i think you need fear as well. and that's where you get academic masterminds coming in. they provide that extra element that convinces a man that unless he kills his neighbor, that neighbor will kill his family. so really he's just defending himself. i had a horrible experience my first trip to rwanda in 2004. i went to a prison where there were 5,000 people who had committed genocide. and rwanda's such a poor country that you only get locked up if you had actually killed a large number of people or if you were a mastermind. so you think of the implications of that is that this case of someone i know every day when she leaves her hut, she looks into the eyes of the person who killed her mom and dad and raped her. they can't afford to put him in prison because there's so many people who participated. ..

pretext, and we say to a generation of unemployed disgruntled young men, your destiny is to get greater germany to fulfill the promise of your people, young map, arise. he said, that's our role, you know, to manipulate and up still fear, and naturally i was taken aback by this. i said, don't be -- you know, why are you here? in the rwanda system because they are so poor, if you confess, say where the body's buried, they let you out. he said, why do i want to get out when i get food in her and antivirals because i'm hiv positive whereas in 2004 the people they raped and infected were going without food and had no antivirals. he said, why would i leave, you know?

it's better in here. i said don't you regret all of this? you were the professor of english, a leading light in your town. he said, yeah, i regret it we didn't get them all, but we will next time. now, the happy aspects of that story is that the politician i was traveling with was so outraged to marry the international committee and the red cross was giving antivirals to the prisoners and not the women who were raped and died before they could testify. he went to britain and made such a stink that he believed the british government to provide money to provide antivirals for every person in rwanda who is innecked. there was a purpose to that adventure into alice in wonderland for me, but there's a more important lesson knowing

this is something educated people do, and we let ourselves off the hook if we think we're immune. what we have, we just have more of a vie near of civilization, but given the right circumstances, scrape under the surface, we're all capable of it. >> rebecca, thank you so much for that. just a reminder. she's given books away, but if you want to make a donations, she's accepting them for africa, and once you read it, tell your friends and encourage them to buy it as well. i think we're going to stop here unless there's other questions, but redeck cay is here and she can sign your books and take any other questions you might have. join me in giving her a round of applause. [applause] thank you, all, for coming.

thank you for coming. >> next onbooktv, don peck discusses the impact of the current economic recession. it's about an hour. [inaudible conversations] [inaudible conversations] [inaudible conversations] >> okay, good evening. we will get started. welcome to politics and prose bookstore. i'm mike giarratano, schedule the events here, and i welcome you this evening on behalf of our owners, bradly grahm and liz

muscatine, the new owners we're happy to have aboard here. welcome to politics and prose, and thank you for being here for supporting this bookstore, supporting our events series. if you're new here, to the bookstore, outside of august and december, we do events every night so you can follow us, our eventings which include classes and book groups, follow facebook, twitter, weekly e-mail, politics-prose.com, our website. it's a good time to silence your phones and gadgets as we get started this evening. tonight we welcome don peck to discuss his book, "pinched" how the great recession narrowed our futures and what we can do about it. don lives here in washington,

d.c., and it's always a pleasure here at the bookstore to welcome a local author here, especially for a debut, and so we welcome don. we also welcome the booktv c-span audience. we welcome them tonight. the format is don will speak at the podium for 20-25 minutes. he'll present the book, why he wrote it, and then we'll open it up the second half of the hour to you for questions, and what we ask is that you get to the audience microphone here in the center aisle. it's difficult getting to a crowd to size, but because we're taping, it keeping the talk audible and we'll field questions from that microphone. we encourage your questions and input after the q&a, and don will sign books at this table.

his books are for sale at the front of the store. that's how it'll go, but, again, we just welcome you and say thank you for being here and for don peck. don is a national award winning writer and a features editor at the atlantic covering the economy in american society. the september issue of the atlantic out now and also available here for sale, featured a cover story by don, can the middle class be saved? it's an essay adapted from this book, "pinched," and also end to say thank you to the atlantic for supporting this event and supporting don in his work and this particular event. pinched is about the enduring impact that the great recession has ton american life, how economic and societal norms have been deeply impacted and are being and will continue to be

altered, transformed. work environments, family dynamics, and personal identities were turned on their heads and will stay that way. the scars will be in the near and distant future. meanwhile, the chasm between the wealthy elites and poor wydens and the middle class is hollowed out. communities and families suffer from the same risk. wealthy have recovered and others are shuddered. our national identity is once again shifting. with historical context by comparing this recession with collapses of years passed, he calls for civic duty and public action. thank you for joining us, and it's a pleasure to introduce to politics and prose to discuss this book, don peck. [applause] >> thanks, mike. that's a great introduction. i should just take questions

after that. [laughter] i live 10 minutes from politics and prose, and this is my first book and first time on this side of the microphone. it's mildly sur reel for me, but i'll do my best. thank you all for coming. i want to talk about how this book came about. as mike said, i'm a features editor at the atlantic, and i spend my time frying to find big stories, cover stories for us, and if you know the atlantic at all, is we write very long stories, and they take -- yeah -- they take a long time to report. they are deeply reported, take awhile to incubate. one of the pressures of -- pleasures of the job is finding things that don't appear for six months, but are still relevant. i cover the economy among other things so when we had the initial financial crash in 2008,

you know, it just wasn't even possible to predict what the next nine months would look like. things were fluid and would not even predict next week, but by the time spring of 2009 arrived, after t.a.r.p., the stimulus, the economy stopped free falling, market was rebounding. i breathed a sigh of relief as we all probably did, but i was trying to think ahead to stories for the fall and winter, and so i was talking quite a lot to labor economists and economic historians and students of other major financial crashes, and what i found was that really all of them were sounding the same note. you know, they were saying that we were prematurely breathing a sigh of relief, and they were saying that actually where things had been fluid, the next six to nine to 12 months, 24 months more were likely to be

quite predictable. the labor market was likely to recover incredibly slowly. the economy was likely to take years to mend. when i started reading histories of other long slumps, deeper into american history and talking to cosh -- sociologists about them, they stew in long periods like this one, people change in many, many profound ways, and so i decided whether than assigning pieces i want to write about this phenomena, it struck me as important and struck me as important to try to identify them as quickly as possible for people so that we could understand them and so that we can think more intelligently about recovering. well, two years later, after two cover stories and now a book, i am sorry to say that in my opinion, the next year or two or more are still quite

predictable, at least if we don't significantly shift our public actions, our public policies. we are not, in my opinion, yet near the end of this period, and if we stay in such a period of weakness for another two or three years or more, i think we'll begin to see many of the social changes that we can see now. we'll see them begin to become much, much more pronounced. so what is pinched? in part, as mike said, it's a history. i look in some detail at the 1970s, the 1930s, the 1890s, different periods that in some ways recall our own, and i detailed how life changed within them, and how we got out of them as well which i think holds important lessons for us. in part, it's quite a lot of reporting from around the

country op different people, different places, different classes because the recession and recovery as it's been has felt very, very difficultly in parts of the country by different people, and that holds important lessons for us in recovering. in part, it's a generational study. one thing that's clear from past slumps, long slumps, is up and coming generations change profoundly in periods like this. i spent a long time among the mille in, i -- millenial generation and how they felt their life was changing, how their political beliefs were changing and so on. overall, it's an attempt to assess how this period very broadly is changing the places we live, the work we do, our family ties, our marriages, our politics, and for some of us

even who we are. that's kind of what the book sets out to do. in addition and importantly, it sets out to try to begin to make some recommendations about how we can recover from this period faster and stand the u.s. economy up more strongly for the future. that's a lot of things, and i can't talk about all of them tonight. what i -- we can cover some in q&a. what i'd like to do is talk about -- try to distill things down to three main messages frts book with a few illustrations and then we'll just take some questions. three messages from the book. one is that periods like this one, slumps that are deep and long do have enduring consequences. we think of them as temporary, jobs go away, come back, housing

values go up, they go down, but recessions do leave society, in some ways, permanently changed, not entirely for the worse although substantially for the worse, but they change generations, communities, and change families in ways that are not quickly or easily reversed, so because of that, because many of the changes that we are now beginning to experience will last decades, many of the most significant consequences of the great recession are still ahead of us. the second main message from the book is that this recession has also kind of temporarily accelerated some very deep economic forces that were already transforming our society, most significantly the hollowing of the middle class, and in that sense, in some ways, it's given us a preview where our society is heading anyway, and who it is leaving behind.

it's critical to think how to bring unemployment down and build a stronger society in the decades to come. my final message from the book is that we can recover faster. i think we're seeing a disturbing amount of fatalism right now among many members of media and many members of congress, and we should not be fatalistic about this period. we face a long slog, but there are things that can be done faster, and we're just not doing it. i'll provide a little bit of detail. first, on enduring consequences in periods like this one. life changes in countless and surprising ways, i think, during slumps. people sleep more, date less, spend more time at home, they drive less and drive more slowly which actually tends to reduce traffic fatalities and overall

mortality, something that's happened in this recession. skirts famously lengthen and lady gaga not with standing, pop songs are more earnest, complex, romantic, and less sexual. in almost aspect of life, everybody becomes more personally conservative. they go away as soon as strong growth returns, the economy recovers, but deep slumps leave enduring marks on our families, communities, and the places we live. i talk about all of that in the book. i talk a lot about how suburbs and some of the former middle class mekkahs like las vegas, tampa, and others are changing dramatically in the light of the recession. i'll talk about how millenials

are changing. this is one change we'll continue to see. when i began reporting for the magazine story that led to pinched, i really expected that young people would bear some of the light oath scars from this recession. they are in, out of the labor market anyway, don't have a lot of personal responsibilities so a few bad years are a few bad years, but, in fact, when you look at history, when you look at the ample scholarly research done on the subject, it's just the opposite. the first few years in the job market are crucial to establishing the career tracks and life trajectories of young people, and people who struggle cohorts and generations who struggle early because of a bad economy, who get stuck in bad jobs or who can't find work at all never fully recover. they not only start out behind, but according to good research

by the yale economists, lisa con, 10-30 years later, they have not caught up to where they would have been if they came up in more bowptful times. they get stuck in low prestige jobs and professors, and they cling more tightly to their jobs. they decent switch jobs as often which is how one increases earnings, particularly in one's career. about two-thirds of lifetime income growth after you factor out inflation usually occurs in the first ten years of a career, so as this recession stretches, you know, three, four more years, a lot of people are losing that opportunity and acquiring a stigma up under achievement that will be really difficult to shed. now, those economic conditions and that kind of lifetime economic problem is made complex

particularly when thinking about the millenial generation. on the eve of the recession, the millenial generation was inevitably the most audacious generation in history with higher self-esteem and material expectations than any other generation at a similar age. you know, this is a generation of -- as children of people who were told they can do anything they want to, and the collision of that attitude and outlook with this economy has been painful to watch. you know, when the recession began, a lot of millenials quite understandably didn't really realize what was happening to them. many move the back in with their parents after graduation. many had to do that and couldn't leave home. many did it to wait the recession out. the term "funployment" gained

among 20-something college graduates, but as i reported on millenials over the past couple years, i found not surprisingly that those attitudes are changing, millenials are beginning to profoundly change as a result of this period. economically, we are seeing some of the same career conservative that lee cay con described in past generations. job tenure among millenials has spiked far more than it has for older workers. in a recent survey asked whether they would prefer to switch employers throughout their careers or stay with the same employer, and an overwhelming majority wanted to stay with the same employer for their careers. more than that, you know, millenials are beginning to --

well, they are not beginning to feel -- they are -- they're seeing their entire lives really put on hold. you know, i spoke to a young attorney in dc who had graduated from law school in 2009, had not found work as a lawyer. after months and months, was working at barnes & noble, worked for the federal government that didn't make use of his law degree. he was living in efficiency with a roommate. you know, he said, you know, his patients were a machinist and a secretary. you know, by the time by dad was 23 years old, he had a house, wife, kids. these things have been pushed back so far for me, you know, i can't even see them. that attitude, i think, has become more and more purr vasive -- pervasive with 20-somethings. they feel trapped increasingly i think in an adolescence in which

they simply can't escape. it's interesting when you look at the political beliefs of 20-somethings today. those, too, are changing radically -- not radically, but changing significantly. this was already a liberal generation, but what we see in survey data now is that 20-somethings are more liberal in principle, in support of the poor, more cognizant of the role luck plays in life, but at the same time, they are more skeptical that the government can be trusted to competently carry out good policy. this, too, is not a surprise. it's exactly what's happened to prior generations who came out in deep slumps in the 1980s and 70s and before, and those characteristics in the past have then stayed with those cohorts, you know, for decades afterwards.

i write a bit about the millenials who had to move home and spend extended time with their families. there's been some good news from this, you know. i think both parents and the adult children at times have said that they've grown closer, appreciated spending the time together, but it's been a pretty complex relationship to say the least. [laughter] you know, psychological research shows that while parents are more than willing to give financial support to struggling adult children, they actually prefer to spend their time with children who are already succeeding. perhaps because it flatters the parents more. when we look -- when we look at japan, which is a very interesting case, 20-somethings began to live at home quite a lot more than they had used to

beginning in the late 80s and early 90s. just before japan's two decade long slump began, and at first, people were doing that by choice. they were doing it because they had artistic ambitions, rejecting the kind of salary-manned lifestyle that characterized their parents, and in many ways, i mean, there was a lot of criticism at the time, but they were also glamourized for doing that, but what we see is as more and more 20-somethings had to move home and as they couldn't move out bought the economy remained weak for years and years, essential attitudes towards 20-somethings changed markettedly. all traces of glamour went away, an went term that describes 20-somethings at home today calls them parasite singles, and they are blamed widely in japan for everything from low

birthrates to low economic growth. i think it will be interesting to watch how social views of millenials change over the next few years, and how our attitudes towards youth change as well, again, if we don't recover more quickly. i do want to stress not all the changes underway for millenials are bad. i mean, some are merely transformations. you know, i don't think that the political changes, you know, the changes in political views are necessarily bad, of course, for 20-somethings. i do certainlyceps a return to thrift in this generation. you know, we saw a generation of thrift after the depression that was only undone by the long inflation of the 1970s and the lessons that young boomers drew from that. i think we are likely to see a turning towards generational thrift again after this period, and i think that will stand millenials in good stead.

it's also interesting to look at adolescents. in the depression, addless sents were shaped differently than 20-somethings. they could not be blamed for the economic struggles their families were having, and at the same time they were counted on for more during the depression and pampered less, and they became the greatest generation after that. they -- and were renowned for their ability to postpone gratification, for their firm commitment to family, and generally for a sort of can-do, very practical attitude. now, the greatest generation had world war ii, a horrific event, but provided an uplift to the economy at the beginning of their careers, but if we can get out of this period quickly, i think we may see some benefits for people that are currently in their teens. that's a little taste of one how this period will probably leave

enduring marks on the u.s., how our culture, our politics, the character of our society will likely be changed for decades even after we fully we cover. part two is the way that this period is accelerating deep economic forces that were already underway in society and were kind of changing our classes and life in america anyway. let me just ask a question to everyone here. how many people, just raise your hand, how many people feel personally in your own life, your own career, your own close social circles that you're still living in a bad slump? yeah, not too many people. i'd say less than one in five

people just raised their hands, and that's not surprising because we're in northwest washington, d.c.. [laughter] and america's power cities and creative enclaves, the places to which the most highly educated, highest potential people flocked before, you know, over the past 20 years have felt this recession much more lightly than most of america. housing values didn't decline as much and rebounded more, wage growth has been remarkably rapid in the last year or so, particularly in places like manhattan and silicon valley. it's a very different environment than characterizes much of the country now, and i think in part, it explains why politically we have been less focused on job growth than we really should be today. david, an economist at mit, looked carefully at the structure of job losses in this

recession, and what he found was that overwhelmingly the jobs lost on net were what economists call mid-skill jobs. these were jobs in manufacturing, non-manager office work like clerks, administrative assistants that have tiply been taken by people with a high school degree, but not a four-year college degree. about 60% of the population -- it's that group of jobs overwhelmingly that have disappeared in this recession. you know, jobs throughout the economy should have been growing and were not, but if you look at high school jobs in management and professional work, there was no net job loss. the unemployment rate among professionals, people with a professional degree is 2% today. if you look at the bottom of the economy, jobs in security, food preparation, minimum wage jobs are just a little bit better, there's been no net loss in those jobs either. all of it has been in the middle, and companies, as a

result of the recession and because the recession gave them license to do this, have largely pulled forward restructuring and offshoring decisions that they otherwise would have taken years to do and enormous number of people are falling out of the middle class. as a result, the job growth we've had such as it is has been towards the bottom of the economy. economic data are not great here, but it looks like it's jobs that are at the $15 an hour level and less that have been growing, not jobs in the middle, and i don't think there's any good reason to believe that many of those middle skilled jobs are likely to come back unless we do something to change it, and there are no quick fixes in this particular case. i think we're looking at the large chopping the middle class -- chunk of the middle class that will be working, if at all, at

much lower wages than in the past. this has been called the mancession, and it's true three quarters of all pink slips delivered in the recession were given to men. that has consequences too. the manufacturing was declined a third in total jobs. the construction bubble hid that for a time, but that's gone now too. men with a college degree are really, really struggling. in fact, men have not adapted well to the post industrial economy as a group. college graduation rates have not risen substantially. men have not successfully transitioned into the services either. growing fields like education and health care remain just as lop lopsided in employment towards women today as they were in the beginning of the decade. what men have done is exited the work force.

they've been doing it for years, more quickly since the recession. in 1967 among men with a high school degree in their prime working years, 97% were working, and today, 76% are working. now, what does that mean? the consequences are more than one mights initially suppose, and they have more -- it's not just about paychecks and bank accounts. family life is changing really significantly in many parts of the country characterized by blue collar work and communities where people overwhelmingly do not have college educations. women don't marry men who don't have jobs or who are economically insecure, but they do have children with them, and those chirp tend to -- children tend to struggle as when usually happens, their parents don't stay together. what are we seeing kind of as far as an acceleration of the trends that were already

existing in the u.s.? well, seeing recovery among the rich continuing, and we're seeing not just the hollowing of the nonprofessional-midding class, but changes to middle structure and community character that i fear unaddressed will change the future of children in those communities and possibly make class divides much harder to bridge in the future. i was going to tell a story, so how do we -- well, just quickly. okay. i met this guy outside redding, pennsylvania, and, you know, a great guy. optimistic guy, caring guy, when

he and his wife were still together before he lost his job in the recession, he and she had adopted eight children, you know, he really is the salt of the earth. he lost his job as a construction foreman working most of the life outside, started in a factory, then construction, mid-40s, italian-american outside redding. he just didn't know what to do. i mean, he struggled in school. that was 20 years in the past. he knew retraining efforts were available to him, but he was terrifieded of the classroom and felt too old to take these opportunities. his whole manner, you know, had been shapedded by blue collar work, and, you know, a human resource -- like an interviewing coach that was provided by a local church group told him, you know, with the style of conversation that you're, you know, that you use, you're not going to get a job outside construction. his response, by the way, he told me was you can kiss my

ass. [laughter] you know, he field like he was a good worker, and that's what was important. in many ways, he represents, though, there's a lot of men who are good guys, work hard, their work has been devalued, they are being forced, now, into parts of the economy that require very different social skills and skill sets and don't know how to react to this. this guy, frank -- he asked for a pseudonym -- he got by rooting through his neighbor's trash for about a year and a half. he learned the garbage collection schedule for his neighborhood, then his town, then towns within about 30 miles of his town, and he would drive his pick-up truck through much of the night looking for appliances that he could salvage for scrap, sometimes with his children in the cab.

not an easy problem to fix, and one that, i think, we're going to see more and more in society, and even as the economy recovers, it's a fundamental change in the nature of work that is really harming men, their family, and their communities in blue collar areas. the last thing that i want to talk about before taking questions, the third message of the book is, and it's important, is, you know, we can get out of this period more quickly, and we can build a more robust society, but it's going to take a wide array of actions, and we need to start now, and i will mention three things. in the short run, the most important problem facing the economy is fundamentally a lack of consumer demand. the housing bubble mask the a lot of problems. it allows middle class consumers

whose wages were not growing for a decade to feel they were getting ahead by taking on more and more debt and expect housing debt to make up the difference. that fig leaf blew aware. it's going to take another couple of years if you look at debt levels for consumers to finish deleveraging, get back to sustainable debt levels, and to be able to spend again. when that happens and unemployment is high, it is appropriate and necessary for the government to step in and provide support for the economy and direct job growth. we need to worry about the debt in the long run. we need to pass binding measures today to reduce the get -- the debt once the economy is halted again, but it's dead wrong to move towards austerity today, and it is something we, as citizens, i think, need to struggle against. what we should be doing is investing much more in

infrastructure, for instance, which is deteriorating and decaying. it's an investment, and we could bring, you know, hundreds of thousands of unemployed construction workers, manufacturing workers back into the economy, keep them working. so we need, you know, i describe in the book, you know, it's more than simple stimulus. i describe in the book, you know, the ways i think the government can in the short run create jobs, support the economy, and kind of help us -- help carry us through this period where consumer demand is still recovering, but that is the most important thing in the short run, and we're just not doing it today. the second thing, and this is really important and much neglected today. in the longer run, a lot of the story is about technology, and it's not just about the kinds of up no vaitions that -- innovations that have been

eliminating work for american workers. it's been a slow down throughout the outs in the rate of breakthrough up no vaitions, the sources that create new products, new services, whole new industries. i don't have time to get into kind of why that's happened, but it quite clearly has, and it happened at the same time that innovations diffuse globally more quickly so the work leaves our borders for quickly, so in "pinched requests, i call for a breakthrough in innovations, and part of that involves more investment in scientific advance, research and development, a different way of thinking about regulations, especially regulation of young industries that have real growth potential and can provide the next generation of products and services for america. the last set of things that

recommend in the book have to do with filling the hole in the middle class. if our government is willing to intelligently and creatively expand support for the economy today, and if we start taking measures, some of which cost money and some of which don't, to raise the rate of innovation in the u.s. economy, a lot will go right overtime, and jobs will come back, and particularly for people with college degrees who are struggling badly today, things will get a lot better, but it's not clear that things will get entirely better for people who don't have college degrees. the forces that are hollowing the middle class appear quite inexitble. what do we need to do to re-- mitigate these trends, allow for a good middle class life for people who don't have a college degree?

we should encourage college, but only 30% of the population, even among young adults are college graduates. it's been growing very slowly, about one percentage point every four years. college, while we need to wideen access, is simply to the the solution to the problem. in the book, i introduce vocational programs to people in hyl, apprenticeships, which are showing do not close post-secondary opportunities, but do provide young men in particular who might not go to college, a better sense of real careers that are available to them and how they can reach them. i think this is going to be critical for the u.s., but the last thing within kind of filling the home in the middle class, and then i will stop is to some extent i do believe that the answer is to the problems that we see today must be

political. a lot of formally middle class americans will not recover the wages they had. a lot of middle scale jobs they had will not come back, and i think we really need to think about more aggressive sub -- subsidization of work for people on the bottom of the economy. economists on the left and the right always advocated a social compact with americans who are working. over time, the problem in the u.s. is going to shift from unemployment itself to the pay that many people are getting, and when we're seeing such explosive rates of growth among the wealthy, and still good incomes among the professional middle class, i think we owe it to ourselves as a society. i think we need to think about more aggressively subsidizing the low skill low income work

that many people are going to need to take who are now falling out of the middle class. let me stop there, and thank you very much for your attention for a very long presentation. [applause] >> we have 20 minutes for questions. >> okay. thank you. that was very interesting, and i listened to you yesterday on point. my -- you're talking about the effect of the recession on us. my question is about the politics that have affected the recession and our response it it. i graduated from college in 1969. my parents graduated from college in 1943, so the response this time is so different from the kind of response of people from the depression. roosevelt was not afraid to say that the problem was the bankers, and he immediately put in regulation, which was popular

. in the 60s, it was just assumed that social security and the progressive income tax and labor unions were the -- the source of our prosperity. this time, when the government went to bailout gm and chrysler, the response of people like frank, middle class workers, was why should they get $40 an hour when toyota only pays $20? they should be getting $20 like the rest of us. the response of people in wisconsin was the same. why should public employees have good pensions if we don't have good pensions? it was exactly the opposite, and i wonder why that's happened? >> well, it's a great question, and, you know, when you look at depression, the depression especially really stands out from other long slumps in american history and in europe as well, and i think in part the very depths of that period,

which, of course, was, you know, much deeper than what we're in today did pull sod together, the middle class came to identify with the poor more than with the rich which is unusual in american history, and, you know, the iconic images of the period included bankers selling apples on street corners. there was a sense everybody was in it together and had to get out of it together. that's not the case today. the images of bankers today do not involve the sale of apples. [laughter] and the recession has been felt very differently by different people. that has something to do with the response. as i mentioned in the talk, part of what's going on is the most influential people in the u.s. feel the recovery is well advanced a recent gallop poll shows washington, d.c. is the most optimistic city in the

country with the future of the economy. we have this separation in the u.s. that contributed to an unintention pont part of many american elites. there's something else that goes on in periods like this typically, and that's bust psychology taking over, and what we see again and again in periods like this is people become much more jealous of their status relative to others. they engage in zero-sum thinking. politics grow meaner. support for the poor generally diminishes, and so among a lot of middle class people who are not employed, but see the housing values decline and the career prospects decline, you know, to them a lot of the benefits they see, a lot of the government programs that they see are benefiting people unlike them, and they deponent support

that -- don't support that. national debt in particular takes on and oversized importance again and again in periods like this. in the early 1980s when the debt is smaller than it is today, a large majority of americans were intensely concerned that the debt was going to choke off the recovery. rage p didn't listen -- reagan didn't listen. you know, in 1936 as the economy was improving, but still veryings very bad, a majority of americans became to believe that the federal budget absolutely had to be balanced that year, and in 1937, the government tried to do that. it cut spending radically, raised taxes, stock market crashed, unemployment skyrocketed up to 19% and took five years and world war ii to fully get us out of the depression so in some ways i think the, you know, the push towards austerity, the reluctance to do more is actually understandable today.

it's a psychological and emotional rea, and it's -- reaction, and it's happened before, but we really, really need to struggle against it because it is ultimately an emotional reaction leading to very bad policies. >> thank you. >> hi. thank you very much for a most compelling discussion. i wanted to address more the situation of professionals. you talked about the lawyer who can't find a job. what we're seeing is a shrinking of options of professionals, not the least of this, of course, is the fact that in india there's many college educated people who are assuming jobs in engineering and other fields, even law can be outsourced at certain levels, and law firms are doing that for the more pedestrian kinds of things. i think that we're seeing shrinking of state governments that are going to continue no matter who the president becomes and, of course, perry will

certainly be inflewsing that -- influencing that discussion. in new york city, teachers are being laid off in huge numbers. these are good middle class, maybe middle middle class jobs, some of the professional jobs like engineering are upper middle class depending or on the income. this is not focused on so much blue collar workers sometimes at the heights of the blue collar pay scale, and i think, again the whole globalization, engineers in china turn out in huge numbers, many of the people learning how to speak english. there's an international dimension here that is not going to go away, and with government cut backs and support for training and other programs, the situation is in some ways kind of dire i would think. i'd be interested in your comments. >> well, sure, sure. you make a lot of good points, and it's certainly true, especially for college graduates

and professionals as well, that life is less certain than it used tube. a college or bachelor's degree is no protection again job loss. people have to retrain later in life, and we've seen that in this recession. you know, at the same time, the unemployment rate for people with a professional degree is 2%. people with a bachelor's degree it is 4.5%, and over 9% overall. when you talk high school garage watts and dropouts, you're into the tens and twenties, so i mean, it's true that life is less certain today and that's not going to change for just about everyone, but it is also true that people with more education have been more insulated than everybody else. people questioned the value of a college degree quite widely, and

they were wrong. i think people who were doing that today are also wrong. i mean, the return on a college degree remains near historical high, and while there is more competition from overseas, there's also more demand overseas now. i mean, this period kind of is about the rise of the middle class globally, just not our middle class, and for people with strong skilled, strong generalizable skills, and a good education, and some ability, you know, while there's going to be more competition, there's really also more opportunity because markets have expanded so much, so it's not so much a kind of a one-way street with globalization, and particularly for people with strong skills. i think overtime, you know, the benefits are going to outweigh the costs. >> let's hope so. >> yes. >> there was quite a lot of violent labor unrest in the late

19th century, and i noticed you talked about japan, but not any of the unemployed unrest in london, so what's your sense of what it's going to take for there to be blood on the streets for america? >> well, violence is very unpredictable, but we know from history as periods like this extend, we see more incidence of it, more rioting and so forth. as you mentioned, the end of the 19th century in general was a violent, violent period in the u.s., and we didn't see anything comparable in the depression, but we did see a substantial increase in lynchings and in mob violence in that era as well. we saw it to some extent in the 1970s. you know, what's interesting is even when we recover, reactionary sentimentses once out of the bottle, are not

easily stuffed back in. when you look at the 1970s, for instance, the oklahoma city bombing occurred in 1994, 1995 as the economy was beginning a period of incredible growth, but when you actually look at the specific ideology and kind of the -- the origins of that ide -- ideology of the bomber, they are clearly traced to the 70s and things written in the 70s. you know, when the economy was really in bad shape, and a lot of, you know, white men were losing faith in the economy, so i don't know what's dwing going to happen as to violence. japan hasn't had a lot of violence, very much in its culture unlike the u.s.. it's very hard to predict, but i do think we are going to be vulnerable, certainly, to reaction and extremism, much

more than we have been in the last decade or two probably for the next decade or two. >> yeah, like others, i really think this is an excellent presentation. a lot of times, people, the culture can't see the forest through the trees, and you're sort of putting a little bit of the forest out there, but i think possibly, and we heard earlier questioners there's a bigger forest than even you're presenting, and what we're going to experience as you describe may only be a prelude to a greater reconfiguration of human existence and human history, and i'm saying that because we're not geared up institutionally and politically and psych psychologically. i mean, if you put another layer, for example, of the environment on top of what you're describing, that's even going to make it more complex,

so i just wanted to hear your response to that that this may be even a greater turning point in history than you're describing because we're accelerating, and that's the difference. we've changed over, you know, hundreds and hundreds of years, but now we're accelerating to where we're being come pressed into a smaller time period with greater stresses. >> you know, i mean, there's a lot changing profoundly in the world, and that is kind of accelerating a lot. you know, a lot of changes in american life, and i think that we've been kind of politically unprepared for many of the changes that have been occurring, actually, for 15-20 years, and that have been hidden by create and by the housing bubble, so i mean, that is why in "pinched" i think we really need to look very, very broadly

at how we need to change our economic policy, our industrial policies, technology policy, and our kind of taxation and redistribution systems to try to accommodate ourselves to a new world that is likely to continue to change very, very quickly. the one source of -- it's not the one source, but one source i had speaking very broadly, talking about the rise of the global middle class, wages in china and india are rising rapidly, and over the course of, you know, a couple of decades or more, you know, we'll begin to see, you know, wage disparities being eliminated and we'll see a lot more demand globally if the u.s. can get out of its own wayings you know, continue to increase education, provide a

fertile environment for innovation. i think the country will be fine. you know, in the long run. you know, my worry is more what's happening to specific classes within the country. >> the world can't even afford the level of pollution that you're describing. >> time for two more questions. >> all right. i have a question about job creation, and this is partly an outgrowth of what we've seen in the last few weeks with the political polarization, and what your thoughts are on how we can get a situation where we really are as a country creating more jobs for these people that you're describing in the face of it seems a very uninformed electorat that put in place elected officials who are almost taking positions against people's bet e