and we could do other things to say it's continually the fight for free enterprise as we are. great explanation in my view is we do indeed love free enterprise. we know it's part of our culture. we know it's central to our culture as a matter of fact. our defense, given the fact they tend to be focusing on materialistic impulses don't stand up in the face of moral arguments on the freighter price system that constantly hear them constantly lose the debate. if you want to lose the debate, we have to find really good for

arguments. now why do i believe that? because experience tells us that materialistic arguments always lose to moral argument. think about it in your own life. maybe you're like me can build a conservative in your family like me and thanksgiving time if i was really kind of rest. and you're around the thanksgiving table and people turn to you and say hey, s. guide, defend the free market system after the two 2008 financial collapse. that's a great, right? you say well, it wasn't free enterprise at fault. it was the system that grew and grew and the housing market will not pay for government policy. and furthermore, instantiated corporate cronyism that required out these bailouts. you need to get out of the way of entrepreneurs and lower tax states. it's the highest in the oecd.

feels really good. got all the facts. nothing wrong with that argument. future sister-in-law says i think you just want to get their last end tax breaks to millionaires. you know what else? free enterprise isn't so good for her. i lose. i lost that argument. it doesn't matter if this is platitudes and eight hits. it doesn't matter. i lost the argument because as making a cold coming materialistic case going head to head with a hot war case. this tells us something. it turns out my experience and perhaps your experience to his back up by a whole bunch of research these days about moral arguments. let's start with a little bit of brain science. one of the things we know is that the most amazing part of the human brain called the front or tax behind your forehead and

processes all of these great things. one of the things that it does is helps to make executives judgments. when you have to decide whether to go writer that she make explicit decisions, you're able to do that and let me know spastics to get to work. the same part of your brain helps you process moral judgments. you finally get to work and your colleagues have come at you like my tight? you have to make a decision. [laughter] to make them feel good or do i tell the truth. that is a moral decision. you're going back and forth between executive judgments, moral decisions all day long about this process by the circuitry in your cortex. the question is this come if you are confronted with an executive decision and a moral judgment at the same time, which one is going to win out? we know the answer to that one,

too. it comes from a great part of aei called john height. john height is a social psychologist was written a wonderful book called the righteous mind and it talks about moral judgment. the world's leading expert in moral judgment talks about the fact that when you are confronted with a deep the moral situation it basically does your circus. you can't concentrate on anything else. if someone comes up with deep moral argument, that will occupy your brain and attention you will go to do anything else. they say prove it. okay, let's prove it. i'll give inexperienced john height has used its audiences. i am so sure this is going to work after i saw you a story that 90 seconds from now will not be able to if anything but a moral judgment. i'll occupy your prefrontal cortex. furthermore, if you don't remember anything else about this speech, you remember the stirring i tell you at this time next year.

big plans. so let's see. there's a family like mine. my wife mr. and i have three kids. my daughter is nine, my sons are 12 and 14 in the family and the stories just a nicely. and like most families come in the family in the story is at war with the tells. every family is fighting about something that seems in the family is fighting about something really common. the kids want to get a dog, but mom and dad don't. i can't say come on, why can't we get it out? they say because you're too irresponsible to have a dog. i notice in the cleanup clean up after him up after him like so were not going to get a dog. the same thing that happens in the family happens in my family are virtually other family. the kids of her mom and is the coalition against dad. [laughter] said the statement goes down to the palate and that is really solid. i know how this is going to end

he says. they are at the pound and it up at the end they name her mass in and bring her home. turns out that mom and dad were wrong. nothing is sacred to. you know who loves most in the most? dad because no one else is happy to see dad come home from work. [laughter] jamaica won for a couple years like this and really brings families together. they're really happy to have this dog. one saturday afternoon it's august. it's a beautiful day. the youngest child accidentally leaves the front door open. now there's a squirrel in the front yard and nothing seasick, hit by a car, killed in front of the whole family. you never heard a story like this at aei, did you? the kids are screaming, mom is crying, data is crying.

the kids a dad, what do we do? said dad picks up lifeless body and together they bring her into the house and they decided to cook her and each her. [laughter] i said to john height, you get tenure for that? this is a problem with america's universities and a friend. so he asks his audience is at this point was that the right thing to do? everybody says of course not, just want to eat that dog. a bunch of these cold calculated reasons why it might be okay. high quality protein source. this is like really in the news since the whole obama saying. it's legal in the dog was in her. it is their job.

and you can go through all these other things. it's still not right. so why? people can't say why. most of you can't say why he feels so right to do something like that. that's a public policy arguments work, too. if you're confronted with a moral case and not you've got is a materialistic reminder, guess who's going to win? you can tell people in finland there's fiscal consolidation works better because of tax decreases in spending kies than what we do in the united states today. and the little girl in the car has faced what everyone is seeing and you lose the argument. umass will tell everyone they should eat their dog because that's equally persuasive. so what does all this mean? it means they must come up with a moral argument, not to make the case to say was really written on our hearts.

we believe in this stuff for a reason. we have to be able to state data and methodology talk about today. our founders knew this. they were more or less. our founders were not our list. think about what they wrote. think about the second paragraph of the declaration of independence. we are endowed by our creator with certain inalienable rights. among them life, liberty and pursuit of happiness. nothing about money in there. all about the moral covenant between our founders in our nation. they would be scandalized to hear how free-market advocates talk about free enterprise today. they'd be scandalized because we're not making a moral case. occasionally we remember. the case of her members to make the case and we win. for example, when i was a kid growing up in seattle, washington we had very little money and a lot of her neighbors were on welfare. fortunately we were the guys we had two jobs.

the reason he did is because he honestly believed that welfare was horrible for poor people in the 1970s. he looked at the sailors on welfare. they're really disorganized. dad comes, dad goes. who are the parents? we don't know. the car up a block. two houses down were in the living room with chickens. at the time he seemed normal. turns out it's not. we tried that in bethesda. [laughter] an essential claim that my father made was that he was horrible for people to be in public assistance. horrible for poor people themselves. it turns that everybody knew that. he wasn't some public-policy visionary. the only people who were really sameness or politician in the 1970s. they talked about the fact it was a colossal waste of money. so what changed? the answer is there is an ats,

an idea in a book, a book by scholar named charles murray. charles murray is a scholar at the american enterprise institute and grief in his book are losing ground in 1884. that equate essential claim there was not that the welfare system is a colossal waste of money, which it was, but rather the welfare system is hurting the people is supposed to help and that was immoral. that lit the fuse. it took a lot of time. 12 years before it became the conventional list of democrats and republicans courageously signed into law. that is what it took, 12 years. every public policy inflection takes 12 years. every public policy inflection requires leaders and people who love their country, teachers fight for these to decade. that is the danger of anybody who makes the claim that the changes we need are only about

2012. we have to understand they're about 2013 and 2014 and that is why aei exist. be ye i ask this because in a decade will fight the space for you. welfare reform became the law of the land because scholars and then citizens and legislatures realize it was about orality, not about money. so here's the question. what is the moral case for free enterprise today like the welfare reform case? what is the pursuit of happiness? isn't making money? that kind of giveaway to show a second ago because they noticed it was at that ration of independent people to think about about that a second. economists have asked a question. does money bring you happiness? the answer is your mother certainly toast you know. but this leads to all odd and seemingly illogical behaviors.

the pursuit of happiness is money itself. what do people do? they did terrible things. they neglect their families can achieve brothers and sisters. it's actually really scandalous. furthermore the pursuit of money mistaking the pursuit of happiness leads to some curious things that we find in the literature and happiness. i've written a lot about happiness. the first work i did nurse visiting scholar with a book called gross national happiness. one of the things i found it not look that proved in subsequent research is that thing about men, the unhappiest average age that men experience. i say men because it turns that women don't have this. women are much, much more consonant to happiness. it doesn't have a beef tips and they are generally happier all throughout their lives than men are. you'll be happy to know.

what is the average unhappiest age in a man's life? i've re-created the data analysis and is so that proper controls are good protocol. what do you think the average unhappiest age and insight is an america? summits at 40, 7650. let's take the average, 45 is the average unhappiest age. why? if you tacked a psychologist. 40 fives and your wife figures out that your boring. [laughter] that's it. 45 you are most likely to have a teenager in the home. misery, right? it turns out that economists have a good explanation consistent with all that data. the economic explanation is basically that is when people figure out they've been chasing the wrong thing. when men are in their late 20s money and success move together.

it's like a superhighway with neon lights and you're cruising down at him and not paying attention to anything else. around age 45, lots of men say or realize they kind of missed an exit somewhere somewhere along the way, an unmarked exit. they missed the exit that goes to neighborhood towards that they really wanted. the question is this, what is on that xa? have a look what makes people happy, especially men authorities, incidentally 45 does come up after the rest of your life. i'm 47 and it's going to be good here on out. [laughter] is a few 43 commissary. so what is it asked that xa? what is that we really, really crave? the answer is whether actual in the introduction. it is earned success. now, that is not a term we just would've made a.

it is something that pops out of the data on the subject of human happiness. when people say they've earned their success, you can predict they will be the happiest people in america. so it's the belief you created value in your life and value of the lives of other people. when people have said they've earned their success to become much happier than neighbors and friends and families. using data from the general social survey at the university of chicago can you take people exactly the same both feel they have to earn their success and are the same in age and education and race and religion in the same college come the same town of residence, everything except the one earned eight times as much money sasaki and you will find they are equally likely to be happy about their lives. spread money till the cows come sown. give people all the money you want. it is only earned success that will bring happiness.

this is according to the best that is available. why does this matter? at government can spread around money. they can spread around her and success. this helps us understand the paradox in which we don't like what the government is doing, but we ask for more and more and more. we look for the wrong thing and when it's delivered with don't care for it. the key point about her and success is that it has to be earned. at work and everything. there is an unmistakable connection between sacrificing happiness. there's a big literature in sacrificing happiness. for example, a wonderful study some of you may know about. my favorite study and sacrifice involves children in the back of marshmallows. there is a famous psychologist from steve virtue in 1972 wanted to figure out whether or not kids could delay gratification because sacrifice for something he wanted.

he took the kids to the laboratory that would put a marshmallow on the table and say to each kid, you can eat that marshmallow if you want, but i'm going to leave the room for 15 minutes and if i come back and it's still so here i give you a second one. lucas has okayed. easy, right? two thirds failed within 30 seconds. they have it on tape. some kids try to discipline themselves and are in agony and begging their little heads on the table. so it interesting enough. but here is where it gets really interesting. he followed up 15 years later to see how their lives were turning out. all the same, right? the kids who couldn't wait had an average s.a.t. score 210 points lower than the kids who could way. the kids who couldn't wait were more likely to drop out of college, more likely to use drugs and alcohol, get divorced and commit crimes.

there was a direct link that he saw between the deferral of ratification. maybe it's not causal just because they didn't eat the marshmallow that they would to have a successful life. so how do we understand the causality of this? the answer is attacked to watch burners. charles schwab the legendary investor commit $15 billion cuts company. i asked what it was like to find this vessel come to me. what did he tell me? he said you don't have any idea. there was one day when a guy said that it had to take a second mortgage on my house tonight payroll. he told me a bunch of stories like this. i said tell me about your success. he said i am telling you about my success. that's what it's all about. about the same conversations with dozens of entrepreneurs and they always tell you the same

thing. they always tell you about the sacrifice. sacrifice leads to success. when there's no sacrifice, when there's no earned in the earned success commit the answer is something else, learned helplessness. learned helplessness is when merits don't lead to move forward and bad behavior doesn't lead to punishment and laboratory testing in the imminent social same psychologist at the university to the man who's been studies on this have shown that when people learned helplessness they become passive and apprised and attenuates their quality of life. now this is a big deal. there was thought sheens with nickels coming out. people figured out i matter how often they pulled the lever in the dust came up with this option at nothing to do with the nickels. as soon as they figured out they didn't want to play anymore.

they started to act as little depressed. why? because people need to earn their success and people he learned helplessness it turns out. so once again, what do we need? a system that allows earned success and avoid helplessness. a system that matches skills and passions and allows us to be rewarded for our merrit. a system that allows us to keep what we earn. that is the free enterprise system. earned success is the first moral comment of the free enterprise system to all of us. a lot of reasonable people will object. they will object because they see earned success is great. eric talked about this kind of weird life story that i've had. played the french word 12 years before went back to graduate school and somehow ended up at the american enterprise institute. it is a little weird. when i quit -- but i decided to quit a called my dad and i said

dad, i've decided to take up another line of work beard added me to go. going to go to college and become an economist and get a phd and become a professor. he said what you talking about? you're on top of the world. you're making money come you're married, why do other work away from the? assay data not happy. there is kind of silence in the phone. finally said what makes you so special? last night last night and the answer is nothing. i just think of this can. the figure can be done if we put our minds to it. turns out it worked okay can someone who might object that's only really going to work for certain people. but it's not fair earned success is not distributed to everybody. relatively few. the wealthy are the ones who are in the first of earned success.

we need to deal with these objections. so let's examine them one at a time and first are talking about fairness. fairness is the leitmotif of this political season. you'll hear it again and again and again. lately the president of the united states has gone on and on about fairness. he talks about fairness 14 times in the economic policy speech. also lot of me. i practiced for two hours so i hope you appreciate. he talked about fairness nine times in his state of the union speech in january. because i'm ceaselessly about fairness. on the other side, free-market advocates gather at the first mention of fairness. why? we know we can't win. we can't win on fairness. we know we're not supposed to talk about fairness. according to same built-in freedmen, fairness is a subjective concept. it is not something that we can

define. we should stay away from it. now milton friedman was a genius and i'm not, but i don't agree with that. i think it's wrong. and the reason we believe is wrong is because according to latest research on moral judgment people crave fairness. as a matter of days conservatives or liberals or centuries. everyone demands a moral system. the problem is we must never ask what they say. turns out economists have been good at laboratory are meant trying to investigate what fairness is. they do this with what they call ultimatum games. here is how the ultimatum game works. the first subject walks into a laboratory and is given $10. the second box as they sat across the table. the first subject to a $10 has to decide how much he's going to shares with his new friend. the person out of out of their

sight of attitude is if you that i should ask her is rejected. if he rejects it, folks watch out with nothing. if he accepts the offer for the first player they both walk out with what they were offered. so i walk out. you walk in the other side and i ciotti before. he's a fine parmesan. i get for come you get fixed. you say forget about it, buddy. that's not fair. we both walk out with nothing because he's biting me. economists had predicted by out for you a penny you'll take it. but of course that is nonsense. people list by each other and they do constantly. in the united states the first 4.10% of the time it's rejected. it turns out this experiment has been done all over the world and you find dramatically different results. different results between new york and los angeles. they cooperate more and los angeles and they don't cooperate in new york nearly as much.

so what's the country that has the highest rejection rate and lowest offer? the answer is our beloved spain. my wife and i were married for revenge for many years. it's been the average offers $2.50 rejection is 30%. my wife tells you that explains doing business in spain. it is not very cooperative. now why do people think that it's fair to share. but equality is fairness? cassettes of people talk about. the reason is because $10 was earned. it is given away. a friend of mine is an economist and says we need to change the experience fairness. the person who got 10 bucks had to sing a song at front of the class. for 10 bucks you have to sing the bear went over the mountain.

and this fortified. it's embarrassing. i can tell you for sure because for some reason i just did it. you sing a song and then he could contend? he is not parting with that 10 bucks it turns out. the offers are really, really though. they offered little to the other partner. but here's the most interesting part of the offers are those that were rejected when the other person sees it has been earned. they don't think it is fair anymore to share because the resources were earned. another way of looking at this, the world value survey 2006 as the question about 4000 americans. imagine two secretaries at the same age doing practically the same job. one finds that the other does considerably more. the other is quicker, more efficient and reliable. is it fair or not the one secretary is paid more than another? 89% think it fair that the board

efficient is paid more. americans believe that rewarding merit is fair if resources are earned bottom line. 89%, overwhelming. if resources are unearned, americans believe fairness means spreading the wealth. this is the difference every time. now whether one party is more fair than the other. it is said that we believe americans are and what we have. that defines whether we believe the american economy is fair. which do you believe is true? it as 70% of americans think by and large, not perfectly, the plan i large we earned that we have a rewarding merit is the right definition of the president's incorrect. okay now just think about this intuitively. eric have to put his ancestors. i did ask ancestors come from russia and it did under?

i bet it wasn't to get a better system of forced income redistribution. it was during their success. it was to be treated fairly for the first time. imagine some guy in vietnam since i went to get to america and there they have cash for clunkers. forget about it, right? you want to know what earned success and fairness are all about? type to an immigrant. that said they come to this country in the first place. the second objection is beyond whether or not earned success, but who really benefits. who benefits the most we reward earned success? is easy to see the rich do. the rich get really rich and we have seen the run up in income equality of the past few years. statistics are pretty complicated. we could talk about that later if you like.

the rich do i. well and have done well and so it's really only helps wealthy people. that it turns out is manifestly false. the best recipients have been earned success, the best recipients are the poor themselves. how do i know it? go back to 1970 and compare 10 around iraq today. it turns out between 1970 and 2010 the worst poverty in the world, people live on 1 dollar a day or less has decreased by 80% as a percentage of the world's population. it is the greatest achievement in human history and you never hear about it. 80% of the poverty has been eradicated. it is never, ever happened before. what accounts for that? the united nations? u.s. foreign aid? the international monetary fund? central planning?

it was globalization, free trade, the boom in international trade or share. free enterprise american-style witches are after the world. i will assert and defend the statement said if you love the poor, if you are a good samaritan you must stand for the free enterprise system then you must defend and not just for ourselves, but people around the world. it's the best antipoverty measure ever invested. now, will suffice? will free enterprise suffice to help all the poor? the answer of course is no. one of the things i talk about is the need for a strong, reliable social safety net. they probably haven't america today is that relief that comes from the safety net a cruise to middle class. it evens the risk out of life and equalizes for the sake of

equality. it doesn't just bring people out of the most abject poverty. the safety net today than we do need for people who are the least among us is threatened the most by an economy under threat. what we damaged the free enterprise system to the extent that we are careening. you and i know sooner or later will catch up with us given the spending and irresponsible policies we see today. when that happens, who suffers most? go to our own home in barcelona 20 years ago compared today. today there are homeless people. today 52% of young people can't bamberg. today 46% of adults under 35 celibate parents. misery. to assert the most? the poor themselves. the social safety net will be destroyed if we destroy the free enterprise system as we are on a path ultimately to do. so let's summarize.

the free enterprise system allows us to earn our success. it is the fairest system decide how americans to find fairness which is merit based in a system best of the gene at the least among us. that is the reason for enterprises not an economic alternative. it is a moral imperative. now, the structure of the winning argument for free enterprises face. you get 30 seconds. at the talking for 30 minutes. you get 30 seconds to convince her sister-in-law at the thanksgiving table. that's the battle of november is every american defining the system in defending the system we love. you get 30 seconds to make your case. you have to start by establishing your moral bona fides. do it in terms of earned success, true fairness. only then can we talk about data and policy.

that's a real hard from to do. i am burdened under the weight of a phd. it's hard for me not to go straight to the data. i want to do it because they've got the data, but it's not the right thing to do because i'm going to blues. because it's not what is written on my heart. you're my conclusions. the trend cannot be reversed without a dominant moral case. most importantly, we will lose the great from our founders and a system that dignifies us as individuals. that lets you set that we don't make the moral case. aei scholars and staff and supporters and friends, all of us here tonight are dedicated to the long haul for this fight, for this highly moral project. that is the reason we are a community supporters. that is the reason we do what we do. this is a fight for what is right. this is a pipe ourselves can all

scummy kids and people we will never meet. i am honored to be in this fight with you. so my last words tonight are, it thank you. [applause] >> thank you. what is between ice and a reception that includes alcohol is questioned answers. but if her summers in you prefer question and answers i'd be delighted to start. generally the crowd was at aei are you put your protest and in the form of a question and you tell me your name and maybe where you are from it will be off to the races. so who would like to take it

off. right here in the front. >> thank you. i miss competitive enterprises. that was one fantastic talk, really. to make thank you. are there any other questions? >> that was not a protest either. i think about what is hot today, but movements are around. the one movement he can't fit into your framework is argumentative. global warming and drought aid of homes that is better. icebergs are now humanity is unfairly taking it away or what do you see driving that as the framework you have sent to us? >> one of the things i haven't talked about much, but mercifully i haven't talked about this evening with you as a long chapter in this book about what i believe is the proper role for government details of these issues. to get the proper role of government consistent with this

notion of morality at the free enterprise system. there's no matter authors to read than friedrich hayek. friedrich hayek is iconic among conservatives, but truly great economists. one of the greatest of the 20th century. what should the government do according to hayek? number one come at a minimum basic safety net for the indigent at. hayek says that. crazy stuff. i had a friend of mine come a very strong libertarian would have been arguing about this. i think safety net conservatives and libertarians don't have to be against. hayek said that. he writes back the e-mail, just this. prince was a switch. a minimum basic safety net. the other is dealing with cases where markets fail. markets do feel sometimes. the burden is really high to get involved in markets.

the market has to really fail. the government has to intervene and cost-effectively. there's a huge barrier and generally speaking, even when we see a source of failure, the government should get involved for all reasons. one of these cases the case when economists call externalities. a case where individuals or for affect the welfare of others outside the market system in pollution is an economical example is that. the trouble is this. does that mean in the tennessee pollution and climate change the government should get involved? the answer is of course not because we don't know whether the market is failing. we don't know if the government can make things better and even if they can't come but we don't know if they can do so cost effect to believe. -- cost-effectively. >> at a gut level if tomorrow we have persuasive evidence that carbon dioxide has no impact on

climate, it seems to me that hundreds of thousands of environmentalists and their immediate prefrontal cortex would be devastated. they would feel something had been taken a break from them. i guess i'm asking you for an explanation of why they are wedded at this emotional level, immoral and physical level that humanity is bad for the earth. >> yes, now there are a lot of people were eloquent on the subject, which is slightly different than what i'm talking about. again, i recommend your interest the righteous mind which is how people deal with science and deeply human questions as they interact with science. believe me it's not rational. it's not always rational. why do some people feel its humanity and consequently put themselves squarely against humanity? i have hard time looking in the hearts of others because it's hard for me to relate to. in my view, one of the precepts

of a good society, good culture and economy is one of those people up, but saw people a period one that is anti-human eye can't exactly relate to that and only the explanation to those better equipped. but i join you in your discomfort. yes, right here, sir. >> dale johnson. i understand that the little girl in the car and we can take the case that we need to get mom a small apartment, not the suburban home that the welfare state now pushes for and maybe when that moral argument. but too often they go for the much more expensive things. the little cronies a heart transplant at no cost $200,000. why shouldn't she get the same treatment as warren buffett and how do we beat out? be met but we decide on this with a minimum asic standard is. but we can't decide what that is for a welfare state, we will

make decisions and decide all people should double the medicare in the world with absolutely no constraints. it doesn't matter if it's crowding out vaccinations for kids in poverty which is the the decisions we effectively make. not making decisions means making decisions. so this comes down to true moral leadership. this is the reason we need true moral leadership because we have to make decisions. it is a decision should not make a decision that it always goes to those who can scream the loudest. if we make a decision that little girl needs a transplant, she's not going to get a heart transplant. it will devolve into people retiring, taking three times smart than social security and medicare systems. that is how that will fold up enough or unwilling to make hard decisions. it's much easier to have the closed monocle solution that said here's what we do, but sometimes the answer surely is more courageous leadership in this is one of those cases.

yes, sir. >> marked droid with the jefferson institute. my question is about the earned success as a source of happiness. he made a compelling case, but i'm also familiar with the study of over 100,000 people that found that it was loud, the presence of people in your life that lets you enter the view that fell happiness. just wondering how you resolve that. >> shortcomings thank you. the happiness studies are wonderful enough why i put a hold book on the subject. let me to you at charles byrd eloquently calls the ford institutions of meaning in our lives. faith, family, community and vocation. those are the things that give us true meaning and those are huge sources of meaning.

earned success is a big deal, but it's a driver of happiness as we decided we could mimic life and economic policy. but we put together personalized and personal policies, we need to revolve those are the institutions of faith, family, community and vocation, which is to say work. that of course relates to earned success. but to say earned success as an expression of also be inaccurate and unfortunate because it was the ice to awful lights. john. >> john's holiday, independent economists. i was thinking that one of the reason that people are recipients of redistribution are not as happy as because they are since they didn't earn it. have another question, a moral question and that is not considering the minimum safety net.

but when we get to redistribution and i start coding benefits for myself that are from somebody else come it is not awfully different from stealing. i am wondering if there isn't a moral case against that kind of the dvd. not taking the minimum minimum, but once it benefits me as a middle-class person. >> yakima is very moral case against coding your own not quite sure. as a matter of fact, this is the reason there is so much moral rebellion against earmarks in congress. people recognize that isn't proper to do something like that. the dangers in this country is we are covert through the system or read more takers than makers should not put too fine a point on it, where about half of american wage earners have no federalism tax liability of war a liability to the tax foundation, upwards of 70% take more out of the system than they

put in. at some point it's really not in anyone's pecuniary interest or practical interest to not win totally towards a welfare state. at that point all bets are off and everybody loses because the whole country gets poorer. how do we avoid that? mother is still time to make the moral case. we tacked to people about what it means. for example we have a fairness crisis this country. what is the fairness crisis? we are stealing from kids. that is immoral to be stealing from our kids because we have a system that rewards public-sector workers for the net private sector counterparts according to responsible research done at aei. that is not fair because we are special bailouts and cardbus and special deals. corporate cronyism is nothing more than we know that. we know when accessed and that is not fair. we have been on fairness crisis in this country and until we

address that in moral terms, we'll be in danger of exactly the situation do you identify, which is precisely the problem in greece today. right here. that will come over to this site. >> daily beast. over the past two decades there's been emerging evidence that median average in cubs have not been racing. do you think that is an example of our success in action, which is to see say they haven't risen they haven't earned the prize or do prize 32 different successes in this country we would see higher median wages? >> at questions at the apparent stagnation in the lower and middle class, how do we do with that fact? i recommend your interest, the work of our bloggers. whence the enterprise sprout which will be renamed aee ideas. jim pepper koopa points out it's

more than pretax wages the way we should look at income equality. we should look at government and defense, what happens if taxes and that greatly attenuates the argument. look at our blog if you want to understand that. but more to the point, let's say mobility hasn't been high enough. mobility is a key concept. whether the president of the united states or anybody tax about income he's wasting our time. the problem is the ability. that's what everybody really cares about. when you focus on income inequality come the focus how to bring the top down. if you talk about mobility come to talk about people at the bottom. we care about people in the bottom 20% because those people have objectively seamless income and economic and opportunity mobility over the last few decades. doesn't matter how you look at the data, you will see some lessening of mobility in the bottom 20% of the population. we charles murray's new book

cover big seller this spring. he talks about the fact the bottom 20% are marginalized. so what are you going to do? the question is not as success matter or is it real or is it not. that is what are we going to do to increase mobility? and their answers. a school system that exists for kids, that grown-ups. the civil rights crisis. it doesn't hurt my kids. it hurts kids in the bottom 20% and that's not right. everyone knows you're not supposed her poor people. you don't know that, you're raised by wolves. our school system marginalizes the poor automatically. school systems say they need her money. it's not true. we spend more and more money and we don't get the results. number two, which selfishly claimed all the benefits and blessings of the entrepreneurial culture for ourselves. we have not thought in any broad

way about how to share the culture with the income distribution. what are we doing to bring people over the income it distribution into the culture? one of the things that kevin hassett who is her chief economist here at aei writes about is the fact that when you're in an economic crisis today, one that happens is they think about ways to dodge but a really they can strike on the road. we are getting in their way. we talked to small business people to strike at on the road print the first thing they talk about is the regulatory system is out of control. they don't know what environmental policies will be, what they were policies are going to be. we were in the way of people who should start businesses and act entrepreneurially. but about rural area so people could take more entrepreneurially to pay most of you do. the answers were doing almost nothing. and the third is without talk

openly about culture and institutions of meaning. we don't talk about the fact that states, family, community and vocation are not evenly distributed and until we talk openly about cultural issues. we don't have to be religious about it. but until we take openly, we are systematically as a society to marcia lies the bottom 20% will attenuate their mobility and see a worse and 20 and 30 years from today than we do today. >> minimus bailiffs frank and from colorado christian university in centennial institute. my question is bacher comment about having 30 seconds to persuade someone with this viewpoint and appealing to the emotions and the moral side of the argument. with respect to the occupied movement, how would you pursue coring towards them? are they just simply to miseducated from the start or

does that thought i'll have to be five? or is there a pitch he would make to an occupied member? >> great question. no, they're not beyond redemption. are you kidding? actually they're making a a strong moral argument. they say the american economy is not fair. and you know what? they are right. they are reacting to the fact that the american economy has gained two people disproportionate access to the tools of government that can turn public policies in their favor, that are too big to fail, have tax carbonates and bailouts and things that normal people, ordinary people don't have. where they are wrong is that the diagnosis of the problem. it's not that we are too much for enterprise. and so we need to start by saying you are right and all your discomfort. or write in your moral outrage. where you are wrong is for the problem comes from. now let's have a discussion about it.

start off with fairness and you're talking for basic is a moral date and this can in my experience the destructive conversation. leon aron. i recommend his new look coming out june -- june 12th. his new book about the opening of the soviet union. one of the most powerful defenses at the culture of freedom and its power around the world to not just the united states. truly understands the moral case for freedom. and it's not going to criticizing him because of what i just said. >> no, i have very little to add to that. actually, what i was thinking is indeed a stunned the research and into the moral trekkers of antiauthoritarian movements in the world, starting with the fall of the soviet union come and go another way to the arab spring and the grassroots

movement in russia today and the protests. i was waiting for one word, which inevitably or a concept that inevitably i discover i think he'll be young and one layer after another, getting to the heart of the small triggers. and that word is dignity. i wonder, aren't you in fact talking about dignity, arthur, in your brilliant talk today? you use plurality, but is that the key component? and would you recommend that word for the 32nd debate at the dinner table? >> indeed, leon, excellent point. earned success is about treating people equally means treating them with equal dignity and that is what people see. the beginning of your book talks about the fact that it was the

lessening of the dignity of individuals was ground people down so ultimately there was a war of rebellion. dignity is the reason earned success ultimately matters. i completely agree. completely agree. >> one question that piggybacks in a way. it seems there was a discussion between these two different things. i'm the one hand you say welfare is corrosive and a lot of people get that instant deadly in the living room and so on beard on the other hand you say we do need a safety net. but then, why would it be bad for some people, but then not bad and not harmful to the dignity of the people? >> good question. how was the requirement of having a functioning safety social nets not possible with the concept of dignity of every individual because we all deserve to burn our success.

the answer is there is a balance between relief and opportunity frequently we had to come to it that balance really is. relief matters. ultimately the problem that franklin delano roosevelt refers to as destroyer at this. is where we reach of those basic relief from the start utilizing returns in getting rid of risk in society so that what was immediate relief becomes a dependent lifestyle. where we destroy the dignity of individuals is where we don't give them an opportunity beyond relief to her their success in that the balance we need to find. we cannot find it until we adjudicate this moral ground. it's an imprecise answer comes up as the gravity to cover but the real debates of our time about how we do with the poor. where does that leave stopped and where does it start and where do we need to make sure

one doesn't cut out the other. i hope we find out the answer, but we will start until we start to finish a moral case free enterprise. in fact, the messages it's time for us to go to a reception at. thank you so much for coming tonight. [applause] you know, if you look at the 18th century, journalists and started off this country in senate tino for is a very puny and unimpressive kind of enterprise. the very first newspapers are very small. but circulations and the denizens and then maybe the hundred and they were really timid dated by the other institution that society, especially church and state. compared to them, these

newspapers were not at all in working and very much under their thumbs. but what you see over the course of the next couple of decades as a process by which newspapers become increasingly political one but they focus on and they get to be bolder and bolder for reasons that go into in the boat. so by the 1760s and certainly by 1770 they are in full throat expressing themselves on all kinds of political issues of the day, independence from britain or reconciliation with another country on if we break, what kind of government should we have? all these huge questions. and the price becomes quite polemical during this period. it is often the products that people are reading are often produced anonymously or pseudo-anonymously by people who don't want to be known as political partisans.

and that is the nature of the press, that the founders were familiar with. that price is very local. it was small-scale. it is very polemical. most of those newspapers had very what you think of as original group wording of nonfiction material that the stats are generated. that was not in the cards. so as we see a return to a more polemical style today in journalism, it is not sent to that is unanticipated or doesn't fit into this constitutional scheme. >> who invented reporters? i mean, because we tend to think of reporters and journalists as synonyms, but that was not -- >> donegal, no, no, no. it wasn't until the 1830s

again, here in new york city another invented journalist named benjamin dey created the first so-called penny press newspaper, so that for a penny a copy so he was going way down market and trying to reach the broadest possible audience. and to do that he needed to fill it up with surprising, amazing things every day. fires, news from the police station, dockings of ships, anything like that he could find. and he wore himself out trying to fill the paper and so he hired the first full-time reporter, a man named george wisner who is a regrettably obscure figure in american history, but i'm going to try and do something about that. >> when did journalism become a business? that is coming to. you are describing in the

colonial. doesn't sound like -- how did to support itself done? >> well, most of those newspapers were created by people who were in another trade. that is they were printers. in order to keep their print shop is the again order to bring customers into the shop to pick up their papers so they can sell them some stationary and the side or a book while they were in their common dated upon the idea of the newspaper is the perfect device. it expires every week and later every day once the pace picked up. and so, most of those first enterprises were sidelined as somebody who we would think of as a job printer, someone open to printing all kinds of stuff from anybody who had business. and to round up revolutionary. can this certainly the early federal. come to where yo