what did she do now she's a lawyer she actually she teaches law at a northeastern a law school kids sorry kids two kids two boys how old 7 and 10 and in the sigh and the opening of the book here you have a dedication to the memory of Frances freshmen who's that Frances freshman a great reformer a great progressive a person that would never sit still what organized people would get on with with changing the public she was my grandma a great influence tell us more about her a woman that had a very hard life her husband first husband died when when he was he was very young she was very young she had a couple of kids those days you know you didn't have a lot of the social insurance you have now she worked very hard at a time when a lot of women didn't go into the workforce but that didn't stop her from doing a lot of civic organizing whenever there were all kinds of causes she was involved in and when there wasn't an organization that she could get involved in she created an organization in fact I remember she used to have a little house in the community there were it was infested by bugs and she started a Civic Association to get people to pay money to get rid of the bugs she had that kind of spirit and that spunk a tough lady where Childress admired her for it she ended up living here in Washington up on the lanyard place and many many years I came to a visitor those were my first recollections in Washington DC the name rice and I know we talked just briefly before we went on the air about the pronunciation of it to people butcher it all the time yes they do I I think a lot of people use the German pronunciation Reich but my ancestors were Austrian it's a softer almost an SCH rice sound I say to you before I answer to anything except retch I draw the line at retch but there is there is a lot of butchering after Dartmouth and Yale and Oxford and some of the experiences we talked about in the government when did you go to the John F Kennedy School 1981 I started and I didn't know very much about the Kennedy School I knew that it would it taught people who were interested in going into government I had a pretty good record a fairly small school I didn't know whether I wanted to teach at a law school or a business school I knew I wanted to teach I had a lot of things I wanted to write and I had a almost an intuition that I would be a good teacher but I took a chance I went to the Kennedy School and I was very very pleasantly surprised and delighted with what I found very dedicated students people coming there who easily could have gone to business school or law school but are fired up about public service about public problems public issues come there instead very committed faculty people who again could easily be an economics departments or in political science but are there at the Kennedy School because they are fired up and concerned about public issues one of the persons you acknowledge in your and the preface is martin peretz who is he money parents is the publisher owner of the New Republic and Marty's an old friend I've been a contributing editor on the New Republic for must be about 10 years now written a lot for them don't always agree with their positions particularly on foreign policy but nevertheless respects the New Republic a great deal the Atlantic right also for the Atlantic more and more often different kind of a magazine you can write much longer pieces for the Atlantic and the Whitworth Jack BT people who I don't know if you know these people this is sort of the Boston crowd I don't know if I ever get down to to Washington but very talented people all these outlets and platforms that you have if you could change the way we are governed right now give us two or three examples of what you would do if all of a sudden president said Bob anything you want I'll do I doubt that George Bush is going to do that somehow Brian I've been waiting my telephone is open he hasn't called yet it seems to me and and this gets back to one of the major themes of the book that American corporations have lost their linkage to the American economy the competitiveness of America no longer depends on the competitiveness of American companies it depends on the competitiveness of the American workforce and we have a situation in which the top 20 percent of American workers by income are on an upward escalator they're doing very well they have good suburban schools good four-year colleges like me they went to law school or they went someplace else they're doing fine we don't have to worry about them are you calling them the symbolic analysts I call them symbolic analysts in the book because they basically spend their lives their working lives manipulating symbols mathematical symbols if they're say engineers verbal symbols maybe if they're in journalism oral visual symbols they are symbolic analysts in the sense that they're conceptualizes they're problem solvers and the world is giving them a premium in return for their valuable skills and valuable talents are you a symbolic analyst yourself I suppose I am I'm a writer I'm a thinker I deal in symbols the problem is that eighty percent of the public is not on that upward escalator eighty percent of the American public is actually on a downward escalator if you're a non supervisory worker production worker most of these people in the American economy right now have a an income in real inflation-adjusted terms nineteen ninety one that is about what it was in nineteen fifty-eight the reason you have so many two income families now is not because all these opportunities for women but because people women have to be in the workforce now to make ends meet a lot of people don't realize how much struggle is going on American families are getting smaller fewer kids not because they don't like kids he can't afford kids two years ago for the first time since the Second World War the percentage of Americans owning their homes went down the percentage of Americans renting their homes went up so you have two escalators Brian you have a upward escalator of the top twenty percent which by the way top twenty percent brought home last year more money in income than the bottom eighty percent put together and then you have a downward escalator so you have on your way to becoming a two-track society your question to me what would I do about it with if Bush called me up tomorrow I'd say look let's make workforce training education preschool let's make building the American workforce the centerpiece of our economic policy he hasn't done that one of the other recommendations I remember reading about was a progressive tax well the question is how are you going to pay for all of this now the minute I use the T word a lot of people say I don't want to listen to you but if we had a tax that was as progressive as we had in 1978 now in 1978 very few people were screaming that the American income tax was too progressive if we had a tax that was as progressive as we had it in 1978 last year the top 20% of Americans would have paid about ninety six billion dollars more in taxes than they in fact paid you can do an awful lot with education and training and investing in the American workforce for ninety six billion dollars a year when you have the progressive tax though did have all the tax loopholes I'm talking about and this is with tax loopholes figured in that is you know you officially you had a tax rate that was much higher than the effective rate of 1978 but even with the effective rate the top 20% fact the top 10% weren't paid ninety three billion dollars more than they actually paid last year so this is not a radical but people say that I'm way over there and left no a progressive income tax on the 1978 reducing military expenditures that's another way of getting some money to rebuild America when we start off you said that a number of conservative publications like your book they do and it perplexes me and worries me because if if I'm suddenly becoming an author that the Wall Street Journal Fortune magazine and some neoconservatives find appetizing appealing then I must be doing something wrong I have to go back to my notes do you have any sense of why they think it's a book worth reading worth thinking about well I talked to George Gilder the other day George is a friend even though we see eye to eye on absolutely nothing he is a neoconservative he liked the book he said because he thinks I correctly analyzed the global economy the way corporations and the global economy are moving he didn't like my prescriptions he didn't like my description of the top 20 percent at the bottom 80% but the first half of the book he said was the best thing he has ever read on the emerging global economy let me pick out a couple of companies that you mentioned as a way of getting you to talk about structure northern telecom northern telecom a Canadian company that is actually not really a Canadian company it's it's making things all over the world it's investing all over the world it is becoming a global company you mentioned that northern telecom was a Canadian company with offices and manufacturing facilities in the United States and selling a lot here but also Japanese are involved in how these are involved how does that although it's it's very hard to separate out any longer who is US and who is them if you want to buy an american-made car today a year you have a better better buying an american-made car if you buy a Honda than buy a Pontiac LeMans most of which is produced outside the United States people forget or they don't understand the extent to which globalization has taken over these corporations foreigners coming here we're going there chrysler owns a big chunk of mitsubishi ford owns 25% of mazda where do you draw the line the only thing that's left here in the united states is the american workforce regardless who they're working for I don't care who they're working for you you want to work for Fujitsu perfectly fun if you're getting the training you need if you're adding value to the world economy Brian your real income is going to be going up and you didn't mention General Motors they own part of Isuzu General Motors very close to Isuzu he was part of Isuzu and again General Motors made more money outside the United States last year than inside the United States these companies are very very rapidly going global well how does why does Lee Iacocca based the Japanese in Lee Iacocca bashes the job he doesn't he doesn't want to face Japanese competition he would like to have a wall around the United States he owns part of but he owns part of Mitsubishi and he uses a lot of parts that are made in Japan he doesn't want to talk about that Lee Iacocca I think would like the government to restrain Japanese imports even more than they're restrained right now but you know protectionism doesn't get us anywhere this is where I part company from a lot of my fellow Democrats and liberals protectionism is really like put it trying to put your finger in a dike as the ocean is changing you're not going to get anywhere moreover you are costing Americans a great deal of money you know we protected the steel industry in the United States after 1968 with this big steel quota what happened to American steel steel makers in the United States after 1968 began investing less in steelmaking technologies than they had before 1968 because the heat was off in fact steel makers began getting out of steel a US Steel became US x with the X being an indelible reminder that the real purpose of that company is now unknown and unknowable well protectionism mmm has a multiplier effect a lot of companies that depended on Steel like auto companies in America and appliance companies suddenly they had to pay 40 percent or for the steel they used then their international competitors had to pay for the steel they used and you have this multiplier effect in terms of making appliance of manufacturers and auto manufacturers less and less competitive page 143 by 1994 Japanese corporations are expected to be contributing about 1 billion to American charities which will compromise I'm sorry will comprise about 8% of the total corporate donations in the United States Japanese are trying to become good corporate citizens in America American corporations would like to be good corporate citizens abroad the former chairman of IBM told me that IBM has got to be a good corporate citizen wherever it does business cannot be seen to be playing favorites now that's an important point cannot be seen to be playing favorites so when it comes to for example shutting down factories or laying off workers IBM cannot you have special preference to American workers otherwise it runs into political problems around the world wherever it does business IBM is gradually ceasing to become an American company are you how do you feel about these global corporations is it good for us or bad for us well global capital is not a good nor bad per se run I think it's part of the emerging world economic order capital itself money is sloshing across borders we need Japanese money we need German money and if they stopped investing in us we'd really be in a pickle the issue is not where the money comes from the issue is not who's corporation it is the issue is not who the shareholders are the issue again I sound like a broken record but I want to emphasize this point the issue is what are the values that Americans the skills that Americans add to the world economy how much a value do we actually add to the world economy regardless of who were working for in Madonna Bruce Springsteen are they now under the control of the Japanese no they're making a huge amount of money Akio Morita is making them more money than Larry Tisch ever made for them got something I want to hold up here and get a picture of it and we want to leave the camera on there for just a moment at first glance it struck me as being humorous why did you do this and what is it well I did it with little bit of a twinkle in my eye these are the kinds of jobs that symbolic analysts often hold it's very difficult to explain exactly what symbolic analysts do if you are again one of these people with an office in a steel and glass tower in a major American city you're a management consultant you're an engineer you're a researcher a strategist a planner you are probably spending most of your days behind a computer or you are in meetings you're on the telephone what are you doing well that little chart gives a an indication of the kind of jobs you are under undertaking you can you can like you can be a communications management engineer but a communications applications adviser you can in other words you say Kenny yeah take any title from the first column add it to any title in the second column and then add it to any title in the third column and you get a title that probably engages or involved somebody in some sort of symbolic analytic activity the higher status symbolic analysts drop the last column or drop the second column they usually only have two words in their title like applications planner or a development director or management engineer well these are jobs that they're difficult to define because they are engaged continuously in ideas and concepts and problem solving very different from the old manufacturing or even old service economy we used to have even as late as ten years ago is there going to be in this country a permanent underclass but we already have something of a permanent underclass but we are also evolving a a fairly permanent lower class and we're evolving a fairly permanent overclass we've talked about the underclass for years and years and that is a problem and we have to do things about that problem and we're going to be living with that problem for years and years so it would be somebody in in the underclass to define I'm talking right underclass having long term poverty so that I mean but basically long term poverty how many how many people in our country are in long-term poverty well we know that one out of every five chldren now is hungry and as we sit here Brian one out of every five American children is at this moment hungry is going to go to bed tonight without a meal now that for an advanced industrial nation that prides itself on our standard of living that is outrageous if someone listen to this has a hungry child is there some place for that person to go get food for that job sometimes there is some cities do have shelters do have sort of voluntary soup kitchens there are some points of light there are not thousands of points of light you know George Bush says that there's all this volunteerism going on it's not nearly that much in fact the top 20% you look at their charitable giving and you find that at least since the 1986 tax revisions the top 20% have cut way back on their charitable giving it doesn't it's there's there are a few tax advantages in that much charitable giving in fact if you're at the top chances are you're contributing a smaller portion of your income then if you're at the middle or bottom of the income scale what's available again let's say that there's a mother and a father listening and and they want to know is there enough government resource available so apart from the soup kitchens food stamps are being cut back in fact during the 1980s they were cut back about 15% many states know it's a federal state program matter what many states simply cannot afford it so there are food stamps but not nearly as much as there were before if you have a poor kid who comes from a poor family and wants to get some preschool education maybe the family needs some daycare and would like to give the kid a little advantage the Head Start program classic Great Society program that works one program that we know works study after study after study shows that if you take poor kids put them into a headstart they're going to have higher incomes and more productive lives eventually out there we're not funding it only half of the kids that are eligible for headstart are X have it accessible to them George Bush is president he's sitting there looking at these figures one in five children you say are hungry do you think he's watching this program Brian I hope so I can't get to him he doesn't answer my phone calls well let's say that he is and and he's hearing this statistic that one in five children go to bed or whatever you want to use he looks over at this column and sees that we just spent seventy eighty billion dollars on the war in the Gulf how do we do that intellectually why wouldn't we want to just say well we'll take twenty five billion over here and spend it on those folks that are hungry well first of all there's this there is no domestic policy that I can find in the Bush administration I mean it's like Gertrude Stein said about Oakland California there's no there there George Bush is a wonderful Secretary of State it's one of the most effective secretaries of state we've ever had I think his foreign policy I may have some differences with it but he's very effective there's no doubt about what happened in the Persian Gulf he was effective but when it comes to putting our energies into rebuilding this nation I'm not just talking about the underclass I'm talking about the middle class the lower middle class the working class all of these people on the downward escalator we're also talking about infrastructure the potholes bridges we haven't built a new airport in this country since 1974 every other factor of production is mobile if we want to build the economy we've got to pay attention to human capital and infrastructure but it's not happening the federal government is getting out of the business back to the hungry thing you're Tom Foley and George Mitchell watching this and they're sitting there thinking about the figures why wouldn't they get together pass a bill to spend the money on hungry children because they would probably say the new budget deficit agreement with the White House makes it almost impossible for us to increase domestic discretionary spending without taking the money out from other programs for the disadvantaged and we don't want to do that we have put ourselves in a straitjacket Brian there's absolutely no way under the new agreements that we can spend more money in ways that we need to spend it now the next question would be well why don't we change the agreement why don't we have an entirely different budget structure yes I think we should I think Democrats ought to be saying look going into debt to the rest of the world is not such a bad thing if we are spending that indebtedness on investments in our future if we're spending it on education training infrastructure if we're building up our capacity to be more productive in the future that's good debt it's not banded in the 19th century we as a nation we're much more indebted as a percentage of gross national product to foreigners and we are today but in those days we invested those in Dedham canals railroads bridges factories we are not investing that's the problem not debt it's lack of public and private investment go back to the hungry kids if there are really one in five hungry kids how come there aren't more outraged politicians across the spectrum we don't hear them we don't hear people making lots of speeches about it why it wouldn't this be an emergency well I think it is emergency why aren't they that some of them are talking about it remember half of Americans don't vote and the half that doesn't vote are the people that are at the lowest point on that escalator that is there's a direct correlation between political activism and how much money you have is the top 20% is very active politically they vote and they also make a lot of campaign contributions and they finance PACs and they do a lot of things half of Americans do not vote a lot of politicians these days why should they listen to people that don't vote it's a callous and cynical thing to say I hope that our politicians would listen to even the people that don't vote and to some extent they do but if there there's no political activism if there's no participation by the bottom half then they're not going to be listened to how would you take care of those kids that are hungry specifically well I don't think there's any I mean with regard to one out of every five kids there's no great secret about about how to handle how to handle hunger I mean by golly we do have a food stamp program we do have ways of dealing with hunger quite directly we have famine relief programs all over the world it is an emergency I'll give you another frightening statistic infant mortality in this country we trail 18 other nations in our level of infant mortality we have the the 19th level of information other nations are better than we are have a lower level of infant mortality we have in some of our central cities it levels of infant mortality like the third world Brian the top 20 percent what's happening and it's happening gradually I don't mean to indict the top 20% but what's happening is the top 20% are in effect seceding from the rest of the country many of them living in nice suburbs with their own school systems surrounding themselves with security guards good parks and recreation private health clubs they are not connected in ways that they were before we are segregating by income as a nation more than we've ever segregated before is zip code marketing is all the rage why because marketers now know that the best way of a finding affluent people is to target certain communities those are good schools but kids have all the brakes the bottom 80% are on a different track the political issue over the next 10 or even 20 years is how can we get the top 20% to make investments in the future productivity of the bottom 80 you teach kids young people you talk lecture right let's say a kid comes up to you young student comes up to you stand in the train station over here and says professor right I get it you know my acute is fairly high my parents don't have anything I don't you know I don't know how to get ahead what would you tell a young person 16 17 years old how can they get ready for school and then a professional well I probably say look if you were very poor I mean really very very poor and your family's very very poor and your did very well in high school chances are you can get a scholarship to college if you were middle class lower middle class working class you didn't do great in high school you're gonna have trouble getting to college college costs have increased in inflation-adjusted terms about 26% over the 1980s the federal government has pulled a plug on college grants on college loans and college aid well what are you gonna do I would say to that kid if you can't get a loan if you can't finance college at least get the technical training that you need to set you on a channel for lifelong learning and some in some trade in some technical area of competence unfortunately I would say the kid we don't have an apprenticeship program like they have in the former West Germany we don't have a public-private partnership to make sure that you get you can get skills designed to put you in touch with particular jobs but by all means do whatever you can to get those skills and when you get a job make sure it's the kind of job that's going to build your skills not just a job that's going to be automated over the next ten years this book you have the works of Nations preparing ourselves for 21st century capitalism what line of work would you go into if you were a young person today to get ready for 20 the 21st century how were young for a person today I would try to get along the lines we've been talking before the best education in the building blocks of symbolic analytic thinking problem solving problem identifying a good liberal arts education there's no substitute no substitute for a good liberal arts education if you can go there if you can afford it because that does build a foundation stones for lifelong learning also communication skills are very important not just the analytic skills not just being good with with a computer or with a pencil paper you need to communicate you're going to be making presentations you're going to be cooperating with other people you're gonna be working in teams learn how to work in teams a lot of the American educational system is now premise taun individual performance but that's not the working life you're going to lead in the future gonna have to work with people Harvard has a five billion dollar endowment what the largest in the world or at least the largest amount of states do you think it's doing enough as a university for the people that aren't so well I know I don't I don't think any university is doing enough I I'm a trustee at another University I think that there are all kinds of things that American higher education ought to be doing could be doing working with the American business community in fact American business is not doing enough Ryan a lot of American corporate chief executive officers every time I go to a conference on American competitiveness and there are many in fact the conference industry on American competitiveness is one of the most competitive industries in America every time I go to one of those conferences there's a chief executive officer that says by golly I care about the American school systems we are engaging in a partnership with American schools we are we are funding computers and we're doing this in that baloney American corporations are pulling out more money from local school districts than they ever put in their playing school district off against school history they're saying essentially to any town whether do business look if you don't give us a tax abatements we're gonna go to the next town that will give us a tax cut and as a result a lot of towns don't have the money they need to finance a decent a decent Elementary School in these decent high school in 1960 44% of local property taxes much of which financed schools came from American corporations 1991 were down to 16% so all of these corporate ceos that are talking in a good game of their about American education they're pulling money out of American education what would you do then if you're running one of those corporations would you say I'd rather pay more tax no I would work with other business leaders I'd say look we have we have an obligation a social obligation we have an economic obligation we are Americans after all let's all get together we're not going to have this war between the states or between the cities for tax abatements we're gonna have a national truce we're not going to threaten local towns we're not going to try to get the best deal we can we are going to say to the local tax jurisdictions you have a responsibility you have responsibility we're going to help you fulfill that responsibility to provide the best education possible for those kids what do you think of this deficit is it something to worry about if you were in charge again would you get rid of it I don't think the deficit per se is something to worry about again the issue is what we do with the borrowings not whether we borrow we have not been investing those borrowings public sector or private sector I have no patience with people that say we've got to simply reduce the deficit for the sake of reducing the deficit what difference does that make any businessperson knows that you borrow money for the sake of investing in the future of your business those are wise borrowings because then you can pay those debts off when you get bigger a national economy works in exactly the same way it doesn't matter that we're borrowing money if we were investing those monies that we borrowed from abroad in education training infrastructure of factories but we're not who's got the power and economics in this town in your opinion what jobs really pull the levers well basically in this town right now there's only one game and that is the Federal Reserve Board it's Alan Greenspan and his crew over there primarily because there's no longer a fiscal policy to speak of again we've hamstrung ourselves we've created this new budget agreement you can't do anything with fiscal policy we can't try to get out of this recession by stimulating public expenditures because basically we're hamstrung so it all belongs with the Federal Reserve and that's too much responsibility for the Federal Reserve Board Alan Greenspan is trying to stimulate the economy it's like pushing on a wet noodle there's not enough demand in the system American corporations are laden with debt American consumers are laden with that the spending is not coming forth exports we can't rely on exports Europe is in a recession East Asia is going into a recession I think this recession by the way is going to last much longer than a lot of people now claim but getting back to your question economic policy no it's not here in Washington it's a Federal Reserve Board it's not in the executive branch it's not in Congress somebody said we're gonna make you chairman of the Federal Reserve would that be an exciting position to be in not for me I don't find it very thrilling to look at figures about the money supply some people do if you're into macroeconomics if you if you want to maintain steady growth and I think that money supply is important for steady growth then that would be a very good job but I'm looking at the structure of the American economy Ron I'm looking beyond the current recession even when we get out of the current recession the structural problems that I've been talking about that two-tiered economy that we're creating with a top 20% but most Americans on a downward tilt that to me is much more important over the long term do you think that given your view of how this town operates that it will ever change and that four-fifths that are going down will ever start back up well if I didn't think there was a possibility for change I wouldn't write my books I wouldn't be here today obviously deep in my heart I'm a cockeyed optimist why am i optimistic everybody says to me you know I've read your book I don't see why you're optimistic the top 20% are linking up with a global economy doing better and better putting themselves in these economic unclaimed separate from the rest of the of society and if they have all the money and they're not willing to invest in the rest of America why rush are you so optimistic well when I say back to them is is this that ultimately I'm a student of American history not only American economics and politics if you look back in American history this country has an extraordinary ability and willingness to roll up its sleeves and get on with what has to be done when they understand stand the nature of the problem first world war depression second world war we do it we ultimately do it there's a feeling of affinity not only when we fight Foreign Wars you know all the yellow ribbons all the good feeling all the self-confidence I think we can turn that toward rebuilding America with the right kind of leadership after the Second World War remember we rebuild Europe we rebuild Japan why can't we rebuild America you sit in Boston and say if we could only get X elected this thing would change well I've been involved in a number of presidential campaigns all of them unsuccessful in fact if I were a presidential candidate I'd avoid me like the plague because obviously I do something wrong there are some very attractive candidates out there for the Democrats many of them have not yet put up their hand and said I'd like to be a candidate everybody's scared off now without popularity ratings that George Bush has the Democrats have not displayed a great deal of intestinal fortitude of late and maybe I can't blame them when you have a president with 90 percent popularity but there are terrific people out there who's the best economic thinker in your opinion among politicians well I among my favorites is a guy named Bill Clinton the governor of Arkansas he's a dear and old friend we were at Oxford together I've looked what he's done in Arkansas with Arkansas education he's done exactly the right thing with very limited resources and he's the kind of talented guy I think we need right at the top the cabro provide the right kind of leadership anybody else I like Al Gore I think he's also extraordinarily talented I used he's level-headed he's been saying many of the same things not in as much detail or maybe I should say he's been influenced by me maybe hopefully I'm very impressed with him as well I've worked for a number of years with other Democrats on the hill there are other governor's around they're very very impressive another senator that I like very much I don't know him very well but I like what he's done so far as Bob Kerrey I think he could be a very attractive candidate for a number of reasons would you advise an Al Gore about Kerry or Bill Clinton to jump in the race for 1992 I would I would and I would for the simple reason that even if you don't have a a prayers chance of winning at least in 1992 you can help set the national agenda for 1996 you can establish credibility for yourself you make a respectable showing but also you alert the American public to what you stand for and so by the time 1996 rolls around even if you don't do very well in 92 you already have the beginnings of a movement it's all about education you know I go back to my role as an educator I think politics is very much about education to the American population is many people are very confused about economics and about college they don't know what's happening Japanese are coming here they're concerned about that they're losing their jobs a lot of economic insecurity well the obligation of people like me college professors but also the obligation of people in politics is to help educate the public alert them to reality not to pull the wool over their eyes not to simply say don't worry be happy' but to alert them to reality how much do you teach I teach a lot how many hours a week well I teach let's see in the fall I teach two big courses one course has a better hundred and twenty students another course remember these graduate students now the course has a last fall about 6070 students in the spring I teach this spring I I have it easy I have a little seminar because I knew the book was coming out and I wanted I wanted the the intimate cannot contact that you get in a seminar and I wanted to talk about many of the themes in this book I don't mind teaching big classes I'm like big classes I don't like lecturing I never lecture I try to say make the class into an arena of discussion I try to provoke dissent in the class I want people to take sometimes there's simulations they take different roles have different characters and politics and economics I want the classroom to be alive exciting any way to characterize today's students in your classes well remember my students at the John F Kennedy School of Government our self selected group these are people who could have gone to law school or Business School but went to the Kennedy School at Harvard because they're committed to public service so this is not a representative cross sample of America's students I'm very fortunate I'm very fortunate now I have in the past taught in a law school in fact I've taught a few courses at Harvard Law School I've taught at American University Law School here in Washington a lot of students in law school obviously are very career-oriented that's why they're there they want to make a lot of money Business School is exactly the same way one concern I have is that so many bright American kids want to go into law and Investment Banking you know the pie slicing professions instead of the pie and larger professions and that is a problem for the country it continues to be a problem what's the most popular lecture that you give in any and anyone here well again I don't give lectures ever I give I I don't well I try not to give lecture in classrooms I don't know why I give a lecture you know kids can be a lecture is a medieval institution you know if you if you if you have lecture notes why not just Xerox the notes and give them to students what's the most engaging topic then what what is it what hour is it did you walk out and say again I'll tell you brothers I love my classes I love tea tree in fact the exception is when I walk out of a classroom saying I didn't have fun I don't think anything happened in that classroom I teach courses on political economy I teach courses on management in the public sector and leadership in the public sector a lot of them our case classes that is that we examine a particular case of somebody trying to grapple with a political economic or leadership issue and if I can get those students excited upset provocation intellectual provocations what I do in this book I'm an intellectual provocateur that's my role anyway to define the politics of your students today and know a lot of people look at and they immediately assume liberal but no that's totally simplistic I have a lot of people who most people would say are extreme right-wingers a lot of international students who fall not quite on the American political spectrum at all I think these old ideological compartments are meaning less and less frankly but the common denominator of my students is a commitment to make the world better make public policy better make public service mean something at a time this is what the book looks like the work of nations by robert rice professor at the John F Kennedy School at Harvard thank you for being with us thank you Brian
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