>> welcome to al jazeera, america. i'm tony harris. here are the stories we're following this hour. president obama has a warning for congress, don't shut down the government. the president spoke after the senate passed the senate spending bill stripped of the provision to refund the healthcare. the u.n. security council is expected to vote on the resolution governing syria's weapons as early as this evening. president obama is, quote, says is a huge victory international community. scientists say they're very

confident that people are the dominant cause of global warming and causing the sea levels to rise. protesting cairo and other cities come days after a muslim brotherhood protesters held banners and shout the slogans. and detroit will receive aid from the federal government and private funds. those are the headlines. inside story is next for al jazeera. >> never before than now has there been a difference between the haves and have notes. but in the worries of the shrinking middle class seem far from the minds of those who can

do something about it. that's inside story tonight. >> hello and thanks for being with us. americans are increasingly worried that the country is going in the wrong direction. in the action on capitol hill with the repeated fights over the budget obamacare and the debt ceiling is clearly not happening. on the budget the action on the senate back to the house over the weekend as lawmakers work to avert a possible government shutdown. tonight on inside story we'll move away from the politics at the moment and discuss the middle class which has been hit hard since the great recession of 2008. >> this was all about elevating the debate in the public. >> there has been a big waste of time. >> as the debate over the budget

and debt ceiling rages on there is a growing disconnect between washington and the rest of the country. the recession in 2008 sent the american income spiraling. for the first time in five years incomes are rising. the obama administration defends economic progress boasting 42 straight months of growth in over 7. million private sector jobs. but the president is aware of today's economic inequality. >> for other a decade work americans have seen their wages stagnate even though the pay for a few explodes. ththe inequality has steadily risen. >> reporter: the president's approval rating is at a two year low. only 45% approve of his handling

of the economy. a recent bloomberg pole show 68% of the countr country say the cy is heading in the wrong direction. >> creating jobs is our number one priority, and this bill will help us to do it. it's hard to get to the number one priority when you have some of the shenanigans going on in the u.s. house and some of this manufactured crisis they've created. >> reporter: as americans watch the budget battle unfold on capitol hill in theaters across the country a new movie tackles the issue of the shrinking middle class. >> the united states has the most unequal distribution of income. and we're surging to a greater inequality. >> it's called "inequality" for all. inside story talked with its director. >> i made this film specifically for people like me who are

worried, have economic anxiety about what their future is like, are they going to be retire, get healthcare, but i wanted them to be able to understand, get a real framework of what i consider to be the noise of the 24 hours news cycle that comes to them on a regular basis. >> we're going cut through that noise in just a moment. later in our program we're going to hear more from jacob kornbleuth and joining us now from the studio, the research and policy director at the economic policy institute. with us is leslie mccall from northwestern university. the author of "the undeserving rich." and edward mcclelland, journalist and author of "nothing but blue skies." good to have you with us. >> thank you.

>> take us back to a time when we didn't have that 24 hour noise if you will back to the 50s and 60s where the middle class was sailing along one parent in the home. things were working out. money in the bank for college, and no major loan debt. what happened? >> well, if you go back to the 40s and 50s and 60s that's a time when working people had everything working for them. that's when we came out o out od war two with any industrial capacity. we were the only country that could make cars, steel. there was no competition. there was no foreign competition for labor. there was no domestic competition. between 1945 and 1965 the country was closed to immigration. the classic strike breaking tactic of the late 19th and early 20 20th century of importg

cheap foreign workers was unavailable at that time. you have high marginal tax rates for the wealthy. government for industry and government support for labor. >> leslie, things have not been getting better. net worths that dropped $36,000. what has changed? >> well, a number of things have changed in the economy from the time in which mr. mcclelland is talking about, that golden age really ended in the 1970s. and even equality started to rise really precipitously in the 1980s. and then it actually started to decline somewhat in the late 1990s. and then it started to tick up again in the 2000. we had a brief period in 1990s when things were getting better. we have an idea of what might help inequality slow by looking

back at the 1990. >> what would help? >> you had tremendous growth throughout distribution. so unemployment rates were very low in the late 1990s. 4% and even below 4%. so that was one major factor that produced a rise in living standards up and down the economic ladder. so one possible solution here of course is to try to grow the economy. so that everyone has a chance at a job that will put them into the middle class, and also give them the kinds of benefits that they would expect from a job such as healthcare and bench benefits. >> i want to talk about getting jobs in just a moment. josh, are you surprised more americans are blaming congress more so than banks and large

corporations? >> i don't know that i'm surprised. there is something to it. from my perspective corporations exist to make profits, and i think it is incumbent on policymakers to constrain what they do to make those profits. if you look at who has really failed the american people in core competency over the past decade or so, it's really been policymakers. there is a very easy fix to the high rates of unemployment today. that is reverse the course of austerity we're on. we've hit public spending far more over the past four years in terms of recovery from this business cycle than we ever have. all we need to allow fiscal policy to support growth, and we would be about back to full recovery from the great recession. it really is corporations that have kept us from doing that. it's the policy make necessary washington and it's the g.o.p. members of the house of

representatives who have really been able to force those spending cuts and enforce the economy. >> where does the blame fall? >> yes, i think there is some information that i think would contradict your question to mr. bevan's, and that is confidence in major companies, especially banks and financial institutions is as low as confidences in the executive branch and congress is a little bit lower, but really not that much. we're talking about all-time lows since the surveys have been taken which began in the 1970s. all-time lows for confidence in major companies as well as banks and financial institutions. so i actually disagree with the premise of the question. i think that the american public in fact does blame corporations and the banks for the situation that we're in currently.

>> those statistics, by the way, were from a recent pew study. edward, i want to get back to you. why hasn't our policymakers on both sides of the i'll been able to pull the middle class out of the recession? >> i would go all the way back to the 1970s to talk about when the policy makers began to fail us. starting--one thing i've argued is the last president who had a plan for the working class was president nixon with his tariffs on japanese imports. beginning with jimmy carter we began an age of deregulation, which really took the reins off of industry, carter deregulated airlines, rail lines, he hoped it would reduce inflations. it didn't, and it give companies more ref larg leverage against r

employees, and then they raised interest rates so high in an tempt to reduce inflation that nobody could afford to buy a car, buy a house, and many of the industrial parts of this country never recovered. we're still in this 40-year period in what i call th the agf deregulation. the government does not even need to spend a lot of money to reverts this. enact policies such as higher tax rates on inheritances and investments and also healthcare system to replace the welfare capitalism that has disappeared as unions have become weaker. >> josh, do we need higher taxes on the healthy and tax relief on the middle class? >> i think we definitely need higher taxes on people with high incomes for a couple of reasons. in the long run we need the revenue. over the past 30 years as your

guests have noted they've gotten the lion share of income gains. which why tax the rich. and we've had marginal tax rates on rich people in previous history. you do not see down sides in terms of overall growth or anything like that. raising taxes on the very rich should an key priority. i want to say one other thing in response to edward. i think he's right, but i think we've got two problems that are separable. in the longer run we have ever-rising inequality which began roughly in the late 1970s. i think that's the result of all sorts of policy changes towards the very well off. we have minimum wage. we didn't run unemployment rates low enough to give people bargaining power. we allowed employers to not allow their willing workers to unionize. you can change a lot of those things without changing a lot of tax money. we should. and we should restore some of

that bargaining power. we entered economic crisis. we still have not recovered from it. to solve that problem. the problem of having not recovered fully from the great recession. for that we need spending. the problem with th now is, we d spending to address the longer run of inequality. we can do a lot of it without direct government spending. >> we're going to pause for just a moment. we'll take a quick break and when we come back we'll continue our discussion in the middle class and income inequality. stay with us.

>> leslie mccall take away the politics, the noise if you will. what do you think is the real pulse of americans in the economy? >> yes, i think that's sort of the question that is going back to this issue of short term versus long term. that's the question that we really want to address in the long term. i think what you're seeing there is not necessarily among the public, a desire for taxes

especially taxes on the wealthy to solve all the problems that they see as befalling them and their families as well as the economy overall. i think ultimately they look to the private sector, actually, to solve these kind of problems. that's really part of our history. it's part of the history of not just economic growth in this country, but equitable growth, growth that will spread evenly across all parts of the direction. so i think really what we need is a partnership, and i think this is consistent with the american public, their views of how they want inequality solved. what they want is a partnership between government and government intervention. we see a majority of americans saying they want the government to work with businesses, employers, to create the economic growth that benefits the middle class as well as

those in the upper reaches of the occupational ladder. honestly i think that's where there are the most questions about what that would look like. and i think that's where we need to focus our attention at the moment. and at least to be consistent with what the american public desires. >> edward, what road do we need to take back in the 50s and 60s we thought the future would be better off for our children. that's not the case today. >> no, and you know, your other guests were talking about partnerships between business and government. i think certainly george w bush and barack obama deserve a lot of credit for the auto bailout. bush acted against the wishes of many members of his own party who wanted to see the american auto industry and united auto workers just go into the dust bin of history. these were senators who had non-union auto plants. he was not going to be the

president who gave the auto industry go bankrupt and give them tarp money and thin obama completed the job. that's the kind of intervention into the economy we need to see from the federal government. i also think that the affordable care act is a positive step in the right direction, to provide to americans the benefits that companies are just no longer going to provide for them. >> josh, we're seeing higher and low wage jobs. how do we get the middle income jobs back. >> i don't think there is a silver bullet to do that. talking about climate change. there is no silver bullet. there is silver buck shot. the thing that unites them all you need to do things that restore bargaining power to moderate wage workers. if you look at the past three decades before the great recession robbed those workers of bargaining power you have a number of things.

at the low end, you have the failure of the minimum wage, the number of workers who say they wish were in an union has risen. that gap of workers in an union and want to be is a failure of policy to not keep up with employer hostility and keep the playing field level in terms of organizing unions. i think you need macro-policymakers, the federal reserve, congress, to make sure that they make very real rates of unemployment a bigger priority and real rates of inflation. that's a target. i think workers need low rates of unemployment, in the 90s where you saw across the board wage growth. the way we write our trade

agreements that don't provide protections to american workers. it's not one thing. it's all sorts of things. but all of those things over the past couple of decades have been tilted to make sure more of the bargaining power goes to the very top and we need to restore that. >> i want to start with you, leslie, do you feel the american dream is fading? >> you know, the american dream has always been as much go equal outcomes as equal opportunities. the american public is very much aware of the fact that those two go hand in hand, and they're not going hand in hand now. so i would like to see politicians and others in of the private sector understand that the american dream means fair pay. it includes fair pay. that means fair pay for executives as well as fair pay for those who are lower down and

in the middle part of the income distribution. then i think we can get back to fulfilling the goals and aspirations of americans for the american dream. >> edward, where do we stand on the american dream. >> i think it's defined downward on every generation. 24% of young people said their american dream is not being in debt. they're not trying to get ahead. they're trying to get to zero and be something more than a funnel of money from their inters to their creditors. i think mr. bevans is right. there is an imbalance between employers. the drift drift between labor is to concentrate money at the top. that can't be arrested without an activist government. >> we'll have to end our discussion there. i want to thank all of our guests. thank you. we'll take a short break and when we come back, the interview with the director of the new

film "inequality for all." stay with us.

>> welcome back to inside story. the concerns of the middle class will be on the big screen with the new film "inequality for all." starring robert reisch. >> we're losing equal opportunity in america. any one of you who feels cynical, just consider where we have been. >> joining us now to talk about the topic of income inequality in america is jacob kornbleuth.

it's called inequality for all. to start with, explain the tit title. >> well, "inequality for all" was chosen because inequality does really affect us all. it affects the poor and middle class but the wealthy among us. they would do better with a rapidly growing economy than the larger share of the economy that is stuck and not growing at all. >> your film has a message and an opportunity to educate, but you also want to entertain and pull in your audience. how do you do both at once? >> well, that was the big question about making this film. how do you make a film about the economy entertaining? i don't come from documentary, and i felt that helped a lot. film needs to be a transformation machine. you turn off the lights, go into the cinema and come out changed. that's an experience entertaining first and foremost. we use middle class characters and personal stories to pull you

along on a personally emotional journey and at the same time hit the larger points between effecting the whole economy. >> robert reisch. >> i was secretary of labor under bill clinton, before that i was a special age of abrooklyn con. >> what people find most surprising about the film is they're going to see a dire film about the economy. it turns out they laugh. they laugh, and maybe even cry while watching the film. and part of that is how they relate to his personal story. he's an incredibly sympathetic character to be talking about economics. i mean, normally we talk about the people in economics as being sort of heady, maybe too intellectual, but this is an emotional story, "inequality for

all." >> we made $36,000. >> i mad work 70 hours a week. >> people occasionally say to me. what nation does it better? my answer is the united states. >> our goals are to change the conversation around income and inequality. the right blames the poor and the left blames the wealthier organizations. our goal is to change the conversation to understand that this affects us all. >> it has not reduced the number of job available to americans. it has reduced their pay. >> watching a film can be a passive experience. it sound like you're trying to inspire people to leave the theater, leave the viewing area where they watch it and do something or keep the dialogue going? >> absolutely. that's an important part of a film like this. if your goal is to change the conversation when people leave--when people see this movie i feel like they've walked

out from the screenings i've seen, as very inspired. we're trying to take an inspiration, energy, and turn it into action. i mean, the occupy movement is at about its two two-year anniversary and we're at the five-year anniversary of the lehman brothers and the crash of 2008. we have not done anything about the economy. the income and wealth is distributed in a way that makes our economy and democracy less functioning than it should be. >> once against, insid "inside " with libby casey. that's it for me, thanks for watching.