it's a very interesting fact. host pledge your right at the 60's and 70's they had a strange period and which the military was polarizing and attacking the military and then leader we got into a problem which was what i would call it patriotism police were people with questionable there's patriotism on both sides. when we talk about how bad things are going more and more partisan, more and more ideological, this to me is actually a good swing which is we've gotten away from that. there is not quite as much questioning of the military or patriotism or whether joe biden is less patriotic than cheney even though they disagree fundamentally. >> guest: i'm with you on that and apart from some of my colleagues on the right that when people said we shouldn't -- you shouldn't ask questions about the iraq war and why we, are there. if you are the u.s. senate and or not there to talk about the

wisdom of going to the war, what are you therefore? let's go back to the founders. if you're not supposed to ask questions about those issues what are you reduced to? absolutely. ..

>> guest: the main thing is fascinating -- talk about katrina in the book. but ernie duncan was attacked, and he said -- maybe one silver lining in this cloud, katrina, is it gave the city a chance to reinvent us education system. >> host: a gaff is when you accidentally tell the truth. let me say that arnie duncan is 100% right. they have been able to rebuild the school system that is so much better than before the storm, and it's because we got the chance to say, let's see how you would do it now, charter schools, public schools, and i thing that criticism of arnie duncan was outrageous. he was totally correct. >> guest: from what i'm observing and hearing -- i had a guess on though show today, who

was in new orleans looking at what is going on, and paul valis, the superintendent of public schools and is new orleans. >> paul pasturik is the hidden saint. the state student of education. katherine blanco, a democrat but retained by bobby jindal, and he is bringing reform. >> guest: there's a ton of charters, a ton of accountability, not standing for schools that have been operating for a long time where they're not getting educational results, and they're experimenting with an awful lot, always with measurement, evaluation and accountability. sounds like a dream. this is part of what duncan's plan is nationally. now, you are more politically adept than i am.

you said commonnen standards not federal standards. >> for those who belief there should be standards across the nation what kids should learn, you said? >> guest: national testing, we will never have it bus liberals would be testing it. that's the problem. but we taught be able to come to some agreement about common standards as you put it. the math is the same. you can read or you can't read. the problem without having national standards or common standards -- this was a problem with "no child left behind," is that when you let each state set its own goals and standards, defining -- since the enactment of that legislation, there's been the expenditure of a lot of federal money, and 18 states have lowered their standards. >> host: it needs common

testing. >> guest: you do need common testing and that's perfectly fine. when i was secretary of education, i beefed up the assessment, and people reacted hard to the people i appointed. i appointed hillary clinton, wife of the governor of arkansas, and the governor of tennessee at the time. they turned out to be two very good people for that job. this is one of the best national -- assessments we have for measuring whether our kids are good in math. this issue is -- i think it's crunch time. it's sputnik again. base we now know what costs u.s. if we're focused on our fiscal house and economic recovery, we know what costs us not to have good, sound educational practices. >> host: what do you think about obama's plan? >> guest: i need to see more.

there's things i like. they're spending too much money. on the other hand, they're the dc scholarship program was working for the kids who need it the most. if they're talk about real evaluation -- this is what has made real constituents angry, teachers unions, saying you have to look at student performance, are the kid learning, and that puts the burden of accountability where it should be. so i'm prepared, at my risk to agreeing with president obama on things from time to time. >> host: we started the show talking about competitiveness in china and the world and education and understanding of history, and ending with education. let me let you sum it up by saying, what worries you and what encourages you about the notion of america being competitive in the 21st 21st century the way it was in

the 20th? how do we educate our kids and not fall behind the way we seem to be follow falling behind? >> guest: that encourages me or discourages me? what discourages me, you have seen the assessments and heard the panels, many of them very, very good. i've sat in on a few. here's what discourages me. when weapon test our kids in fourth grade, we're in at the top third, in the 8th grate, we're in the middle. 12th agreed, we're at the bottom. the longer you stay in the system the dumber you get. that won't work not in this economy. i talk to kids at harvard, graduating, losing jobs to kids from other countries. talks about the flat -- the world is flat, and in some waysf its flat. in terms of competitiveness, the

sheer dollar value of capital. what encourages me is that there is some common ground on education. we know what works, we know what makes for good teachers. there's a lot of good research in that. and apart from the family at home, the teacher is the single most important person in the educational process. doesn't matter about class size or resources. quality of the teacher. now that we have a good state-of-the-art knowledge, maybe we can rewrite the thing. that's the part that encourages me. i've been pushing 30 years, and i will keep pushing. >> host: i'm involved in teach for america, and we're bringing in new teachers, and holding them accountability is the most important thing to do is make sure the 21st century is -- >> guest: look at thenterest of these talented kids in wanting to teach.

>> host: bill bennet, thank you very much. >> guest: appreciate it. >> barry lynn talks about the power of business monopolies and why they're bad for the united states. the new america foundation is the host of this event. >> the word, two big to fail, hinted at the fact i have been writing about things that are too big to fail for a long time, and what that means is when a single company goes down, an entire system can go down, and i started writing about things that were too going to fail about eight years ago. and as we mentioned, i wrote a whole book on that. i continue that conversation, that analysis, in corner, and i'm kind of proud of that work. it's pretty cutting edge. thanks to the meltdown, or the

near meltdown, thanks to the near collapse of the auto industry last you're, people are actually starting to pay a little attention. actually sometimes -- surprisingly in the uk, in the torry party. i'm not going to talk too much that "too big to fail" because the last time around with my book "end of the line" i did more than 100 events. and i discovered when you really lay out what "too big to fail" means, its doesn't make audience members happy. so what i thought i would do tonight is instead talk about the people who are responsible for making our banks, banking systems and industrial systems, too big to fail. and these are the monopolists in

america. just the fact there are monopolists in america doesn't -- a year and a half ago when people asked me what i was writing about, i said, monopolists of america. they said, you have be to out of mind. the most free market, come.tive, fantastic economy in the entire world. well, we have actually learned a few things over the last year and a half, from in the near meltdown of the system after one bank went down. we learned from lessons from the health insurance debate. there's little small monopolies. most americans today believe the basic story, which is that we live in some kind of market paradise. so what i want to do, just to debunk that idea, is take us on a little tour of what has happened in this country since the reagan administration

overturned our antimonopoly laws a generation ago. start with eye glasses. if you go out and go shopping for eye glasses, you might go to peril vision, you might go to lenscrafters. you might go to target or sears optical. the fact is, every one -- these are the biggest chains that sell eye glasses in the united states, all owned by one company,ite -- giant italian firm. you say, i'm going to go upscale, go to a boutique. well, the fact it, luxotica is also a manufacturer. so any boutique you go to if you're buying oakley, tag heuer, you're buying luxotica products. toothpaste, you're standing in the store, huge array of boxes

in front of you. all these choices, all these different brands, different tastes. two companies, colgate plumule -- palmolive are responsible for those toothpastes, and every day they collude. and these two companies get together and decide together how they're going to display their products together, how they're going to price their products, -- how they're going to divy up market share. pet food. if you go to a store you see a be willedderring array of options, but if you paid attention though pet food recall, you will remember five of the six companies that sell brands of pet food in this

country, and 17 out of the 20 companies that sell private label pet food in this country, they all source their cans and pouches of certain kinds of food from one company, from one plant, in kansas. milk. not long ago i was in a wal-mart in tennessee. you walk up to the cold case and you see all these different options. gallons with the name pet dairy, great value, the private label of wal-mart. well, afterwards i did a little research. i found out that pet dairy and mayfield are actually owned by the same company, dean foods, dean foods provides wal-mart with most of its private label milk. so when your standing there, it's all one company.

and dean does have a rival that control half of the united states. the other half is called by dairy farmers of america. they also pretty much -- pretty openly cooperate, collude, in much of their work. we can walk up and down this aisle and that aisle and the mall, you're going to get the picture. i don't have to do that. but consider the stores we shop in. we all know that wal-mart is big. but what we may not know is that wal-mart actually controls 30-plus% of most of the basic sale of goods in this country. and in many cases it's above 50%. soaps, detergents, pet food. it's not just discount. high-endepartment stores,

there's more than a thousand independent department stores from coast-to-coast. now there's a company called macy's. a thousand department stores, not one chain. ingredient in the food we buy. probably a lot of us know that the processed food has corn inside of it. and we also probably suspect that most of that corn comes from feed stock that monsanto owns. but did you though that aascorbic, the vitamin c, 100% of that is controlled by a chinese vitamin cartel. the stuff that we buy in our grocery. the materials inside the store, the iron ore that goes into the steel and the beams, the aluminum on the shelving, three companies control almost the entire supply of iron ore and

aluminum in the world. two of them recently tried merge. they pretty much cooperate openly. entire systems in our economy have been monopolized. if you go around and look at the automotive industry, you say, my god, here at least is a case in which we have real american cowboy capitalism, even though most of the companies are now japanese. you got 12 companies out there, or more, selling all these different brandts, all these different types of cars. what happens is as all those companies were outsourcing their supply activities over the last 15 years, monopolists were coming in from below ask they were getting control over many of their suppliers. so up here you see many heads, down below, one body. you know, just to sort of sum up -- i could go on and on.

you guys me a know jim kramer omsnbc's mad money. i figure i should let him give a sense of what has happened a. a couple years back when the justice department approved whirlpool's takeover of maytag, which gave whirlpool 75% control over all the washers and dryers in this country, he said if there was ever any doubt in your mine that we have a government of, by, and for the corporations, if you thought for a second that we were not right back in the guildded age, if you had the least ounce of faith in our regulators to do the right thing, you should give it up right now. and then he went on and said, on tv, i play a guy who is just out to make you money. but when you're not trying to get rich, you should feel free to get mad. so, one generation in this country, we have seen a true

revelation, at least in the structure of our political economy. so how does this revolution affect us? we all know from seventh grade civics classes that monopolies affect us as consumers. i'll give you one example. the chinese vitamin c cartel, the day after they finished son -- consolidating the power over our vitamin c, they jacked the price 100%. we know that's what happens. but it affects us as consumers in the variety of product in front of us, and the quality of the product in front of us. how about jobs. that's actually a big issue today. i'm sure that tonight the president will talk a lot about jobs. now, the simple common sense tells us that monopolization will reduce the bargaining power of the people who work for those

monopolies. who are under the control of those monopolies. just to give you a sense of how this works, consider the advertising industry. you watch the show "mad men." and it's about all these sort of very scrappy little companies, j walter thompson, leo burnett. all those companies in recent years have been brought under the control of three holding companies. the people would work for those companies compared to even ten years ago, they got a lots ability to trade their labor on the free market. but monopolization affects the number of jobs in this country. we al probably know when there's a merger, they often destroy jobs. a year ago, january 2009,

pfizer, the world's largest drug company, was allowed to take over wyeth in a $68 million deal the manager said, we're going to do this because it's going to allow to us get rid of 19,000 jobs. that's just one case, and that's actually in some ways not the biggest issue because what monopolization does, it doesn't just eliminate existing jobs. it eliminates the potential to create new jobs. it does that in a couple ways. one of these makes sense, which is that monopolization for a big company -- monopolization eliminates its incentives to create new jobs. if you own the market, you cut back on costs. you can get what you want pretty much by charging your customers more or paying your suppliers less. but what about small companies? actually in recent years we have come to understand that most new

jobs are created by small countries. the problem here is that when you have monopolization at the upper level, there's less and less space for the small companies to occupy. there's fewer niches for them to move into. they may have a better idea. might have some entirely new idea. but the powerful are so powerful that there's no place to bring that idea. in the united states of america, our markets are increasingly closed. also, this is not -- on the issue of jobs, it's not only an issue of salaried jobs. there's a lot of folks in this country who have a dream, and the dream is to own their own business, pay their own way, by their own boss. some people regard that as a right. there's a recent oecd study that came out, of 22 nations, 22 rich

nations, do you know where the united states came in terms of the percentage of the population that runs -- owns its own business? we're actually 21st. >> who is 22nd? >> luxembourg. so we're behind france, we're behind sweden, behind japan, behind germany. here, too, in one generation is proof that we have had a revolution in our political economy. but in this case it's a social revolution. over the last generation, millions of families, millions of small business people, have been run out of their retail business and have been run out of their farms, out of their service-sector businesses like opt -- optometrics.

to understand how radical it is, i'm going to quote one of the people who helped to shape the previous political economic system in america. this is the supreme court justice william o. douglas, 50 years ago, in a case in which big oil companies were attempting to take control over independent retailers. he said: "when independents are swallowed up by the trusts and entrepreneurs who are employees of absentee owners, the resultes serious loss of citizenship. he who was leader becomes dependent for outsiders on action, clerks take the place've resident proprietors beholding to no one. what he said reflects a very simple vision, which is that america should be a nation

composed of independent citizens. in which power is distributed out to the states, out to the communities. as anyone who is a little older will remember, until reagan came along, that actually was pretty much the way it was in retail and farming. there was a true distribution of power. today, the a generation after they changed the laws, just to put it perspective -- more than 50% of lines of business in america have been concentrated in the hands of people who own and operate one company, and that's wal-mart. so how is this revolution accomplished? well, the simplest answer is that we were taught to view ourselves differently. in this country, for 200 years

we viewed ourselveses a citizens, and what you want and what you seek is liberty. about a generation ago we were told we were something else. we were told we were consumers, that we are consumers. what do consumers want? well, consumers don't want liberty, they want stuff. we want a lot of cheap stuff. now, i want to make -- it's important to understand i'm not making some kind of a hippie rant here against materialism. i'm talking about law because that idea, the idea that americans are not citizens but we're consumers, was actually used to reframe how we enforce an entire body of law, which is our antimonopoly law. for two centuries in this country, we used antimonopoly law to protect yourselves.

against concentration of power. we used it to protect our independent retaylors and producers against predation by people using concentrated capital in a corporate institution. this is part of a tradition in the anglo americans tradition that goes back 800 years to magna carta. the reagan administration, 1981, changed this. they said the most important -- from now on, we're not going worry about antitrust in terms of consumer -- in terms of citizens. we are going to use it to protect the welfare of the consumer. it's importanthen the reagan administration did this, they had help. various factions in the consumer

movement came to their aid. when robert bork, of the chicago school, came up with his frame, consumer welfare frame there were a lot of of amen's from the democrats, and to be frank, the clinton administration in terms of consolidation was in most cases worse than what the reagan people did. we should make no mistake about what mr. bork and his fellow chicago schoolers affected with their consumer welfare frame. this was to pass essentially into law the efficiency argument that has been favored by monopolists for centuries. what do i mean by that? john d. rockefeller, j. p. morgan, they all basically had a

single message, competition is wasteful. centralization and control in one hand, that's deficient. but consider how it plays out over time. the logic goes like this. consumer want low prices. low prices are best with economies of scale. monopoly is the best friend of the consumer. so here we are a generation later and, well, it's proven effective again. we actually see the greatest concentration of power in this country in a century, and in some cases it's actually worse because last time around, they did not get their hands on to the farms, on to the retailers. if we view american history

through the lens of our antimonopoly law. we see four eras. the first was in the first half of the 19th century. the year in which power and opportunity was distributed very widely through the system, an extremely egalitarian society. second era began after the civil war. first we saw power concentrated by the private lords using corporations and banks. and then we saw in the progressive era the state get into the mix, and we saw for the next 30 years, corporatism in this country. third era began in 1935. not because -- some you know there's actually two new deals. the second one began when the supreme court rejected the national industrial recovery act, nin -- the 9-0 decision in

1935. after that we saw an entirely different political economy built by the populists who had repressed. they came out of the box and passed laws that were designed to distribute power out, from wall street to the states and communities to the independent citizens. since 1981, concentration, corporatism, financers with control. last may in the atlantic, there was an article. it's a really big deal which i don't think has attracted enough attention. you had the chief economist of the imf, a man who spend his time in russia, in indonesia, and what does he see center he

comes back and travels around the world and comes back and sees in america what he called a financial -- allegory. i don't know why other people haven't focused on it. i wrote the book to flesh out the basic argument that there was in deed some sort of cue there was a social change that was extremely significant. i wrote it also to show the destructive effects because when the financers use the corporations to extract capital, not to make things or provide jobs, one of the things that happens is the assets, the real property, the skills under the control of the corporations are destroyed. i wrote it also to give a sense of what the principles of the

previous political economic system looked like, the one that was overthrown by the chicago schoolers, by reagan and then ratified by clinton. what to do. simplest thing is to make our corporations, make our banks smaller. we have the laws. we just have to reframe them. we had antimonopoly laws, pricing laws, myriad laws. americans in previous generations were really smart. what we have to do essentially, we have to rebuild all of the markets that were closed. but the last point i want to make is there's been a lot of talk of populism.

we saw thomas frank in the "wall street journal" write about it. we should be clear. we need to be clear that there are really in terms of real populism, there's two forms. the first form -- one of the forms is destructive. it's kind of barbaric, and this take place when the rich and the powerful, or the merely ignorant, direct the people's anger and power against the people's own institutions, the people's own government. we're seeing a lot of that now. the government is the only tool we have to protect ourselves from concentrated power. the other populism goes back

through brandeis to madison to jefferson, based on the concept that doctrines of checks and balances must be applied to our political economy and our political system. this is a principle, a constructive populism that spoke cusses on the breaking up of concentrations of private power that threaten the rights and liberties of american citizens. right now i don't know which populism we're going achieve. i didn't think when i was writing this book that the choice would come on us so fast. i hoped that corner helps people figure it out. thank you for coming. [applause] >> we're going to have time for questions and discussions. so, i will call on you from

here, and barry will take -- we will have a mic out there. let us know who you are, where you're from, and state your question or comment crisply and clearly. and i have to turn that on. you all heard me, especially the part about the crisp and concise questions. and let us know who you are. yeah. let's start right here. >> hi. i'm dr. karl poplin, i'm a physician. i wonder if you could talk about health care. >> it's pretty complicated, but from what i have seen of the health care argument, debate, discussion, there hasn't been a really effective discussion

about how to use competition, rivalry to get what you want to achieve, the outcomes we want. most of what i have seen is how to concentrate the power so we can essentially exert power down on to the providers of services and dictate to them the prices they're going receive. this is something that we saw -- one of the cases this is something that -- i don't know if you're familiar with group purchasing organizations and hospitals. there's a case in which you have these -- the idea that was to create these powers that would be able to -- buying cooperatives that provided power to team who provide us with medical devices and that's been an absolute disaster. those organizations have the essentially been taken over by the suppliers, and they're used to push products on to the hospitals. it's just a -- i don't see any

creative thinking about competition. >> right down here. >> i think that's a very important thing. i think it helps define people and who they are and have -- how do you gift back? how do you change the culture that says having jobs is lots more important than having a gazillion dollars. it's a value system. >> the people who most need to get together and cooperate so they can make their wishes known, so people just want a gazillion dollars. all the systems are being run by

people who just want a gazillion dollars, and they're laughing about it right now. it's like -- just dismissing the obama administration's efforts to control the banks. so, the simple answer is actually just to focus on those people -- not to think about how we are going to tinker with this tax thing. let's just focus on the people that have the power, exercising their power in ways that destroy jobs. that would be a much simpler, more whole appach. i caution you in describing that the sort of period of jacksonian

which you were referring to as being sunny, a whole group of people didn't think it was all that egalitarian. so you might want to use a different adjective. a little snarky. to give milton freedman his due, the chicago school owes more to him than bob bork. my question would be, why was the chicago school -- i'm going push you harder because it's a matter of political philosophy, economics and law. why do we think the chicago school was able to be as successful as it was? many people say the most recent financial problem -- it's been written about so there is a golden moment here. nevertheless, it strikes me your critique doesn't really -- maybe you do in the book -- does not take on hard enough what it was that allowed that philosophy to be as triumphant as it clearly was because that set the

economic context for all that followed. >> a great question. before i get to it, if you notice i didn't use the name of andrew jackson -- yeah. [inaudible] >> i know it's a problem. part of the challenge is to actually pull out to extract what was really good about the first half of the 19th under and what was not so good. [inaudible conversations] >> well, there was actually two -- you had two parallel economies, and one was actually -- there was some pretty remarkable check characteristics about that, and the other one was pretty awful. now, as far as milton freedman, he deserves his due. he was in so many ways the father of this revolution, and just -- you go back and read carefully that one book from

1962, capitalism and freedom, a very slim book, but the basic arguments that have been made about free market, about free trade, about who owns the corporations, they're all in there. it's really -- they're actually not really arguments, they're a series of assertions. so, in terms of how was it achieveed, how were those arguments pushed on to us, it's a really complicated question because you also have the fact you had a revolution in thinking in the democratic party. i mention the fact that the consumer movement worked as an echo chamber for what was being done. the consumer movement was essentially a throwback to the classical progressive era, and there are many elements in the consumer movement that weren't interested in distribution of power. the consumer concept comes back

to 1914. so it's like this is a -- this was a concept out of an era in the united states that was very corporatist, in which people believed in top-down control. you basically had to some extent an alliance between what you could call the laissez-faire people, which is essentially let the people who control our private corporations, and then you have the people who expected to pick if the power afterward,s, who said, once those people screw up, we will have control. it's happened various times. it just happened now. we have this corporatist right now. so, one of the things we have to do is to understand the rate to which people are on the left have helped to lay the groundwork for this revolution that was affected by the chicago

scores. >> i'm a generation of the major thesis you described. let me voice a conundrum. one of the things that those who promote this say that in order to compete in the world, one has to continually increase on productivity. agriculture is a good example. and the business began quite a long time ago, has been relentless. it has produced, as they say, the only product that has at a consistent balance of trade, for example, the price of food has gone down in relation to everything else that we buy, and we give a lot of it away. how does one in fact reconcile this constant quest for more and more productivity with distribution as you would see it that we should enjoy in the industrial sector?

>> that's a great question. if you actually look at what was put together, the political economy that was structured during the second new deal, you see a balanced economy that was meant -- essentially was saying the very things you're discussing, and that is the people in the new deal were not -- they weren't a bunch of hillbillies with hatchets. what they said was, okay, in certain cases we need monopolies. it's the only natural, necessary, rational way to deal with this problem. but those monopolies should not be run by private people for private profit. they should be run by the people, indirectly or directly for the people's interests. then hay had a system for the heavy industrial sectors. like making metal or making cars or making chemicals. and they didn't break down the chemical industries, they didn't

break down the car industry. they didn't break down the metal industries. they left them in place. they enneared some rivalry -- engineered some rivalry but not a whole lot. the case in offend is alcoa. it was 100% monopoly on the making of aluminum in the united states. what the new deal ares did, after the end of the war they sold off a bunch of plants that the government owned that had been run by alcoa. and sold them to other companies. sold them to kaiser. that's why we had three companies making aluminum in this country. but we didn't have 100 companies. we lad three companies. and then you had this overseer in which -- this other sector, retail, restaurants, plumbing services. there's really no case to be made that consolidation actually boosted productivity, and in the

case of agriculture there are cases to say, bringing machines on to the farm -- although some people constitute dispute this -- increased productive. there are a number of people who point to other countries in which the per-person output per acre is often much higher than the united states, and there's actually a huge waste. a huge waste in our present system. besides the fact you have huge environmental problems. so, the question you raise is very important, and there are certain industries in which consolidation and which scale of scope is very important. >> hi. apparently i'm a consumer. my question to you is, i have always felt that my dollar was a

vote and that if i could choose barnes & noble or an independent book store or shaw's versus the little corner grocery store, and the independent book store and corner store or more expensive itch always felt bush my question is, aim wrong in thinking that i have some power in how this -- against wal-mart and against these other companies? >> your dollar is a vet when you actually -- vote when you have real market systems in which you have many buyers and many sellers. a our present system is not much of a vote. the person who has been pushing the idea if you don't like the way a corporation is acting, take your dollars elsewhere, the father of this is capitalism and freedom in 1962. the point earlier about milton freedman. one of the things i did, i went back to look at the frame free

market, which is the idea that there's actually this market system, this being out there, which before 1980 most people would say, well, who controls -- who creates wealth in this country? who creates new products and new technologies? most of you say, well, it's people who do that. what milton freedman did was create the concept over the free market. he eliminated people from it. he said this force, this power. capitalism. and right now most people -- there was an article ten years -- most people in this country look at themark mechanism as some court of god. so, that one book, that one -- framing activity that that one man engaged in was truly -- it

was remarkable achievement. >> my name is bill. my question, how do you feel about the rampant consolidation in the financial services industry? do you see this as just a example of the trend you discuss or do you see it as something more, perhaps one of the drivers of the trend? particularly amongst the consolidation with the top five major bank holding companies and the increase in overall share of the banking market amongst members of the federal reserve system. >> consolidation of financial services in banking is a huge issue and as you mentioned, the top five banks control doubled between 2000 and 2010. even so, the share of the control is not huge compared to other countries.

until quite recently, d -- one of the things about consoling addition in finance services, certain people will be able to say yes or no to whether you have a good idea or not. whether you're going to fund it. that kind of consolidation, it didn't come through the financial -- control of the financial name. it came through control by in the financiers over the corporations. so it did not need to pursue the kind of concentration in banking that we saw, say in the 1890s with j.w. morgan, or 1912 with j.p. morgan. [inaudible question] >> or as sort of not -- >> the concentration of the real

world holdings was a result -- not a result of the changeness the antimonopoly law and the changes in corporate governance laws. until the 1980s, the corporations in the united states, no one regarded them as propertieses. in the old regime, a corporation is a dnr -- it's an institution designed to govern activities. exerts power over real people and real properties but you can't own it. the city of miami is a corporation. no one can own it. harvard university is a corporation. you can't own it. these are government institutions. you set up constitutions that determine how you use these institutions. over the last 30 years, what we have seen also is simultaneous with this change in the monopoly law, we have seen this shift, becaus b corporations were controlled by unionized

labor, professional managers, by the state. the cold war state was in every important corporation's boardroom, and by small share holders. now all the power over these institutions is in the hands of a few financers. so, that was not due to the exercise of financial power. this was -- it wasn't necessary in this case. it was used in the 1890s and 1912 -- it was used to concentrate control. not this time around. >> thank you. first, this is of great work. thank you for it. i'm jessica, george mason university. can you speak a little bit -- you did just touch on it a little bit. the connection with on the one hand ownership of the federal reserve and the connection with this and the fight over the federal reserve, and as well as

john perkins in his book, talks a lot about the military industrial complex in connection with private industry, and traces quite a continuity from world war ii onward so if you could weave those into your story. >> going backwards, the military industrial complex, it became a lot more powerful in 1993. just after the end over the cold war and this is one of the works of the clinton administration. and what happened is that there was a secretary of defense perry brought in all the different people who were running the defense corporations at that time. they said you guys have to merge. there's just to many of you. it's confusing us. it's creates waste in our offices. of merge. so they went from more than 100 companies down to about five

really big ones. and those five really big ones obviously were going to end up with a lot more control over the government than if you got 100 of them. so, it's clearly an issue that actually got worse rather than better after the end of the cold war, thanks to clinton administration policy. the federal reserve, i would prefer -- i think what i will comment on that is that what is really interesting in this event is that we're seeing the populist -- the public and populism coming together, and all this talk in this town is about how there is no cross-party work being done. we're actually seeing it in this case because it's the people who are starting to come together on economic issues. they're starting to come

together -- focus on concentration of power issues. >> you did a great job. we're going stack up several questions in a row to facilitate time. so let's go here, and then in the back, and then in the middle here. these are quick, concise comments or questions. and barry will address them all. >> my name is martin. head of a group of scientists. i want to bring together three ideas and ask how you converge them. one is that the supreme court told us that future governments will be the best money can buy. two is that you just talk about son -- consolidation system in which we have mayor dali -- daly run to go the political system. what is our future in that circumstance?

>> -- i am a retired economist but i have a lot of problems with my fellow economists. they do, like you did -- i'm not saying that to demean what you say in any way. they have fascinating high possession thesesees and theories and make a great argument but there are other people who are just as clever as you are, and the average citizen is scratching his head and saying, who is right and what is going on? in order to evaluation these issues one must first speak about what you value most. if you for good to life, liberty and the pursuit of happiness, or freedom or liberty and justice

for all, and could be right. what we have now is in conflict with those thing we value, and then we have a base tee valuate things from. >> thank you. last one right here. >> i was interested in what you had to say about the role of government and law and regulations in promoting monopolies. special interest, protectionism. small companies can't afford lawyers. >> can you handle that? >> i think the first question, what's the future, and i will tie it to the second question. the future as far as i can tell, at the present trajectory -- i have a couple of kid at home -- they will spend their lives on their knees. so, they will spend their lives serving epeople and won't have much recourse to law to protect them.

as to what to do about it, well, when you talk to folks because there are a lot of smart folks who are serving the powers of concentration inch fact they're in a lot better funded so they can buy anyone they want. i had a huge faith in regular people, and i spent a lot of time outside washington talking to people all over the country, peoria, birmingham, los angeles, and people outside of this town are so much more able to actually use common sense. and out there you say, well, you shouldn't put all your eggs in one basket. and people say, no h! here you say you wouldn't put all your e