se pretty positive or more like the son w s sck hear. gh h >> the administration and others realize the relationship with pakistan, where does the administtiontan t dibi hand they also presumably ar behind a lot of the elections that flowedhe abpring. tretas.ce ah tiomhehe tas on barak. what is fascinating is, at the same time the saudis were on the phone with president oba. they wereg,hever hav to supporthek, ev ioehe opn ts.

cahe we log at w gng on tnking about themselves and thinking about their own fragile leaders, more fragile since the debt -- death ofhe prihe en crsheecd own cey ruroa ta aaiitus within the family about what is going to come up next. the president wt ou a ge rousin

eaon thean e qio i the arab spring ever actually spread to saudi arabia, how would the administrati react? and i'm not sure i came awa >>ahi o--ig w reea >> thank you for your appearance tonight. very insightful. ret tco summit

with iran, asming pessimism is justified, what do you think the lycoou be? atyoinilpp, crl ? iopredict world events, particularly -- [laughter] in places where the oil markets are very sensitive to it, i coulprobably be making a l re mey tn a in thai,etee u ora o ons et aume for a moment that the iranians decide they're going to try to bide r some me ththup aderan inst t ceof nthisater tts t disrtion in the middle east. the president for obvious reasons, a huge spike in oil prices at this moment between now and november would not

irnsogor,an t vogegom efm saon th the clus comes down -- the calculus comes down entirely to the israelis. and me september ocr, to igis keo moik t t ey elected president, i think he might well determine he can hold moiktoinn ack edn pc attst,d be, he would take military action, or that he would be less likely to be ctical after the election of the israelis if ey decide to a. wainetretee mi aou a ifs --

might welcome to conclusion that if israel's going to move, it's better they move prior to the election, that the u. abit queoaiprto t ec m bea erer ths ooo he three-dimensional chessboard and trying to guess out how projections of these come together. and then there's, also, just the question ofwhe ttis e ow che ian we opoapit emre il e two sound the same, they're actually quite different. president obama's been very clear that he does not believe you could ntai anrai a eaap bu h esn in aasat'v con raatuis right up to the line and could assemble a weapon fairly quickly but doesn't quite have one. and when i asked him in an har tw ygosa and

not ing path sois vole that the u.s. and israel together may thran aowom commcln ane s,he an -he israelis measure time the same way the u.s. does? the u.s. feels like it hs more time because it has more capabilityif it didit ed tke tac. rafeik 'v nngt c g detbi ugrte fe e iranians are building their next enrichment plant. >> [inaudible] >> i d, indeed. and astost ekn w ec l on d,, the interesting

question is does perez get a vote in this o, and i'm not sure of the an toat e stio iwhey dee sta pr st netanyahu actually are, in the end, the ones who are going to make the decision. >> yeah, right here,ourth from ba emico t eeahe rtiip thisgecr unnarr given what you just mentioned about saudi arabia, would you int dctior the on had titreet el athe relationship between the u.s. and kistan is like a dysfunctional marriage is mage dncalin to sof

aur] meweinua reh oy tis called major non-nato ally, still listed as one, that has blocked our ability to go provide food up through their rout ioroo i ghtar mths offr a cales u ugat hnete the bin laden raid and how we sort of, we knew this would be bad, but we had no idea how bad. with t saus, i't thatwee anplacse , usitht t caus wre their national interest lies, and they don't act as if they have to worry about public opinion was in pellerut%,ourn heevid y arseats agns the united states. you don't hear that in saudi arabia.

and you don't because it's a ry controlled media environment, in part. >>t ou t theese. khamenei's statement that nuclear weapons are antislamic? >>heestiwas,hato we wrn emofhd sa tting a nuclear weapon would be anti-islamic. president obama has sort of leaned on these in writing letters back to threme er sng, no'm sten.yry alu tno is reassure the world community that, in fact, what you're doing is not intended to build a weapon or the weans capability dibed fore d th weould w warmathi

even -- at least prior to the election year -- ruled out the possibility that iran could go out and produce its own nuclear fuelnde therighind o verytric ict re h been in answering the questions thathe international inspectors have raised, you know please explain this tr t p theth ptw nar . sela this video that looks like a reentry vehicle that would detonate at about 600 meters which is abouthe height which weetoned t thst n'mek w e aer th ueor esent obama is, if this negotiation is successful -- and

we all hope it ctain is of aanideskianis hikt'erhe real rubbeis going to meet the road here, because there are going to be a lot of people questioning whether the iranians are simply playing f time ettheyavceav huo thea ed haat so f j dse e enett ey've decided to change strategy. might come. >> yeah, the woman right there you think one of them will be used by our country to attack our leaders? >> when drones would be us to fr cdaor daup frxi

t dd in which to do these. and, you know, the thing about drones is that while they look small and, you know, you're airpnes at pladwi-ntroed as k ifa t ir uou onfrue stke t a ng and the base at bagram where a lot of these fly out of is enormous. -- caemr, ty' ballrsy,t e o technical troubles are significant. it's not an expensive prram, but they're siificant. so this is an area wherehe th fctat e fwaary snyer nnsd d hlam necessarily to go launch them from. but it'll happen one day. my own personal prediction -- i said to you before i wouldn't make any, b' mak one

. a er tyb ck ss acabo t gneos errd happens every single day, mostly to corporate america. so my suspicion is that you're gog to see a lot me of that before you have to worry abo the dron. >> lies d le ts all htime fr. [ausot.tki >> you're watching booktv on c-span2, 48 hours of nonfiction authors and books every weekend. haeeg mm tvanoow >> oh, i am having an ambitious summer for reading. inben the suff at iave ineg "ckmae or i've already started it, and it

seems like a pretty good read. it sort of ends before it gets into politics, so it's a really theale htowhit also "why good people are divided by reapplication and potics byna ht. thth pbl dafof "'se erhsaanin recommended to me by someone who said you've got to do more than just talk about the teabaggers th, bu et somhow stupid and d si io tinfrs i'so d th rachel maddow's "drift." it really takes a really kind of technical subject and makes it really fun and histical a i'mea ejoyihat

ilsanto rm,"t immortal lifef henrietta lacks," and that t if i get enou timto d d eeilai ts k. >> for more information on this and other summer reading lists, visit booktv.org. >> ilian-born eonomtu ecy r eahi of berlusconi is a system of crony capitalism in which government support for big business has overwhelmed the support f a fr market. it a ltlndern hou. w to thank you all very, very much for coming tonight.

my name is brian anderson, i'm the editor of the manhattan instutcity jrnal 's areatleaseto oulundtme m charming contributing editors who's here tonight to speak about his brand new book, "capitalism for the people: recapturinthe lo geus o amicanprri thou ttuecic ckth 1980s, he enthusiastically embraced the american dream, the idea that what brings you success is hd rk. nolucknotwho uowch to ohe c s otdeatuns. is ethos was central to american-style capitalism which, he recognized, has been a extraordinary engine of exelmpntne bn ooo

our new postfinancial cris era of massive taxpayer bailouts, of failed banks, political cotito ar-ndromheir ra lthne arung middle class, the genius of american prosperity is at profound risk. ther are disturbing signs, he beevesthatheu.s. ecomy is sfngo rlnile y ta sem loent that will prevent us from full economic recovery and mean a anwiaeior, in ts mss future. ctieke in b and we'll talk about tonight. luigi received a ph.d.

economics from mit and joined the falty of theniversity of chico's ot schlof bussn19 we ro.mcac professor of entrepreneurship and finance. he's written on a host of financial and economic topics including in our ges ranging from finanalregutionto hiar cth bwaul. thapists," a theme central to his new book, too, just as it was for aam smith at "the dawn of american capitalism." foesun pece tri ncont. prident of the american finance association, the lead independent director of telecom italia and a member ofhe sce.ican academy of arts and he ao rvesnheomee aiitmas

lifhe appointments. now, "capitalism for the people" is already gerating intense discussion. the economist tyler cowa rently s rgin lus,i t p onok eints auce noneconomists, this might welle it. paul ryan described it as a mustead that provides a lucid whes iccenan f risri ne ytiol ug ey ai ad i all that should encourage you to go out and get copy if you haven't already. but in the meantime, let me ziesome theanmsgi ppe] >> thank you very much, brian, and thank you, all of you, to come. and thank yoto the manhattan

institute and the cityrn whtyorflp m hece mat is s of easy for academics who have a lot of other things to do to write sort popur .tmpt to write a more arot tthi ithe innt e t g d lee ein o i e bany i think is valuable and important. as brian was saying, i was born in aoy atned t anic l . aur] eritly s emergency room theres are chosen on theasis of their political affiliation. [laughter] wherit's much more important who you know tnat ow comg hi cry, busodeeorwa of

how lacking this country wasnd what are the -- how lucky this condionshat de oseere the sy, hhame eear chteicwhich is, i think, unique to the united states is if you go around, the free markesystem is really ther peoe.t marif isnotrun ee,s inat aicr dend os isecause they have experienced a superior form of capitalism. what drivesis ortr ee mket sysm? user ans twfrar moy. democracy somehow tend to more distribution and free market deliversnequal outme

beuse it'ecry t so leulven bee,be on tte is so productive and so efficient that they make everybody better off. it's the engine of growth that brian s talking abt. gr tgeor ceauth ghre atenhe and the third one is because they think that this system is fair, and, of course, it's a bit yo tka ndtircl tha isfayoie ts system fair. but you need to believe that the rules are set and they're n rigg agast yoliin the st eltsteaa ergran made this kind

of capitalism different from the one prevailing in the rest of the world are weakening. coatadag til ne ehi m eabee en tm fo. dt he elements that make sort of the system more at risk? to some extent,terld war in acawerou iih gigantic superiority from a technological point of view and also gigantic superiority in terms of instutio. anu ed tvethearm noalaf p t ve e rif rl s dictators, quite unstable. communism was taking over country after country, and ev ama, and the typical

american worker was getting some thstiof icrese ias oqu acad erizastt a sort of extra benefit out of those. restf thwoastted by exale t ed wamid d esult it's not so unique. and now the american workers are competing with the rest of the world. so part of whawee seef me iequaty lyis mpiohakila rle whhe tf t rt of distribution of talent

and education in the united states is probably the best in the world. that's not true thrghout the strition ofen a inl cat s opei lin thll sortf has been made worse by the lack of a sense offairness that ih ths seh yhe ited nt ygome thie and they were acting in the interest of the country. and this just disappeared. i remember as an italian arrive anything boston the frst time the w atooch a ther was atyorce t ybha ame reonasrs it must be the bther of the mayor produces tape. [laughter] and second, i do exactlyhe opposite because wt ieard intaly i io po oatvent

, ye ysfi gh d iasck ee all my fellow bostonians were follow those directives very closely. why? because there was a dffus ust thathe vent w ngehn te teo i d a survey shortly after the financial bailout asking people where they thought that -- whether eyug that crety pulwasctinin in ies olu ch d 5f op,50 respondents said tha they thought was acting in the interest of goldman sachs. and whether this was true not is-- elt usn lircon s important, as realy. and when people feel there is this sort of other interest that

is dringolic tt the tr nun t teool aste st. aleev w ve seen or sort of movement or revolt from i claim from the tea rty toccupy wall reetare exprsif e in horlyisrt a very dangerous combination of a shrinng middle cls, insi li nsef ir. its ly pct haasor of pulace that might destroy the free market system. and the problem is wen instut aren tat siion,hey' tgto otecthlf dring ripregerd

e. th cte the system more and more corrupt and create more and more resentment for the system. so it's basically a vicus th , i something sort of risky. i say why don't we try to channel this natural sense of revolt agast the steou ma,utesng atter marketa more sort of equal, level playing field that will lead to rt o a mor efftive rm o catali. d o bo i lysa hando no epil reaction when you see issues like income wo ayow, eeesrutio

atisbo me ua taruc ern the united states because the richest people move to monte carlo or to the united states, and they don't appear in th t onhe atcs br. wn' wt lld, k'r abot o soccer, you're more fan of football, but some economists have looked at soccereams, and thai -- th've own at in eden t whea ri toine prsgo d s treat their soccer players with a special tax treatment of 20% marginal tax . and surprise, surprise, they have the bestc pler [lte ts a ti ha tut in oc e

ings. the first one is we actually need to have more competition in a lot of sectors that today are prted ther b la ope h ca.h i yoohe statistics, the reason why most americans feel they're falling behind is because their wages don't grow fast enough ter th cst he re tos o at d tewoec t eavul a il sbsidized. and health care,ost of us n't see directly the cost of health care because it's bedded r soof payeck packor yveee t anon eis enough pressure to contn costs because we don't bear the full cost of that choice. and thiss a vy disrted

if wcon suldehand hshe pryng t. d same is true with college. college costs has gone up emendously. and even if you account r the fact that inhete scol yo he lotffesh a 's dthesth quaitd ter u massive subsidies in if the form of, basically, subsidized loans that most people don't pay becae yoo sa tuc oe ic ple t nru because they charge a price for it. [laughter] and, two, you shouldn't worry about itecause you alwaysake enough money to pay inhis ba. payhis ck ab icathvent ev somebody defaults,

the lender is not paying the cost of thatort o mistake. and this has really pushed the cost of educatio mchhe evdnti m ct iatrtt bott, not at the top. and start when firms cannot provide in the marketpla and need to find new way to opera. intin atmof t se e trt of focus on is to try to rethink the way we doconomic policy. the typical way the government intervenes today is ehero deth sr mrtan and the political economy of this game is such that there are few pele who benefit a lot x there are the rest ofs who pa 's aun ge, ae

id the -- [inaudible] always win. ac2, pat mat, deregulation is 67 studiesnd more regulation on the line. so it is really difficult for anybody to actually keep upwith deatountauheid legislation is basically done by a restricted set of lobbyists. so my claim is, number one, we want rela tha le ghatn ces untat. frn economist's point of view that it's, basically, the

same if you want to subsidize something that you taxthe suti owhihe alternative is to tack -- [inaudible] now, imagine i'm a congressman, how easy it is for me to g to re tomake the icnt ax m ly ve g cathitons is that you tax a concentrated interest, and you benefit a diffuse one. inctof ohas woulbega s h henend i leoven iven. he other hand, we now make it impossible because there are factors where if you explain t peoplethey might be convinced at a tax i a godhing et akxa. nota lyi

exive tt lobbying has become the most profitable activitiesn this country, and i don't say just legal activity eier ial acvi beuse al in cne n'thgiyo t rn when, when tyco was sort of potentially subjectto dedi itoau ty bedesre imposed, a inor bda an ts thit es so a republin senator propose in the senate a law to subject this kind of crporation t erag txati. to jail, so call jack abramoff and say i need the a-teamo do

athe-t sprof $00 rk o the one hand creating fake grassroots corporation and on the oth hand giving money to the cagn fu o publanat rehainss t w ms,aeth e to defeat this law for the modest price of $4 million. so tyco saved $4 billion for the ths ncty ef $ll rlat tin tu so one solution is to -- [inaudible] the other solution is to tax it. i don't think that we should go through complicated lega argunt thic niceaxatn wdo brngt ce tom

e to rethink the social norms about doing business. and in particular business school, and i teachn a prlytfrede a shouldth good set of laws believer the best outcome for everybody, we never learn that greed is good. h hlfan ilhewo rin h e kiboheing something like that. and importantly hasone past thnormal level and in the end is destroyingheconssus r anso wet ndua simeghve erinst ada i mind, business school at large, they really thrive on the success of free markets. so they shouldave in tir

tere t tch tirtts busoeiaoof ha. so how do you do that? first of all, you do it in class. but also when you sortof celeatelumn y wao bre aihaso o ton ien th in plf, actually, a former ph.d. from mit who went in business of gambling, and his cimto iso ha ipo tod etgcheso mb. a rt hat, basically targeted people who are addicted to gambling to maximize his revenues. now, this is clearly a legal ha, i nhin agast at, t ion'nst odav a calub t st t e apis d makes sort of the enemy of

capitalism stronger. so as a business school, we should not dorse somebodyi atouot b aea um sd beet anhe t sort of skills, at the same time we should also teach a basic social no. monormi'mt mor osr, iot a ha alato ttfmono i -- moral norms, but i do have qualification to talk about what general norms work well andelp no'thearke wod bee rne, an,. the alrnative is the destruction of capitalism or massive regulation. and as a lbertarian, ifer

th on both pe.enofmatyf because the beauty of a social norm is that unlike a piece of legislation that goes in congress and i lobbied upon a cialores not hr thopn or viable because only this consensus, then thanorm would be applied. and so i think that diio trarhe mal anoigth netion that, unfortunately, is sort of reaching this country. and i think we should act before it's too late. thank yo [alaus

>> we have time for some questions. i'll field them, but if you could wait for the micrhone to rive dust intduce uried,ea epss ped tant quon an vh. um, right down here. one second, just wait for the mic. [di you mentioned the idea of a lobbying tax -- >> a tax on lobbying. >>ax o lbyin o. i risifre w y ifolyops omnge,f, ucouthe given to the fact that lobbying is, essentially, just communication between individuals. it seems really easy to skirt oversight on tt. soas cous ither i cy htdesth

atbl myk is not a detailed policy book, so it's more a book of idea that is written to tryto des waois t ersaon be emd. whe a yi there is a vast range of activies. and, of urse, some of them are normal freedom of speech and even me wring this bk is foflong fe sonkh t's o l. e hebb congress which at this point is registered, and so that is very easily taxed. and i think we can discuss where you want to impose that tax. e imptaripl iat actys a nivum activity because it's destroying value. we need to find a way to address

itand the simplest way to addrsitis w tth prelbehe re i so slippery. trying to regulate it will be impossible. and then there is a sort of ge cesic ateemma o longpta and this is where i do believe that public pressure can achieve a lot on veryard a mpbjecve d avore xae, w,reas psa gasira em ong, and that law was ignored for years uil a book came out that exposed how much they wereoing. anin thr dsha se aec lahe

th rlwas limiting the power of congress, but they felt the need to do it under public pressure. of so i think that my go is to staraski tuen ad hthree >>hte. >> luigi, you discussed the ill onha o craat come from lobbying instut tmo cly li oatuof course, have wide public support like the mortgage tax deduction, like medicare, like the employer x exclusfoal surae. esrtar proamor li cheert lioflla y i al ha can have faith that democracy and public opinion will eliminate rent seeking? in fact, itseems quite the

>> inot sg wa easatli oio nale i k eery neeban wth cn. and i do believe that the oly defensible line in terms of, for example, tax deduction is t ha non enyou heovo chab oat pot. mo ype the floodgate, it is impossie to resist. so the only line of defense is to say we want none of it. and i think tatf ak ea tmeane thoul hppa hit. ifou start saying, oh, but we haven exception for x, then everybody will have an ception. not onlythat, but you'llave gant at by catoe pt x ry,re vbl th tea iay

ho eminate all this. and if you really think a goal is so valuable, do it with a tax and let's see whether that pass the rtfonus usagwi y arebyorf i items -- [inaible] nice ideas. and i mention homeownership because who is against home ownehip? it's le beg ainstpeac and f uca rpur d rewi d l that, you become irresistible. and that's what i woultry to avoid by saying if you want to do enomipolicy, you have to nv me at aax iood at mgh le . >> professor, you just told us that lobing is the highest

ofargibuss th thes. a ogo ss on taosobts are going to pass along their tax to tyco or whether it is grou, isrl caps, anti-smokg wh iha tax policy -- which is almost never worked, i don't, i'd be interested in e she deterring. tax dinte should be oppod to. where is that tax policy that ve cas ionth >>st a is not obvious

that you can always tax -- translated completely to the buyer depends on sortf th rketyste t mo porttly,ekn ax tiil wh yunc pe . so that's a pretty good example of a ta working in the wrong direction, but working. tad ait i'm saying is i want ax ptifo efivy ftros than -- to solve poblems than regulating pollution. why do we see a lot of regulation and very little taxes? i was told that recently bloomberg has passed a colicadregutionof ps ew y w,yoeahiha dapse bee of experraltieses, let's have a tax on soda p. it's much simpler. now, let's discuss it, and som opleightgreeome ple

ghsa, bit meg isy opo rs hi t e ss for large financial institution. one way to sort of solve the problem of too big to fail is reemwhis bal si tnth. d at ti save you 2,400 pages of legislation. and i n't know how many people woing in trying toimplent thategistion ink thatoda eatcocsal w ooanxe a very effective alternative. so effective that that's the reason why we don'tsee it. because people prefernything se but that w, iwe t oanndy e on wouan rv t ll hoch rvonrengge d and then over here.

>> prossitld sth var s ul ov y t advance one or more advocates to persuade betsf ugg went -- t wh d itm. e w this advocate or advocates come from? would they come from academia? would they come from other parts woul theyvcrly coitebuss stjoad h frelith the average citizen. i'm not sure he would actually advocate this idea. wh w y thocitaye. >>hihaxcnt

whwrot tok is really to make people understand that defending free markets doesnot aninloo n,hetien ci w free marketeers feel obliged to defend business in whatever they do without understanding in this has a ga c ierfpu io soeo ustmy tw wsnch crony capitalism would be exposed. one, and i have a chapter on this c breg veapywi alae inayor isore diicult to destroy data than to collect it. they're automatically sort of

collted. however, there is a lot of sicehagh thes encat o p. and i was discussing with some manager of an itali bankha fotholy wn he wevndid th respect to the man with the same job, but they were mu more product i. product anf sehen' tuoe a rg callnine the man who are in power at that bank. i have colleague who teaming up withomoplet dereewr a that rat ath

ib. and bank state regulator are, basically, two biased in the direction of banks. noerbeet'rtas retoutuno eyalheameo t ot have this study released soleat tarany further use of deree fal regulators rating aback might not be -- a bank might not be released iediately because of financial concer but there is n jtition wi dy.t ras hetshr our ar. but ea academics -- we academics actual can go back and look at them and find out whether the

ratings re wdonerot etthe ul ot. po, i kathe recent intert both in the media world and in the academic world to uncover these facts moxcgapi twantto wre an i gog o t taortow e problems. so the best way to get this infoation out is acombination of competitioin theed a e emaranta aili owre cr, ev >> luigi, why is it that despite the crony capitalism that you talk about in italy so industries in italy like t inryagsud in woea ipi ohi indfhe a

on that about overcoming, if you will, the strictures of the state. >> if you allow me a joke,and ovme t asi t ihit seriously there is a lot ofreativity in italy, and in industries that they ope be osl fashion industry is basically an industry based on few individuals with a lot of talent. is not age orgizatn efen.rt ofstrd d 'srelyas mpivan. aanicn pducing products like ferrari, but we're not as good in producing cars. look at fiat. and so -- [laughter] ihinkth i semt

nenndot m accuratic is much more difficult to havlarge organization. in a system that lacks trust, it is much more difficult to hav large orgizatn. th's wre ilys fit, be ildt fin >>arcoit >> howard husic, manhattan institute. critique has emerged from the ft oameran citalm enpsuled bthorhe ont ue sayez that a fuamlw heteuality haseed ideinne you believe those trend lines as

identified have been accurately identified, if the d --ta trheh bsea 'vre