one has the obligation to use a and we look at the three bays of the clinical behavior. on the right and the yellow will look at the second and what one sees as the soft intervention were just education was provided. in the second part you can see there was what was called the semi hard stop which was providing the obstetricians with information about the findings that early preterm delivery resulted in the higher risk for newborn intensive care and access poor outcomes. they were allowed to make the decision but any decision to go to the early elected delivery resulted in the peer review of the decision. the heart stop was a policy of each hospital except thou shall not do this, but over the last year converged and against the national backdrop but somewhere between 80 to 85% compliance up to 96 compliance with early

preterm delivery. what are the lessons one can take away from this? that when one thinks about these sorts of questions and questions that have been taken as gospel in this case somewhat literally without challenging that wasn't what is not always the correct how could we go so long without saying that 37 weeks couldn't do as well as a 38-year-old -- 38 week-old as well as for the nine week-old it is that no doctor in his or her experience has enough caseload to detect is going to dig a fairly large sample the power to find the difference and so in my experience is simply not adequate in fact it is sometimes joked a dr. mix is something is in my experience, it means the obscene to of something that and in case after case it means for. that's not evidence, evidence is looking at a power symbol to see

what the difference is sort of come. and using that sort of learning to drive improvements. let me close with this. that both of the previous speakers i agree with completely. in fact, the current environment meter provides the transparency though now pleased to say on the basis of the study on the march of fines efficacy joint commission and others, have created performance metrics looking just at this. the truth of the matter is the incentives don't line up if we as providers do the absolute evidence based finger it is actually financially penalizing. nevertheless, we've pushed that as far as it can go. but we have to be will to call these three transparency and bring data together, something that's challenging and systematically redefined on the basis of evidence the standards of excellence. i found this to eliminate high

levels of the the ruben as an avoidable cause of brain damage and death. we've done this by requiring fetal monitoring and we've done this in a new area of defining the highest risk for complications after a section. we've actually had the data to redefine postpartum and look at the windows for intravenous. we need a set of incentives that support the linkage of the evidence with the best practice. the alternative or both damaged in terms of the quality care that could be provided for or ways that really wouldn't be the best as the bill to legislate when delivery occurs, great intention but i think difficult in terms of the lack of flexibility. but the end is this, good quality should always be good business. when the intent and the consent of selling and the environment

of transparency, and if all of the providers were on board with this u.s. healthcare to pay itself $1 billion even more than the dollar savings, safety effectiveness and indeed the compassionate care would be approved. thank you very much. [applause] >> the title of the panel spending the cost curve i guess i would like to have each of you address the specific question and get to some numbers here. are we talking about bending the trend toward giving to the new cost curve? how much below the current curve does that need to be if it is a new one and if we are just talking about trend what is it likely to be? are we talking about -- i hear that you were out in the industry we have to get the cpr

and others to say we have to get to where other countries are and we haven't actually settled on what are we talking about here which will give us at least some object of a goal to talk about >> i'd start with a very real example of what's in going on in the industry over the last five years. when the bush administration put forward the changes to medicare advantage one of the questions we were asked is how can we get you to take sick patients? and what they put in place was a risk adjustment based on the underlining diagnosis of the medicare enrollee. we started that kind of program and after the first year realized 75-year-olds with to chronic morbidities' in the case of disease management we could dramatically reduce the cost of care. as a matter of fact the industry started competing for 75-year-olds with chronic morbidity by offering them more

benefits. where to they can get a plan for 50 to $80 if they bought elkhart it would be $270. the way we did it is in a bunch of interesting ways but we'd 47 different pilots across the country where we actually paid physicians 125% of the fee-for-service. we put the case management nurses into their offices and reduced the a to the admissions by 31% and by 34%. and that had a dramatic impact on the underlying health care cost. so i think we can do more than just been the trend. i think we can have a dramatic hit to the underlying health care cost if we are able to work together across the whole system and i think that is the biggest issue we have is how do we scale to a level where we can have that kind of impact across the healthcare system. >> thank you. today we talked about the population of those in the onus

using by virtue of their illness the health care resources for the 15% use 85% of the resources of medicare as an example. we've also alluded to the prevention keeping people who aren't healthy from slipping into that latter category at managing the disease. an observation from my former wife is that we need to have coverage because it's not enough just to have insurance today one needs continuity so one can support prevention over the longer haul and management of established disease over the longer haul. a little data to indicate that's what we talk about one in six americans being uninsured if one looks at individuals through the year that is in excess of one of four and the preventive services and disease management one would need to occur would have to be given across the continuum. the lesson i took away as when colin cancer was detected in 1996 and veteran's it was almost invariably advanced stage with access broadly in support for

the preventive services by 2004 it was almost earlier stage. the that safety compassion all of the above, but not to disregard it was a whole lot less expensive and more efficient to care for veterans with polyps than advanced disease so providing the continuity for the disease management service is absolutely imperative. >> i think it is possible to give the cost to the rate of increase of care down to the cpi over a number of years if we actually do a really good job in identifying the basis we need to take the collective care and delivering that care to those people and then don't allow the marketplace to price up to care for the remaining population. if we have half as many heart transplants because we deliver medicare to heart patients and

charge twice as much for each transplant we lose the ground. we have the great care of the fund and then we need to pay the same amount per transplant in the combination of that could get us down to the cpi and we need to do is have a environment that channels the patient still best care and then a provider environment that's providing best care. if the business model of care is rewarded for doing the best care in a team way and if it isn't rewarded for it won't happen. it's a simple business model issue and the only people who can create the business model or the buyers, it's the pay years and the lawyers because that's where the money comes from. as if they restructure the model, the care delivery will follow in a microsecond. care delivery is very nimble in responding to changes in cash

flow. so there's a lot of creativity there but it's not going to be channeled until the business model changes in a couple of basic ways. but once that happens there is a lot of low hanging fruit out there. there's way too many kidney failures and kids having asthma attacks. there's all kinds of opportunities. so i think we can bring down the rate. it's not just been the trend. i think we can get down to it is kind of a cpi sort of number. but we have to do it systematically, programmatic the across-the-board, and we have to stop the cost shifting. if we let the inflation eat up all of the gains, they will be gone. we have the lowest number of hostile bids in the world and lowest number of hospital admissions in the world in this country. we have we less hospital care and we spend twice as much on hospitalization as anybody in the world because we have offset all of the gains and efficiency by doubling and tripling prices.

it's been acquitted a question from the audience. all of you have talked about even in the face of reform and in fact using the market mechanisms to try to help this issue. we the question in the audience apparently some of the earlier speakers said they don't exist which may be the same. if you seen what you've seen one. >> a lot of the first generation documents articles and research was done about it accountable we take the total population, we have the full data for each patient and function so the aco model the rest of the world is trying to get to actually is sort of various versions not cloning but looking like as and the people who wrote the law, people sitting in the little rooms writing the aco law so explicitly in the final days of

the testimony they were trying to get the big countries to function like the guys by two -- guisinger. now the rest of the world is trying to find out how to get that of that and it's a very creative and positive thing working with the care systems to create the business model that was in aco thrive and that is going to be very positive thing. but right now, the other version of aco. >> mark, i'm interested in how aetna picks up the issue of aco when you look at the market. how do you -- are there good relationships you're looking at? is it a strategic kind relationship? >> i think a couple of things. the world would be a wonderful place it for devotee was organized like kaiser permanente the structure of the delivery

system and payment mechanism works well it's just that it is difficult to get the model to scale anywhere else. and so our approach is how do we find the scalable model, how do we think about retrofitting the current system to impact what we have in the united states and a way to get toward the model george has in northern california. that is a big task. i would argue actually in countries like china and india we have a better chance of building this model because we are starting fresh even all the way down to the technology level than we are in the united states where we need to retrofit infrastructure capacity and the whole host of other things. as we have a number of pilots going on. we have seven signed aco deals as we said today, on hundred people on the list that want to talk to us. we are literally involved in moving into the infrastructure of creating sustainable systems

of data and intellectual property of and managing risk. the question as which one of those will work so we are trying to pick our partners well along on to make sure we have people that can be successful that get it so when working with them we can show a produced model and they are all in the different sorts of shapes and sizes so we can find what skills and what doesn't. >> from the perspective on these the were coming at it now on the delivery system. in particular though, the physicians -- hawarden working with your physicians? because this is a huge shift for many cultural shift business processes and practice patterns and so on. our you dealing with that? >> absolutely. the accountable care organization is the of promise of better clinical outcomes and efficient resource utilization. most of the world is not organized as integrated network as well as the world as organized as we are and as the

voluntary practice round us. the great equalizer is information systems that allows one to create a system across the different components of care the it cared at home or an ambulatory care environment and preserve to the conservatism edging and making sure that imaging is used appropriately and efficiently, hospital services as well. information becomes the great equalizer to the managed care in one sense but also the information about risk in the other and i think it changes that possibility frontier from being restricted to what has already been established as a hard wired integrated delivery network to the possibility for more traditional of forms in the world more broadly. and as to be accountable care organization, i'm not sure that i've seen one a singular form. certainly we are interested in the regulations that came out this week but in the commercial there's been many projects that work and just that relationship,

the devotee to go to the risks to promised better outcomes and more efficient resource utilization. >> there's been a question from the audience about among the various players, hospitals, physicians, payers, regulators, who really controls the silver bullet in here for the benefit cost per? >> i think the business model needs to change to reward bending the cost curve and the business model change can only happen from the pay to -- payer, the payer control the cash and needs to identify ways that the cash will flow and then the providers will respond. you can't expect the providers right now to create team care and invest all kind of resources in the care when they don't get paid for team care. i mean, we need to change the business model to make it work and so i think the first step is

to the payer, the provider. the second step is the combination of hospitals and doctors, but we have to start with the money. >> can we do it without cns coming along? >> nope. i think cms is essentials and cooperation with the payer community in order to make it happen. you've seen it happen many times. i mean, the chance to reimburse the for the nuclear medicine and cardiology practices when 55% of the practice revenue tied up in the nuclear medicine all this suddenly not hospitals to become a part of the system. i think that we can't do it without them. never. the upcoming reimbursement create an opportunity to partner and move ahead. if we plan more carefully together on how to do it i think we would have a greater impact and i think we don't act in concert we sort of for a fast follower behind cns when they make these changes. there's a collective the line with a sort of tale following

through. >> care in this country is about to get a lot safer because of what cms is and be doing. in fact come up until now, the business model has been like the car industry with the crash to the car and the reward for the crash of the car is that somebody got two more cars and paid for it. so, you have twice as much per patient you have 1.7 million infections. well, when cms stop paying for those of the hospital world will change the business model, to care will change and get a lot safer very quickly because you change the revenue stream. >> so if you -- how many folks are in the audience of provider organizations? issue with hands? >> pretty good number. if all of you were advising a local community hospital, 300 bed community hospital on what to do about all this, would you

say blacks don't talk to george, taught me? right? [laughter] >> you know, a couple of very interesting things happening. in 2002, 25% of the physician practices were run by hospitals. that number is now 55%. and our view would be that is going to approach 80% over the next five years. so, the institution is going to become the nexus of where this happens a lot of ways accept the large multi specialty groups like the sharks of the world. so i think that is going to have a fairly dramatic impact on how you think about it. so a very small community hospital and 300 bed community hospital in a small community, it depends on what you're surrounding competitive view is whether you're trying to be part of a larger system or create in that community a strong enough

model. i would argue and i goals we back to my days in michigan in the 80's went i went out to talk to the local hospital and the employers who were tired of increase in health care costs used to say you don't need me. you can go to the rotary together and have a conversation because it is all one community. and you all ought to talk to one another about what makes in plymouth and business sustainable and come up with an appropriate reimbursement model. i think would be a great way to think about it and the smaller communities of the our remote enough. if you're close a major writer put the ring and you have to be part of a buddy system, would be my point of view. >> let me answer that question, gary come and to finance. first, the will of the hospital as part of the community and second, the business case for equality. the first is the hospital and the community is probably a substantial employer that community is probably responding to the pressures of the increasing cost of health care. the businesses, the local and state government certainly.

and i think the point my colleagues made earlier about the of devotee working with other health providers and employers to words wellness keeping those individuals and healthiest as opposed to the at risk managing the at risk if they don't become those individuals burdened by chronic disease. for those individuals chronic disease that need to actively manage to keep them from getting to be in the stage. it's going to take the sort of collaboration working within ploy years and the paper to create the census for health and disease management and wellness, the basic engagement in that as well. the second is the hospital itself, in that environment where there is a history of cost shifting where this current environment be for medicare negative, 40, 50 states, structural deficits. there's going to be revenue pressure. and while many have looked on health care, optimizing supply

chain and revenue cycle, what better way to get a real value than try the quality-of-care because of the end of the date the product of the health delivery as health care and the variable costs are almost invariably associated with poor process and poor outcomes. for the safety and quality actually lead to lower utilization of resources and better policies, better outcomes for patient scum a better outcomes in terms of the resources consumed, better health population, better value. >> if i were advising a 200 or 300 bed hospital about next steps, i would say find partners that you like to do the things you don't do to be in the aco world. so find health plans that can give you the backroom infrastructure and do the parts you do very well which is to take care of the patients with acute conditions, chronic conditions who need the care and

do it as a partner model. if individual hospitals try to go out into the insurance world they have to create a sales force and the claims shop and all kind of things that are not of the core competency. the care delivery they won't do them well and they will do them at high cost and on the other hand of the focus on the delivery of achieving care to the right patient and they let aetna get 100% of the population and 20% need care and partnered with aetna, the 20% that need care. so unless you or a hospital in the kaiser permanente a region near someplace we need to build a hospital, and then call us up and see. [laughter] >> i.t. we have time for one last question and then we are going to change this one up a little from looking forward. do you see what is going to have to happen with bending the cost curve as a mythical to the continuing innovation engine, clinically that the united states has been for the last 40

years? >> it is the opposite, the exact opposite. if we start focusing on rewarding better outcomes, the care of the innovation engine is going to focus on that and we are going to see an explosion of creativity. i don't think it is went back of the innovation. i think we will see innovation be becoming better. >> i agree this is an opportunity to invest in one of the best areas of the united states by medical sector. the pressures will lead to an ovation mechanisms to meeting the challenges of the environment but in terms of organizations but in terms of technology, decision support so that a patient gets the right diagnosis the first time. molecular fingerprinting so that medication that is given today and cancer is matched exactly to the specific disease of that patient. but even things to pick it is like high blood pressure, it doesn't work typically written off as no big deal.

it doesn't work 40 to 60% of the time. take that lost waste out of the system, better outcomes for the patient and use of resources. >> there will be losers in this because the system can't continue to produce some of the things it produces today. and so for some it will be painful and for others who have ideas like mentioned by my two colleagues here i think we are going to have a debate to an opportunity to focus on the right things but they will be consultation among the provider community definitely and in a number of ways which is causing us on the pay your site aco works very effectively. the charred and factors, you've already seen that happen in the pipeline of the medications that have been coming through in the focus on biotechnology. the medical device manufacturers are already thinking about how they fit into the system, so i

think the tall order for all of us is where we have the right to dialogue to find out where this works. who are the players that can come together and actually demonstrate that it can happen and create the momentum to have a different system. >> mark, jonathan mcgeorge, thank you for your dialogue. appreciate it. [applause]

president of the american enterprise institute and i'm delighted to welcome all of you to this evening's lecture featuring charles murray, entitled the state of white america. i have read the manuscript of the book that charles is going to talk about tonight called coming apart and despite the title of this evenings lecture, does expect dean to hear a discourse on race are not going to hear it. in fact, there's a lecture about cultured increasing separation between social classes in america in a way that is very little to do with race. instead it exposes a worthless cause sorting process that our

society has developed with writing results for those of us who joined me in wanting america to truly be one nation. charles murray is the who scholar at aei and has been here since 1990. here's the author of many books including plot testers like losing ground and a "the bell curve" as well as many others who have become cult classics like and pursuit of happiness, human accomplishment and real education. charles has had an extraordinary impact on the life of many, many scholars. those of you who know me personally know he has had a major impact on my own career as a scholar. for a long time and made my living as a professional horn player and in the mid-1990s i happen to cost roses were a pure chance. i found his style of analysis opened up a huge list of ideas for me, making me understand that the lyrical beauty that i usually thought of the music

actually can happen in social science and send it back to graduate school and ultimately to a career in public policy, leaving an interest only to the american enterprises to the south. years later, after all of this, charles and i became friends and i told him he had had a hand in leading me out of the music business and to become a college professor. he actually seemed pained, as if i had told if i had told them he had led me to the link with me on some kind. about a year after that, aei was in search of a new president and had approached me about the position. i guess charles is the ice and he strongly urged me to do it. this device for which i still hold him personally accountable. my case is really only one of the many lives that charles has touched. he's been an intellectual model of a whole generation of social scientists and tonight, his fans will want again see why. following his remarks, charles will take questions and after

that, please join us in the reception outside. ladies and gentlemen, charles murray. [applause] >> thank you very much, arthur. bradley lectures are usually reserved for work that is nice to

but the emergence of classes that diverge encore behaviors and values. so what am i arguing?

well, america has never been about maximizing wealth or international power. america has engaged in what i call and others have called the american project. it consists of the continuing effort begun with the founding, to demonstrate that human beings can be left free as individuals and families to live their lives as they see fit. they can come together voluntarily to solve their joint problems. the policy based on that idea led to a civic culture is seen as exceptional by all the world. that culture was so widely shared among american that it amounted to a civil religion. the american way of life, a phrase that we actually don't care much anymore, but used to be taken for granted. that culture is unraveling. in the book as in tonight's lecture, i focus on what

happened, not white. my primary goal is to get people to think about the ways in which america is coming apart at the seams, not seams of race or ethnicity, but of class. and that leads to the title of tonight's lecture, the state of white america, 1960 to 2010, four decades. transamerica might have been presented in terms of race and ethnicity in the reference point has always been non-latino weights. when i used the word whites from now on, i'm always referring to non-latino weights. when you read about the poverty statistics, which are ridiculous to black poverty rate compared to the white poverty rate or the latino compared to the way poverty rate. and here the implications for how america is doing. there's nothing wrong with that. i read a book called losing ground that is filled with such comparisons. but in doing so, we lose sight of the reference point in what i'm going to do is track the

reference point. the book is evidence based on whites and my references this. don't kid yourself that we're looking at trends that can be remedied by eliminating racism or by restrict immigration. i want to give my readers actually has few opportunities as possible to explain away in their own minds the trends that i described. about three fourths of my presentation i focuses on the new lower class because i think it's better to give you a pretty good idea of the data that is involved in demonstrating that trend rather than to give you just a fragmentary presentation of the whole argument about. i'll conclude with a few remarks of the situation regarding the new upper class but without much data attached. for america to work as it was intended to wear, meaning self-governing citizens running their own minds without hindrance from the government and without much help from the

government, it is enough to get the last great or something else required? among libertarians, this is a source of contention and more than a few of my libertarian co-conspirators, some of whom are here tonight think the right constitutional limits on government are anathema to culture can take care of itself once those are in place. i'm very sympathetic to the notion that a limited government tends to foster virtue of the people, but i think that the right path or a necessary not sufficient. in taking that position, at least a really good company, namely all the founders and every observer of the american experiment to watch during the first half century. france has grown, germany wrote it about the same time as tocqueville. quote, no government could be established on the same principle as that of the united states with a different code of morals. the american constitution is

remarkable for simplicity, can only suffice people habitually correct in their actions. change the domestic habits of the american, religious devotion i respect her morality and will not be necessary to change a single letter of the constitution in order to carry the whole form of their government. i could give you quotations from every founder in every european observers say the same thing over and over. it was not just believed, the taken for granted that certain virtues were required of a self-governing people. furthermore, there was lots of agreement about what this virtues were. different people emphasize different things, but for these misses completely universally understood that they can be considered as essential. two of them are virtues in the south. industrious and two of them refers to institutions through which virtue is nurtured. marriage and religion. for convenience, i will refer to

all four as the founding virtues. so how has america been doing on the founding virtues for 1960 to 2010? to track what's been going on, i took two and a white america. the top 20% of the bottom 30%. those percentages are based upon the way that america is right now. in 2010, 20% of ages 30 to 49 have college degrees and were either in a managerial position or in one of the traditional professions by which i mean that in, log, sciences, engineering, architecture or they were married to such a person. that is the endpoint. the people who in 2010 that the occupational and educational classical criteria for the upper middle class. the top 20% go out way back to 1960 based on those with the starting% of bias combination of occupation. but that means there's so much expansion of college education

but in 1960 my top 20% consists of people who had only 42% of college degrees in only 35% of them were in these occupations. the choice of 30% to demarcate the bottom comes from this observation. in 2010, 30% of white americans ages 30 to 49 have no more than a high school diploma and work in a skilled or unskilled blue-collar job, a low skilled service job where those go white collar job or were married to such a person. so those are people who fit the classic definition of the working class. i went out way back to 1960, selecting the bottom 30% from databases i was working with. the occupational distribution of the bottom 30% back in 1960 was pretty much the same as now. the educational distribution was radically different. 80% of that group had not even completed high school in 1968 compared to only 15% now.

59% of that group had completed only the eighth grade. by the way come the last couple sentences illustrate a problem as i am presenting this material orally instead of on paper. it's going to get confusing if i say minimart and as such is 80% said tax compared to 15%. for convenience, going to refer to the top 20% of the upper-middle-class and refer to the bottom 30%. while we have that can 1960s the upper-middle-class plus money from the middle class and what we have at the bottom 30% in 1960 was the very least able of the working class. if you think about it for a while, doing it this way stacks the evidence against -- excuse me, stacks the odds against me finding evidence for my thesis, something we can talk about in the q&a.

what about 50% of whites ages 30 to 49 to belong to neither group on every indicator that we were in the middle statistically as well as conceptually. note that i've been saying 30 to 49 all the time. why? is another case of trying to simplify the interpretation of the analysis as much as possible. people in 30s and 40s are almost always finished with the school and very seldom have taken early retirement. they are in the prime of life. in short, if this is overseen among whites ages 30 to 49, not going to get any better if you look at people who work way. now to the terms, going to start with marriage, were talking that data from the current population survey in 1960 cents is here to 1960, just about everybody was married. 80% of the upper-middle-class ages 30 to 49 compared to 82% of the working classes of 55 percentage point difference.

it's trivial. what is happened by 2010? upper-middle-class with hardly any change at all. the percentage of the working-class ages 30 to 49 who are married 2010, 48%. that's a 35 percentage point gap that widens till 2010. that amounts to a revolution and the separation of classes in this country. furthermore, the decline was continuing at the 2010 with only the slightest evidence of flat in the downward flow. note the discrepancy between what i just said in our common impressions of what's going on with marriage. a very common impression is that the upper-middle-class is that problems with marriage. they're the ones who get divorced all the time. they're the ones in which guys

take mothers of their children in 50s and divorce them and the get trophy wives. this is the group where you have career excess well-educated young woman who forgo marriage altogether. and the common impression is traditional values there's so strong. that's four square opposite to the reality. the upper-middle-class convergys life as well. it has collapsed in the working class. why is it a big deal? that fewer than half of working-class whites ages 30 to 949 are not married? excuse me, are married? welcome in their several reasons. one is that marriage symbolizes men. married men -- incomes go up to my productivity goes. in a more general sense, adult males who are single are coming to a disheveled population, to shelve them in a fired up ways culturally and socially

integrated or ask after they get married with fairly good regularity. another reason is that single people are not good producers of social capital. this autumn coached little league team fenchurch civic fundraiser tape leading getting four-way stop signs at an intersection where children play. a third more fundamental reason is the one that tocqueville saw, which is worth quoting directly. i consider the domestic virtue of the americans, domestic virtue referring to married life in america as the principal source of all their other qualities. he then goes on to enumerate the other qualities and concludes, in short, domestic virtue does more for the preservation of peace and good order them all the laws for the purpose and is a better guarantee for the permanent view the american government than any written instrument to the constitution of does not accept it. well, it's not just marriage --

getting married to change with regard to the institution of marriage. there's also the matter of the rise of earth to single women. the percentage of children born to working-class, single women as a 1960 was around 6%. right now, it is closing in on the%. i'm not talking about inner-city blacks here. not talking about all the populations for each single berths that have been the topic is so much discussion over the last few decades. we are talking about non-hispanic whites. why is this important? because no matter what the outcome been examined, whether a school dropout or emotional health are in employment as a dolt for substance abuse or any other measure of how well or poorly children do have my on average, the best outcomes for children or two biological parents to remain married. divorced parents are sorted next on the latter in terms of outcomes for children in the way

of bottom are the outcomes for children born to never married women. all of these statements apply after controlling for the family socioeconomic status. they apply to unmarried women who are cohabiting with father the child as well as women living alone. i know of no other set of social science findings that there is broadly accepted by social scientists to follow the technical literature on the left as well as the right. and yet it seems impermissible for politicians or network news programs or any other kind of famous people to acknowledge them publicly. let's turn to industriousness. it's just one trade can be said to be deciding that the traditional american dad probably have. active occupation is not going to principal soloist of american happiness and foundation of the greatness come up but absolutely wretched without it.

active occupation is the very soul of an american. he pursues it is the fountain of all humans listening. today, the europeans say that americans live to work while european work to live. i don't think they realize how many of us americans on the side of the atlantic say yeah, that's right and nobody feels very for poor europeans. i'm going to focus on military because the norms are women work outside the home of change so drastically over the last 50 years. for men, the state are damaged the same. as they're supposed to work in 1960 and even today, guys are supposed to work or to help the male 30s and 40s who is not trying to work needs a really good excuse. upper-middle-class males ages 30 to 49 and changed at all. in 1960, one and a half% were not in the labor force. in 2010, 2%. for working-class males, same figure went from 5% in 1968 when it hit it low to 12% in two

dozen eight. i chose to does nader said in 2010 because those numbers came before the recession. they are even higher now. among those in the working class who have jobs come the proportion working fewer than 40 hours a week increase from 13 to 21% from 1960 to 2008, again before recession hit. the deterioration of industriousness among white working-class males have occurred in labor markets that were booming as well as an soft ones. i'm going to say very little about this one. if were talking about felonies such as homicide, and burglary, it's a closed case. ever since criminology began as a discipline, it has been found that criminals who commit offenses are drawn overwhelmingly from the working class and on down. so when you contemplate the great increase in crime that

occurred from 1960s into the early 1990s and the great increase from the 1970s induced to thousands, you're looking into increases that is the demise the populations of working-class communities, not changes that affect my step upper-middle-class communities. one of the dirty secrets about the last 50 years is because crime has been a huge topic and many of those decades, nothing much has changed in upper-middle-class suburbs. they've never been dangerous places. they are now. they went then. religiosity. hardly any of the founders were devout christian. jefferson and franklin were openly tedious, but they weren't the only people who were assessed in terms of religious thought dream. washington and hamilton and madison were always very vague about their adherence to christian orthodoxy. and yet, they were all united in

their belief that religion was essential to the health of the new nation. they made the case in similar terms. my colleague, michael novak, one semi-success rate. liberty is the object of the republic. virtue needs liberty and virtue among people is impossible without religion. they all believed that do not include thomas jefferson. they were making an empirical assertion, which western europe is now putting to the test, namely the moral codes lose their power eventually if they are not based on religion. the jury is still out on whether that is correct or not. but the last few decades have brought forth a very large technical literature about the effects of religion on maintaining civic life in the effects of religion and human flourishing. first, there is the role of organized religion and generating social capital. here is robert putnam in bowling

alone, the landmark book on social capital in its decline. as a rule of thumb, evidence shows that nearly half of all association memberships or church related. half of all personal philanthropy is religious in your and half of all volunteering occurs in a religious context. it's not just the contributions that these religious base type dvds to make religion so important to social capital. people who are religious also account for a large proportion of the secular social capital is putnam describes both in bowling alone and his recent book, american graves. apart from on any social capital in general, churches serve as a source for sustaining democratic citizenry. a variety of studies have found that active involvement in church service serves as a training center for important civic skills and all of these relationships hold true after controlling various demographic is to economic variables.

beyond these kinds of claims come you started your evidence for the 1970s and 1980s that religious faith is empirically associate with good such as better physical health, mental health and longevity. social scientists who have no personal interest in vindicating religion and in fact they themselves are usually secular have been building a rigorous literature on these issues and it turns out most of the claims are true and that includes a wide variety of benefits for the socialization of children. so i suggest that whatever your personal religious beliefs may be, full disclosure, i'm an gnostic who attends quaker meetings with my wife, you are on weak evidentiary ground if you think that the health of the american project does not affect the secularization. the main storyline here is secularization has occurred across all social classes.

the hard-core definition is represented by people who forthrightly say that they have no religion. that number for all americans ages 30 to 49 went from 4% in 1972 the first or the general social survey asked this question to 21% in 2010. very big increase. the changes had been larger in the working class than any upper-middle-class, but the even greater class difference has to do with what i will call de facto secularization. de facto secularization -- secularism is when he told the interviewer interviewer you have a religion, but you don't go to worship services more than once a year. yet if you combine hard-core secularism and de facto secularism, the upper-middle-class went from 26% in 1972 to 42% in 2010. good-sized increase. the parallel numbers for the working class, 35% to 61%.

or to put it another way, a substantial majority of the upper-middle-class retains some meaningful form of religious involvement, whereas just a scheduling majority of the working class is not. it's another case of data is not matching popular impressions. i mean, the idea that we have come especially those in the 90th in washington d.c. is that it's among the intellectual elite, the upper-middle-class that secularism has taken hold. that's true for intellectual elite in washington d.c. and new york city and san francisco and overeducated people like us. it is not true of the upper-middle-class in atlanta and chicago and des moines in the same way. furthermore, it is not true that fundamentalism has been growing in the working-class as a percentage of members of the

working class. among those who still profess their religion has been growing, but somebody needs to have noticed is religious involvement has plummeted by corrupt. i have been talking about the decay in the founding virtues and the working class, but i began by saying there's an emerging new lower-class. that's not the same thing. it's a subset of the working class. in many cases, i had in mind pleasant personally unobjectionable people. so don't think initially about mathematics and disorganized welfare mothers. a better way to think about most people in the new lower-class is in terms of your own extended family and the extended family of your friends. someone or a couple of someone for not circle probably as someone who is quite present, you enjoy their company, but they've never been able to quite get their act together. that's mostly what do

lower-class involves individually they're not much of a problem. if one adult male lives with a hard-pressed sister and her family because he just somehow can't manage to hold onto a steady job, that does put a lot of stress on the sisters family, but that is manageable for the community. if a whole lot of males in the community are living off relatives or girlfriends, that puts lots of stress on the community. a man who fathers a child without meaning to them and doesn't marry the mother may be a nice guy who was sorry that it happened and maybe he tries to do what he can to keep contact with the child, but that doesn't change the nature of the situation the child ceases. if you have a whole bunch of such children, doesn't make difference if there are nice guys. you still have the same problems with the socialization of the next generation for reasons beyond the capacity of

individual fathers who control. people who don't go to church him and just as morally upright as those who do. but they do not generate the social capital that the churchgoing population generate. it's not their fault that social capital deteriorates, but that doesn't make the deterioration in a less real. the empirical relationships that exist among marriage, industriousness, honesty, religiosity and production of a self-governing citizenry means that the damage is done, even though no one intends it. how big is the new lower-class clerics well, there is no sharp edges with assessing who belongs and who doesn't. still it is possible to get a sense of the magnitude of the problem by considering three sets of people who create difficulties for a free society. the first of the sets of men who can't make even a minimal lifting. the second single women raising minor children and the third is what i will call social isolate.

when they're fully grown adults but have no children, no geisha with a church or with any local activities. such people are very rare in the upper-middle-class and they are very common in the working class. altogether, using algorithms, i will not try to describe tonight. if the proportion portion of the problematic population at about 35% before the recession compared to about 10% in 1964 is in the upper-middle-class, those problematic populations have been steady at about 5%. there is that divergence again that is different in kind from any in the nation has ever seen. how do these numbers translate into real life and real communities could well, they translate into an unraveling of daily life and always in large. go to any working-class community and you will find a

variety of people who are making life difficult for their fellows at his sins. it is not just they are nice guys who can't hold a job. they're also growing numbers of men who have no intention of working if they can help it and to commence their preference not only to support them, but sometimes encrypt them. nice guys inadvertently fathered children or others who abandon their girlfriends as soon as they learned that a pregnancy has occurred and are never seen again. alongside the single mothers trying hard to be good parent or mothers who use their 3-year-old to babysit the incident while they go up for the night, plus the common outbreak cases of physical and emotional abuse of children by the current live-in boyfriend of a single women. churches they used to be centers for community committee have close. local schools find that they cannot count on the same kind of parent involvement that they used to take for granted.

problems that used to be solved by the neighborhood without calling and authorities are not transferred immediately to the social service bureaucracies. it's not a crisis. it is, as i said at the outset, unraveling of america's civic culture, focused on the bottom third of white american and almost all of the trendlines going the wrong direction in the working class are continuing to go down. so whatever is bad now about the situation is getting worse. and there's another thing to keep in mind, that 50% of the population now to talk about. their comments are going the wrong way as well. they're going the wrong way as fast as working-class, but things are getting worse. okay, that's enough bad news for a while. here's the good news. the good news is the upper-middle-class seems to be doing pretty well. but the bad news theories we are also developing within the upper-middle-class a new upper

class. at this point were talking about another half dozen chapters in the book, so i'm not going to try to give you more than the quickest sketch. here's the essence. back in 1994, richards jay stein and i argued in a book called "the bell curve" that the nation was in the midst of a fundamental change in the major affiliate. three trends have gathered for us after world war ii and were in full cry as we wrote the increasing market value for brains, a college system that's got almost all of the youth and college and did a really good job of sorting the very smartest ones into a handful of elite colleges. and finally, the increasing degree to which the most able married and pass on not only financial success to children, but their abilities as well. we also saw an increasing isolation of the elites from the rest of the country as they

developed a distinctive culture of their own. in the new book, i take a look at the situation 16 years later. i'm able to have new evidence that all three of those trends announce the new evidence about her trends as well. after all the abuse the bell curve to my mostly for completely irrelevant reasons, i try hard to avoid saying we told you so. i don't think i'm entirely successful not effort. many of you in this room, me among them by the way recapitulate what is happening to the nation as a whole regarding a new upper class and airlines. maybe that's the best way to talk since i'm since i'm not going to get a lot of data right now. the older you are in this room, the more likely it is statistically that your parents did not have college educations and the more likely you grew up in a working-class or a lower middle-class home yourself. you on the other hand, those of you who didn't grow up in

situations that they could get a college education and probably your spouse is almost all have college educations and children of college education. the younger you are in this room, the more likely it is that your parents were in the upper-middle-class, were college educated and that you have spent your entire life living in an upper-middle-class environment. because we are in the sermon washing in the week, we also recapitulate what has happened to the nation in terms of the residential segregation. most of you live in capitol hill or northwest washington or northern virginia and the adjoining suburbs are montgomery county. some of you in this room probably live and exclusive neighborhoods such as georgetown or mclean, but a lot of you are probably a neighborhood like kensington, maryland, north of chevy chase, south of wheaton, where i live for several years back in the 1970s.

and around washington d.c., chas intended to as a pretty run-of-the-mill suburban neighborhood. well, luscious niihau ordinary it isn't. take for every zip code in the united states the median income asset the 1960s -- sorry, 2000 cents is under percentage of adults age 25 years or older with college degrees and every zip code in the country as of the 2710. then combined in a single index and rank order of the zip codes in the united states from top to bottom and create a percent total score for each zip code that's just like the percentile scores and academic tests. if your in the 80th percentile in the sat, that means that only 20 people out of every 100 got a higher score than you did among people he took a test. if you're in a zip code that is the 80th percentile, what that

means if of all the americans in the united states, only 20 live in a zip code with a combination of education and income is hard as your zip codes. so for example, let's take zip code 20007. that's georgetown. is percentile scores is 99.6. [laughter] out of all the zip code in northwest washington, west of the park, rock creek park in the two tiers of zip code above the border between montgomery county, it is correct that kensington has the lowest. 96.7. all the others are in the 99th percentile. to those of us who live in washington, looks like a world of difference between georgetown and kensington compared to the rest of the nation they are both at the tippy top of the pyramid. that wouldn't be so bad.

by the way, does he live in virginia, i should make you out. all the way from great falls down to arlington, all the zip code, 99th percentile. now, this wouldn't be so bad if most of the people who came to washington had grown up in places where most americans to live. i mean, cities like buffalo rpr io or waco or trenton or in small towns or rural areas because that's where most americans still live. but once again, the older you are living in this room, being this room, the older you are come the less likely it is you grew up in a place like that. i'm sorry. i had just gotten that sentence completely wrong. the older you are, the more likely it is that you grew up in a place like that and that you bring with you, to your mature success, memories of life in this part of the country.

the younger you are, the more likely that you grew up not only in the upper-middle-class suburb, but one that was a suburb of new york, chicago, st. louis, dallas, seattle or the other nation cities and that you've never had an experience with any other kind of america except maybe for four years when he lived attached to, but not as a small-town that housed williams college or middlebury college or some other elite school where you attended. speaking of elite schools, that's another consideration that comes into play only talk about the isolation of the upper class. a great many of those who will delete positions have not only been in the upper-middle-class bubble, but in the elite college bubble as well. one of the chapters about the new upper class tracks residences of more than 14,000 graduates of harvard, yale and princeton have assembled the zip codes where they lived when they were in their 40s are really

fit these. the highest graduates of those three institutions is in the zip code is west of cambridge, massachusetts. the second highest density concentrations of such people is and princeton, new jersey. the third-highest isn't the zip code of northwest washington and the adjacent montgomery county zip codes. third-highest in the entire nation. when i asked my aei colleague, michael baran to limit the directory for his class as part of his research, he wrote me an e-mail about the place in northwest d.c. where you lived for 31 years. i'm a former block in washington d.c., where minix or neighbors, princeton 57 in radcliffe 66, the folks next to them and the people across the street camille 71 nel law school 74 classmates, harvard 66 and yellow 69, just a typical american neighborhood in

other words. [laughter] when the people in the rest of the country say that america doesn't inhabit the same planet they do, they are exaggerating only a little. the same thing applies to the new upper class across the country, especially in the cities with the most powerful figures in the entertainment, news, i.t. or financial industry's lives. the new york city's, los angeles and san francisco and its environments. what a picture i am painting. a new lower class whose members are increasingly unsuited for cities and we society. an upper-class increasingly isolated from it. an upper-class increasingly isolated from it. an upper-class increasingly isolated from it. an upper-class increasingly isolated from it the and hostile towards the mainstream culture. given that kind of torture, what does the future look like?

that's another four chapters of the book i'm not going to say much about except a few things. if you're a pessimist, you can find lots of reasons to think that all is lost for the american project. the parallel that keeps nagging at me is rome. in terms of wealth and military might and territorial reach, roma reached its apogee. i've given authority in saying this, which is that she and the insane emperors remain powerful for a few centuries beyond that. so what is the end of the rope and republic back in 49 b.c. a big deal or not? in terms of the wealth and power and territorial reach of roma wasn't a big deal. or for romans who treasure the republic, it was a tragedy. and it was a tragedy that no amount of imperial splendor good reading. the united states faces a similar prospect.

continuing on it wrote for the european-style state remaining as powerful as ever. i'm not evoking the image of the united states. we can have a president to the congress and the supreme court, but the united states will be one more in history is per session of dominant nations. everything that makes america exceptional will have disappeared. so there are many days that a wake-up as a pessimist, but by midmorning i start to recall a few brighter spot. the first is over the course of the next decade or so, we in the united states are going to be watching the european model implode. it's going to implode in some countries that do not permit massive demonstration because they can't pay the bills anymore and they're going to go

bankrupt, the welfare state fair. in other countries that do encourage massive immigration to help pay the bills, they will undergo cultural transformations in people with new political power in those countries are not going to be people who are really fond of the swedish model of the welfare state. so as we watch what happens to the welfare state over the next decade, it's going to be a cautionary example in trying to emulate bullet glass less attractive. the increasing otterness that there has to be an alternative. we are the richest country on earth which a couple hundred million people you don't get a penny in support. the entire welfare state can disappear and they would be justified in yet spend a couple trillion dollars the year in in transfer payments. for those of you who don't think the social security and medicare are transfer payments, you have not been paying attention.

for people like me, this is already crazy. we are looking at a situation in which we can save a few tens of billions of dollars without hurting anybody. we are looking at a situation where you can save a few trillion dollars without hurting anybody. as the amounts of money retransfer continue to balloon over the next years, at some point will become obvious to libertarians like me that this is crazy. it will become obvious to everyone who is not certifiable. there must be another easier way of dealing with human needs in this behemoth of the vast welfare state. a third consideration is the united states has a history of confounding pessimist or whenever the american project has suffered a wound that looks as if it might be fatal, somehow things have always for doubt more or less. can it happen again? why not.

the phenomenon of the tea party i think is a case in point. if you go to the tea party's webpage, their list of core principles in total reads, individual freedom, limited federal government, personal responsibility is, free markets and returning political party to the states and people. that's it and there's not a single item in the list that to me at be controversial with regard to the regional nature of the american project in what it stands for. it remains true however that the tea party itself is controversial. any tea party event in which anybody expresses it with a no nothingism or theocratic ambitions or ethnocentrism gets plenty of coverage on the new square is the hundreds of other tea party events would have none of that focus on the core issues -- core principles of america that they don't get the attention. i also have to admit some of the more visible people who set themselves up as speaking for the tea party is just as

objectionable to me. so there are problems with the tea party, but the bottom line is this. a huge grassroots movement has arisen spontaneously in defense of the current deposed that animated the american project. in the spring of 2009, it didn't look remotely possible that such a thing could have happened. a lot of people have gone broke it in against the resilience of the american project and i'm not about to take that chance when i get around to setting down my best guess about the prospects for the future. from the beginning, america has had defects large and small, including the largest, the unbearable internal contradiction of slavery and its aftermath. but the history of the american project taken in its grand sweep has been one of breathtaking progress in which free people without the dictates of

government steadily remediated the nation's shortcomings while cretinous as a culture than spirit of not only area people, but those around the world who came here to share it. we are now in a phase when we still have to convince many of our fellow citizens that the federal government is akin to the rooster who thinks it's growing makes the sunrise. but that is a case that can be made, not just with frederick, but with empirically with numbers, data, evidence. what we have going for us is the reality. from the founding through his first two centuries, the united states fostered a different way for people to live together, unique among the nations of the earth that is still immeasurably precious to some very large number of americans who are determined that this way of living together will endure and prevail.

thank you very much. [applause] [applause] [applause] >> thank you, thank you. we have questions and the trail is when i call on you, somebody will come and bring your microphone. i saw a handout that there. christopher junius, former president of aei, my former boss. [inaudible] >> -- blacks and latinos, so as to avoid misunderstanding, so as to make conclusions particularly start. after you present it all the data that you assembled, you drew conclusions about america as a whole.

so from your data, you are moving directly to this is what has happened to american. i understand the reasons for your analytical approach, but i wonder if at the end when you're characterizing america as a nation as the people where you try to add the blacks and latinos in. and if so, how that affects your portrait in your conclusions. >> yeah, you're right. it's very important to say at the end of this, okay folks, we've been talking about non-latino whites. now let's expand it. in chapter 17 i take most of the trendlines. i don't try to do all that because were talking about dozens, but most of the termites in earlier chapters and say here's what they look like when you had everybody in. and i have to say this is one of the cases when i saw the results i was surprised.

after i saw them, i could think back and say it shouldn't have been surprised, but i was surprised by the following reasons. i'm familiar, as most of you are, but i'd avoid live births are higher among the black adulation than whites. when you add in blacks as well as whites, you get the worst situation. and that is true for other kinds of indicators as well. doesn't work that way because we knew at an everybody come you at a variety of populations that a lot of times counterbalance each other. the fact is that when you present these trendlines for all americans, they look almost identical to the one that i present for white americans, remarkably close. i found that even though what surprised me to be wonderful, we are one nation not grow much more than we realize. but paradoxically, one of the ways to get people to come to grips with that fact is by forcing the preceding 16

chapters a soundbite americans. [laughter] right down in front. >> thanks for a wonderful and fascinating talk. could use a little bit more about the middle 50% and how the numbers can differ from the top and bottom or just halfway in between or are they themselves bifurcating into an upper and lower part? what about the middle 50%? >> just to get a sense of the 50% are coming are talking about k-12 teachers, nurses, talking about technicians of all kinds. you're talking about salespeople can the people in all kinds of white-collar jobs are not in managerial positions. middle class. different indicators show different things. sometimes the middle tracks closely with the

upper-middle-class and sometimes the tracks closely with the lower class. there's not a generalization to be made about that. the generalization is they're always in the middle. there's no case where the middle class is higher than the upper-middle-class in terms of an indicator. if i had to say was the dominant theme? they look more like the working class than the upper-middle-class. i don't want to emphasize that too much because a lot of times they're up in the middle. looks as if the upper-middle-class has been remarkably stable on a whole bunch of things and everybody else is not. yes. >> and jennifer chat with the hudson institute.

two quick questions. first of all, in your index of income by doucet code, to account for the cost of living because the cost of living in different counties is very different than you adjusted for that, people might be better off in some of the lower income counties. second come in my county, kummer county, you can see immigrants, particularly asian immigrants, so it's not too are doing very well -- you are mobile, so it's not as though counties are completely static in terms of just established upper class. they also have people who recently moved from other areas and then. >> that's true. first, with regard to differences in the cost of living, no, i didn't try to take that into account. it's not relevant in the following since diana. if you go to new york, you will find somebody making $175,000 a

year who is living in a very small, cramped apartment, but holds quite a prestigious position at columbia university or something like that. tickets at coast to qualify under a constant income, it's quite true your standard of living can be quite different. if they're in new york on a standard of living isn't nearly as specified as if they're in a zip code. but that doesn't change the fact they are part of the elite in the way that more real income in des moines aren't. so when these criteria for ranking zip codes but the upper east side in the upper west side in new york and the 90 minute percentile, adult think it's a misrepresentation of their rule of the new upper class. the second aspect involves immigrants and a lot of people aren't making money and actually for the first time. at all of those turning that goes on in american society. and i do not need to in any any way deny that.

however, it is also true that in your most of the code, that is not the kind of person you are getting moving in. you do have a high percentage of people in the elite sickos who are asian. that's true. and i can't, from the census data come and tell you whether they are new immigrants are not. maybe i could but i haven't. they are double the percentage of asians in the population as a whole who are in the elite sickos. so you probably had a phenomenon when you're talking about. you also have been sickos a deal of continuity. i went back in the 1960 in the top neighborhoods in 1960 and the top neighborhoods now and they are very similar. i guess i can't comment in any more detail about that particular issue because they haven't looked at it in detail. ok, we've got a lot of hands.

>> thank you pure terminal foster a the notch burner were. my question pertains to the framework you are utilizing. i migrated either of a lot of work on libertarianism in general, but i tend to get a little weary of using something like race is a macek because it's a little bit fuzzy. it's sort of fluid and highly variable over time. but we make it a white today they have properly been considered members of some other ethnic group at another point in in the past. i wonder if when we employ that for the same reason i have concerns about the other metrics would talk about religiosity or marital status as driving fact there's. not so much marital status is fuzzy, but if are not potentially overlooking some other important contributor factors. i find myself in broad agreement

with most of the conclusions towards the end of your presentation, but when i consider, for example, income stratification in all these other things, i presume there might be some other things that work in the broader economy like the changing in the nature of the opportunities available to most people that required a higher level of educational attainment and cause of greater stratification or with the white cohorts we discussed earlier, if there is a decline in the rate at which in this pertains to the last comment as well, immigrants are joining this cohort, might that account for sort of a degradation of the protestant work ethic, which is so central to the american product as you described it. >> one of the nice things about using working class composed of ways, ages 30 to 49 is that a

whole lot of the complicating issues that what happened in the labor market and how that affects labor force participation, a lot of those get pushed aside so you know one of the major issues about black unemployment in the early 1970s the black dropout from labor force was the argument of professor wilson at the university of chicago the job site for the intercity -- central city to the suburbs and so forth. on the kind of stuff gets swept away. that could've affected whites in central city neighborhoods, but she's got a whole bunch of lights around the country where the jobs are coming to them as opposed to leaving them. so that emphasizes the way in which what i'm talking about whites ages 30 to 49 and you say why is that you've had these changes in labor force behavior, there's a whole set of things that don't enter into it. this is not the white labor force behavior was not affected by what was going on in other groups. i think an interaction effect if

there is quite possible. but that leads to a really interesting thing to ponder. and let's talk about the late 1990s when jobs were everywhere and anybody who wanted a job in the late 1990s could find a job. why is it that a white male ages 32 mike 49 would not be in the labor force? by which you have larger numbers have been leaving the labor force? well, you can save the interaction are talking about. maybe so, but in some broader sense it reflect his indefinite difference with the causes for her. it was reflect that of a different attitude towards work, towards industriousness then used to exist. a fundamental change in a norm. and so i guess what i say to you is that's what i've identified this procedure. and we can all thought then

about why this happens. but the fact that it has happened is important for the future of the american project all by itself. michael. >> michael brown at aei. i'm a little disappointed to find out that my former zip is only a 99.6 percentile. [laughter] maybe those were cheap apartments or something. >> charles, you presented this as an aberration from a long-term trend in american life and has made reference to contemporaries of tocqueville described an actor to risk it, but i wonder, you know, it's a starting point in 1960 is a little specific to each generation and not necessarily typical of american life is the end of the baby boom generation, of where we had rises in

birthrates rather than declines, which usually get what societies become more affluent. i wonder if i couldn't look at the 19th 10 or 1900. don't we see some of the same things that theodore dreiser is writing novels about, the huge gap between incomes between north and south. and one suspects industriousness as well. ..

which is of course the great irony which we've made incredible progress in those years, so in juan sense, you can say there was an inflection point to around the 1960's and that's true. whether you have ups or downs to have him in a crime a big spike in the 1920's did you have a spike in the labour force this nation, have you had ups and downs in the labour force for dissipation? i don't think we have the data for that. i don't know but i will say this, i did choose 1960 partly because the was the earliest feasible time i could get all the data i needed, but for another reason as well on a whole bunch of trend is the

united states was heading in the right direction on industriousness religionocity, honesty and marriage. we were headed in the right direction. things change in the 1960's, social cavity is a fascinating example. when the document a social capital is not the case back in the 1920's we were a religious nation and then we became less religious, they were much more religious in terms of the measures in the 1950's and 1920's i don't need to go into all the other ways things are headed in the right direction and so many of those turned around and not only had it in the right direction for the people of the top, the credit in the right direction for the people with a lot of 30%. and so wife -- when you've been writing about these issues as long as i have, you're kind of

afraid that you're sounding like a broken record and i've bashed the 1960's and 1984 and losing ground and it's kind of pathetic bashing the 1960's now but the 1967 ought to apologize for, and when it robert putnam, bless his heart, he's a wonderful scholar and i admire his work enormously and takes all of these ways in which social couple was going up during the 1950's and starts to go down and he says at one point in the book that the modal year in which the trend lines reversed was 1964 and then he says he doesn't think these conservatives who say the government had something to the far right and i say 1964 is the turnaround point? i start with 1960 for that reason. the united states could have kept getting better in all sorts of ways but that happened.

right behind michael this time. >> katella so you are, please? >> you describe how you ranked ordered his of codes by combining education and median income. have you looked at data that similarly ring orders zip codes in terms of political contributions as reported by the federal election commission, and how much of an overlap with erbe? my guess is a would be almost complete. >> what a great idea. i didn't realize the data were available by its code. i'm heading home tonight. i tell you what i have done which i have computed the rating

of the representatives during the 2000 conference after the redistricting from 2000 census so i have the average rating of the congressman to the codes in the country and that is also dealing with interesting stuff in the segregating suppose not just income and education but on another dimension and there are read as it could impose oppose even among the leaders of codes that provide a very interesting contrasts as to in terms of the segregation of the supposed from other americans and cultural characteristics of this approach. i haven't thought of doing when you're doing. wonderful idea. mr.. >> mittal smith, independent. i'm sure you've looked at the big sort. i can't remember the author -- >> thank you very much. he put the inflection point at

1965 very specifically after the summer of 1965 and some of the key turning points falling away from trust and the major parties and other institutional things people have trusten and the vietnam war with 20,000 since the 200,000 at the end you have the high point of the civil rights movement as a voting rights action on the march on selma and the riots, the great turning away, the two indicators, the two events and i have questions what is the indicator. i want to know what your thought of that is in the inflection point when the polls show that. second, there are parallels in the sense that in 1960 had just been a landslide election of the democratic party after the november 64 goldwater lost and huge expansion overextension of the democratic party agenda in the great society and the vietnam war if you want to call with competitive or not.

you have similar offense with obama, a huge landslide for the democratic party. arguably and overreach of the democratic party in terms of the health care legislation. arguably a similar involvement expansion of overseas involvement with what we are doing now. libya and elsewhere and the surge in afghanistan. do you see a parallel and the rise of the tea party? >> is there a parallel? >> that's really interesting. by the way, bill bishop recalled the big source the gentleman referenced. it's a terrific book and basically talks about the way we've sort of ourselves especially politically in the homogeneous enclaves. it's very hard to talk about the mid 1960's without considering the profound effect of race at that point and the civil rights act of 1964, the civil rights movement and was a very

fundamental change in the role of the federal government with the civil rights act of 1964. just a landmark change, not arguing that good or bad or anything i'm just saying it was huge. and along with that i'm not going to get too specific with 64 and 65i think it is the mid-1960s where they have a whole bunch of other things because i wasn't just the war on poverty was also supreme court decisions which radically change the will of the federal government and i'm thinking on my feet here because you're parallels are fascinating. there was at that time i think a broad sense in middle america and this is not what we bought into in the past with the government, and i think that there is a similarity with what happened the last couple of years to get speaking for someone on the right and someone

who hangs out with other people on the right to know for affect a lot of us were saying, you know, these guys aren't playing by the rules with the health care bill. this is what you do when you get sales from the electorate we don't want. you don't go through. there was a sense you aren't playing fair that also exist the mid-1960s and the you guys aren't playing fair comes a breakdown in all kind of trust. it's broken the covenants, and that i think is probably what i would come in the process of answering the question ad lib like this. that is what stick in my mind as the common feature between 1965 and the last couple of years. a really interesting idea. >> yes, we will try right here. >> i'm sorry i'm not able to get so so many of you i know have been held in pure hands patiently. >> syndicated columnist.

he began by talking about the american way of life and changes that he traced from the 60's about the things we think it is uniquely american and yet so much of your focus is also on the welfare state and the influence of the welfare state on behavior. so i'm wondering if you have looked at all on the european experience and the welfare states created hours and whether they have seen a similar social consequences of marriage and so on, the older welfare state. >> i look on the evidence will for a state as a canary in the coal mine. and not in terms of the underclass so much as the whole population. if you are talking about industrial and mining, the united states is an out later if you take europe and the amount of hours americans worked compared to the europeans, plus tick the attitudes towards work,

completely different. in the united states, large proportions of people still say they'd love their work and that they find their work hard at the end of the day. much higher than most european countries. a couple exceptions but religionocity, you all know the story about that. western europe is the post christian age three islamic and you know, church attendance in countries the 100% christian, 10%. mortgage rates are far lower than europe than they are in the united states and dropped more precipitously. you're probably more familiar with the childbearing rates, fertility rates below replacement. you take -- by the way, in terms of honesty, we've also seen increasing prime rates. if you take the institutions through which we are talking about the founding virtues and you look at the european counterparts and the welfare

state, i don't think you can make the case that these haven't dkb enormously in ways that suggest a very close causal link with the welfare state pity is something i've written about a lot in the book called in our hands. yes, sir. >> five-point of view. yes, you. >> my name is bill lancastrian by founding board member of the charter school and we are in our sixth year and have won all kind of awards national, international, over twice the number of african-american students which is unheard of, the counties of the federal injunction because the achievement gap and the people who support and we have

apartheid and our educational system. we have the education for the state of virginia, three delegates from the state of virginia and about eight other people -- >> google runge of people waiting. i don't mean to be in polite but i think we need to answer questions. >> que turtle is the most dysfunctional institution we have. you get me add another gathering and i will do 20 minutes on your question. okay, i'm not going to do it tonight because of the different age of the topic but godspeed with your charter school i really appreciate the positive note on which you and your talk and so let me perversely ask a question about the possibility that optimism isn't warranted.

there's a colleague of mine who likes to quit there will always be in america it might just not be in the united states so my question is if that were to come to pass where do you think it would be? >> where else in the world do you see the trends and the culture going in the direction that might not produce the american project? >> no place comes to mind. it is a rare combination of qualities you have to have. the thing i'm thinking of the specially, i know i have libertarian friends who think i am a wuss for talking about community but there's lots of cultures of the united states -- around the world that have wonderful traditions of hospitality. but there are very, very few cultures of of the world that have wonderful traditions of

people voluntarily helping their neighbors who are not related by blood. very few, and when i see very few, one with england having sort of second place but england with its class system second places in that close. the united states of the culture where by from the very first everybody mom marveled at it the way that americans constantly said they were pursuing their own self-interest but in practice to spend huge amounts of energy collaborating with each other to solve problems. i just don't know of anywhere else in the world that has ever done that. and i don't see anywhere else in the world that looks like it is on the cost of doing that. that is pretty much of the top of my list. >> you mentioned putnam and 1965 and i know that he said

immigration, stopping immigration will solve it but obviously 1965 we had the immigration act and the racial diversity was the most negative effect on the social capital and going to your pocket is the poll to compete against the immigrants who have to live -- >> you must excuse me, my hearing is not the greatest and i'm having a hard time following you. >> just in terms of speak a little louder, please. >> welcome the class has to compete with immigrants for jobs, go to school with them and liver of them on the upper class as private school, and the [inaudible] so i know that they will solve it but do you think exacerbates the problem? >> if we were looking at problems at which the trend lines had been in sync with the competition for jobs i think

that that case is a strong one. in most cases the trend lines started going the wrong direction before it became an issue. i agree that the competition for the blue-collar jobs posed by illegal immigration has been really serious and there are a lot of white blue-collar workers who are incensed you have illegal immigrants working and the employee is don't have to pay and benefits and it's making a lot difficult for them. i agree all of that is true. it is also true if you go to small contractors or painters or plumbers or electricians or other skilled labor and you can't get them to come to your house for a while because they are so overloaded with work when they do come to your house they say why don't you add some more people? and they will say that it's almost impossible for them to

find young white males or females who want to learn their trade in return for good wages they don't want to do it and they can't find the higher. i don't think this is a matter of anecdote. i think this reflects the kind of deterioration and industriousness and the working class that i use statistics to try to prove. so immigration as relevant to the issues for the reasons you said it is something else is happening that is much more insidious. >> and the front here. >> john, independent economist. has there been -- as moralism played any role in this? i can think of the query and calls from churches about rectitude and now we hear from a lot of the church based institutions discussions of

victimhood and the system and stuff and i wonder if there hasn't been a slight shift on the truth and lending. i'm a catholic and i'm wondering vatican's who screw things up -- [laughter] -- you know, one of the curious things of the upper middle class and upper class is precisely that. they are beating all the right place. they are getting married, the working hard, the hours worked per week for the middle class have gone up rubber band on for most of this period. so they are doing all the right stuff. but they won't dare say this is the way people to be. they will not preach with the practice. and i put this down which says it works for me but you might say this is appropriate for

someone with a different background, different ethnicity? one of the things in the book where i do my own preaching is to say this has got to stop. it's almost as if they are keeping the good stuff to itself. i talk about the ways in which these things -- industriousness, religionocity and marriage and so forth contributed him and flourishing. the ways people are happier because of this. the lead more fulfilled lives. the upper middle class knows this. why not say it out loud? and so what we are preaching here is what we are practicing and is not because we want to work harder see you can pay more taxes. it's because this is the route to the flourishing. edward crane -- >> i want to defend the gentleman with the charter school you abruptly cut off. [laughter]

>> i'm so glad you came to my. [laughter] >> i knew you would be. >> it seems to me the school system is very much a driver of the social pathologies you're talking about that they don't teach a moral values, the ethical standards, the concept of stigma because they think it's that is the sign their secular but there has to be the charter school school choice ultimately that will create an environment. they say mafia captain send their kids to private schools because they get better moral grounding. [laughter] and i think the school choice is a big element of solving the problems you outlined. >> i agree with that. and i'm sorry that i couldn't

respond fully to the gentleman because i see people like you sticking up their hands. [laughter] this will have to be the last question. you've been patient with putting up this long period of q&a. >> thank you for your presentation. i'm wondering whether you can comment as to the extent to which the decline of the industriousness and work in the working class is specifically in real phenomenon. my understanding which may be wrong is the decline in work among the working class has been on till the opposite at least until the entire male population is that right? is this a global phenomenon engender or just an american phenomenon? and what the answers to the questions suggest that all potential causes of the phenomena? >> i have three minutes before 7:00. point number one is your life. it is a concentrated on meals.

it's almost exclusively among males, and of course the increase the labour force participation drastically, but the norms have changed so much you can't tell what's going on in terms of trend lines and industriousness. it's a male phenomena. why? what's been going on? with its international, i don't know. i think a large part of the explanation lies in a phenomenon of the people besides me have noted which is mails or kind floundering especially on the working class as to what the role is anymore. the women don't need them as much as they used to as helpmates for their children and getting hired a lot of times they were higher than the guys will. and in the upper middle class a lot of the turmoil of the change in the rules in the workplace gender roles, a lot of that has been assimilated if you're

uncomfortable. i think in the working-class where a guy is working a lot of times at a pretty boring job, and not that well a paying job it is really important that he be able to say to himself and supporting my wife and children and if you want for me they would be in bad shape and that is really changed a lot. and that's become i think a demoralization. it is real. i don't use this as an excuse for what happened. i still think that they're being reckless, but i think that maybe part of the explanation for the recklessness. this has been lots of fun. thank you very much for your time. [applause] [inaudible conversations]

[inaudible conversations]

last week the supreme court heard a case involving wal-mart and gender discrimination over pay and promotion for as many as 1.5 million kernan and four women employees. the issue before the court is whether the female plaintiffs have enough uncommon to qualify for a class-action lawsuit. if the lawsuit is allowed to proceed will be the largest class-action suit in the u.s.

history. >> mr. chief justice may please the court. the mandatory nationwide class in this case was improperly certified for two fundamental reasons. first, plaintiffs failed to satisfy rule 23a, cohesion requirement as reflected in the commonality come to the cavity and adequacy requirements of the rule. second, plaintiffs highly individualized the monetary relief, failed to satisfy over the 23 requirements for the certification of the mandatory mom opt out class. regarding the rule 23a the plaintiffs claim in the case hinged on the delegation and discretion to the individual managers throughout the country and they cannot meet the cohesion requirements and rule 23a the delegation of the discretion in some ways is the opposite of the cohesive claims that are common to everyone in the class. the plaintiffs are either

neutral or not argued to be discriminatory for the are of relatively nondescript the jury. the very strong policy against discrimination and in favor of diversity. the corporate headquarters had learned this objective decision making or the delegation of the decision making to the field is resulting in several discriminatory practices or pattern of discrimination. in other words, the decentralized process was leading to discrimination then i suppose the company is -- that could be attributed to the policy by the headquarters? >> no, your honor. i think in this situation if it was a pattern, for example, at a particular store where the decision making -- >> i'm talking about thousands of stores and every week they get a report from another store saying there's an allegation of the gender discrimination. at some point and they conclude that it's in their policy of

decentralizing the decision making that it's causing or permitting the discrimination? >> i think it would be an inquiry, your honor, i don't think it would rise to the common policy that affects everyone in the same way. certainly companies to look at the situation for the company and seek to reduce discrimination but it would take more than some reports especially in the company that has so many stores and so many units and here the plaintiff claims simply aren't typical if the three named plaintiffs stand before the court, they are supposed to represent 500 billion or more people and standing in judgment that is the words the court used in hansberry verses lead to represent all those other people and the claim is that the individual decision makers in those other cases exercise their discretion in a way that was biased and there is no proof -- >> the question reminds me of one of the rules under 1983 the

city is not liable for the constitutional violation unless it has a policy. would you think the we could use that as an analog to determine whether or not there is a common question here? ..

>> is there any responsibility, the numbers are what has been left out so far. the company gets reports months after month showing that women are disproportioned passed over for promotions, and there is a pay gap between men and women doing the same jobs. it happens not once, but twice. isn't there some responsibility on the company to say this is gender discrimination at work, and if it is, isn't there an obligation to stop it? >> your honor, yes, there is an obligation to ensure for a company to do its best to ensure there's not wage gaps in discrimination, but here, for example, one looks at the

statistics the plaintiffs pointed to and it's a different issue. it does not show there were gender gaps at the stores among comparable people. that's the fundamental flaw in the case. decision makers throughout the country made stereotype decisions, but they added everything together. they haven't showed a pattern across the map and mirrored the statistics that -- >> i thought their experts didn't aggregate them together. he did it regionally, not store by store as your expert did number one, and number two that he performed those accepted by the district courts and affirmed by the circuit court any number of controlled variable comparisons including job history, job ratings, and other things and found that the

disperty could not be explained on any of the normal variables that one would expect and that the disparity was significantly much higher than the ten competitors of wal-mart and what they were paying their labor fours, so what is speculative about that number one, and two, why is that kind of statistical analysis inadequate to show a policy of some sort exists. >> first, it was national regression and simply estimated the results. even if he had, these statistics go to the marts. we think we have strong argumented on the merits. >> well that's the legal question which is you are right, ultimately you may win and prove to a fact finder that this analysis is fatally flawed, but

what the district court concluded is on the basis of your expert whom he discounts it because your expert was facing analysis on premises that the court found not acceptable, that there was enough here after a rigorous analysis. what's the standard that the court should use in upsetting that factual conclusion? >> your honor, the district judge did not discount wal-mart's expert. the district court found it wasn't at the stage to make a determination between the two. the standard we think is the standard that the second circuit adopted which says there needs to be a choice. when you talk about discretionary decision around the country, there has to be some demonstration there's a common effect throughout the system. our experts report in testimony show that 90% of the stores, there was no pay disparity, and even putting that aside, the

plaintiffs need something that show there was this miraculous occurrence at every decision across every store, and the evidence simply doesn't show that. the other problem on the cohesion analysis is again the typicality inquiry. each plaintiff has different stories. one was promoted, one was terminated, one was promoted and then had a disciplinary problem and then was demoted. in each of the case, but this one individual case, they would have to show they were treated differently than people who were situated like them, with the same supervisor, department, and -- >> what do you think is the difference between the standard that the district court was required to apply at the certification stage on the question whether there was a company-wide policy and the

standards that would be applied on the merits? >> at certification stage, justice alito, they didn't have to prove there was discrimination. that was the company's policy, but they needed to point to a policy that was common and linged all these expert individuals, locations, and different people together, and what their argument is that the common policy is giving tens of thousands of individuals discretions to do what they want. that's not commonty. >> that's not fair. i think the argument was the common policy was one of complete subjectivity, was one of using factors that allowed gender discrimination to come into all employment decisions, and in watson, we suggested that was a policy, a policy of using suggestive factors only in making employment decisions.

>> justice kagan, they do not october it was an entire subjectivity process. they argue it was excessive subjectivity and that there were general overarching company standards exhibiting control. on page 13 of the brief they say the discretion was unguided. three pages later they say it was guided by nondiscriminatory policies. it's an incoherent theory. >> i just am confused as to why excessive subjectivity is not a policy to be alleged in a title vii pattern an practice suit or title vii desperate impact suit. >> in wattson they stated and held that subjective decision making is impactful, but justice o'connor's decision said there

had to be a practice within the policy. title vii does not govern policies. it governs practices, and subjectivity is not a practice if it were a policy, and like most companies, wam mart has a combination of subjective standards. if they pointed to a certain criteria, people with a great personality, they are the ones we're going to push up, and they were trying to tie that to a desperate impact. >> there was a case -- it was in the 70s, and it was a class action against at&t for i think promotion into middle management . what was at issue there was part of the objective, but then in the end, the final step was so-called total person test, and women disproportion flunked, and

the idea wasn't at all complicated. it was that most people prefer themselves, and so a decision maker or other things made equal would prefer someone who looks like him, and that was found that total application was found to be a violation of title vii. this sounds quite similar. it's not just suggestive. you have the expert. i know you have some questions about that expert, but the expert saying that gender bias can creep into a system like that simply cause of the natural phenomena that people tend to feel comfortable and seem to like themselves. >> your honor, this is not like the total person test, but that's a good example of

something that could be a practice inside the overarching policies, and if you are a case where a particular decision making unit applied the total practice test and you had desperate results in that particular unit, that group of people would have a much stronger case to a class action, but as pointed out, the cosh yowlings here -- sociologist here said he could tell is stereotyping was occurring. this is a class action. the question here is whether we can assume that every decision maker acted in the same manner in a way that had, in the court's words, the same interest and the same injury by their own expert accepting all of their proof, the answer is no. that assumption is not supported by the record. that's why there's not the cohesion necessary to protect the rights of the absent class members and the defendant.

the other -- >> i think that that suggests that the plaintiffs would have to demonstrate discrimination in every individual case, and that's never been the law. all the plaintiffs have to demonstrate, and especially in this stage of the proceedings, is there is a practice, a policy of subjectivity that on the whole results in discrimination against women, not that each one of these women in the class were themselves discriminated against. >> that's correct. we're not arguing that plaintiff would have to comport and show every class member was discriminated at that point. under the analysis, there must be proof of a standard operating and it's undisputed wal-mart's policy was enforced rigorously that was antidiscrimination, but, yourj÷

>> i think it's a fundamental crucial value. >> would the woman with the claim for compensatory damages be able to sue that after the class prevails in this case? >> our view is that she would not be because that would have been part of the core facts of the case. >> even though she could have not received notice and not had an opportunity to opt out? >> that's the problem with the b2 certification that this case, if it was certified at all, needs to be looked at under rule 23b3. it was created for this circumstance, the growing edge of the law where individualized

monetary claims are at stake. the language of rule 23b2 speaks of declaratory ruling. >> your position was this could not be certified under rule 23b3 either; is that correct? >> the plaintiffs will not be able to satisfy the provisions and that's why it's under b2 for seniority and dominance and the like. >> would that bar the b2 class? meaning if their claim is as they stated that they are seeking an ininjunction relief and an impacter case, would that have value, and wouldn't that val be standing alone without the damages company be that the plaintiffs who come in later have a presumption that the discrimination effected them and

the burden shifts to wal-mart to prove there was a nondiscriminatory reason? >> there certainly could be a benefit from an injunction if the plaintiffs met alled standards. the problem here is the individualized claims overwhelm -- >> even if they did, why couldn't you separate out the b2 issue from the b3 question of whether monetary damages have enough common facts and law to warrant a certification under b3? >> some courts have done that under the b2 standard and monetary relief under b3 standards that can raise complications. they are seeking punitive damages as well, but that's the possibility. >> would you address the -- address them separately for me

and tell me why ab2 class couldn't exist, and if it can, then is your attack merely that, the monetary component of this, the back pay which, you know, i know the dispute whether that's equitable relief, why that just can't be separated out and put into the b3? >> your honor, our view is the injunction relief claim has problems with adhesion, commonality. there are alleged discriminators and victims. if that's not a conflict, i don't know what is. the women who are compelled to be in the class, they can't opt out. they are current employees,

former employees, they cut across every position in the country, and there's no demonstration that their affected in the common way. i think there's still those commonality cohesion problems because of the nature of the plaintiffs' case here, the notion of the common policy being given discretion in independent judgment. >> correct me if i'm wrong, i thought this district judge said that the absent class members would get notice and have an opportunity to opt out, so a plaintiff -- a member of the class who wants to go for compensation instead of back pay could opt out. >> the district court limited that ruling to the punitive damage claim, and the ninth circuit said it was that way and punitive damages back, that would simplify things because then there wasn't notice and

opportunity to opt out under back pay, and back pay is monetary relief for individuals to bind people based on a balancing test under b2 to a judgment to which they were not a party. in taylor veer stergle, an individual is not bound to a judgment to which they are not a party. we need crisp rules with sharp corners. that's why we think it needs to be rule 23b3, one individual monetary relief is at stake. >> that takes my question. are you talking about any monetary relief? you're claiming that monetary relief includes equitable relief? >> yes, your honor. >> the fifth circuit described the test where it doesn't use the predominant question, but uses the incidental test. what's wrong with that test? >> that test is better than the test applied below.

they walked away from the two tests applied in the lower courts. they never contended they could meet the test. in the fifth circuit's test, the automatic back pay going to the group as a whole would qualify for that. here, this is individualized -- >> i, i -- that's where i'm going to. would you accept that incidental test as appropriate to the question of when monetary damages predominate or don't in >> your honor, the text of rule 23b2 is very clear talking about injunction and declaratory relief. the only ambiguity created is from the advisory committee. as this court said three weeks ago, we don't look to legislative history to create am ambiguities. the other part makes clear the drafters were concerned about the historical ant see dents where it was to desegregate of

the like. i think the creators would have been shocked if they learned this case that involves millions of claims and individualized monetary relief were sought to be included in a b2 class. that said, your honor, the answer to the double damage test is far sue superior because it's clear and closer to a sharp lined rule required in this context. i'd like to go back briefly about individual relief and taking away the rights of wal-mart and individual class members. the ninth circuit proposed a method. the plaintiffs do not defend that or mention the case that was the corner stone of the ninth circuit's ruling to allow a sort of prediction about who might have been hurt, how many might have been hurt, and then a dividing up of moneys based on that. the district court precluded the

fundamental hearings to allow once a presumption, if one was to arise, if a discrimination occurred in a patterned practice, would allow the defendant to then show it didn't discriminate on an individual basis a and loys the individual -- allows the individuals to have their day in court. that violates seven and shows some of the core flaws in this case. >> what if the class does not prevail, but loses. >> yes, your honor, there's a presongs in the world of class action. there's two. one is that class actions are always good, and the bigger the class action the better, and that the class will win. none of those presumptions can be counted on. if the plaintiffs lose and here their company story damages claims would be gone. if they try to bring a case as

pattern or practice or pay or promotion, there's questions on race, and it's not fair to anyone to put this all into one big class. >> you're not suggesting they are precluded on individual discrime flags claims, are you? >> no, your honor. there's operative facts and that poses a different question. >> what if it was the same theory that the reason this person discriminated was because there was subjective discretion in the hiring? >> then there's a question, your honor. >> i'd like to remain my time for rebuttal. >> thank you, counsel. >> may it please the court. this case follows from the models of theories of discrimination, and as a cops convince, there is no requirement to have a formal

policy of discrimination here. >> what would the injunction look like in this case? >> the injunction would look like a series of remedial measures directing wal-mart to provide for detailed criteria by which to make pay and promote decisions that are job related in a way that hasn't been true up until now. it would provide for it to hold managers accountable for the decisions they make. it would ensure effective oversight of the pay and promotion decisions in a way that the company had, while the company did have, by the way, information regularly submitted to it about pay decisions. it took no action, and did it not effectively -- affectively monitor, and allowed these problems to fester. >> is it your opinion on this scale subjective decision making

processes are necessarily illegal? >> no, not at all, mr. chief justice. >> how many stores are we talking? >> several thousand stores. >> several thousand stores. how many examples of abuse of the subjective discrimination delegation need to be shown before you can say that flows from the policy rather than from bad actors? i assume at how many thousands of stores, there's some bad apples. >> well, mr. chief justice, we have examples in the record. as -- >> no, i know there's examples. how many do you need to have? surely it's not one letter saying the guy at this store is discriminating. that can't be enough to support your theory. >> that's correct. we don't submit that. there is no minimum number that this court has ever set. the court had before it about 40 champs, but -- examples, but significantly,

they were not required. in order to establish a practice of liability, and we have more than that, of course, but in order to establish a practice of liability, at least a prime fascia case, they hold that there was at least disparities substantial to create an interest in discrimination with respect to discreet practice. >> is it true wal-mart's cost of the company was less than the national average? >> mr. chief justice, the position -- i don't know that that's a fair comparison. the position wal-mart makes is with the general population, not with people in retail. wal-mart's obligation under title vii is to ensure managers do not make pay decisions because of sex, and the comparison is relevant. it's between men and women at wal-mart, not the general population that includes people

in retail, but includes railroad workers and all kinds of other people. that's not the appropriate comparison. >> it's not clear to me. what is the unlawful policy that wal-mart has adopted under your theory? >> justice kennedy, our theory is that wal-mart provided to its managers unchecked discretion that was used to pay women less than men doing the same work in the same facilities at the same time even though the women had more seniority and higher performance and provided fewer opportunities for promotion than women because of sex. >> it's hard for me to see that -- your complaint faces in two directions. number one, you said this is a culture where arkansas, and head quarters knows everything, and

then the supervisors have too much discretion. there's an inconsistency there. what's the unlawful policy? >> well, justice kennedy, there is no inconsistency anymore than it's inconsistent within wal-mart's own personnel procedures. they provide managers this discretion, which by the way, is very discreet. it's not the browed kind of -- we're not attacking every facet of pay decisions. they found specific procedures of the process that are totally discretionary. there's no guidance whatsoever about how to make the decisions, but with respect to the discretion, every store the district court found, mags provided with the same level of discretion, but the company also has a very strong corporate culture that ensures that managers, not just with respect to the practices we're challenging, but with all respects, the wal-mart way, and

the purpose of that is to ensure that in the various stores that contrary to what wal-mart argues these are holy facilities, that the decisions of managers are informed by the values the company provide. >> is that just for treatment? >> it is a form of treatment because they are making the decisions because of sex, and they are doing so with -- we have evidence that we think through this stereotyping evidence we have here as well as the statistical results. >> i don't, i'm getting whip sawed here. on the one hand you say they were utterly subjective, and on the other hand, you say there's a strong corporate culture that guides all of this. well, which is it? i mean, it's either the individual supervisors are left on their own, or else there is a strong corporate culture that tells them what to do. >> well, justice scalia, there's this broad discretion given to managers.

>> right. >> but they do not make the decisions in a videocassette consume. they make the decisions within a company. >> so there's no discretion? >> i'm suggesting they are given discretion, but they are guided on how to exercise the discretion. >> if somebody tells you how to exercise discretion, you don't have discretion. >> well, all right. the bottom line is they didn't, and the results show it. there was consistent disparities in every one of the regions. >> what do you do about the unchallenged fact that the central company had a policy, an announced policy against sex discreme nation so that it wasn't totally subjective at the manager level. you make the hiring decisions, but you do not make them on the basis of sexment wasn't that the central policy of the company? >> that was a writ policy, not

the policy effectively communicated to the managers, and -- >> how was that established here? >> well, as i said before, we have evidence of -- for instance, at the sam wallton institute where every manager is trained before they become a manager, they provide as a question to a response of a standard question, why are women so under represented, and the response given was because men seek advancement more aggressively. that's a typical stereotypical statement provided to every person going through the management training program that they go off and inform their decisions when they have this discretion to make promotions. >> and that causes them to discriminate on the basis of sex? >> that is -- >> how could that cause them to intentionally discriminate on the basis of sex? >> well, they have, they have an intent to take sex into account in making their decisions.

that is -- that is they apply a stereotype that women are less aggressive when it comes to assessing their suitability for promotions. >> that's just an assessment of why the percentage is different, not only at wal-mart, but at throughout the industry. to say that that's the explanation is not to tell your people don't promote women. >> right. >> if you have an aggressive woman, promote her. >> i understand that, and there have been women promoted, but justice scalia, first of all, we think that that is, the questions you are raising are ones that wal-mart can raise at trial. the question at this juncture is whether there are questions common to the class. we've identified recognized as a

common policy that there's no dispute this policy applies throughout the company, and the fact that we at this juneture, and -- juncture, and we have shown commonality that there are disparities adversed to women and we have the means to show through the testimony and other evidence that we can provide this -- >> have you successfully shown despite the fact of an explicit written central policy of no discrimination against women. do you think you adequately shown that policy is a fraud and what's really going on is there's a central policy that promotes discrimination against women? >> we have testimony in the record from the vice president of the company that that policy was lip service at the company. we have testimony from the expert in this case. >> isn't this something that

would be -- i mean, this witness is talking about getting a foot in the door, talking about certifying the class, and you may well lose on every one of these points, but the 23a standards are not supposed to be very difficult to overcome. it's just a common question or fact that predominates at that stage. >> i'm sorry. >> but what seems to me is a very serious problem in this case. how do you work out the back pay? you say we get through the 23a threshold, and there's a class certified on 23b2, and the judge says there's no way i could possibly try each of these individuals, so we're going to do it how? how are they beginning to calculate the back pay?

>> well, the approach that the district court endorsed and the approach we recommended and has been endorsed by seven circuits over a period of 40 years which is in circumstances here that are exceptions of the rule where the company had no standards by which to make promotion and pay decisions, they kept no records of who -- the reasons for people being promoted and the reasons why they paid people certain amounts, that as a consequence of that, the decision made clear that the obligation of the district court upon finding lability is to attempt to reconstruct the decisions that would have been made in the absence of discrimination, and the district court found here, and we submit it's not clearly erroneous that the more reliable method for doing so is to use a

formula to rely on wal-mart's robust data base in capturing performance, seniority, and a host of other job related factors that they are on pay and promotion decisions and permits a comparison, a very presis comparison, that in a way having individual hearings relying on ad hoc rationalizations don't. >> what if you had a situation that you had a company with a very clear policy in favor of equal treatment of men and women? you know, the answer to your question was women don't have as many positions because managers discriminate them against hiring and promotion, and yet, you still have the same subjective delegation system. could you have a class of women harmed by this subjective policy even though it was clear that the policy of the corporation

favored equal employment opportunity? >> i think if it's as clear as your hypothetical suggests, and there was a policy of that sort, it's qualifying for rejudgment. >> you're saying it's not enough that it be a subjective decision. this company has 1,000 stores, and sure enough, in 1,000 stores there's a number not following the policy, exercising their subjective judgment in a way that violates the right to equal treatment. couldn't you bring a class of people subjected to discrimination as a result of that subjective policy? >> you could bring a class case on behalf of women -- >> i'm sorry? >> who were subject to discrimination as a con convince of that unchecked discretion. i want to be clear we can't lose site of the fact that we have evidence as a result of this, that are really extraordinary.

>> so i see the common question is of law or fact whether given the training which central management knew -- >> right. >> given the facts about what people say and how they behave, many of which central management knew, and given the results which central management knew or should have known, should central management under the law have withdrawn some of the subjective discretion in order to stop these results? >> that is a fair way to put it. >> if that's a fair way, is that a question that every one of these women in the class shares in common? >> i believe so, justice breyer because they have all been the subject in every one of these stores to this very broad discretion. >> district judge didn't think so. didn't the district judge say that warning back pay some get a wind fall and otherred would be

undercompensated. >> actually, the district judge did not find that. what he found was the formula, and i assure you the formula we use is a regression analysis to permit the comparison between each woman and the amount paid and similarly situated men taking into account performance and seniority and the like, and you will find there's women who are not underpaid, and the formula shows they should get no back pay. >> i thought his point was simply some women were underpaid, but women, if you had an individual case, the employer might show this person would have been fired or disciplined and wasn't owed any back pay, not that she compares favorably

to a male peer, but that she wouldn't have gotten any pay at all. >> well, justice ginsberg, the kinds of factors entered into economic model, performance in particular, should capture whether somebody should have been fired. that is a very important part of the model here that permits people to -- and we found, evidence shows women had higher performance than men and were nonetheless underpaid. >> doesn't your class include both those women who were underpaid and both -- and those women who were not underpaid? duped your class -- doesn't your class include both? suspect that commonnalty? >> every class has portions not harmed by the discrimination. what is common about them is they were all subject to the same highly discretionary

decision making even if some of them were not harmed by it. that still presents a question common to the class. >> correct me if i'm wrong, i thought it was a action by the government, not a class action case. >> that is correct, but it is a paradigm we use for determining what you need to establish a pattern of practice of discrimination. >> pattern of practice, that that's correct. help me if you can with this. let's suppose an expert's testimony and cosh yowlings establish -- sociologist determined that women are still discriminated against by a mathematical factor of exx. you have a company with a specific policy against discrime nation, and you look at the way the employees are treated, and you find a disparity by that same mathematical factor x. does that give you cause of action? >> i'm sorry, if the --

>> the disparity that women are subjected to, the same in the company as they are outside society wise? the company has a policy against discrimination. >> i would say the company's responsibility under title vii is to ensure managers do not make pay and promotion decisions because of sex. if the comparison between the pay women receive, for instance, who are similarly situated to men within the company is such that they are underpaid compared to similarly situated men in the company, then the company would have legal responsibility under title vii regardless of what happens in the rest of the industry, what happens in the rest of the world. >> would that be true even though you could not show deliberate indifference? >> well, i don't know that the respect of the standard is deliberate indifference. i think that under this court's decision in heller -- >> suppose

there's no difference and a specific policy prohibiting discrimination, can you still proceed? >> i submit you can still proceed. if announcing a policy saying don't discriminate were to be effective in immunizing companies against liability and class actions, imagine every company in the country publishes that policy and has free license. >> i understand your answer to the question to say this company would be under title vii and that's the literature on which your theory is based includes, isn't that right? >> it's not just academic literature, but the precedence from this court. i think that's the premise behind seemers. >> you have the company that is absolutely typical of the entire

american work force, and let's say every single -- there weren't variations, every single company had the same profile, and you would say every single company is in violation of title vii? >> that could very well be the case. i think that title vii holds companies responsible for the actions they take with respect to their employees. there's certainly industries, and there were 30-40 years ago when this was decided, where the entire industry could have had discrimination. there's not a negligent standard under the statute that immunizes industries. >> your answer assumes if there's a disparity, it can only be attributed to sex discrimination. >> no -- >> well, otherwise how do you say all the other countries are presumetively engaging in sex

discrimination? >> well, justice scalia, i want to deal with -- in this instance, it's just not any old analysis. we have statistical analysis that isolates and takes into account the factors such as performance and seniority. >> i wasn't talking about the case, but your answer to justice . unless there's equality for promotion for men and women. >> i don't take that position, justice scalia. i was trying to make clear that there's companies in the same industry where the same problems arise. it wasn't true here where wal-mart was behind the other large retailers doesn't mean a company is less liable for the discrimination practice in its own workplacement i can't speak for the rest of society. i can't imagine they are

engaging in the discrimination. >> back to the remedial question here and when do you think it is individualized hearings are required? you described a formula you would use. when is the formula approach right and the individual hearings io approach right? >> well, i think it's a call that i think we should leave to the district court in the first instance, but factors to weigh in the balance would include whether or not you have available the kind of information that we do here from data base with which to be able to more reliably construct the kinds of decisions that would have been made in the acts of discrimination. like wise, there's companies where they kept better records or any records or have more substantial standards to permit the reconstruction through individual hearings. i don't think this is something -- i'm not contending that you could always use a

formula like approach in connection with the cases. they kept no standards. >> didn't the district say because of the numbers we couldn't possibly send a hearing in each case on whether the particular woman was owed back pay. >> i'm sorry, the district court did make the comment that the sheer number of class members would make the administration of individual hearings difficult, but the district court went on -- >> impossible. >> i'm sorry? >> i thought he said more than difficult? >> well, he might have said impossible, but the district court went ahead to make specific findings to the extent of which the particular record here shows that the use of a formula would be more reliable than individualized hearings. >> counsel, i'm a little

confused. >> okay. >> all right? because you're saying an individualized hearing is impossible, but that's exactly what you're saying you're going to do, only through statistics. you say through my model, i will be able to identify those women in the class who are deserving a pay raise. what that doesn't answer is when in this process is the defendants going to be given an opportunity to defend against that finding? >> right. >> are you suggesting that the district court would appropriately bar a defendant where there's no proof of intentionality with respect to not keeping records? that it was intentive to stop the women from collecting money, ect.? when are they going to get a chance? if they're going to get a chance, is that an individualized period? >> wal-mart will have ample

opportunity through the arguments over which variables to use. there was a very robust debate already on which variables to use that will have a significant impact on whether women are shown to be underpaid or underpromoted compared to men, so wal-mart will have that opportunity, and frankly -- >> no, no, no. that sounds like their only opportunity is on the model. they are precluded from attempting to show any individual evidence that a particular decision was not made. >> if wal-mart comes forward, and it hasn't done so so far, and is able to purr suede the -- persuade the district court in a way consistent with reliable determination of who should have been paid what and promoted -- >> you're not answering me. >> i'm trying to. >> what you're saying is we're going to preclude them from doing anything but offering a

mathematical model because otherwise it's going to be too hard to have individual hearings. >> i'm -- let me answer you directly. i'm not saying that. wal-mart has an opportunity to make the case with whatever showing it wishes to make. it can reconstruct the decisions more reliably in an entirely subjective environment, and if it does, it offers evidence in certain circumstances, but it hasn't done so, and i don't submit it's able to do so. >> this takes evidence? to establish it's more reliable to have a hearing with evidence on the particular promotion or dismissal of the individual that that is more reliable than using, i don't care how admirable a statistical guess you make, i mean, is that really a question? >> i think it is, justice scalia, because -- >> must have a pretty bad judicial system then. >> it's not the system, but the

recordkeeping of the company and the standardlessness of the pay and promotion processes that basically mean 10 years later, these managers are coming forward to speck cue late about what they did ten years earlier with no records to cross examine them on. that is not the model for reliable adjudication. >> we should use that in jury trials for really old cases, put a statistical model before the jury and say this is too old, but we'll do it on the basis -- is this really due process? >> justice scalia, i smut it is. the circuits have so held in the narrow set of circumstances we have here with standardless and recordless -- >> if it is, why is there commonality? the answer that you just gave

really shows the floor on your case on commonality. >> justice kennedy, the standardless and recordless aspect is an attempt to reconstruct the decisions years later. as i said before, we have a common policy here, presents a common question, we've shown evidence that would probably create a prime prime ma fascia case. >> one thing you haven't touched on is this foirs of all the question of limited to -- >> yes. >> but if you follow the advisory committee's notes, if damages predominate, if damages predominate, then you can't use b2. you have to make your case under b3, and one factor here is that about half the class is gone, so

they are not interested in injunction relief, but everybody's interested in money, so why doesn't the money -- why do you say that the, that the injunction relief is the thing and the damages are lesser rather than the other way around? >> well, n., it's more than half the class that's gone. >> well, nobody knows that because they continue to have more employees added at the company, so i -- >> nobody's leaving? >> there are people leaving, but more importantly, the advisory committee with respect makes clear that there is a, that whether or not an action or inaction is taken with respect to the class, a predicate to b2

certification, it doesn't depend on the number of people adversely affected by that action. as a consequence whether former employees, they would be included in the class under b2 because the question is not on a day-to-day basis who should have been in a position to seek relief and who is important and who is not. >> thank you, counsel. >> thank you. >> thank you, mr. chief justice. i begin with the question of back pay. it's been made clear under their vision, wail medical report would never have an opportunity to prove they didn't discriminate against a women seeking back pay, and the district court didn't suggest it would be difficult, but the distribute court said that he found it would be impossible, not just because of the number of people, but because of the nature of the claims that dipped

discretionary decisions implemented in a way that affected different people differently. the problem here is that the records are not available, then he says we're going to have a proceeding where the district judge relies only on the records that he says are inadequate to allow reconstruction of the decisions. that is not a process known to our jurisprudence. it doesn't comport to due proeases sen takes away wal-mart's rights of title vii. >> you don't seriously contend if the plaintiffs -- if a policy or practice were found of discrimination, that a woman couldn't come in and say they put x in, i had a longer history at wal-mart, far superior job ratings, and i wasn't promoted. isn't that enough to show?

>> i agree with you. >> your personal data base has that information, so why is it m poibl to try the pieces other than the large number? that's a different issue. >> yes, your honor. what you said, we believe. ed records don't show what happened. i was a better employee than the guy working next to me. under the plaintiff's theory in order to get a class here, they through that out the wipe doe. wal-mart could not see this person was a terrible employee or a great employee. on the record it's not impossible to recreate the decisions. the record is filled with managers who remember very well that ms. dukes violated company policy and others were fired for infractions. >> just spend one second -- remember my question, why can't

is support a b2 action? >> there's no dispute about the policies that existed at the time. >> that sounds like the marriage you get to. the point is that this is just certification. my question is assuming they can support it with evidence, why can't they have their be 2-rbgs class at least on an injux? >> because, your honor, the common policy affects everyone differently by definition, therefore, these plaintiffs are not typical and arguing everybody was affected the same way. some women thrived, maybe some men. 554 women are store managers. it's impossible to make sweeping generalizations which of course is what stereotypes are supposed to prevent. if there's no way there's a fair process here, on the policy question, the policy -- the plaintiff's point to the general policies in the central control,

but the one policy they don't want to confront is the policy against discrimination. it was not a written policy on paper. in fact, there's a declaration on page 1556 of the joint appendix lying out aggressive -- >> what about the vice president who said it was just window dressing or something like that. >> i'm glad you asked that, justice scalia. he testified about the diversity goals of the company at the time, the efforts to get women into management, and he said in his view until the company linked diversity goals to compensation of managers, it would be lip service. he was not saying the whole program was lip service. he wanted to be more aggressive. his goals were 20%, others were 10%. it's misleading to suggest he was denigrating the entire policy. >> i think he's just making their point which is they started paying women the same as men, they might get more

diversity. >> they do pay the same. >> that's the whole issue in dispute. >> thank you. >> thank you, counsel. the case is submitted. >> thank you. >> >> up next on c-span2, oklahoma's governor talking about the political unrest and killings on the ivory coast. from the senate floor, his remarks are 10 minutes. >> we're all concerned about the

atrocities committed in libya and about the people who are being moeed down, and what they don't realize is that's not the only place this is going on. i have to share, as much as i hate to do it because i'm disagreeing with our state department when i do this, but i have to say it because somebody has to say it. right now, there's the potential of having large numbers of people tortured, murdered and it's taking place, and let me just say and set the stage here so people are aware of it. some people call it the ivory coast, it's in west africa, an area where the slave trade came from that came to the country. it's a place that has been led by a president name bagboe for the last ten years. i first became acquainted with the country back before he was