insurgency and counterinsurgency for several years. one of the most import aspect of that, i knew people who were involved in it. one of my dear friend was john roach was invited to lyndon johnson. i quoted extensively. it has been in the background of my life for long time. >> can you tell us what your next project might be? >> i'm looking at a variety of things. maybe something and the 1862 soo uprising. we are coming up on the 150th anniversary of that and some other ideas. the tenth on with the publishers want. ..

fa hope things that are very

popular. it keeps us from being able to have an adequate social security system, a good fully funded safety net. is a way to say look, you may like those things. this may be a democracy. you may have very favorable polling. we are not trying to take those things away. we simply can't afford them. very insidious, very effective. you see in other issues like public employees and unions and the right to collectively bargain. we need to look at this deficit issue very carefully. james galbraith is a very esteemed -- he points out a very interesting tidbit in the projections, congressional budget office's projection. every reporter writing about this uses the same projections.

that is what everybody is talking about. the cbo projects relatively large and increasing budget deficits over the next year. especially the so-called bush tax cuts which we might rename the obama tax cuts. are not allowed to expire on schedule. it is an interesting thing that the cbo does. they assume that we will have inflation at the same rate as now on 1-1/2 to 2% and they assumed interest rates will go from zero% or close to zero% where they are now to 5% over the next five years. the worst thing you can do is public speaking is getting to the weeds but this is a crucially important to understand. the only reason they raise interest rates is to attract buyers when inflation is high. it is pretty much impossible to have very low inflation as we

have now or relatively low inflation and magically have them increase interest rates from almost zero% to 5%. what he says is this basically mechanically create these massive deficits. there are other assumptions too. health-care spending in this country will reach 30% of our gross domestic product and he points out this is absolutely true, before that happens we will simply buy cars france. we will just buy it. some cheese on the way. i don't know how that works with health care. let's set that aside and pretend these deficits are not mechanically created by very dodgy assumption that we never hear about. james galbraith if he could the door to door and tell the story

to everyone in america he would. if he could learn how to skywrite he would. if he could get on tv on sunday talk shows he would explain this better than i. it is about like he is never heard from. he is often quoted in the seventeenth paragraph of a story in the washington post after we already heard from the heritage foundation and john boehner and other sources to tell us the fiscal sky is falling. let's set that aside and define the term. what does a fiscal deficit mean? what does the budget crisis mean? very common sense terms the way i think of that, when i want to do something but don't have enough money to do it. i would like to purchase a new car and it costs $10,000 and i don't have enough cash for it.

let's examine this narrative, this fiscal budget deficit. has an economic shortfall, something we baked into the cake which is a term economists like to use. i think we have a structural economic problem called the deficit. many tea party years contend we had out-of-control spending, crazy, while government spending. if possible we couldn't afford that. i would like to point out between 2004/2007, we ranked 24th out of 26 wealthy countries in the organization for economic cooperation in terms of government spending. overall spending is a share of the economy. 242 but out of 26. we are ranked officially has a low public spending country. sh also it might be true that we

have a structural economic problem we are going to call deficit. if we were in the tax to death. .. in world war ii corporations paid 50% more than individuals and families in federal taxes, 50% more. by the time ronald reagan left

office, individuals and households paid four times what corporations paid. so it's a shifting tax burden. that's a story we almost never hear. i hear all the time, all the time about high tax rates or low tax rates, but i never hear enough about the details of this shifting tax burden. so those people do have reason to feel that they are taxed enough already, even if we as a society are not. and i want to point out, also, that we, our federal government last year collected the lowest amount of revenue since 1950, 1950. this is primarily a result of the financial crash, mind you, not necessarily even the tax cuts that have been given away. you know, revenues are down. this economy is moribund. now, that's not exactly the whole story when i talk about our tax burden and our spending because if you look at the

countries we're compared to, well, a lot of them send this their tax checks just like we do, and then they get free health care and then they get education. and if you think about another narrative that is just as true as the structural economic problem, it's that if we had the same, if we spent the same on health care costs per person as any one of the 35 countries with a longer average life expectancy, any single one of them, within a few short years all of those projected deficits turn around and become sur pluses -- surpluses. and what can you do with surpluses? well, maybe we could talk about lowering the retirement age. maybe we could talk about helping people who need help more, we could talk about different programs. a lot that we could do with that. or if you're a conservative, you can give a rebate. you can give more tax cuts. so we could just as easily say that we have an out-of-control

health care cost crisis as we say that we have a deficit crisis. but how often do you hear that compared to the deficit crisis narrative, which i would argue is ubiquitous? now, we have -- there's a lot of different ways to estimate how much of our public debt is due to military spending. but according to one very basic analysis which just goes back and looks at the defense budget and the veterans' affairs budget, the very straightforward or defense spending, 91% -- 91% -- of our public debt is based on unpaid, past conflicts. 91%. we have not fully paid off world war ii, ladies and gentlemen. we have not fully paid it off. we're still paying for korea, we're still paying for vietnam, we're still paying for grenada

which was a good war. so we could just as easily say that it's a health care crisis spending -- health care spending crisis, and we can just as easily say we have an unsustainable foreign entanglement crisis. these are all equally valid narrative. but the one that suggests that we must cut, whether we like it or not, popular progressive programs is the dominant narrative that you hear again and again and again every time you open up a newspaper, every time you turn on your cable tv. it's very clear. and i want you to think about that. the amount of ink, the amount of discussion that we're going over over this deficit, i would argue, hysteria. and then i want you to contrast that for a moment with some very real, very real crises in the american economy today. these are not contrived.

these are not trumped up. we've been hearing less and less about the foreclosure crisis. even though 2011 will be, is projected to break the record set either in 2008 or 2009, i'm not sure which, in foreclosures. so in other words, that crisis which began several years ago is going to be at its worst this year, and it's getting very, very little attention. a few interesting facts about that. the amount of housing wealth that has been lost by the american people since the crash is a number 50% greater than our entire deficit. this year americans will spend $250 billion paying mortgage payments on phantom housing wealth that they've lost. just on the part that they've lost. not the whole house, just the value that they've lost.

this represents four times the amount of money being debated by democrats and republicans in washington d.c. four times. more than times. they're looking for $61 billion in cuts, republicans are. now, let's talk about the depth of this jobs crisis because this is a real crisis. this is a deep and painful and sustained crisis, and i've interviewed a number of economists who tell me i don't know how we're getting out of it. there is no obvious engine of growth absent really large-scale public intervention in terms of either a direct jobs program or a green energy program or something else. they don't see any new, new wonderful engine of economic prosperity that's going to be taking over. and i want to just talk about this because it's not getting the attention that it should be.

yes, we see stories about, oh, unemployment is 9.5%, unemployment is bad. companies aren't hiring. but i think that we don't really grapple with just how severe it is. we have 16% of the work force right now is either unemployed or underemployed which means a lot of people have given up. we just, they've tried, they've been out of jobs for a long time, they've given up, and that includes people who are working part time and need a full-time job. want or need a full-time job. the average duration for the unemployed right now in the united states in february was 36 weeks. nines. nine -- nine months. nine months is the average duration of unemployment. now, the previous record is something like -- don't quote me the exact number -- 23 weeks. but whatever the precise number, this is a hugely inflated new record.

it's an all-time record since they began tracking these things. now, long-term unemployment is a little different than if you're at a job for a month or six weeks. it crushes your self-esteem, of course. like finding an amorous partner, you have to be confident going into a job interview. you have to present yourself well. you have to feel good. it's a real problem, the psychological issue. but beyond psychological issues, beyond the psychological issues we're seeing increasing discrimination against the long-term unemployed. we're seeing reports of companies that are saying we're getting so many applications for each job that the easiest way to win know it -- winnow it down is to just throw out everybody who's been unemployed for two years or 18 months or more under the assumption that their skills are rusty or that there's

something wrong with them. there's something wrong with them. credit scores are a problem. companies increasingly check credit scores. 3.9 million people last year were still jobless when their extended unemployment benefits ran out, and a similar number's projected for this year. so what happens? what do you do? what do you do? well, we see anecdotal stories, people sheeping on their -- sleeping on their, you know, moving into their parents' house or getting roommates. what do you do when you have no benefits and no job? it's a human catastrophe right here in the united states. so your credit goes. you've got to max out the credit cards. you can't pay your mortgage payment, you can't make your bills on time. your credit goes. it's another barrier to reentering the work force for these people. it's a horribly bleak situation. finally, we see ageism, age

discrimination. not legal, not legal, but the average unemployment duration for somebody between 55 and 64 years of age is 44 weeks. eleven months, that's the average. younger workers, their average is 29 weeks. so it's right there in the numbers. you see i. if you're -- you see it. if you're over 45, you've been out of work for a while, what are you going to do? nobody's telling people what they're supposed to do. there is no relief in sight. there is no relief. they're tinkering around the margins of this problem. maybe we can get 'em 13 more weeks of an extended unemployment benefits. that's not enough, that's not enough. extended unemployment has long-term effects long after the economy recovers. there are studies of people who have been out of work for an

extended period of time in the early '80s, and we found that their earnings were significantly less than those who kept their jobs ten years later, 15 years later. one study that i find particularly jarring given the current circumstance that we're dealing with tracked 60,000 father/son pairs from 1981 '82 recession through 2000. and what they found was 17 years after that recession, 17 years after that recession children of fathers who had been unemployed during the '81-'82 recession for an extended period of time earned 9% less than those who had kept their jobs. you hear sometimes that there's five people who are unemployed for every job opening in the united states. that's true. but i want to include the people

who are involuntarily working part time. they're looking for a job too. they're in that same pool looking for a job. that number, ladies and gentlemen, is 821. eight people looking for a full-time job for each full-time job opening. now, i want you to think for a moment, just imagine for one moment what we might be doing if same attention were being paid to these real crises that are hitting the american middle class in the most profoundly painful way as was being paid to this deficit which is con treefed -- contrived from a little funny numbers, a little funny accounting. there are solutions, there are potential solutions. during the great depression, of course, we had direct job programs. we were paying people to work,

to fix roads and do murals. we remember the wpa mural. you could talk a second stimulus. already things that we could be doing. don't believe anybody who says that there's nothing that can be done. nothing is being done because there is such a relentless focus on other issues and very little attention being paid to this. how am i doing for time? >> good. >> okay. now, how the financial crash happened is a fairly complex story, be but how it has spread to the main street economy is fairly simple. american households, individuals, families lost $14 trillion this wealth. $14 trillion in housing wealth, 401(k)s, stock wealth, etc., etc. and economists talk about something called the wealth effect. and it's a very simple idea that when you lose wealth or gain

wealth, you spend less or spend more to adjust -- it's very common sense. i have a lot, if i have a lot of wealth, you want to go out to dinner? the fine, it's on me. you look at housing wealth, for example, they say that about five cents for every dollar is the wealth effect. it depresses demand. demand -- consumer demand represents about 70% of our economy. is so you talk about this great drop in wealth, anxiety about losing your job, anxiety about losing your home, and the sum total of this is a significant falloff in demand. that's my mother slipping me water. thank you. [laughter] thanks. so we have a huge demand problem, and every single survey of business owners -- these are the people who actually are running businesses -- every single survey i've read in the

last two years has the same conclusion. we need customers. we need customers. there's not enough customers. demand for goods and services. but we have this alternative narrative that's really interesting. even though taxes have gone down for the third year in a row, by the way, we've collected less taxes than under the bush administration. but even though taxes have gone down under obama, we get this narrative that taxes are killing these jobs, that we need to cut taxes, we need to cut taxes. it's a demand matter, and you could argue that that puts money into people's pockets, but the other one is this idea that there's uncertainty about some future regulation that's coming down the road like, you never know, maybe, maybe he'll turn out to be a kenyan socialist. who knows? who knows what could happen? so the idea, and it's being

advanced every day by conservatives, is that the only reason companies aren't hiring is because they're uncertain about the future. it's not because there's no customers. but i want to tell you what is happening. we have productivity going through the roof, we have record profits, and what does that mean? well, in 2009 and 2010 we saw our first two-year drop in labor costs since the early 1960s. never happened before. never happened -- or it's never happened in the last 40 years. and productivity grew for the fastest rate in eight years, and it just beat out 2009 which was a super fast year for productivity growth. what does this mean? what does productivity mean? it means how much a single worker can produce. and what economists are telling us, serious economists looking at these data, is they're saying

that employers are squeezing more and more out of their existing work force. they've trimmed them down, they've gotten rid of older workers, they've brought in younger workers who are willing to work for less, and they're using the threat of joblessness in this horrific, horrific economy to just wring every last bit of productivity out of them. and yet we're talking deficit reduction. that's the main topic of discussion these days. the economist mark zandi, who's a chief economist for moody's, estimated that if republican spending cuts were to take effect, the economy would shed 700,000 additional jobs. because that government spending is, of course, an alternative to consumer demand. so there are companies that are kind of keeping afloat because

of that stimulus spending which is now done. but the issue that -- so in response to this criticism, the republican study group in the house, the republican economic staff put out a report, and they said -- and this is really remarkable, this came out two weeks ago. this is in response to this criticism. they said that this is good. they're going to cut transfer payments which means, you know, social security, welfare, aid to the poor, and they're going to cut salaries for public employees, and they're going to trim, reduce the public sector work force. and what they, they touted as a benefit of all this -- and this is, i think, eye opening -- as a benefit of this program they touted the fact that you would have all of these

newly-unemployed, newly-unemployed public sector workers, highly educated public sector workers coming into the work force, and that this turn would help -- that in turn would help lower labor costs further. now, i guess there is a point, there is a point where we meet the china price, and that would achieve some sort of equilibrium where there'd be no reason to offshore jobs. but if you're going to come out and say that, i mean, it's eye opening. so these are the kinds of things that i talk about in the book, and we can talk about how we end up with such a stilted discourse. i'm looking forward to answering questions, and i'm sure that we have a very lively conversation in the offing. so that will conclude my chitchat. [applause]

now, i think you need to get a mic to ask a question, is that right? so just -- okay. wait for the mic. >> yeah. my question is in regard to the corporate tax rate. >> yes. >> um, it's been suggested that one of the problems we've had is that the corporate tax rate is such that it moves jobs overseas because of lower tax rates if you're in a foreign location. >> good question. >> so it's been suggested we should even lower further. so i want to hear your argument about that. >> okay, great. it's based on just a very false premise. there is the nominal tax rate, and that is the tax rate that's written in the books. the law that they passed. okay. we have a 35% corporate tax rate in the united states, and that's one of the highest in the world. that's the kernel of truth

around which an utter fabrication is built. the nominal tax rate, what they write in the books, is inconsequential next to the effective tax rate which can means what they write in checks. what they write in checks. now, our effective tax rate is about half of what our nominal tax rate is because corporate, corporate america, lobbyists have created so many, have effectively won so many loopholes. and manipulated the tax code in such a way that they're paying far, far less than the nominal, official corporate tax rate of 35%. now, let me add something. two-thirds of all major u.s. corporations pay no taxes at all. this week a big story was general electric. general electric is not only not paying taxes, they took a 3.2 billion dollar tax benefit. what does that mean? that mean ha you and i are -- that you and i are paying general electric out of our tax,

out of our taxes. we're paying them, effectively. so this idea is, um, is simply based on using a number that's inconsequential, our nominal tax rate. and if anybody wanted to make a deal with the left, if they could find the left, to drop the effective -- the nominal rate and increase the effective rate by closing loopholes, we'd be all for that. okay. we've got to wait for microphones, and i'll just let you figure out who's next. >> um, well, this may not be your area, but, um, i just wondered, you know, you mentioned that, um, things can be done like a second stimulus, but we're currently seeing a congress that is fighting and in a deadlock and not even able to pads our next -- pass our next

fiscal budget. so i guess my question is, how do you, um, you know, the conservative agenda, they seem to be able to create falsehoods in their own reports that are not necessarily accurate, but they seem to be able to talk louder. they seem to be able to have the general public believe what they're saying even if it's not truement -- true. how can that be combated? i mean, how can, you know, we have a democratic president and house of representatives, but we don't seem to be able to get the truth out there. and it's amazing to me that, um, regarding the bush tax cuts that are expiring, it's amazing to me that not more of a stink has been made about the top two, you know, tax brackets like people making, you know, a million dollars or more --

>> right. >> -- why it seems like we should let those people have tax cuts at, um, the expense of taking money from the poor and things like that, you know? >> or just social social servic. it's not even the poor. >> right. of everyone, right. [laughter] so i guess i just wondered how -- if you have any ideas or -- >> it's a hard question -- >> -- about how to get that through, that message. >> it's a question that i face every time i talk about the book. it's, i think, probably the hardest question i have to answer. there's two points that i'd make. first, you need an opposition party that's not afraid of its own ideology. we don't really have a forceful opposition party in this country. president obama has, i think, not done a sufficient job of articulating these problems. he's been too quick to concede the terrain to the other side. the other thing is that i think that we need to think long term. i think one real advantage that

conservatives seem to have in my analysis is that they'll think, okay, what is going to further our movement's agenda 30 years from now? we don't think that way. we never think that way. finally, i would make a call to all progressive fat-cat donors to stop being afraid of investing in media infrastructure. this is something that the conservative movement does a lot. they put a lot of money into media infrastructure. and it's not an accident, then, that we have these kind of dominant narratives that take a distinctly conservative turn. and i've been told by -- i won't mention names -- i've been told by a progressive donor that he won't fund media because the facts have a liberal bias, because the facts are on our side. so he doesn't feel the need to help get them out there. so he invests in very good

organizations, think tanks, you know, very valuable things, community groups, etc., etc., but he won't put any money into media. i think that's resulted in an uneven playing field. and if you read the book, it talks about how much investment the conservative movement has put into what i call alternative information infrastructure like the media. >> thank you. that was a wonderful talk. what about the right-wing chicken little narrative involving who owns our t-bills? and china, of course, being a big investor in this kind of abstraction called treasury bills and this nervousness that has been enunciated that if we do something that upsets this country or that country, we will

completely go to hell in a hand basket? because suddenly the debts will be called in. how does that work in to this progressive response you have to the right-wing chicken little narrative? >> it's like the audience was planted with people who like, ask me questions about things i like to talk about. [laughter] i don't know why it is that this, that this idea that china own so much of our debt has become so prevalent. but the reality is they're holding 9.6% of our public debt. 9.6. american households and institutions own 42%. more than four times the amount. it's an odd kind of thick. i -- thing. i think part of it is, i don't know why this is so prevalent. i'm not sure it's an ideological thing. it seems to be that -- i meet -- everybody i meet what are their political persuasion also seems

to think china holds this huge sword over our head, and we need to do, we need to let, you know, i don't know, walmart go there and do what -- we can't make china angry because, oh, no. but more than four times the amount is held by u.s. individuals and institutions, a very big chunk of it is held in the social security trust fund. now, this is one of the more pernicious lies that i think in my book, the social security trust fund is a huge pile of treasury bills. a huge pile of treasury bills. according to the law of the united states of america, the social security administration's finances cannot be used to either influence the surplus or deficit of the u.s. federal government's budget. by law they are distinct. by law. so you have this huge pile of

cash, 2.6 trillion. it's earning so much interest that even after we start drawing it down, you hear about this date, oh, we're going to start drawing it down. even after we start drawing it down, the interest payments are such that it will continue to increase in size until it hits $4.2 trillion with a t. and i hear people who are so brazen as to assault this incredibly secure and popular retirement program by saying these are worthless ious which is just stunning. because i want you to just think about this. those worthless ious are 2.6 trillion in t-bills out of 14 trillion in total. so that means that if they're worthless, so are the 9.6% held by china, and so are the 42%

held in your 401(k)s, in the pension funds, etc., etc. they're not worthless ious. what they are is they're the safest investment on planet earth. that's what they are. you've been waiting for a long time. actually, they both have. >> getting to the nub of the question -- >> uh-oh. >> why do you think our president is not willing to deal with these issues? why is he unwilling to discuss the insolvency of social security, and -- tell me? >> i don't have a good answer. i am, i am informed. i am not somebody who has very good contacts in the white house, but i know people who do, and they tell me that these are deeply-held convictions that they have to get out in front of the conservative movement on these issues, that by seeming willing to fix social security

and to do those kind of technocratic, democratic fixes that they've been talking about, oh, we'll do a tweak here, they'll make it so obviously sustainable even on the outside of this 75-year projection everybody always talks about that it will undercut the right's desire to utterly gut the program. right? so they think, okay, we'll get in there, we'll tweak it and play with it and, you know, we'll cut benefits a little bit, but that'll protect, that'll protect the program. now, i'll tell you a much more, i think, self-evident narrative, reality. once you start fiddling, once you concede the ground that it needs to be fixed now, then what happens next, then you're negotiating again. and you know how obama negotiates. [laughter] not very hard. >> thank you.

it was great hearing you. i've got three pages of notes already. [laughter] >> you should bring an audio recorder next time. >> first thing, though, i have been a green party candidate four times, and i cannot tell you how many times i have heard, oh, i'd love to vote for you, but i can't because you can't win. self-fulfilling prophesy. >> this is an argument i try to stay out of, by the way. [laughter] >> the second thing is i heard trumka answer this very recently. he was asked why didn't the labor movement have its own cable, own a cable network or at the minimum have some cable shows, and he just shrugged his shoulders and said, you know, so they'll put hundreds of millions of dollars into democratic politics but not into the media which is where i come really to the question, particularly for you. you're, obviously, a very smart journalist. >> oh, thank you. >> and an honest journalist.

so how is it that 90% of the journalists in the country are propounding these stories? >> that's actually a very complex, it's a complex story, and i'll just point to a few very simple answers. and then in the book i go into this, i talk about this in great detail. so i think there is a few things going on. i think the end of the cold war resulted in this kind of economic triumphalism as well as an american triumphalism so what you ended up with is this kind of idea that it's not capitalism that proved to be ascendant but american-style, you know, corporate capitalism. and that's, i think, a dubious claim in itself. it's clear to me that central planning in the an economy is wrought with difficulties, but that doesn't mean that you have to, you know, have a low-wage economy, it doesn't mean you have to have a threadbare social

safety net. it's a false dichotomy to suggest one or the other, but i think that infused a lot of economic reporting. now our theories have been proven true. another thing is just the nature of american reporting. this supposedly neutral, unbiased reporting this that this is, obviously, a very old critique that many people have made, the he said/she said. so if you think about the amount of intellectual infrastructure that the conservative movement has created over the years, any reporter who needs a quote on deadline can get somebody on the phone from heritage or cato or aei or whatever and balance out their story. and then you have a story where you probably have a pretty accurate rendering somewhere in the story. but it's very hard for readers to differentiate fact from fiction. and it's just not part of our reporting model to do the kind of presentation that i did today

where you said, okay, look at this and then look at, look at the data that suggests that this may not be true. that's just not the way they -- that's just not the way our media does it. it's up to you. >> hi. i'd like to do a flipside to the lie that i brought up to you before that you discussed regarding t-bills going south. sometimes, perhaps more honestly, you'll hear the right say, well, whatever money we have to spend has to be spent militarily because to the extent we are going to protect our investments, we have to show that we're in ever muscle-flexing and secure

country because that'll mean people want to put their money here because we're safe, we're secure, and the military proves it. you spend on the military, then you tonight have money left over -- you don't have money left over. and maybe that's not true, but you don't have money left over for social services. please discuss. >> okay. [laughter] yeah, this is a very interesting thing. there's another kind of related lament. there's a great column by max boot, a very gifted neoconservative, crazy person -- [laughter] and i talk about it in the book. he wrote this column, and he complained, he complained that the europeans were subsidizing their generous social safety nets by piggybacking on our defense spending. so he basically turned that whole thing around and said why won't they spend more on military so we can spend less? the obvious answer to this, as far as i'm concerned, is that multilateralism, you know, you don't need to be, you don't need to spend whatever we spend which

is so disproportionate to all the rest of the world to be safe. it's not defense spending. so even if you -- i reject the premise that this is defense spending, we're defending the homeland. you know, i'm not afraid of the italians invading the country, and we have bases there. we have an enormous amount of waste. and waste opportunity make us any safer. waste may put some money into people's pockets if you want to think of it as stimulus, but it is not good economic policy to waste untold billions. you know, the missile defense shield. i hadn't realized how, just how ridiculously flawed the system is. because once in a while they say we did a test, we got up with of these vehicles to -- one of these vehicles to hit a missile in midair. what i found out was they put a homing device on that missile. first of all, they program into the interception vehicle the

coordinates. but then in case it doesn't, it doesn't, can't figure it out, then they put a homing device on it. and then because it has an infrared seeking capacity, they heat it up. and they still only hit it like one out of every -- so, i mean, we've spent -- i don't know the numbers offhand, but we've spent a fortune on that as just one example. okay, we only have time for, i think, a couple more. is that right? two more. two more. two more questions. take these two. talk to you later. >> so this is the kind of question that i feel like what is the ultimate goal of the conservative side? i mean, it's kind of frightening if you look down the road toward the ultimate end of these economic policies. i'm sure you can't speak to

their ultimate goal, but it certainly seems like not the american dream for almost anyone. >> yeah. you know, i, i'd like to say i don't like to impugn the motives of those whom i disagree, but it's not true. [laughter] i do impugn the motives quite a bit. i don't really know what the end goal is. i think there is a common misconception about what the end result will look like. you know, a lot of, a lot of conservatives are motivated by these very abstract ideas when they talk about the economy, right? they talk about freedom and liberty. and it's an economic policy with a lot of emotional appeal. a lot of these messages are designed to appeal not to this, but to this. you know? and i think that that's, i think that that means there's not a clear idea of what it will look like. you know, we know that it's supposed to look like no taxes

and -- or minimal taxes and no regulation and a very, very threadbare social safety net, if at all. depends on who you talk to. certainly, the ayn rand fans, they don't believe that there should be any social safety net. and i personally believe that if they ever were to come face to face with their vision and practice, maybe some of them would have second thoughts as well. look for tent camps this summer. look for tent camps this summer when it heats up. we're going to have 3.9 million people out of a job when their unemployment benefits expire this year just as we did last year. this is a very visual thing. i think we're going to see them. i'm not, not hopeful, but i think so. thank you for your patience. >> the tea party has demonstrators in washington complaining about -- >> i heard about that. i heard about it everywhere.

>> and they're willing to say let the government, you know, shut down. now, to me that wouldn't be a good thing. how do we educate? i mean, i'm sure these people have good intentions. but are they so ill-informed that they don't know what, you know, the tax structure of this country is? we are, how do we get across, or is it that the progressives do not do a good job in getting this message out? it frustrates me, and it depresses me. >> yeah. i'd say yes to both of those. they are so ill-informed that they don't quite understand, and we're pretty bad at getting the message out. if you look at, if you look at -- you've been in the mainstream media, you know, there was a story that the associated press did that was picked up by the drudge report which is a conservative blog and fox nation, and it was, it went viral. there was a lot of attention paid to it. of course, it had the credibility of being the associated press which is the

supposedly liberal media, and its headline and most of the text of this piece said that 50% of american households don't pay taxes. 50% of americans don't pay taxes. and rush limbaugh said, well, now when you hear those liberals talking about tax cuts for the wealthy, they're the only ones paying taxes, baby, so who else you gonna cut? now, the reality is that that is, that's a very intentional kind of misleading statement because you have to, you have to just imagine that the only taxes paid in the united states are federal income taxes which are among the most progressive. and it's true, about 50% of families don't pay federal income taxes, the most progressive taxes. we have a lot of regressive taxes too. most of the working poor their biggest taxes come out of their paychecks and social security taxes.

sales taxes are very regressive. excise taxes are among the most regressive. and a lot of states that have income taxes have less progressive income tax structures. and some economists added it all up, and what they found is we all pay about the same taxes give or take 5%. that's a really important difference between reality, that reality that we all pay taxes, a very similar amount of taxes as a percentage and this idea that only half the families pay taxes. so this is a great example of, you know, this, this group of people who are very angry not having solid information. and, of course, i think that was typified in the tea party health care demonstrations when you saw people saying, keep the d.o.t. out of my -- keep the government out of my medicare. i mean, you know, that is a big problem. okay. i think that's it. thank you all very much. [applause]

>> is there a nonfiction author or book you'd like to see featured on booktv? send us an e-mail at booktv@cspan.org. or tweet us at twitter.com/booktv. >> who is owen sullivan? >> owen sullivan was one of the most notorious counterfeiters in colonial america. he came to this country in the 170s from ireland -- 1740s from ireland, and he ends up in boston as a silversmith, and that's where he begins to counterfeit colonial massachusetts notes and over the next five or six years builds a huge intercolonial network that spans from rhode island, new hampshire, massachusetts, all over. >> how easy was it to counterfeit at that time? is. >> well, the printing quality of the bills is fairly primitive by our standards, but it did require tremendous skills as an engraver. one of the things you see in the early period most counterfeiters are former silversmiths or

engravers because it takes tremendous physical dexterity to engrave a copperplate in reverse, because that's what was required. >> how much -- well, first of all, was there a national currency? was there, were there 13 different types of currency that were official? is. >> in the colonial era there was 13 different types of colonial currency, and after the revolution it becomes even more confusing because instead of colonial governments, you have private banks all across the country all printing their own notes. so, first, hundreds and then, later, thousands. the peak of it is more than 10,000 different types of notes circulating all over the country. >> how did that system work? if somebody lived in massachusetts at the time and wanted to go to a store or a mercantile? >> it's really so confusing. i think this was the biggest discovery for me in my research was just to think of it from the ground's-eye view. if you wanted to buy an apple from the local merchant, you could show up and present one of

10,000 different types of money. so there were ways to manage it. one of the things that happen in this period, they have something called a bank note reporter so you could actually look up twice a week in the mail in a little magazine the differing values of different notes and also see which are counterfeit, you know, that there are certain counterfeit detectors. if this stroke's a little too thin, a little too thick, you might be dealing with a forged note. >> so was it a common, everyday thing to have money passed, forged money passed? >> extremely common. the one statistic we have, which is fairly rough, is that at the height of counterfeiting in america around the time of the civil war, you have between a third and a half of all currency in circulation is forged. that's a fairly rough estimate, but even if it's half of that, it's a tremendous amount of fake money in circumstance -- circulation. >> well, how did you find the story of owen sullivan when you were writing "moneymakers"? >> i started researching the

book during the recent financial crisis, and that was my entry point because i was reading a lot about the history of american currency and finance and really struck by the powerful parallels between the past and the present. and these three characters seemed like excellent windows into our very tumultuous financial past. >> did owen sullivan make a lot of money in his lifetime? >> he certainly did. and there are various estimates. i mean, it's probably in the vicinity of hundreds of thousands of pounds, colonial currency. but differing estimates especially because if he engraves a plate, his accomplices can use it long after he leaves a particular community. so it's not just what he prints himself, but it's his tremendously diffuse network of accomplices all over the northeast. you could have different types of currency in different commitments, and in the colonial period you could also have different colonial currencies passing in this a single colony. so you didn't need to be in massachusetts, for instance, to spend massachusetts money. >> so if somebody was traveling

from philadelphia to new york city -- >> yeah. >> -- what would they bring with them? >> well, it depends. in the early republic period, what you'd want to do is buy what was considered eastern paper or city paper which is bank notes printed by very reputable banks in this east, places like boston, new york and philadelphia. but if you were traveling particularly to the west, you would see quite a bit of what's called western paper which was passed at a discount. it was shaved a certain percentage based on the reputation of the bank that issued it. so you'd want to have, essentially, the strongest paper currency with you, and you'd be able to buy up the cheap paper at a discount. >> did the continental congresses or the constitutional convention address the issue of money? >> well, the continental congress gets into a lot of trouble during the revolution because they start printing their own paper currency to fund the war. they are, they need money. i mean, there's really no options for them. they're isolated by a british

blockade, they can't tax the states, so they start printing a legal tender currency which becomes hugely inflationary and almost sinks the revolutionary effort and becomes a major disaster in that revolutionary period. >> but no addressing of the thousands of different type t of currency? -- types of currency? >> what happens is when they sit down to write the constitution, the memory of both all of those colonial currencies and, more vividly, the crisis with the continental currency means that virtually none of america's leading men in the revolution advocate a paper money. so the constitution explicitly prohibits states from printing their own paper currency. >> what happened to owen sullivan? >> well, owen sullivan does very well for a period and then is tracked down by a posse of vigilantes and is eventually executed in 1756 in new york in if what is now city hall park, actually. >> now, who were the vigilantes who tracked him down? is. >> that's the thing. in this period law enforcement is very primitive, and it tends to be very amateurish, so if you

want someone who's willing to do what it takes and travel across many jurisdictions to find a counterfeiter, you need to pay 'em pretty well. and there's a man named peacher who's from -- beecher who's from connecticut who was paid to track down sullivan and bring him to justice. >> you profile two other counterfeiters of the time. one was david lewis. who was he? >> david lewis was born in the allegheny back country of pennsylvania in 1788, and he learned the counterfeiting trade in the money-making enclaves along the border between canada and the united states which is a major counterfeiting hot spot in this period. he returns to his home state of pennsylvania just in time, in this 181 or so, when the state charters a bunch of new banks which is part of this broader movement in the first few decades after the revolution. an explosion of both banks and bank notes across the country which really opens up the opportunities for counterfeiters. so lewis is perfectly poised to

take advantage of the new events. >> samuel upham? >> yeah. and he is probably my favorite of the three just because he's the least conventional. he's a shopkeeper in downtown philadelphia. he runs a stationer in store on chestnut street. and when the civil war comes in 1862 or so, he starts to print confederate currency which he sees reproduced on the coffer of the "philadelphia inquirer". now, he sells these notes from his shop, and he doesn't call them counterfeits, he calls them facsimiles. and his idea is that they're going to be souvenirs which was credible because people mostly thought the rebellion would be crushed fairly quickly. but as the war goes on and becomes more serious, he expands his enterprise to become a major counterfeiting operation. >> and did he get caught or punished at the end? is. >> he's never punished. the south hates him. i mean, his name appears in a ton of richmond newspapers, but he is never punished because he

is counterfeiting the currency of a government that is emphatically not recognized by the union. and the federal government certainly knew what he was doing. there's endless conspiracy theories about whether he may have received funding from the secretary of war, but there's really no evidence either way. they probably just let it happen. >> at what point, ben, did this country get to a single currency? >> well, it happens during the civil war, and there's a number of remarkable steps the federal government takes in the 1860s which really wouldn't have been politically possible without the civil war. so before the war, as we've said, you had more than 10,000 types of currenciment after the war the only paper money is federal. it's either printed directly by the treasury in the form of greenbacks, or it's printed by a system of federally-chartered banks. and counterfeiting, subsequently,